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Auditors give Eagle a clean opinion but warn of shrinking general‑fund reserves
Summary
Independent auditors delivered an unmodified opinion on Eagle's FY2025 financial statements and reported no internal control findings, but warned the city's general‑fund reserve fell by about $2.84 million to roughly $5.12 million (approximately a 3.2‑month reserve) and recommended rebuilding reserves.
Kurt Fokie of Quest CPAs presented the City of Eagle's audited financial statements for the year ended Sept. 30, 2025, telling the council the auditors issued an unmodified (clean) opinion and found no reportable internal control deficiencies. "There are no findings here this year," he said.
Fokie highlighted a $2,836,506 decrease in the general fund, which he said was driven largely by transfers from the general fund into capital projects: "Essentially, we just took money out of one pocket, put it in another for capital projects." He said the resulting general‑fund reserve of about $5,118,266 represents roughly a 3.2‑month operating reserve — well below the six months many governments target — and called that "a little bit scary" from a cash‑flow perspective.
His presentation reviewed every major fund. The park fund had a positive year with an ending reserve around $1.7 million, the capital projects funds showed a net increase of $627,603 and carryover of $5,178,246, and the water enterprise fund showed a roughly doubled asset base after developer contributions (from about $20 million to $40 million), producing higher depreciation expense but a positive net operating position of about $1,179,603. "The water fund is doing fine today," Fokie said, while cautioning that maintenance and depreciation on the expanded asset base will be cost drivers going forward.
Council members asked clarifying questions about enterprise‑fund restrictions and whether money can be moved between enterprise and governmental funds. Fokie explained transfers are allowable only when there is a legal or logical nexus — for example, a governmental employee who does work for the water fund — and cannot be done arbitrarily.
Action and next steps: Council accepted the presentation; staff and council discussed focusing on rebuilding the general fund reserve and factoring the auditor's warnings into budget planning for the next fiscal year.
