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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: FY 2024-25 Annual Comprehensive Financial Report
1. Motion to accept City of Glendale's Annual Comprehensive Financial Report, Report on Internal Control over Financial Reporting, and Communication with Those Charged with Governance for the fiscal year ended June 30, 2025
COUNCIL ACTION
Item Type: Action Item
Approved for December 9, 2025 calendar
EXECUTIVE SUMMARY
The Annual Comprehensive Financial Report, the Report on Internal Control over Financial Reporting, and the Communication with Those Charged with Governance for the fiscal year ended June 30, 2025, are presented. The City received an unmodified opinion from the external auditors, which means the City’s financial statements are presented fairly, in all material respects, in accordance with generally accepted accounting principles.
RECOMMENDATION
That the Council accept the City’s Annual Comprehensive Financial Report, Report on Internal Control over Financial Reporting, and Communication with Those Charged with Governance for the fiscal year ended June 30, 2025
ANALYSIS
The Annual Comprehensive Financial Report (ACFR) is the City’s audited financial statements. Finance staff prepares and compiles the ACFR which is then audited by the City’s independent certified public accountant, CliftonLarsonAllen LLP. The Auditors’ fieldwork commenced in June 2025 and concluded in November 2025 with the issuance of the Independent Auditors’ Report on November 19, 2025.
The ACFR is a set of government financial statements comprising the financial report of the City at the end of the fiscal year. The ACFR complies with the accounting requirements promulgated by the Governmental Accounting Standards Board (GASB), Generally Accepted Accounting Principles (GAAP), and applicable legal requirements.
These standards, principles and regulations provide the framework and rules which the 9b2
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City follows to produce this financial report. The ACFR is audited by an external certified public accountant pursuant to Article VI, Section 16 of the City’s Charter. The ACFR is used by numerous government agencies, bond rating institutions, and financial information repositories in order to comply with various reporting, financial, and bond disclosure requirements. In addition, it is also a public document for the community members of the City to review and understand the City’s financial operations.
The results of the annual audit are formally published in the ACFR. For the fiscal year ended June 30, 2025, the City of Glendale received an Unmodified Opinion. This is the “cleanest” or highest opinion an entity can receive, which means that the City’s financial statements are presented fairly, in all material respects, in accordance with GAAP.
The June 30, 2025, ACFR will be submitted to the Government Finance Officers’ Association (GFOA) for an annual national achievement award. To qualify for this award, the City must publish an easily readable and effectively organized report and must conform to the standards established by the award program. The City has received this national achievement award for 30 consecutive years and staff believe that this years’ ACFR will earn this designation again.
In accordance with the GFOA standards, the ACFR is organized into the following three main sections:
1.Introductory Section – This section includes the Transmittal Letter from the Director of Finance, a listing of the Administration and Executive Management Team members, and the City’s Organization Chart.
2.Financial Section – This section is the main section of the ACFR and includes the Independent Auditors’ Report, Management’s Discussion and Analysis (MD&A), the City’s government-wide statements, governmental, proprietary and fiduciary fund-level statements, notes to the basic financial statements, and the required supplementary information (RSI). The remainder of the Financial Section presents the financial statement information for non-major governmental and enterprise funds, all internal service funds and fiduciary custodial funds.
3.Statistical Section – Located towards the end of the ACFR, this section provides readers with a variety of information. While the City staff are confident in the accuracy of the information presented in this section, this section is unaudited in accordance with GFOA standards and the most common practices in the governmental accounting industry.
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More detailed sectional information follows.
Management’s Discussion and Analysis (MD&A)
The MD&A is located immediately following the Independent Auditors’ Report and serves as an executive summary. GAAP requires that management provide this narrative to accompany the basic financial statements. The Letter of Transmittal which precedes the MD&A in the Introductory section, is designed to complement the MD&A and should be read in conjunction with it.
Government-wide statements
The overall financial picture of the City is presented, in accordance with the Governmental Accounting Standards Board pronouncements, on a government-wide basis. Exhibits A-1 and A-2 in the ACFR are designed to provide readers with a broad overview of the City’s finances similar to a private-sector business consolidated financial statements. These statements show the end balances and overall results of operations for all City funds. These two government-wide financial statements distinguish functions of the City that are principally supported by taxes, fees, and intergovernmental revenues (governmental activities) from those primarily supported by a user rate charges (business-type activities). The two government-wide statements presented are as follows:
The Statement of Net Position presents information on all of the City’s assets and deferred outflows of resources as well as liabilities and deferred inflows of resources, with the difference reported as net position. This is similar to a Balance Sheet in private sector accounting.
Exhibit A-1 Statement of Net Position
(in Millions)
Government Business Total
Assets $ 1,928 $ 1,598 $ 3,526
Deferred outflows of resources 112 26 138
Liabilities (866) (805) (1,671)
Deferred inflows of resources (40) (8) (48)
Net position June 30, 2025 $ 1,134 $ 811 $ 1,945
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The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. Similar to an Income Statement in private sector accounting, all changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods.
Exhibit A-2 Statement of Activities
(in Millions)
Government Business Total
Revenues $ 513 $ 482 $ 995
Expenses 478 413 891
Increase in net position 35 69 104
Net Position July 1, 2024 1,107 748 1,855
Change in Accounting
Principle (8) (6) (14)
Net position June 30, 2025 $ 1,134 $ 811 $ 1,945
Fund-Level Statements and Notes
Following the government-wide statements are the fund-level financial statements and notes. The three main fund types are governmental funds, proprietary funds and fiduciary funds. Governmental funds include General Fund, Special Revenue Funds, Debt Service Funds and Capital Project Funds. Proprietary funds include Enterprise Funds and Internal Service Funds. Fiduciary funds include Private-purpose Trust Funds and Custodial Funds.
The Notes to the Basic Financial Statements section provides a significant amount of disclosure requirements that supplement the financial data presented in the financial statements. Some of the note disclosures include detailed information about cash and investments, capital assets, long-term debt and liabilities, the City’s pension plan and Other Post Employment Benefits Than Pensions (OPEB).
Statistical Section
The last section of the Report, which is unaudited, contains statistical data about the City. There are 20 schedules in total and most of them have 10 years of history. These schedules are broken down in five distinct categories: (1) Financial trends, (2) Revenue capacity, (3) Debt capacity, (4) Demographic and Economic information and (5) Operation information.
Net Pension Liability
A summary of the net pension liability for FY 2023-24 and FY 2024-25 by plans is shown below. Compared to the FY 2023-24 net pension liability, the FY 2024-25 amount decreased by $46 million, from $696 million to $650 million. The decrease was 9b5
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mainly due to a positive 9.3% investment return in FY 2023-24, which is higher than the expected discount rate of 6.8%.
Net Pension Liability
(In Millions)
FY 2024-25 FY 2023-24
Measurement date: June 30, 2024 June 30, 2023
Miscellaneous Plan:
Total pension liability $ 1,410 $ 1,367
Total pension asset $ 1,099 $ 1,025
Net pension liability $ 311 $ 342
Funding % 78% 75%
Safety Plan:
Total pension liability $ 1,104 $ 1,064
Total pension asset $ 765 $ 710
Net pension liability $ 339 $ 354
Funding % 69% 67%
Total Misc. and Safety:
Total pension liability $ 2,514 $ 2,431
Total pension asset $ 1,864 $ 1,735
Net pension liability $ 650 $ 696
Funding % 74% 71%
Report on Internal Control over Financial Reporting
The Report on Internal Control over Financial Reporting summarizes the auditors’ comments and recommendations regarding opportunities to strengthen internal controls and operating efficiency. For the fiscal year ended June 30, 2025, the auditors did not identify any significant deficiency or material weakness.
Communication with Those Charged with Governance
The Communication with Those Charged with Governance is for the auditors to communicate the significant audit findings or issues, and other information, that are not communicated in the audited financial statements. For the fiscal year ended June 30, 2025, the auditors concluded the following major points: (1) all significant transactions have been recognized in the financial statements in the proper period; (2) management’s estimates impacting the financial statements are disclosed; (3) the financial statement disclosures are neutral, consistent and clear; (4) the auditors encountered no significant difficulties in dealing with management in performing and 9b6
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completing the audit; (5) no misstatements have been identified. (6) the auditors had no disagreement with the management.
STAKEHOLDERS/OUTREACH
As a part of the City’s long standing practice, the accepted Annual Comprehensive Financial Report will be published on the City’s website for public access.
FISCAL IMPACT
There is no fiscal impact associated with this report.
ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is considered a ministerial activity and therefore, not subject to CEQA review.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
1. Do not accept City of Glendale's Annual Comprehensive Financial Report, Report on Internal Control over Financial Reporting, and Communication with Those Charged with Governance for the fiscal year ended June 30, 2025.
2. Consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Jack Liang, Director of Finance
Prepared by:
Shu-Jun Li, Assistant Director of Finance
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1) City of Glendale Annual Comprehensive Financial Report 2) Report on Internal Control over Financial Reporting
3)Communication with Those Charged with Governance