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Carmel-by-the-Sea council accepts clean audit showing stronger fund balance
Summary
The Carmel-by-the-Sea City Council unanimously received the city's Annual Comprehensive Financial Report for FY2024–25 after auditors issued an unmodified opinion; the report shows improved net position and a healthy general fund, while pension liabilities remain a long‑term pressure.
The Carmel-by-the-Sea City Council unanimously voted March 24 to receive the city's Annual Comprehensive Financial Report for the fiscal year ending June 30, 2025, after the independent auditor delivered a clean opinion.
Sheldon, the city's auditor, told the council the firm issued an unmodified opinion, meaning it found no material misstatements in the financial statements. "We issued an unmodified opinion on the financial statements," he said, and reported no material weaknesses or significant control deficiencies.
The audited statements show the city's total net position increased to $55.6 million from $49.6 million a year earlier, largely reflecting increases in long‑term investment in capital assets. The general fund balance grew to $37.5 million, and the city's unrestricted net position rose by about $6.5 million from the prior year.
Sheldon also reviewed the city's pension exposure: the net pension liability was about $29.6 million as of June 30, 2025, a slight rise from the prior year. He warned the council that pension costs remain a long‑term pressure and noted that actuarial assumptions and investment performance can materially change that liability over time.
Council members praised the finance team for the report's clarity and historical detail. "This is a really good document," Council member Bob said, and Jeff Hans added that the statistical sections were particularly useable.
Resident Tim Tumi praised staff for the presentation and asked a question about the demographic data in the packet.
The council adopted Resolution 2026‑22 receiving the ACFR by unanimous roll call vote. The vote was recorded as: Council member Baron — yes; Council Member Berter — yes; Mayor Prom Delves — yes; Council Member Germa — yes; Mayor Burn — yes.
What's next: receiving the audit is a required annual step; the council will use the report and the audit's information as staff brings the five‑year forecast and the draft FY 2026–27 budget forward in April and May.
