Auditing Highland: what city records show about its audit, reserves, debt and 2026 budget

The Utah Ledger is reviewing Highland's public financial records in a series called Auditing Highland. The series reports what audits, council minutes, packets and public notices state, and labels each figure with the year and basis it was reported on.

Highland's fiscal year runs from July 1 through June 30. The city posted notice on Feb. 4, 2026 that its fiscal 2025 annual financial report had been completed and accepted by the City Council. ^[1][2]

The audit

K&C, CPAs dated its independent auditor's report on the fiscal 2025 statements Jan. 29, 2026. The report says the financial statements "present fairly, in all material respects," the city's financial position, an unmodified opinion. ^[1]

Steve Rowley of K&C CPAs presented the audit to the council on Feb. 3, 2026. According to the approved minutes, he reported no internal control findings, no federal noncompliance and no state compliance findings, and said it was the first audit in at least four years with no findings. The council took no vote on the audit that night. ^[1]

Reserves

The General Fund, which pays for most day-to-day services, took in $13,217,677 in fiscal 2025 and spent $11,145,485. After $253,902 in transfers in, $2,185,023 in transfers out and $14,352 from sales of capital assets, its fund balance rose $155,423, from $4,471,945 to $4,627,368. ^[1]

Of that year-end balance, $46,117 was nonspendable and $4,581,251 was unassigned. The General Fund also held $2,060,024 in restricted cash, alongside $2,033,648 in developer bonds payable from restricted assets. All of the city's governmental funds together held $14,571,895. ^[1]

The audit's management discussion gives the General Fund's unrestricted balance as $4,581,251 in one passage and $4,171,345 in another, and gives total governmental fund balance as $14,571,345 in its highlights. The figures above are from the audited balance sheet. ^[1]

The city's total net position, a measure that includes capital assets such as roads and utility systems, was $175,945,767 on June 30, 2025. ^[1]

Debt

The audit lists $2,801,000 in governmental revenue bonds on June 30, 2025, down from $3,695,000 a year earlier; governmental activities paid $894,000 in bond principal during the year. It states that the city had no general obligation bonds outstanding. ^[1]

Separately, the city's business-type activities had $1,101,842 in notes payable, down from $1,226,689. These are a different kind of obligation from the bonds. ^[1]

At the Sept. 1, 2026 council meeting, City Administrator Erin Wells said the city's transportation utility fee would expire in fiscal 2028, when the bonds that initially funded the city's road projects are set to expire, according to the minutes. ^[5]

The 2026–27 budget

On Aug. 11, 2026, the council voted 4–1 to adopt the fiscal 2026–27 final budget, with Council Member Liz Rice voting no. ^[4]

The final budget presented that night lists $14,760,494 in General Fund revenue before transfers and $14,917,509 including $157,015 in transfers in. General Fund spending including $888,000 in transfers out totals $14,764,651. The budget's displayed $332,858 operating surplus also counts $180,000 of prior-year fund balance. ^[3]

The budget estimates the General Fund will begin the year with $4,378,972 and end it with $4,531,830. These are budget estimates, not audited results. ^[3]

Stories in this series

The library property tax increase; the renewal of the city's $100,000 grant and legislative consulting contract; costs and changes on the Mitchell Hollow Trail; and the state's amended grant for Highland's secondary water meters.