By Jim Bloch
The city of Marysville has achieved “an unmodified or clean opinion” on its annual audit.
“That is the best opinion you can receive,” said Karen Shafik, an accountant with the firm UHY.
Shafik presented a brief overview of the audit at the regular meeting of the city council, Jan. 10.
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“We came out a few months ago to do the audit of the city and met with management about three weeks ago to go through the financials in great detail,” said Shafik, as heard on the recording of the meeting posted on the city’s website.
The city’s financial statements were “presented in conformity with accounting principles generally accepted in the U.S,” Shafik said.
The firm found “no material weaknesses” in the city’s accounting practices.
“Every line item came in under budget,” said City Manager Randy Fernandez. “That doesn’t happen usually, right, Karen?”
Not usually, said Shafik.
“Our mission and vision statements say we’ll be fiscally responsible and we are,” said Fernandez.
General and other funds
Shafik presented the city’s balance sheet using the commercial or full accrual method of accounting, required for an unmodified opinion.
The city’s general fund, used to support the day to day activities of the city, ended the year with assets of $9,771,733, liabilities of $248,729, and deferred inflows of resources of $18,250, which left the fund balance — a kind of rainy day cache of money — of the general fund at $9,504,000.
The city’s fiscal year runs July 1-June 30.
The local street fund had assets of $673,936, with liabilities of $38,253 and a fund balance of $635,683. The public improvement fund had assets of $174,110, liabilities of $24,374, and a fund balance of $149,736.
The rest of the city’s funds had assets of $4,058,202, liabilities of $390,571, and deferred inflows of resources of $72,871, leaving a cumulative fund balance of $3,594,760.
“For the general fund at the end of the year, there was a portion that was non-spendable, really in a form that just can’t be spent at the current time — $771,008 of non-spendable fund balance,” said Shafik. “Committed fund balance is at $188,552 for industrial development and then assigned fund balance for your industrial development as well as this current year’s operations was at $1,468,735. That left the unassigned fund balance of your general fund at $7,076,459. That can be spent for general operations and general expenditures in the following years.”
The fund balance of the general fund has increased annually since 2018, growing from around $7.2 million to $9.5 million. In 2021, it grew by $461,108.
“We started the year with a fund balance of about $7.5 million, pulled $1.5 million out of it for projects, but we wound up $2 million ahead,” said Fernandez. “I don’t think many cities do that.”
“Your fund balance is about 93 percent of your 2021 expenditures,” said Shafik. “When we look at just your unassigned fund balance, that’s about 69 percent of your 2021 expenditures.”
Accountants generally recommend that cities retain fund balances of anywhere from five-25 percent of annual expenses.
Shafik called the fund balance “very healthy.”
The fund balance of the local street fund grew by over $505,000. The fund balance of the public improvement fund grew by over $7,000. The city’s other funds saw their cumulative fund balances grow by nearly $1 million.
The largest portion of general fund expenses went to public safety at 34 percent, public works at 16 percent, general government at nine percent, recreation and culture at four percent, and “other” at 15 percent.
Golf course in the black
All of the city’s non-major funds, including its special revenue funds such as major street, drug law enforcement, parks and recreation, the golf course, and ambulance, showed positive growth of their fund balances.
“The one I really want to highlight is the golf fund,” said Fernandez. “To my knowledge, this is the first time ever that the golf course made a dollar. I’m very, very pleased with Brian Lentz.”
Lentz manages the course.
“I’ve been here 11 years now and they said it couldn’t be done,” Fernandez said. “We always give it a subsidy. He made over $6,000. It can be done.”
The golf course had revenues of $715,345 and expenses of $707,991.
“Your final net position for your water supply system is $9,963,987 and for your sewer fund is at $16,893,014,” Shafik said.
The water fund had a positive change in net position of $423,896. The wastewater fund had a positive change of $208,017.
The pension fund for police and fire retirees had assets of $17,588,925 and liabilities of $23,296, leaving a net position of $17,565,629. It was 64.25 percent funded. It grew by more than $3.1 million in 2021.
The pension fund for other city retirees had assets of $20,617,594 and liabilities of $27,227, resulting in a net position of $20,590,367. It was 72.25 percent funded. It grew by more than $3.3 million.
Retirees’ healthcare fund had assets of $16,743,361 and liabilities of $844,441, leaving a net position of $15,898,920. It was 61.22 percent funded. It grew by more than $2 million.
The council voted 6-0 to accept and file the audit. Councilmember Dan Shirkey was absent.
“Thank you for another great job,” said council member Paul Wessel.
Jim Bloch is a freelance writer based in St. Clair, Michigan. Contact him at email@example.com.