Palm Springs auditors issue clean opinion; council reviews midyear budget, airport performance and capital projects
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Summary
External auditors reported an unmodified (clean) FY24-25 opinion; city finance staff presented a midyear forecast that projects general-fund revenues roughly on budget and highlighted TOT timing effects and stronger property and sales tax collections, while airport revenue exceeded budget owing to revised rates and stronger non-airline revenue.
CliftonLarsonAllen partner Daphne Munoz presented the City of Palm Springs FY24-25 audit to the City Council on Feb. 25 and reported an unmodified opinion on the financial statements for the fiscal year that ended June 30, 2025. The auditors included an "emphasis of matter" pointing readers to restatements tied to implementation of Governmental Accounting Standards Board guidance and changes in compensated absence presentation.
"We have issued what we call an unmodified opinion, which means that the financial statements did not require any modification," Munoz said. She added the auditors performed internal control reviews and required governance communications and had no reportable findings under the audit.
Finance Director Christopher Mooney then reviewed a midyear budget snapshot through December. Key highlights included timing-driven increases in transient occupancy tax (TOT) cash collections, continued growth in property tax, and sales tax up about 5% year-to-date. Mooney said revenue forecasts are conservative because the city has realized only about 30% of annual revenue by the midpoint of the fiscal year and the remainder is collected later in the fiscal cycle.
Council members asked for more real-time business indicators to supplement the official monthly and quarterly collections data. Bernstein and others suggested the city speak directly with large hoteliers and merchants to better gauge short-term trends.
Mooney and airport staff also reviewed airport finances: higher airline rates and charges implemented Aug. 1 drove airline revenues well above the adopted budget, and non-airline terminal retail and food-and-beverage revenues increased after terminal renovations. The airport faces higher operating costs related to cogen (on-site power) charges; staff said the airport would show an operating surplus if a planned transfer to capital is excluded from the operating P&L. Airport executives said Canadian service is down but domestic passenger demand is up.
Council accepted the audit and received the midyear financial update for filing.
