That the City Council, Agency, and Authorities receive and file the audited Fiscal Year 2024-2025 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 2024-2025 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 2024-2025 in a positive financial condition. The City’s practice of conservative revenue projections combined with closely controlled expenditures helped maintain or grow 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 2024-2025.

In most cases, fund balances or net positions for the City’s major funds grew or remained level over the past fiscal year. 

The General Fund total fund balance increased by $2,327,468 in FY 202425 compared to the prior fiscal year. This net increase is primarily attributable to growth in both unassigned and restricted fund balance categories, partially offset by a decrease in assigned and non-spendable balances. Unassigned fund balance increased by $1,462,181, reflecting higher-than-anticipated revenues relative to expenditures. Restricted fund balance increased by $1,539,780, primarily due to deposits and investment activity within the City’s Section 115 trust established with PARS for pension stabilization purposes. These resources are legally restricted and intended to offset current or future pension liabilities. Overall fund increases were partially offset by a decrease of $674,493 in assigned fund balance, which reflects the planned use of previously set-aside resources. Assigned fund balance represents amounts set aside by management for specific intended purposes, such as facility improvements, land acquisition, and special events, and may fluctuate based on the timing of project expenditures and resource allocations. Overall, the growth in total fund balance indicates continued fiscal stability and strengthens the City’s financial position, providing additional flexibility to address future operational needs and long-term pension obligations.

The fund balance of the Capital Projects Fund was reduced by $815,371 due to capital spending for various public works projects such as the Vin Scully Centennial Park, the Las Reinas Woman’s Club Park, and City facilities improvements in various other locations.

The net position for the RDA Successor Fund is negative due to the outstanding long-term obligation (tax allocation bond). This obligation is being 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 $4,412,628 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. The Final Budgeted Total Revenues increased from $61,139,020 to $62,127,266 to account for Measure V Transaction and Use Tax that took effect in April 2025. Total expenditures were less than the budget by $1,582,965, primarily due to vacant budgeted staff positions. The Final Budgeted Total Expenditures decreased from $62,123,965 to $58,650,747 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.

As shown in the Chart #2 below, Public Safety (Police and Fire/Ambulance) represents the largest budgeted expense for the General Fund, accounting for over 68 percent of General Fund expenditures.