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Paramount posts unmodified audit but finance director flags rising liabilities

Paramount City Council · January 14, 2026

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Summary

The city's finance director reported an unmodified audit opinion for fiscal year ending 06/30/2025 and a near-$2 million one-time surplus, while warning of long-term pressures from pension, retiree health liabilities and water-fund constraints.

The City of Paramount received an unmodified auditor’s opinion for the fiscal year ending June 30, 2025, but finance staff told the council the positive result masks structural challenges that will require planning.

Lana Deech, the city’s finance director, presented the year-end audit and said the auditors issued an unmodified opinion — the highest level of assurance — and the city also received a GFOA (Government Finance Officers Association) award for the report’s clarity and completeness. Deech said the general fund closed the year with a surplus close to $2 million but that surplus largely consisted of one-time items: strong investment earnings in excess of budget of about $1,000,000, a sale of a property for $650,000 and settlement payments of $265,000.

Deech provided additional fiscal details: the special revenue and restricted funds reported an ending fund balance of about $18.7 million (with $779,000 surplus in those funds); operating reserves met the city’s policy target but the ‘economic uncertainty’ reserve was short by about 2 percentage points; pension and retiree-health liabilities exceeded $32 million and staff said they expect annual post-employment obligations to grow — staff estimated obligations could reach about $4 million annually by 2030 without corrective action. The water fund closed the year with a roughly $1,000,000 operational deficit and had borrowed $1,700,000 from the general fund; staff said Water Well 16 was placed in service in August and should improve supply reliability and reduce purchased-water costs.

Council members asked staff questions about water purchases and Well 16; staff replied the city is purchasing only a minimal amount from the Central Basin now and expects cost reductions as Well 16 contributes supply. Deech said the city is working on a water rate study and will continue monitoring reserves, liabilities and revenue trends.

Next steps: staff will continue the rate study, monitor pension and OPEB liabilities, and return with recommended long-term financial strategies.