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9 DATE: January 20, 2026
TO: Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: Nate Cruz, Finance Director
DEPARTMENT: Finance
SUBJECT: RATIFYING AND APPROVING THE AUDITED FISCAL YEAR 2024-25 ANNUAL COMPREHENSIVE FINANCIAL REPORT
(ACFR), OTHER AUDIT COMPLIANCE REPORTS, AND THE
FISCAL YEAR 2024-25 WARRANT REGISTERS IN THE FORM
OF THAT ACFR
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors adopt the attached resolutions ratifying and approving the Fiscal Year 2024-25 Annual Comprehensive Financial Report (ACFR), other audit compliance reports, and the Warrant Register in the Form of that ACFR in accordance with California Government Code Section 37208(c).
EXECUTIVE SUMMARY
The FY 2024-25 ACFR, along with the independent auditor’s clean opinion, confirm the results of another strong fiscal year for the City. Ending General Fund balance on June 30, 2025 was $75.6 million, of which $71.1 million was unrestricted, which represents 109% of the next year’s budgeted operating expenditures.
Year over year General Fund revenues increased by $5.5 million, from $64.3 to $69.8.
This increase was mainly due to the new business license tax structure ($2.1 million) and increased property tax receipts ($1.85 million). Permit revenues also increased
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9 due to the expansion of a research facility in the City. These increases were offset by decreases in transient occupancy tax, interest earnings, and charges for services.
General Fund expenditures totaled $56.7 million with Net Transfers In of $50,000 and Net Transfers Out of $5.8 million. Transfers-In included $50,000 from the Construction and Demolition Recycling Fund representing forfeiture of deposits. Transfers Out included $5.75 million to the City’s Capital Improvement Projects Fund and $34,111 to the Housing Successor Fund for 20% of the loan repayment from the Successor Agency.
BACKGROUND/ANALYSIS
Financial Condition
In addition to the ACFR, the auditors also prepared the following reports as part of their audit engagement with the City/District:
Report on compliance with the Agreement for Distribution of San Mateo County Measure A Funds for Local Transportation Purposes for the year ended June 30, 2025
Report on Compliance with the Agreement for Distribution of San Mateo County Measure W Funds for Local Transportation Purposes for the year ended June 30, 2025
Report on Agreed Upon Procedures Applied to Appropriation Limit Schedule for the year ending June 30, 2026
Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards for the year ended June 30, 2025
Auditor’s Communication with Those Charged with Governance for the year ended June 30, 2025
These reports are all available for public viewing on the City's website at:
https://www.fostercity.org/finance/page/budget-and-financial-reports.
The City/District was awarded its 32nd consecutive Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for its FY 2023-24 ACFR. Since the Certificate of Achievement is awarded annually, City staff will submit the FY 2024-25 ACFR for certificate consideration.
As part of the City's annual financial reports preparation process, the Audit Committee reviewed the draft ACFR and each of the above draft reports.
Warrant of Demands / CA Government Code Section 37208(c)
The California Government Code requires that all warrant of demands either be approved at the time of issuance by City Council resolution, or by “ratification and approval in the form of an audited comprehensive annual financial report.” The City 1 2
9 Council adopted Minute Order No. 1041 in 2007, determining that it was in the best interest of the City/District’s financial operations to accept the latter form of approval through the ratification of the annual ACFR. The attached resolutions, upon approval by the City Council and EMID Board of Directors, will satisfy the requirements of California Government Code Section 37208(c).
CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable
FISCAL IMPACT
There is no fiscal impact associated with the City Council/EMID Board of Directors’ adoption of the attached resolutions approving the Fiscal Year 2024-25 ACFR and the expenditures in the ACFR in accordance with California Government Code Section 37208(c).
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Innovation and Sustainability
ATTACHMENTS:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution