Salinas auditors give "clean" opinion on 2025 ACFR; committee reviews finances but lacks quorum

Salinas Finance Director Selena Andrews brought the committee together February 3 to review the city's 2025 Annual Comprehensive Financial Report (ACFR), and the city's external auditors issued an unmodified — commonly called "clean" — opinion on the statements.

"The item before you is the 2025 Annual Comprehensive Financial Report, also referred to as the ACFR," Andrews said, describing the report as an accounting exercise that summarizes the city's prior fiscal year. Coley Delaney, engagement partner for the auditor, led a presentation of the report and highlighted new ACFR elements, required disclosures and key year-over-year changes.

Delaney told the committee the auditors "issued unmodified opinions" on all opinion units and that the financial statements "are fairly presented in all material respects." He added the auditors identified no material weaknesses or significant deficiencies in internal control and reported "no inappropriate activities or fraud, waste, or abuse to report." The federal single audit, Delaney said, remains "in progress" and the auditors do not anticipate findings.

On the substance of the report, the auditors flagged a number of drivers behind the city's improved governmental position in 2025. Governmental assets increased roughly $6.1 million year over year, current assets rose about $2.9 million (including $3.2 million in cash and investments), and long-term liabilities fell about $9.4 million, largely from debt paydown and a $12.8 million decrease in net pension liability. Overall governmental net position increased about $28.5 million in 2025 after a loss in 2024.

Delaney also explained that about $21,000,000 of previously recorded unearned ARPA funds were spent and recognized as revenue in 2025, which materially affected balances. On the general fund, taxes receivable increased to $20.6 million from $17.9 million; unassigned fund balance rose by $13.7 million, and total general fund balance increased by $5.3 million for the year.

During questions, Mayor Donahue contrasted those general-fund numbers with an earlier $77 million "all funds" figure he had seen. Delaney clarified the $77 million referred to all funds as of Sept. 30, while the presentation focused on the general fund results for the fiscal year ending June 30.

Because the committee lacked a quorum, members did not take formal action on the consent minutes; Mayor Donahue announced, "we'll table the minutes until the next meeting." Committee members discussed scheduling a special session on Feb. 17 so more members could review the report in an official body.

The finance director said the city will submit the ACFR to the Government Finance Officers Association for consideration for its financial reporting award. The auditors said they will complete the federal single audit review in the coming weeks and do not expect reportable findings.

The committee adjourned without votes other than the procedural decision to table the minutes; auditors and staff remained available to answer follow-up questions.