Orem staff proposed moving $3.68 million to capital projects after the fiscal 2025 reserve finding
A February 2026 council packet said Orem had to spend or transfer $4.1 million to get back under the state's general fund cap and proposed a $3.68 million transfer to the capital projects fund. The records reviewed do not show the council's vote or whether the money moved by June 30.
Continuing story: Auditing Orem
In February 2026, Orem's finance staff proposed moving $3,680,788.60 from the city's general fund into its capital improvement projects fund, according to the council's Feb. 24, 2026, agenda packet. [2]
The proposal followed the city's fiscal 2025 audit, which reported that the general fund's balance exceeded the state limit. [1]
What the audit said
Larson & Company's fiscal 2025 state compliance finding, in reports dated Nov. 21, 2025, cites Utah Code 10-6-116(2), which limits a city's general fund balance to 35% of the fund's total revenue. [1]
The finding gives a maximum of $30,563,646 and says the city exceeded it by $4,072,195. [1] It lists an unassigned balance of $26,559,579 and an assigned balance of $9,713,187, which add to $36,272,766, and gives the total as $47,593,378. [1]
The auditors wrote that money set aside for future capital projects had not been transferred out of the general fund by year-end. [1] The city responded that it "will be including a budget amendment in FY 2026" to transfer enough from the general fund to the capital projects fund. [1]
What the February packet proposed
A note in the packet says that after the city completed its fiscal 2025 annual report and calculated the state maximum, "the City exceeded the maximum allowable amount of 35%." [2] It continues: "Therefore, the City is required to either spend or transfer $4,100,000 by the end of the current fiscal year." [2]
The note says staff had identified projects that could be paid for with the excess, "as well as an operational need for dispatch services." [2] Because the projects might not be finished by the end of the fiscal year, it says, the funds "need to be transferred to the Capital Projects Fund so that the funds will be available when the specific projects are identified and receive approval to proceed." [2]
The note says that with the transfer, the general fund balance "would fall below" the state maximum "and the City would then be in compliance." [2]
The packet's Exhibit A lists a general fund expense of $3,680,788.60 labeled "Cont. To - Fund 45 - CIP" and a matching revenue line in Fund 45. [2] On the general fund's revenue side, it lists $3,645,000 labeled "App. Surp - CIP Projects" and $455,000 labeled "App. Surp - Operations," which together equal $4.1 million, along with $35,788.60 in donations for a Gold Star Family monument. [2]
The packet's $4,100,000 figure differs from the audit's stated excess of $4,072,195. [1][2] The packet does not explain the difference.
What isn't known
The draft ordinance in the packet is unnumbered and its vote record is blank. [2] The state's public notice listing for the meeting shows a public hearing on the fiscal 2025-2026 budget amendments and includes attached minutes and a document labeled O-2026-0004. [3]
The records reviewed do not show the council's vote, whether the transfer was posted before June 30, 2026, or what the fiscal 2026 audit will conclude. [3]
This story reports a proposed budget amendment. A budget amendment authorizes a transfer; it is not a record that money moved. The minutes and ordinance posted for the Feb. 24, 2026 meeting are scanned images, and The Ledger could not read their text, so this story does not report the outcome of the vote.
Sources
- City of Orem · FY2025 single audit and state compliance reports (Larson & Company)
- City of Orem · City Council agenda packet, FY 2025-2026 budget amendments (Feb. 24, 2026)
- Utah Public Notice Website · Orem City Council meeting notice and attachments (Feb. 24, 2026)
Reporting by The Utah Ledger from the public records above. AI-assisted, checked against those records.