Council accepts FY 2023–24 audit, hears sobering five‑year forecast as compensation requests spur debate

The Glendale City Council accepted the City’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024, after a presentation by Finance and the City’s external auditors. CliftonLarsonAllen reported an unmodified (clean) opinion and said it had no material weaknesses to report for FY2023–24. The council also received the FY2024–25 first quarter general fund status update and a five‑year forecast.

Finance staff and the external auditor highlighted key figures: the city reported a net position increase for FY2023–24, general fund reserves were approximately $128 million (around 40% of FY23‑24 actual expenditures), and the audit identified significant accounting estimates (pensions, OPEB, landfill post‑closure liabilities) as usual audit matters.

Deputy Finance Director Mary Karamian presented the Q1 results and a five‑year forecast. Staff showed the city would remain within reserve policy in the near term but projected a downward trend in later years that could push reserves below the council’s 25% floor if structural actions (new revenue or spending reductions) are not taken. Staff noted the landfill revenues and other one‑time items were important drivers of the forecast and that some future years show sizable declines unless replaced by new revenue sources.

The latter half of the agenda item focused on a classification and compensation alignment package. Human Resources and management proposed adjustments: 19 classification salary adjustments, 19 new classifications to be funded by repurposed vacancies, and the permanent removal of 52 obsolete job classifications. Staff said most of the adjustments are budget‑neutral (reassigning funding from vacancies) and estimated an ongoing annual cost of roughly $300,000–$500,000 depending on fills; the immediate fiscal year cost (partial year) was estimated at about $190,000 and a prorated $50,000 for 1 public safety civilian conversion.

Council debate was robust. Several council members and the city manager said they supported the principle of addressing recruitment and retention, but multiple members raised concerns about approving recurring salary adjustments at a time the five‑year forecast shows reserves declining. Some council members asked for more time and additional detail; others said they would support select critical items. The council ultimately approved a narrow set of noncontroversial finance acceptance and filing motions (ACFR, audit communications and Q1 reports) and directed staff to return with additional detail and to schedule further consideration of compensation items at a later meeting. Council separated and later continued several classification/compensation items for additional review; one executive‑level Glendale Water & Power classification was handled separately by council action.

Public commenters urged the council to focus on fiscal discipline or, conversely, to adopt measures supporting low‑income residents and staffing needs. The external auditor identified the city’s significant pension and OPEB estimates and noted required disclosures were in the ACFR.

Votes: Council accepted the ACFR and filed the Q1 reports by recorded roll call votes. Several compensation items were deferred or revised; officers of HR and finance will return with revised proposals.

What’s next: Staff will bring additional detail on the proposed classification/compensation changes, provide options for how to pay recurring costs, and return with a timeline for decisions as part of the upcoming budget process.