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PUBLIC PRESENTATION - 5A <br />-AR�QEN HILLS <br />MEMORANDUM <br />DATE: June 8, 2026 <br />TO: Honorable Mayor and City Councilmembers <br />Jessica Jagoe, City Administrator <br />FROM: Joua Yang, Finance Director <br />SUBJECT: 2025 City Financial Statements <br />Budgeted Amount: Actual Amount: Funding Source: <br />N/A N/A N/A <br />Background/Discussion <br />The City's auditor, Aaron Nielsen from LB Carlson, LLP will be present at the June 8, 2026 City <br />Council meeting to give an overview and answer questions. The auditors have issued an <br />unmodified ("clean") opinion on the City's financial statements for the year ended December 31, <br />2025. The total general fund balance at December 31, 2025, was $4,222,107, with $4,051,711 in <br />unassigned balance; the new balance represents an increase in the General Fund balance of <br />$901,344. The ending unassigned General Fund balance makes up approximately 55.8 percent of <br />next year's budgeted expenditures. The City's total net position increased by $3,028,720. The <br />combined ending fund balances for governmental funds was $11,631,473; the combined ending <br />unrestricted net position for the enterprise funds was $6,382,876, and internal service funds were <br />$213,733. <br />We have completed the report in the form prescribed by the Government Finance Officers <br />Association of the United States and Canada (GFOA) for their Certificate of Achievement for <br />Excellence in Financial Reporting. In order to qualify for this, the report has to be published in an <br />easily readable and efficiently organized Annual Comprehensive Financial Report (ACFR) that <br />satisfies both accounting principles generally accepted in the United States of America and <br />applicable legal requirements. <br />As a note, the Auditing Standards are constantly increasing and changing. With these changes, <br />you may see increased findings. This does not mean that the City has done anything wrong <br />compared to previous years, only that the reporting requirements have become much stricter. <br />Similar to prior years, one finding was noted in the report related to Segregation of Duties. This <br />finding was downgraded in 2020 from a material weakness to a significant deficiency due to <br />improvements made in the internal controls over financial reporting. Staff is pleased with the <br />outcome of the audit. <br />Attachments <br />A. PowerPoint presentation <br />B. Management Report <br />C. Annual Comprehensive Financial Report <br />D. Special Purpose Audit Report <br />Page 1 of 1 <br />