Lake Forest council accepts first Popular Annual Financial Report; resident raises concerns about revenue drop

At its Feb. 18, 2025, Lake Forest City Council meeting, the council accepted the city’s Popular Annual Financial Report for the fiscal year ended June 30, 2024, following a presentation by finance analyst Fonas Rego.

Rego told the council the PAFR is a user-friendly summary of the city’s audited Annual Comprehensive Financial Report (ACFR) and follows Government Accounting Standards Board guidance and generally accepted accounting principles. She said the city’s ACFR has received recognition for 29 consecutive years from the Government Finance Officers Association and that the PAFR is intended to make financial data more accessible to residents.

The report highlights that sales and property taxes together accounted for just over half of the city’s total revenue in the reported year—about $44,100,000 of $84,600,000—and that public safety and infrastructure maintenance represented roughly 30% and 28% of expenses, respectively. Rego described the city’s net position as the difference between assets and long-term liabilities and reiterated that the PAFR links those figures to the city’s reserve policies.

During council questions, the city manager said the city has a 10% contingency the manager may use within individual capital projects and can transfer funds between projects but cannot increase the overall capital projects budget without council approval. Councilman Serbel said the PAFR provides helpful transparency and noted city financial awards and what he described as an increase in net position.

During public comment, resident Andrew O’Connor disputed the presentation’s tone of optimism and described a steep drop in revenue and net position in the last year. “You’re overspending. You overspent,” O’Connor said, pointing to what he described as an $18 million drop in revenue and a roughly $10 million decline in net position. He also questioned whether payments to the Orange County Fire Authority and pension liabilities were fully reflected in the report.

Council members and staff did not accept O’Connor’s characterization as presented. Rego and the city manager emphasized that the ACFR is audited and that the PAFR is a summarized document; the manager also reiterated the city’s controls around capital contingencies. Later in the meeting, Councilman Serbel again praised the city’s finance staff and the oversight provided by the audit committee.

The council made a motion to approve and accept the PAFR for filing; the motion passed unanimously. The item was presented as informational and accepted for the record.