Staff says auditor correction to 'note 12' will restore positive balances in several funds

City finance staff and the city's ACFAR presenter told the council that a line‑item error in the city's audited footnote ("note 12") had inflated reported capital commitments and made some fund cash‑flow previews look negative.

Katrina Owens, the presenter, showed examples for the fleet, water/sewer and drainage funds and said the proposed FY26–27 budget data themselves do not change — "Your proposed budget is the exact same data that was presented. So when we update note 12, you're gonna have all positive data," she said. Staff said they had sent corrected supporting line items to the audit firm (CLA) and that CLA was performing a QA review.

Council members pressed for details about the $288 million in prior commitments and the mechanics of the change; staff said the correction reduces that commitments rollup to about $207 million and that no public money is missing. "No money is missing. No money disappeared," the city manager said. Staff proposed to show updated cash‑flow sheets once CLA completes its amendment.

Why it matters: the note‑12 correction changes how committed CIP dollars are netted from cash and investments to produce the "available funds" number council uses when deciding one‑time CIP submittals. Staff recommended that the council base policy decisions on the corrected cash‑flow once CLA finalizes the amendment.

Next steps: staff will circulate the amended note 12 and revised cash‑flow forecast to the council and reissue the available‑funds worksheet once the auditor's QA is complete.