Agenda Item
Orange City Council
Item #: 8.1. 2/10/2026 File #: 25-0700
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
Fiscal Year 2024-2025 General Fund Report.
2. SUMMARY
The Fiscal Year 2024-25 annual audit is near completion, and staff are prepared to report on the unaudited actuals, focusing on the General Fund. The Annual Comprehensive Financial Report is being finalized and tentatively scheduled to be received and filed with the City Council next month.
3. RECOMMENDED ACTION
1. Receive and file the Fiscal Year 2024-25 Year-end Financial Report, focusing on the General Fund.
2. Approve the Purchase Order carryover requests of $14,746, 733 and continuing appropriations of $4,312,319.49 for all funds.
4. FISCAL IMPACT
The appropriations are from unspent funding in Fiscal Year 2024-25.
5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.
6. DISCUSSION AND BACKGROUND
BACKGROUND
Fiscal Year 2025 Summary
The City’sannual audit started in late October and the field work was completed early January 2026.
The Annual Comprehensive Financial Report (ACFR) is being finalized, and staff has prepared the unaudited actuals, focusing on the General Fund. Staff will present the ACFR and audited results to the Audit Committee in February before returning to the City Council for receive and file.
The Fiscal Year 2024-25 (FY25) General Fund Adopted Budget for revenue was $153.7 million and expenditure of $159.7 million. The General Fund closed FY25 with a total revenue of just over $158.7 million and expenditure of over $159.4 million, resulting in a deficit of almost $700,000. The ending fund balance at June 30, 2025 was $28.5 million, of which $26.4 million is catastrophic reserve and just over $169,000 in undesignated fund balance.
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Item #: 8.1. 2/10/2026 File #: 25-0700
Accounting Changes
Internal Service Funds (ISFs) are commonly used as a financial planning tool to smooth large and irregular expenditure over time and to support reporting compliance with actuarial requirements for self-insurance programs. The City historically maintained nine ISF’s to account for equipment maintenance, vehicle and computer replacement, major building improvements, self-insurance, and information systems operations, with the General Fund serving as the primary funding source.
At the close of Fiscal Year 2025, four of the ISF’swere consolidated into the General Fund for two primary reasons. First, these programs incur routine, recurring annual operating expenses rather than intermittent or long-term costs typically suited for ISF. Second, the Equipment Maintenance Fund has experienced an ongoing structural deficit since Fiscal Year 2016.
The consolidation of the Equipment Maintenance, Major Building Improvements, Dental Insurance, and Information Systems Operations funds into the General Fund improves transparency by fully reflecting the City’strue operating costs and eliminating the need for interfund transfers to subsidize ongoing deficits. Details for revenue and expenditure, combining the General Fund and ISFs, will be discussed later in the report.
DISCUSSION
General Fund Revenue
The FY25 General Fund revenue is approximately $158.7 million, including transfers and 1-time revenues. Actuals were slightly more than the FY25 revised budget by almost $120,000 or 0.1%.
While actuals were consistent with what was budgeted, details on the variance comparing the Fiscal Year 2023-24 (FY24) within various categories are summarized in Table 1.
Compared to FY24, the General Fund total revenue, including transfers in, increased by over $12 million or 8%. The three largest contributors to the increases from FY24 were the consolidation of the ISFs, Property Tax, and Fine and Forfeitures.
· Revenues in the Internal Service Revenues category increased by about $11.8 million or over 325% compared to FY24. However, $8.4 million is the result of the consolidation of the ISFs, including funds previously designated for fleet maintenance, IT operations, and major building repairs. The remaining $3.4 million is attributed to the new cost allocation plan. · Property tax revenues increased by approximately $3.1 million, or 5.7%, compared to FY24 actuals. This increase is primarily attributable to the annual 2% CPI adjustment, with the remaining growth resulting from higher property transfer tax activity. · Revenue from Fines and Forfeitures increased by almost $881,000 or 50.4% compared to the FY24 actuals. This is mostly due to increased parking violation enforcement for street sweeping related violations.
Table 1: FY25 Unaudited General Fund - Revenues
FY24 Actual FY25
Revised
Budget
FY25 Actual Changes
from FY24
Property Tax $54,579,940 $55,710,900 $57,658,841 $3,078,901 Sales Tax 50,610,366 51,617,688 49,355,015 -1,255,351 Transient Occupancy Tax
(TOT)
6,092,658 5,850,000 6,150,976 58,318
Franchise 2,981,298 3,220,194 2,753,299 -227,999
License & Permit 7,206,692 7,106,173 6,396,387 -810,305 Fine & Forfeiture 1,747,538 1,655,800 2,628,786 881,248 Use of Money & Property 4,794,620 3,076,751 3,815,519 -979,101 Revenue from Other
Agencies
3,570,197 2,051,915 3,002,532 -567,665
Fee for Services 6,851,807 6,061,669 6,602,124 -249,683 Miscellaneous Revenue 1,958,560 3,222,295 1,870,906 -87,654 Internal Service Charges 3,635,631 16,015,328 15,474,265 11,838,634 Total Operating Revenues
144,029,307
155,588,713
155,708,650
8,375,692
Transfers in 2,629,049 3,000,000 3,000,000 370,951
Total Revenues $146,658,469 $158,588,713 $158,708,650 12,050,181 City of Orange Printed on 2/5/2026Page 2 of 5
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Item #: 8.1. 2/10/2026 File #: 25-0700
FY24 Actual FY25
Revised
Budget
FY25 Actual Changes
from FY24
Property Tax $54,579,940 $55,710,900 $57,658,841 $3,078,901 Sales Tax 50,610,366 51,617,688 49,355,015 -1,255,351 Transient Occupancy Tax
(TOT)
6,092,658 5,850,000 6,150,976 58,318
Franchise 2,981,298 3,220,194 2,753,299 -227,999
License & Permit 7,206,692 7,106,173 6,396,387 -810,305 Fine & Forfeiture 1,747,538 1,655,800 2,628,786 881,248 Use of Money & Property 4,794,620 3,076,751 3,815,519 -979,101 Revenue from Other
Agencies
3,570,197 2,051,915 3,002,532 -567,665
Fee for Services 6,851,807 6,061,669 6,602,124 -249,683 Miscellaneous Revenue 1,958,560 3,222,295 1,870,906 -87,654 Internal Service Charges 3,635,631 16,015,328 15,474,265 11,838,634 Total Operating Revenues
144,029,307
155,588,713
155,708,650
8,375,692
Transfers in 2,629,049 3,000,000 3,000,000 370,951
Total Revenues $146,658,469 $158,588,713 $158,708,650 12,050,181 General Fund Expenditure
The FY25 General Fund expenditure is $159.4 million, leaving an unspent budget of $9.7 million. The two largest unspent budget categories are in salaries and benefits and miscellaneous expenditure for $5.9 million and $1.6 million, respectively. However, it is important to note that some of the unspent budget has been committed and/or restricted, and will need to be carried over to Fiscal Year 2025-26 (FY26).
When comparing the General Fund expenditure to FY24, total expenditure, including transfers, increased by approximately $15.5 million or 10.8%. The increase is mostly attributed to the consolidation of ISFs contributing to more than $10.6 million or 69% of the increase compared to the previous year. Salaries and benefits increased by about $3 million and accounted for 19% of the increase. The Details on the variance compared the FY24 are summarized in Table 2.
Table 2: FY25 Unaudited General Fund - Expenditure
FY24 Actual FY 25 Revised
Budget
FY 25 Actual Changes
from FY24
Salaries & Benefits $100,385,131 $110,288,544 $104,365,095 $3,979,964 Contractual Services 15,545,853 6,002,855 6,141,942 -9,403,911 Materials & Supplies 2,227,988 6,296,969 4,851,803 2,623,815 Repair & Maintenance - 8,087,496 6,865,145 6,865,145
Utility Charges - 3,044,524 3,321,195 3,321,195
Capital Outlay 135,064 1,306,375 1,006,636 871,572
Misc. Expenses 282,313 2,532,872 961,385 679,072
Debt Services 1,711,460 17,519,111 17,377,333 15,665,873 Internal Service Costs 23,636,031 14,029,588 14,029,588 -9,606,443 Total Operating
Expenses
143,923,840 169,108,334 159,407,802 15,483,962
Transfers Out - - 487,680 487,680
Total Expenses 143,923,840 169,108,334 159,407,802 15,483,962 City of Orange Printed on 2/5/2026Page 3 of 5
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Item #: 8.1. 2/10/2026 File #: 25-0700
FY24 Actual FY 25 Revised
Budget
FY 25 Actual Changes
from FY24
Salaries & Benefits $100,385,131 $110,288,544 $104,365,095 $3,979,964 Contractual Services 15,545,853 6,002,855 6,141,942 -9,403,911 Materials & Supplies 2,227,988 6,296,969 4,851,803 2,623,815 Repair & Maintenance - 8,087,496 6,865,145 6,865,145
Utility Charges - 3,044,524 3,321,195 3,321,195
Capital Outlay 135,064 1,306,375 1,006,636 871,572
Misc. Expenses 282,313 2,532,872 961,385 679,072
Debt Services 1,711,460 17,519,111 17,377,333 15,665,873 Internal Service Costs 23,636,031 14,029,588 14,029,588 -9,606,443 Total Operating
Expenses
143,923,840 169,108,334 159,407,802 15,483,962
Transfers Out - - 487,680 487,680
Total Expenses 143,923,840 169,108,334 159,407,802 15,483,962 General Fund Carryover
Staff are requesting $2,003,807 to be carried over to FY25 for ongoing projects that have been committed and for grants and/or donations that were received for a specific purpose. At the end of FY25, staff are requesting $787,103 or 8% of the unspent General Fund balance be carried over to FY25 for ongoing projects and commitments (attached). Staff are also requesting a continuing appropriation of $1.2 million for grants and donations that were received in FY25 but have not been spent (attached).
Other Funds Carryover
In addition to the General Fund carryovers, year-end closing for FY25 identified a total of $17.1 million in continuing appropriations and purchase order carryovers, as detailed in the attached schedules. This amount reflects purchase orders and appropriations that remained open at fiscal year-end and determined to be justified obligations at fiscal year end. While these balances are identified for carryover purposes, not all amounts will ultimately be carried forward into the subsequent fiscal year.
General Fund - Fund Balance
At the end of FY25, the General Fund had an operating deficit of approximately $700,000, including transfers. Total revenue of $158.7 million and expenditure of $159.4 million. However, it is important to note that the deficit was not a direct result of the General Fund’sunderperformance, but rather from the consolidation of four ISFs that the General Fund supports almost exclusively. After setting aside for catastrophic reserve and carryover, the General Fund closed FY25 with an undesignated fund balance $169,174, a decrease of $1.4 million from FY24.
Table 3: FY25 Unaudited General Fund - Fund Balance
FY24 Actual FY25 Actual Variance to
FY24
Beginning Fund Balance $24,228,416 $29,252,874 $5,024,458 Operating Revenues 144,029,307 155,708,650 11,679,343
Transfers in 2,629,162 3,000,000 370,838
Total Revenues 146,658,469 158,705,650 12,050,181
Operating Expenditures 143,923,841 158,920,122 14,996,281 Transfers out - 487,680 487,680
Total Expenditures 143,923,841 159,407,802 15,483,961
Surplus/(Deficit) 2,734,628 -699,152 -3,433,780
Ending Fund Balance 26,963,044 28,553,772 1,590,678
Catastrophic Reserve 23,891,358 26,380,740 2,489,383
Committed/Carryover 1,477,565 2,003,807 526,242
Undesignated Fund Balance $1,594,121 169,174 -$1,424,947 City of Orange Printed on 2/5/2026Page 4 of 5
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Item #: 8.1. 2/10/2026 File #: 25-0700
FY24 Actual FY25 Actual Variance to
FY24
Beginning Fund Balance $24,228,416 $29,252,874 $5,024,458 Operating Revenues 144,029,307 155,708,650 11,679,343
Transfers in 2,629,162 3,000,000 370,838
Total Revenues 146,658,469 158,705,650 12,050,181
Operating Expenditures 143,923,841 158,920,122 14,996,281 Transfers out - 487,680 487,680
Total Expenditures 143,923,841 159,407,802 15,483,961
Surplus/(Deficit) 2,734,628 -699,152 -3,433,780
Ending Fund Balance 26,963,044 28,553,772 1,590,678
Catastrophic Reserve 23,891,358 26,380,740 2,489,383
Committed/Carryover 1,477,565 2,003,807 526,242
Undesignated Fund Balance $1,594,121 169,174 -$1,424,947 In closing, the City’s unaudited General Fund continued to display slow revenue growth and controlled expenditures through position vacancies, with year-over-year changes largely driven by the strategic consolidation of ISF’sthat had previously been fully supported by the General Fund.
While the consolidation resulted in a modest operating deficit and an undesignated fund balance at year-end, this outcome improves long-term transparency and more accurately reflects the City’strue operating costs within the General Fund.
7. ATTACHMENTS
· Purchase Order Carryover Listing
· Continuing Appropriation Listing
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