City’s unemployment rate remains low, housing market strong while General Fund increased by 1.7%
The City of Folsom has released of its Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2024. The report, now available for public review, provides a detailed overview of the city’s financial position, including audited financial statements, revenue and expenditure data, and long-term financial planning, according to the report.
An independent audit conducted by Badawi & Associates Certified Public Accountants confirmed that the city’s financial statements are accurate and comply with generally accepted accounting principles, according to the report. The audit resulted in an unmodified opinion, the highest level of assurance possible, affirming that the city’s financial statements fairly present its financial position.
The ACFR follows the Governmental Accounting Standards Board financial reporting requirements and aligns with the guidelines set forth by the Government Finance Officers Association (GFOA). Each year, Folsom submits its ACFR for consideration in the GFOA’s Certificate of Achievement for Excellence in Financial Reporting program, an award it previously earned for the fiscal year 2022-23. City officials expect to receive the distinction again this year, according to the report.
Financial health and performance
The city’s total assets and deferred outflows exceeded liabilities and deferred inflows, resulting in a net position of $655.9 million—an 11% increase over the previous year, according to the report. This growth was driven by $17.2 million in capital contributions, $20.1 million in capital asset additions, and new bond issuances amounting to $10.7 million.
Revenue sources continue to reflect a stable financial environment, with General Fund revenues increasing by $7.9 million, according to the report. Property taxes saw a 10.3% rise due to higher home values and new development in the Folsom Plan Area, while sales tax revenue dipped slightly by 1.7%. General Fund expenditures rose by $8.1 million, with public safety and infrastructure maintenance accounting for a significant portion of the spending.
The city maintains a strong financial reserve, with an unassigned General Fund balance of $24.9 million, equating to 21.6% of expenditures, according to the report. This surplus will be transferred to the city’s Capital Fund in accordance with City Council policy.
Local and state economic impact
Folsom’s economy continues to expand at a moderate pace, according to the report. As of June 30, 2024, the city’s unemployment rate stood at 3.8%, significantly lower than the state average of 5.2%. The local real estate market remained robust, with an average home value of $832,000, reflecting a 4% increase over the previous year. However, home sales volume is projected to remain stable due to higher mortgage rates.
At the state level, economic uncertainty and inflation remain key concerns, according to the report. Folsom’s financial planning strategy accounts for these challenges through a five-year financial forecast that anticipates a 3.9% average annual revenue increase, while expenditures are expected to rise at an average of 4.8% per year. Officials emphasize that fiscal sustainability will require careful management of expenditure growth.
Capital investments and debt management
The city made significant capital investments over the past year, including new infrastructure and facility upgrades, according to the report. Major projects included $6.1 million for Fire Station #34, $6.6 million for park improvements, and $4.8 million for wastewater system enhancements along Folsom Boulevard.
Folsom’s long-term liabilities increased slightly to $192.3 million due to new bond issuances, according to the report. However, the city maintains a strong credit rating, with its Water Bonds rated AA/Stable by Standard & Poor’s.
Looking ahead
City officials remain committed to responsible fiscal management as they prepare for the 2024-25 budget cycle, according to the report. The approved General Fund budget allocates $117.1 million in expenditures, reflecting a modest 1.7% increase over the prior year, while projected revenues are estimated at $115.4 million. The city will continue to monitor financial conditions closely, ensuring that resources are allocated efficiently to sustain essential services and infrastructure projects.
