TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Maria Öberg
SUBJECT: See Below DATE: November 17, 2025
Approved
Date:
11/13/25
COUNCIL DISTRICT: Citywide
SUBJECT: Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2025
RECOMMENDATION
Accept the Fiscal Year 2024-2025 Annual Comprehensive Financial Report for the City of San José.
SUMMARY AND OUTCOME
The Annual Comprehensive Financial Report (ACFR) serves as a comprehensive financial document that provides an in-depth account of a government entity's financial performance, position, and cash flows over a specific fiscal year. It aims to offer transparency, accountability, and insight into the City of San José’s (City) financial health, enabling stakeholders, including City Council, residents of San José, creditors, investors, and other interested parties, to make informed decisions.
The primary outcome of the ACFR is the creation of a detailed and transparent financial report that accurately reflects the City’s financial status. It includes audited financial statements, management’s discussion and analysis, and other relevant financial information. The ACFR facilitates effective communication with stakeholders, demonstrates compliance with accounting standards, and serves as a primary financial document used to maintain compliance with continuing disclosure requirements for the City’s outstanding bonds.
COUNCIL AGENDA: 12/9/25
FILE: 25-1287
ITEM: 3.3
HONORABLE MAYOR AND CITY COUNCIL
November 17, 2025
Subject: Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2025
BACKGROUND
The City Charter requires the preparation of annual financial statements that are audited by an independent auditor and then submitted to the City Council. The independent auditor is retained by the City Council and works under the direction of the City Auditor. Also, annual audited financial statements are required by continuing disclosure agreements for the outstanding bonds issued by the City, the City of San José Financing Authority, and the Successor Agency to the Redevelopment Agency.
In some cases, the continuing disclosure agreements specify December 31 of each year as the deadline for providing audited financial statements to investors via the Electronic Municipal Market Access website of the Municipal Securities Rulemaking Board.
In February 2018, the City contracted with Macias Gini & O’Connell, LLP (Auditors), a firm of Certified Public Accountants licensed to practice in the State of California, to perform the City’s annual independent audit for the fiscal years ended June 30, 2018, June 30, 2019, and June 30, 2020, with three one-year options to extend audit services through fiscal year ending June 30, 2023. In February 2024, the City secured a new five-year contract extending audit services up to June 30, 2028, with the possibility of three additional one-year option periods, allowing services to continue through the fiscal year ending June 30, 2031.
The ACFR is prepared by the Accounting Division of the Finance Department and represents the culmination of a concerted team effort by Finance Department staff, along with significant involvement of other City departments, the City Attorney’s Office, and the City Auditor’s Office.
ANALYSIS
The Fiscal Year 2024-2025 ACFR provides a detailed description of the City’s financial activities for the period of July 1, 2024, through June 30, 2025, and is organized into the following sections:
• Introductory Section intended to familiarize the reader with the organizational structure of the City, the scope of City services, and the specifics of the City’s legal operating environment;
• Financial Section which contains the City’s audited financial statements including the independent auditor’s report; and
• Statistical Section which contains up to 10 years of statistical data on the City’s financial trends, revenue, debt capacity, operating information, and demographic and economic information.
HONORABLE MAYOR AND CITY COUNCIL
November 17, 2025
Subject: Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2025
The Fiscal Year 2024-2025 ACFR provides a comprehensive review of the City’s financial operations and can be viewed at the link below. Additionally, a copy is attached to this memorandum.
https://www.sanjoseca.gov/your-government/appointees/city-auditor/external-financial- audits
For Fiscal Year 2024- 2025, the Auditors expressed an opinion that the City’s financial statements are fairly stated in accordance with accounting principles generally accepted in the United States. This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion. The independent Auditor's report is included in the Financial Section of the ACFR.
EVALUATION AND FOLLOW-UP
This memorandum will not require any follow-up from staff.
COORDINATION
The preparation of the ACFR is an extensive coordinated effort across every department in the City. Pursuant to the Disclosure Policies and Procedures, 1 a
substantially final draft of the ACFR was distributed to the Core Disclosure Working Group
2 for review and comment, with comments incorporated into the final ACFR.
The Finance Department has coordinated this memorandum with the City Attorney’s Office and City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum and the attached ACFR will be posted on the City’s Council Agenda website for the December 9, 2025 City Council meeting.
1 Disclosure Policies and Procedures, effective June 30, 2020, revised March 30, 2023 - https://www.sanjoseca.gov/home/showpublisheddocument/61169/637292207533100000 2 Members of the Core Disclosure Working Group include the City Manager, City Attorney, Budget Director, Finance Director and other members as deemed appropriate, which included Directors of the Airport, Energy, Environmental Services, Human Resources/Employee Relations, Public Works, Retirement Services, and Transportation Departments; along with key members of the City Attorney’s Office, Deputy Directors of Finance (Accounting, and Debt and Treasury Management), and Assistant to the City Manager of the City Manager’s Office of Employee Relations.
HONORABLE MAYOR AND CITY COUNCIL
November 17, 2025
Subject: Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2025
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-009, Staff Reports, Assessments, Annual Reports, and Informational Memos that involve no approvals of any City action.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
MARIA ÖBERG
Director of Finance
For questions, please contact Victor Lo, Deputy Director, Accounting Division, Finance Department, at (408) 535- 8310 or [email protected].
ATTACHMENT: FY 2024-2025 Annual Comprehensive Financial Report