Hanford posts clean audit for FY2024-25; general fund reserves near target, refuse fund borrowing flagged

Finance Director (Borba) presented the City of Hanfords annual comprehensive financial report for the fiscal year ending June 30, 2025, and told the council the audit was completed Dec. 17, 2025 with an unqualified (clean) opinion. "We received an all of unqualified clean audit opinion," the director said. Staff highlighted that this is the city's second ACFAR and the first timely audit in several years.

The presentation said the general fund increased modestly (partly due to final ARPA receipts) and that the unrestricted fund balance stood at about $13.6 million, representing roughly 29% of expenditures versus the 35% reserve policy target. The director noted that Measure H sales and use tax receipts were about $3.2 million in the period since Measure H began receiving funds in June 2025, and that the Measure H balance helps meet reserve targets for that fund.

Utility and proprietary funds received separate attention. The wastewater fund had significant capital investments (standby pumps and screw pumps) and potential Prop 2/18 financing was discussed; staff warned deferral of capital could lead to service reductions. The storm drain fund showed a decline (~$512,000) and is subject to a pending rate study. The refuse fund had a $1.2 million year-over-year decrease and is shown borrowing $3,000,000 from the general fund; staff said that borrowing is an internal receivable and the rate study (Prop 218) projects a two-year payback scenario.

Council members congratulated staff for a clean audit and asked for clarity about Measure H cash flow and timing; staff explained the $3.2 million covers part of the year since Measure H began collections and that the expenditure plan projects greater cumulative spending going forward. No council action was required on the ACFAR presentation; staff recommended continued prudence on one-time appropriations and follow-through on rate studies and capital planning.