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Auditors give Los Altos Hills a clean FY2024–25 opinion; $1.2M permit-fee refund noted
Summary
Maize & Associates reported an unmodified (clean) opinion on Los Altos Hills’ FY2024–25 finances, a $500,000 rise in net position to $65.8 million and planned $1.0M Section 115 trust contribution; auditors flagged a prior-year $1.2M permit fee overcharge and recommended a footnote and resident reimbursements in FY25–26.
Vicky Rodriguez Valerga, engagement partner at Maize & Associates, told the Finance & Investment Committee that the town’s annual comprehensive financial report for the year ended June 30, 2025, will be issued with an unmodified opinion, the highest level of assurance auditors provide.
The audit shows the town’s total net position increased to $65,800,000, roughly $500,000 higher than the prior year, and the general fund’s unassigned fund balance rose to about $4.4 million. Rodriguez Valerga said revenues exceeded expenditures, driven largely by approximately $400,000 higher property-tax receipts and about $400,000 more investment income than the prior year.
“Overall, fiscal year 2024–25 was a strong year financially,” Rodriguez Valerga said.
Committee members pressed auditors and staff on technical items in the ACFR. The auditors said the implementation of GASB 101 (compensated absences) increased accruals—adding roughly $130,000—but was immaterial and did not require restating prior-year balances. They also noted a modest increase in the town’s OPEB liability after the discount rate was lowered.
A material disclosure the auditors will add is a footnote about prior-year permit‑fee overcharges. Rodriguez Valerga said the auditors identified about $1,200,000 in excess permit fees from the previous year that the town will reimburse to affected residents in fiscal year 2025–26. “I’ve drafted the footnote; we’ll have management review that just to make sure they’re okay with the footnote disclosure related to that,” she said.
Thomas (town finance staff) told the committee the town will begin sending certified letters to identified residents on Jan. 16 and give recipients 45 days to respond; finance will then issue reimbursements and follow a 90‑day overall process for the outreach and payments.
The auditors said there were no unusual or controversial transactions, no significant audit adjustments, and no disagreements with management. They also noted the town will contribute an additional $1,000,000 to a Section 115 trust in FY25–26 to further fund pension liabilities.
Committee members asked technical questions about investment-allocation differences between funds, the timing of Measure B revenue recognition (the funds arrived after fiscal year close and will be recorded in FY25–26), and whether the town should include forward-looking budget discussion in the ACFR. The auditors said the GFOA certificate application requires more disclosure but is voluntary and carries no direct monetary incentive.
The committee closed the ACFR review with staff direction to finalize the footnote language, proceed with resident reimbursements for the excess permit fees, and provide follow-up information on fund-specific investment allocations.
The committee approved the meeting minutes earlier in the session; no other formal council actions were taken on the audit at the committee meeting.
