California City council demands clearer finance reports, orders review of consultant contract

California City councilors on Jan. 20 reviewed interim financial statements covering July–December 2025 and asked staff to produce clearer monthly reports and return the city’s consultant contract for council review.

The staff presentation described the materials before the council as an expanded “statement” rather than the succinct monthly reports citizens and council previously received. The presenter said the city’s fund balance includes a $3,800,000 amount referenced as reserve funds and noted an apparent $604,151 overspend in one department that staff said results from timing and prepayments such as an annual PERS payment.

Council members pressed for far more detail. Council member Smith said the contract consultant, Price & Page, had not delivered the monthly reports the council expected after an October contract approval and asked staff and the city attorney to bring the contract back for council review. Smith said the delay had left councilors and residents unable to understand whether the city “has enough money to pay our bills” and urged staff to show on paper the general fund, police and fire reserves before approving further spending. “We need to stop the bleeding,” Smith said, calling for immediate options to reduce spending.

Staff told the council that some large, non‑budgeted items — including a $1,700,000 liability insurance payment — were posted to fund lines and would be reconciled in a midyear budget amendment. Staff also said Price & Page will provide their first full report in February and that staff will develop a midyear fund‑balance presentation that separates restricted and unrestricted amounts for clarity.

Public commenters raised additional concerns about auditing and forensic review. Robbie Cortez said the city’s 2024–25 audit had not started and warned that prior‑period adjustments could materially change the numbers presented to council. Al Hudson urged the council to include a clear, public letter of engagement describing the audit scope when contracting auditors.

Council action. The council voted to accept the interim statements and gave direction to staff: bring a format the public recognizes that breaks out reserves and restricted funds; return the consultant contract for council review; and present options to reduce spending and clarify whether additional positions should be delayed. The council also clarified the directive not to approve any new job descriptions going forward (not affecting positions already approved under prior consent).

What happens next. Staff said Price & Page’s next report is expected Feb. 10 and that staff will prepare a midyear budget amendment to further reconcile large, non‑budgeted items. Council requested explicit, on‑paper reserve breakdowns at the next meeting so members and the public can verify the fund balances.