For City Council Meeting April 14, 2026
TO: Honorable Mayor and City Council
FROM: Tanya Williams, City Manager
AUTHOR: Scott Williams, Director of Finance
Title
Request City Council, Rialto Housing Authority, Rialto Utility Authority, and Successor Agency to Accept, Review, and File the Fiscal Year 2024-25 Annual Comprehensive Financial Report (ACFR) and Related Documents.
(RECEIVE AND FILE)
Body
RECOMMENDATION
Staff recommends that the City Council, Rialto Housing Authority, Rialto Utility Authority and Successor Agency accept the Fiscal Year 2024-25 audit results and receive and file the Fiscal Year 2024-25 Annual Comprehensive Financial Report and related documents.
The balance sheet financial statement in Figure 1 reflects the City’s total assets, liabilities, deferred inflows of resources and fund balance for general fund, major governmental funds, nonmajor governmental funds, and the total of all funds (following statement) for FY2025.
The statement in Figure 2 provides a snapshot of the City’s financial position as of June 30, 2025, for all governmental funds.
Figure 1
Figure 2
BACKGROUND
City procedures require the completion of an independent audit of the ACFR, which is then formally reviewed by the City Council in a public meeting. The purpose of the City’s ACFR is to provide relevant financial information to the City Council, citizens, current and future employees, grant entities, creditors, bond investors, rating agencies, and other interested parties.
ANALYSIS/DISCUSSION
The annual audit for the year ending June 30, 2025, was completed by The Pun Group in conformity with Generally Accepted Auditing Standards (GAAS). The unmodified, or “clean” opinion given in the Independent Auditor’s Report states that “the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Rialto, California, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.” Attached is the final and issued Annual Comprehensive Financial Report (Attachment 1).
Annual Comprehensive Financial Report
The City’s financial condition remains strong, as evidenced by a notable increase in net position. The overall net position rose to $619.2 million, reflecting an increase of $43.1 million from the previous fiscal year. City finances are categorized into two main activities:
1. Governmental Activities - This includes core services such as Police, Fire, Public Works, Community Development, and general government operations. These are funded primarily through:
o Taxes
o Intergovernmental revenues
o State and federal grants
o Charges for services
For FY 2025:
• Governmental revenue decreased by $13.9 million compared to FY 2024.
• Governmental expenses increased by $19.9 million.
• Governmental transfers to business-type activities were $30.0 million.
• This resulted in a surplus of $3.4 million in governmental activities.
2. Business-Type Activities - These are services provided by the City that are funded by customer fees, such as the City’s water, wastewater and cemetery services.
For FY2025
• Business-Type operating revenue increased by $1.3 million
• Business-Type operating expenses decreased by $438K
• Transfers received from Government Activities were $30.0 million
• This resulted in a surplus of $35.7 million in FY25
All financial statements and data have been audited by the City’s independent auditors, ensuring their accuracy and integrity.
Auditor’s Communication with Those Charged with Governance Letter
The communication letter, Attachment 2, serves to inform the City Council of any significant matters identified during the course of the audit. These matters may include qualitative aspects of the City’s accounting practices, difficulties encountered during the audit process, corrected and uncorrected misstatements, disagreements with management, if any; representations made by management, and any other significant audit findings. This communication supports the City Council’s governance role by providing transparency into the audit process and its results. The following items are presented in this letter:
• The financial statement disclosures are neutral, consistent, and clear.
• No significant unusual transactions have occurred during fiscal year 2024-2025.
• No significant difficulties were experienced by the auditors in dealing with management in the performance and completion of the audit.
• No Material misstatements were identified for correction by management.
• No disagreements arose during the audit in reference to financial accounting, reporting, or auditing.
ENVIRONMENTAL IMPACT
The action is exempt from California Environmental Quality Act (CEQA) pursuant to Section 15378(b) (5) of the CEQA Guidelines because of the preparation of the Audited Annual Financial Reports are governmental administrative activity that will not result in indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
General Plan Guiding Principle 3 - Rialto’s Economic Environment is Healthy and Diverse - specifically, our City Government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens is a good place to do business.
LEGAL REVIEW
The City Attorney's Office has reviewed the staff report.
FINANCIAL IMPACTS
Operating Budget Impact
There is no impact on the Operating Budget.
Capital Improvement Budget Impact
There is no impact on the Capital Improvement Budget.
Licensing
A Business License is not required with the requested action.
ATTACHMENTS
1. Annual Comprehensive Financial Report (Formerly the Comprehensive Annual Financial Report)
2. Communication at Conclusion Letter