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City auditor presents clean opinion; council acknowledges annual financial report
Summary
Brooks Watson and Company presented the city's annual comprehensive financial report, reporting an unmodified (clean) audit opinion and improved fund balances; council acknowledged receipt of the audit and asked questions about reserves and disaster planning.
The City of Orange received a clean audit for the fiscal year ended Sept. 30, 2025, the city's external auditor told the council on April 28. Mike Brooks, a partner with Brooks Watson and Company PLLC, said the auditor issued an "unmodified audit opinion," the highest-level assurance that the financial statements are free of material misstatement.
Brooks summarized key financial highlights, saying property tax revenue totaled about $9.6 million (an increase of roughly $691,000), sales taxes were about $4.9 million and payments in lieu of taxes declined by roughly $840,000. The city recorded a positive budget variance of about $3.3 million, producing a year-end general fund balance of roughly $22.6 million, including an unassigned fund balance near $22.2 million—about 86% of the annual operating budget or roughly 10 months of operating expenses.
"We were able to issue a clean unmodified audit opinion on the city's financials," Brooks said, noting the audit included a routine audit adjustment and implementation of GASB Statement 101 related to compensated absences.
Council members asked how Orange's reserves compared with peer cities and whether the city's higher balance reflected coastal disaster planning. Brooks replied the city ranked in the upper quartile of cities the firm audits and agreed that coastal communities typically maintain larger reserves because of higher disaster risk.
Finance staff reported the city remained in compliance with the Public Funds Investment Act and provided a quarterly investment update to council. After questions from council, members moved and approved a motion to acknowledge receipt of the annual comprehensive financial report as presented.
The auditor offered to return to review any section of the report in greater detail; council members accepted the offer and thanked staff for preparing the comprehensive report.
