Committee receives Beaumont draft FY2025 financial report; auditors issue unmodified opinion

The Beaumont Audit, Finance and Audit Committee voted to receive and file the draft Fiscal Year 2025 Annual Comprehensive Financial Report and recommend forwarding the report to the City Council after auditors said the city's financial statements were presented fairly.

Veronica Hernandez, manager on the engagement for the audit firm, told the committee: "We issued an unmodified opinion, which is the highest level of assurance that we can give." Hernandez said auditors found no material errors, no disagreements with management and no material weaknesses in internal control.

Lisa Leach, who presented the report, said the city's total net position rose by $37,900,000 in the fiscal year, driven by completed capital projects including City Hall and customer-service improvements, a Memorial Plaza, a new fire station, road rehabilitation and $5.6 million in new buses. Leach said total city assets were $836,000,000 and total liabilities were $212,000,000, leaving a net position of approximately $624,000,000.

Leach reported General Fund revenues for FY25 were $72,800,000, an increase of $8,700,000 from the prior year; she attributed roughly 6.4% of that increase to a one-time audit recovery of misallocated county allocations and cited continued local economic growth and a 15% rise in property tax revenue. Expenses for the year were $57,000,000, an increase of about $6,000,000 year over year, affected by audit-related adjustments, higher insurance costs, settlements and public-safety costs as the new fire station became fully operational.

Under the city's fund-balance policy, Leach said required reserves totaled $18,800,000 (16% of operating budget for working cash flow of $12,800,000, a $5,000,000 budget stabilization set-aside and a $1,000,000 emergency reserve), leaving an available fund balance of approximately $21,700,000 after applying policy constraints. Council members queried whether those available funds could cover a planned Pennsylvania grade separation project; staff said pooled-cash investments provide sufficient liquidity to access funds if needed.

On a motion to receive and file the ACFR and forward it to the City Council, the committee recorded a roll call: Resident member Christian Fernandez voted yes; Council member Fenn voted yes; Vice Chair Ron Reeder voted yes. The motion passed.

Lisa Leach said a staff report will provide additional detail on fund-balance questions raised by committee members. The committee then heard brief subcommittee updates, was notified of an upcoming RFP for investment advisers, and adjourned at 06:28.