Hanford posts clean audit for fiscal 2024-25; Measure H receipts and utility projects highlighted

The City of Hanford received an unqualified clean audit for the 2024-25 fiscal year, finance staff told the council on Jan. 20, marking the first December-issued audit in 14 years. Staff said there were no audit findings and that the work required close coordination with auditors.

Finance staff said the general fund increased by roughly $1 million, driven largely by one-time ARPA funds, and the unrestricted fund balance stood at about $13.6 million (approximately 29% of reserves; the target is 35%). Measure H recorded approximately $3.2 million in sales and use tax receipts beginning in June 2025; staff noted budgeting for Measure H will be formalized in the next fiscal year.

Among enterprise funds staff highlighted a $16.1 million water replacement project underway (expected in 2026) and a refuse fund that decreased and is showing an internal borrowing of $3 million from the general fund. Staff said a Prop 218 rate study has been initiated and the refuse scenario presented projects a two-year payback to restore fund balance if changes proceed as proposed.

Councilmembers praised staff for the timely and clean audit and asked about the practical implications of a higher fiscal grade when pursuing financing. Staff said external creditors rely primarily on audited financial statements and debt ratios, but improved reserves and clear fiscal practices are beneficial when seeking favorable financing terms.

What happens next: staff will continue monitoring utility fund projects (water, wastewater, storm drain and refuse), pursue rate studies where required, and return with appropriation recommendations for any non-routine spending.