The City of Brea maintains a positive fiscal position with all of the indicators required of a fiscally healthy city including: a balanced budget, healthy General Fund reserves, ability to meet all financial obligations on time and assets greater than liabilities. This fact is important to keep in mind in light of some misleading information that reoccurs periodically regarding how to determine the fiscal health of OC cities.
For example, the notion that a city’s financial position is determined solely by its “Unrestricted Net Position” (UNP). This information is contained in what is called the “Comprehensive Annual Financial Report” (CAFR). Since the UNP only considers a portion of a city’s assets and liabilities, it does not tell the whole story when taken out of context and without considering all the financial information. It is particularly problematic when attempting to “rank” a city’s financial position by dividing the UNP divided with residential population. Following are some reasons why: