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City finance director and auditors report strong audit, healthy fund balance and minor compliance notes
Summary
Assistant Finance Director Carly Jensen and auditors from HBME told the council the city's ACFR shows a $58 million general fund balance and unassigned balance at about 21% of revenues; auditors reported strong controls, no major findings, and two remediable items (a budget omission for a new-market-tax-credit fund and a delayed FAA grant single-audit report).
City finance staff and the independent auditors presented the annual comprehensive financial report and audit findings at the Feb. 3 work session, highlighting fund balances, internal controls and a small number of audit flags that staff will address.
Carly Jensen, assistant finance director, described the ACFR structure and reported a general fund balance of about $58 million for fiscal year 2025. She said unassigned (spendable) fund balance equates to roughly 21% of general fund revenues—above the council's 20% target and well above the state's 5% legal minimum. Jensen noted that most remaining ARPA funds are encumbered for the Canyon Waterline project and must be expended by Dec. 31, 2026.
Jeff Miles, partner at HBME, explained the auditor's role and said the audit found the city's financial statements were presented fairly and that internal controls (including segregation of duties) were working well. Miles highlighted ongoing attention to journal-entry oversight and recommended advance planning when entering complex transactions (for example, blended component units tied to new-market tax credits).
The audit contained two items for remediation: a missing formal budget for a new-market-tax-credit blended entity (a presentation/budgeting oversight) and a timing-related reporting omission in the federal single-audit for an FAA grant. Staff said the FAA has contacted the city and the administration will submit a corrective action plan within the required 30 days to address the single-audit issue. There were no penalties reported at the session.
Council members asked about long-term liabilities, interfund loans, and the city's borrowing limits; auditors and staff said debt levels were within legal limits (the city was at about 45% of the statutory debt capacity at the end of FY25) and emphasized continued oversight of RDA-related loans and capital plans.
