Receive and file the audited Fiscal Year 2023-2024 Annual Comprehensive Financial Report (ACFR) for the City of La Habra.

Each year, Finance staff prepares the City’s Annual Comprehensive Financial Report (ACFR) detailing the financial position and results of operations of the City’s various municipal funds, including the General Fund, along with the City’s associated agencies and authorities. The ACFR is prepared in accordance with Generally Accepted Accounting Principles (GAAP) and guidelines developed by the Governmental Accounting Standards Board (GASB). At the conclusion of the Fiscal Year 2023-2024 independent financial audit, there were no adverse audit findings made with respect to the City's financial statements.

In summary, the City’s major operating funds ended Fiscal Year 2023-2024 in a positive financial condition. The City’s practice of conservative revenue projections combined with closely controlled expenditures helped maintain most fund balances. As discussed in the ACFR (Attachment 1) and shown in the summary tables below, the City’s funds are currently in a stable fiscal position, with sufficient fund balance, fund equity, and cash to cover expected short-term operational needs and provide modest reserves. The following tables summarize the changes to fund balance for all major operating funds, and provide a summary of the General Fund’s budget performance for Fiscal Year 2023-2024.

  In most cases, fund balances or net position for the City’s major funds grew or remained relatively level over the past fiscal year.  The General Fund ended the year with $12,185,678 of revenues over expenditures primarily due to a one-time revenue loss replacement from the American Rescue Plan Act (ARPA) and continued growth in property taxes, as well as from expenditure savings due to a number of vacant budgeted positions. These and other factors allowed for sufficient net General Fund resources to fund a total of $5,659,998 in transfers to the debt service fund for Pension Obligation Bond (POB) payments principal and interest payments, and to replenish various Internal Service funds.

The fund balance of the Capital Projects Fund was reduced by $2,346,028 due to planned capital projects such as East Bishop Drive Storm Drain Improvement, Vista Grande Park Improvement, and improvements in various City facilities.

The net position for the RDA Successor Fund is negative due to the outstanding long-term obligation (tax allocation bond). This obligation will be repaid through the Recognized Obligation Payment Schedule (ROPS) process administered by the State of California Department of Finance.

Table 2 illustrates the General Fund budget performance: Revenue and Expenditures. Total revenues outperformed the budget by $4,517,280 primarily due to certain charges for services coming in higher than expected such as ambulance charges and reimbursement for costs associated with state-mandated programs. Total expenditures were less than the budget by $3,291,400. The Final Budgeted Total Expenditures decreased from $57,219,779 to $54,092,259 to reflect the reclassification of departmental budgeted expenditures to budgeted transfers out to the Debt Service fund to set aside funds for the POB debt service payment.

 
The following graphs illustrate the General Fund information found in Table 2.  Property tax remains the single largest source of General Fund revenues, representing 37.5% of total General Fund revenues, followed by sales and use tax at 22.0% and transaction and use tax at 12.1%.

There is no fiscal impact associated with receiving, approving and filing the City’s ACFR (Attachment 1).