AUDIT COMMITTEE FINANCIAL REVIEW
City Council
June 10, 2025
1 2
INTRODUCTION
2008-2013
Recession
• Brian Wilterink
• Caleb Brown
• Jeff Grampp
2014-2019
Post Recession
• Andrew Li
• Chris Horton
• Jack Schroeder
• Jeff Grampp
2020-2023
COVID
• Carolyn Cavecche
• Chris Horton
• Garrett Smith
2024
Present
• Carolyn Cavecche
• Chris Horton
• Garrett Smith
3 Recession Years (2008-2013)
700
710
720
730
740
750
760
$70
$75
$80
$85
$90
$95
$100
2008 2009 2010 2011 2012 2013
Revenues, Expenditures, FTE
FTE Revenues Expenditures
In Millions
4 Recession Years (2008-2013)
Fund Balance
June 30, 2013June 30, 2008Balance as of
$29,255,854$38,285,796General Fund
10,561,35512,859,238Capital Projects
2,277,784389,097Equipment Maintenance
17,154,44719,439,157Equipment Replacement
225,3512,387,255Major Building Improvement
(1,231,493)6,636,941Workers’ Compensation
2,109,6981,927,685Self Insurance Liability
85,219224,671Self Insurance Liability – Dental
3,998,3882,416,795Employee Accrued Liability
779,159323,293Information System
2,029,9835,161,121Computer Replacement
$67,245,745$90,051,049Total Fund Balance
5 Recession Years (2008-2013)
Long Term Liabilities
Total
Claims
Payable
Compensated
Absences
Cert of
Participation
OPEB
Liability
Pension
Liability
Balance
as of
$93,341,397$4,882,178$6,520,368$6,120,000$11,231,057$64,587,794June 30, 2008
$156,296,175$8,688,468$7,981,486$0$16,163,851$123,462,370June 30, 2013
6 Recession Years (2008-2013)
Expenditures, Payroll, Pension Contribution, FTE
20132008
% of Total
Expenses% IncreaseAmount% of Total
ExpensesAmount
-0.2%$89,018,039$89,171,284Expenses
62.8%0.5%$55,939,73662.4%$55,686,962Covered Payroll
15.0%39.5%$13,331,74110.7%$9,555,230Pension Contributions -4.1%722753Full Time Employee
Equivalents
7 Recession Years (2008-2013)
Key Takeaways
The City suffered significant financial setbacks due to the Great Recession and the dissolution of the Redevelopment Agency (RDA)
A total of $19 million in General Fund fund balance was reduced as a result of the Recession and RDA dissolution.
8 Post Recession Years (2014-2019)
620
640
660
680
700
720
740
$80
$85
$90
$95
$100
$105
$110
$115
$120
$125
$130
2014 2015 2016 2017 2018 2019
Revenues, Expenditures, FTE
FTE Revenues Expenditures
In Millions
9 Post Recession Years (2014-2019)
Fund Balance
June 30, 2019June 30, 2013Balance as of
$38,771,518$29,255,854General Fund
29,603,94010,561,355Capital Projects
(4,183,758)2,277,784Equipment Maintenance
17,400,89117,154,447Equipment Replacement
288,880225,351Major Building Improvement
(9,378,545)(1,231,493)Workers’ Compensation
(1,222,261)2,109,698Self Insurance Liability
341,99185,219Self Insurance Liability – Dental
6,935,2453,998,388Employee Accrued Liability
60,425779,159Information System
2,538,4272,029,983Computer Replacement
$81,156,753$67,245,745Total Fund Balance
10 Post Recession Years (2014-2019)
Long Term Liabilities
Total
Claims
Payable
Compensated
AbsencesOPEB Liability
Pension
Liability
Balance
as of
$156,296,175$8,688,468$7,981,486$16,163,851$123,462,370June 30, 2013
$259,101,797$17,928,670$7,910,834$24,891,855$208,370,338June 30, 2019
11 Post Recession Years (2014-2019)
Expenditures, Payroll, Pension Contribution, FTE
20192013
% of Total
Expenses% IncreaseAmount% of Total
ExpensesAmount
29.6%$115,378,298$89,018,039Expenses
54.0%11.1%$62,167,04762.8%$55,939,736Covered Payroll
20.0%76.4%$23,520,03315.0%$13,331,741Pension Contributions -6.7%654722Full Time Employee
Equivalents
12 Post Recession Years (2014-2019)
Key Takeaways
The City was treading water.
Revenues did not rebound enough to offset the financial impact of the Recession. There were deficits in three funds.
FTE decreased during this period.
Long term debt increased by $102.8 million, or 67%, during this period. 13 COVID Years (2020-2023)
630
640
650
660
670
680
690
700
$100
$105
$110
$115
$120
$125
$130
$135
$140
$145
$150
2020 2021 2022 2023
Revenues, Expenditures, FTE
FTE Revenues Revenues w/o One-time Expenditures
In Millions
14 COVID Years (2020-2023)
Fund Balance
June 30, 2023June 30, 2019Balance as of
$25,728,204$38,771,518General Fund
38,359,03229,603,940Capital Projects
(4,449,029)(4,183,758)Equipment Maintenance
25,004,23917,400,891Equipment Replacement
202,129288,880Major Building Improvement
(9,624,987)(9,378,545)Workers’ Compensation
(832,553)(1,222,261)Self Insurance Liability
536,653341,991Self Insurance Liability – Dental
6,761,5746,935,245Employee Accrued Liability
1,047,90160,425Information System
10,457,9152,538,427Computer Replacement
$93,141,078$81,156,753Total Fund Balance
15 COVID Years (2020-2023)
Long Term Liabilities
Total
Lease
Revenue
Bond
Pension
Obligation
Bond
Claims
Payable
Compensated
Absences
OPEB
Liability
Pension
Liability
Balance
as of
$259,101,797$0$0$17,928,670$7,910,834$24,891,855$208,370,338June 30, 2019
$309,398,667$32,797,907$248,970,043$15,780,002$9,595,557$31,950,811($29,695,653)June 30, 2023
16 COVID Years (2020-2023)
Expenditures, Payroll, Pension Contribution, FTE
20232019
% of Total
Expenses% IncreaseAmount% of Total
ExpensesAmount
19.9%$138,337,618$115,378,298Expenses
47.3%5.3%$65,479,77554.0%$62,167,047Covered Payroll
19.8%16.5%$27,389,22220.0%$23,520,033Pension Contributions
6.3%695654Full Time Employee
Equivalents
17 COVID Years (2020-2023)
Key Takeaways
One-time federal dollars, American Rescue Plan Act (ARPA), kept the City afloat. General Fund reserves fall to below immediate post recession level. Long term debt increased by $50.3 million, or 19%, during this period. 18 Present (2024)
600
620
640
660
680
700
720
740
760
$130
$135
$140
$145
$150
2023 2024
Revenues, Expenditures, FTE
FTE Revenues Expenditures
In Millions
19 Present (2024)
Fund Balance
June 30, 2024June 30, 2023Balance as of
$28,457,558$25,728,204General Fund
34,802,55738,359,032Capital Projects
(4,618,612)(4,449,029)Equipment Maintenance
23,678,52225,004,239Equipment Replacement
176,328202,129Major Building Improvement
(7,903,557)(9,624,987)Workers’ Compensation
(691,138)(832,553)Self Insurance Liability
576,014536,653Self Insurance Liability – Dental
7,383,4866,761,574Employee Accrued Liability
1,320,9631,047,901Information System
8,364,10710,457,915Computer Replacement
$91,546,228$93,141,078Total Fund Balance
20 Present (2024)
Long Term Liabilities
Total
Lease
Revenue
Bond
Pension
Obligation
Bond
Claims
Payable
Compensated
Absences
OPEB
Liability
Pension
Liability
Balance
as of
$309,398,667$32,797,907$248,970,043$15,780,002$9,595,557$31,950,811($29,695,653)June 30, 2023
$326,245,145$32,082,059$238,632,971$14,394,262$11,389,987$32,444,297($2,698,431)June 30, 2024
21 Present (2024)
Expenditures, Payroll, Pension Contribution, FTE
20242023
% of Total
Expenses% IncreaseAmount% of Total
ExpensesAmount
4.3%$144,257,908$138,337,618Expenses
48.3%6.3%$69,624,15747.3%$65,479,775Covered Payroll
20.5%8.1%$29,611,52319.8%$27,389,222Pension Contributions & POB
6.2%738695Full Time Employee
Equivalents
22 Present (2024)
Key Takeaways
Three funds continued to run at a deficit.
Total 2024 fund balance is slightly above June 2008 fund balance, yet the annual budget increased by $50 million over that time.
o 2008 General Fund Budget - $94 million
o 2024 General Fund Budget - $144 million
FY 2023-24 long term debt increased by $16.8 million, or 5%, over FY 2022-23. 23 Present (2008-2024)
20242008
% of Total
Expenses% IncreaseAmount
% of Total
ExpensesAmount
52.2%$144,358,213$94,872,591Revenue
61.8%144,257,90889,171,284Expenses
$100,305$5,701,307Operating Surplus
48.3%24.5%$69,624,15762.7%$55,939,736Covered Payroll
20.5%209.9%$29,611,52310.7%$9,555,230Pension Contribution & POB 249.5%$326,245,145$93,341,397Total Long-term Liabilities Pension Cost if Increased at Same Rate of Covered Payroll: $9,555,230 x 24.5% = $11,896,261 Increase in Pension Cost from Changes in Assumptions: $29,611,523 - $11,896,261 = $17,715,262 o Assumptions such as life expectancy and projected investment earnings. 24 Key Takeaways and Recommendations
The City never fully recovered from the Great Recession, and dissolution of the Redevelopment Agency (RDA).
In subsequent years, revenues did not keep up with city needs. Debt Service is becoming an ever increasingly larger percentage of yearly budget; this is not unique to Orange.
Specific goals and target levels for internal service funds need to be clarified and set by City Council.
Balancing service levels with available revenue for a city the size of Orange will become increasingly challenging.