The Wayzata City Council accepted the city’s 2025 audited financial reports at its May 19 meeting, after the city’s outside auditor reported a clean opinion and no legal compliance findings.
The audit was completed by LB Carlson for the year ending Dec. 31, 2025. State law requires the city to have its financial statements audited each year by an independent certified public accounting firm.
Bill Lauer of LB Carlson presented the audit summary to the council. According to the city’s agenda report, the city received an unmodified, or “clean,” opinion for 2025.
The audit did include one finding related to internal control over financial reporting. The finding involved limited segregation of duties, which the report attributed to the small size of the city’s finance staff. The city noted that this is a recurring finding Wayzata has historically had because of staffing size.
The special purpose audit report described the issue as a significant deficiency, but not a material weakness. The report also stated that the audit found no reportable instances of noncompliance under Government Auditing Standards and no findings related to the city’s compliance with Minnesota laws and regulations.
Lauer also walked through several year-end financial highlights, including the city’s General Fund performance.
“As I mentioned, your general fund revenues came in at about $478,000, roughly 5.5% over budget,” Lauer said. “The biggest reason for this variance, frankly, was conservative budgeting.”
General Fund revenues totaled about $9.28 million in 2025, coming in $477,955 over budget. The largest positive variances came from licenses and permits, intergovernmental revenue, charges for services and investment earnings.
General Fund expenditures totaled about $8.58 million, which was $439,136 under budget. Public safety spending was under budget by $376,387, largely because the city budgeted for full police staffing but had several openings during the year.
The General Fund ended 2025 with a fund balance of $5.2 million, an increase of $279,411 compared with a break-even budget. The city’s unassigned fund balance stood at 49.8% of the next year’s budgeted expenditures and transfers out, above the city’s 40% policy target.
Citywide, Wayzata’s governmental funds ended the year with combined fund balances of $12.42 million, a decrease of about $2.09 million from the previous year. The decrease was tied largely to planned capital spending, including the Klapprich Park project, equipment purchases, street improvements and other capital work.
The city also reported no new debt issued in 2025. Scheduled principal payments reduced total bonded debt by about $1.46 million during the year.
The city’s enterprise funds, which include utilities, motor vehicle licensing, the municipal liquor operation and the marina, were also reviewed. The Liquor Fund reported $6.87 million in gross sales for 2025, down $213,289 from the previous year, and transferred $220,000 to support the General Fund.
Following the presentation, the council voted 3-0 to accept the city’s 2025 audited financial reports.
