City posts stronger net position in 2024; general fund reserves remain robust

City Finance staff and the independent auditor Malden & Jenkins presented the annual comprehensive financial report for the fiscal year ended Sept. 30, 2024 at the June 14 workshop.

The audit team issued an unmodified opinion — the highest level of assurance — and reported that the city—s net position increased by roughly $37.7 million in fiscal 2024. The change included a governmental net-position gain of about $20.4 million and business-type (enterprise fund) gains of about $16.8 million. The audit also highlighted $24 million of reported capital-asset additions during the year.

City staff noted that the city—s unassigned general-fund fund balance stood at about $25.1 million, roughly 43% of general-fund expenditures — a level staff described as a built-up reserve partly set aside in prior years to cover potential costs associated with seawall litigation and other capital matters. Auditors said they found no current-year findings related to internal controls or major federal/state programs. Malden & Jenkins performed a federal single-audit review of the city—s major federal and state programs and reported no findings.

Council members sought clarification on a few points: how rising pension funded ratios were affected by investment returns; the implications of lower tourist-related revenues; and how recent audit findings compared with prior years. Finance staff and the auditors said investment earnings contributed to improved pension funding ratios in 2024 and confirmed the audit was a review/audit cycle consistent with prior practice; a full audit cycle will provide additional detail in the next year.

Why it matters: The unmodified audit opinion and the city—s healthy unassigned fund balance provide fiscal flexibility for capital planning, but several councilors asked staff to continue monitoring revenue trends and the potential need to refresh reserves as capital and storm-related demands increase.