Finance committee accepts unmodified FY2025 audit; staff warns reserves declining

The Santa Barbara City Finance Committee accepted an unmodified independent audit for fiscal year 2025 and approved staff’s recommendation by unanimous voice vote.

City finance staff presented the government‑wide financial statements and told the committee that while the city’s net position increased year over year, much of that improvement is tied to capital assets and legal or policy restrictions. Staff reported an approximate $24,000,000 increase in government net position compared with the prior year, total governmental revenues of about $188,800,000 and an increase in tax revenues of roughly $7.3 million.

The audit was presented by the city’s independent auditor, who said the firm’s opinion for FY2025 is unmodified and requires no changes. The auditor described that opinion as the highest level of assurance the firm can provide and noted there were no reportable deficiencies requiring modification in the audit opinion.

Why it matters: an unmodified opinion signals that the city’s financial statements are presented fairly under applicable…