Auditor notes “healthy” fund balance
By Barb Pert Templeton
A Jan. 2 meeting of the Algonac City Council included a 22-minute presentation from the city’s auditing firm, McBride, Manley, and Company PC located in Marine City. The city received a clean unmodified audit which means the auditors feel the financial statements are fairly stated and they are in compliance with professional standards.
Curtis McBride, a partner and CPA in the accounting firm did a slide presentation for the city council going over the city’s financial status following an audit that concluded on June 30, 2023.
McBride said that’s the ‘clean unmodified” best audit opinion you want to strive for but it’s also important to realize that it’s not an opinion on the financial health of the city it’s just simply on the accuracy of the financial records.
As his slide presentation began, McBride said the first item to discuss was the general fund, which is comprised of revenues from property taxes, state shared revenue, and state and federal grants. The general fund had $4.19 million in total assets, most were liquid assets including $1.57 million in cash and another $1.66 million in investments in this case in the form of a CD being held at a local bank. Liabilities against the assets were about $900,000 to finish the fiscal year with a general fund balance of $3.219 million.
McBride said the Michigan Department of Treasury did a study and found on average, a majority of the cities in Michigan had a general fund balance level of about 42% of their annual revenues while Algonac has a 100% balance, which is a full year.
The Algonac City Council meets on the first and third Tuesdays of the month at 6 p.m.
“So, the city’s is higher than the median for all the cities throughout the state of Michigan,” McBride said.
The city should also have at least at least two months’ worth of expenditures in their fund balance but Algonac has a year’s worth available
“You do have a healthy fund balance in your general fund,” McBride said.
Next, he highlighted figures on the income statement, reflecting revenues and expenditures, comparing 2022 to 2023.
McBride stated that the statement shows that total revenues actually went down. In 2022 the city generated $3.49 million in revenues compared to 2023 numbers when the city generated $3.183 million. The primary reason for the decrease was that federal grants were recognized in 2022 – specifically, $424,000 which was the spending of ARPA funds.
As to expenditures the city spent $3.29 million in 2022, but spent $2.86 million in 2023 included funds spent on a fire truck and ARPA funds.
“So, you generated about $3.183 million in revenues in 2022 and spent about $2.86 million so the city had a net increase to general fund balance of about $322,000,” McBride said.
Looking at general fund sources of revenue between 2022 and 2023 McBride said property taxes went from $1.58 million in 2022 to $1.628 million in 2023. He said distributions from the State of Michigan increased slightly.
He noted that the bulk of the general fund is made up of property taxes and state revenue sharing.
As for expenditures by type in the general fund fire service reflects a decrease from $729,000 in 2022 to $382,000 in 2023 which shows spending the $445,000 for a new fire truck.
General government expenditures – which includes administrators from the clerk and treasurer’s offices – increased a bit as did the police services which is driven by the services provided to the city by the contract with St. Clair County Sheriff’s Department.
McBride shared many more numbers related to streets plus water and sewer funds, to name a few.
He told members of the city council that he enjoyed working with city administrators.
“We had a great working relationship with your former treasurer, Linda Mackie,” McBride said. “And everything’s going pretty well so far with (new employee, Treasurer) Alysia (Bugg).
He said his firm prefers to have a constant and ongoing relationship with the city, not just showing up once a year to do the audit.
“This really helps us stay on top of what’s going on here at the city and makes a more effective audit,” McBride said.
Several members of the city council thanked McBride and the city staff for working so hard on this year’s audit.
To see the audit in full visit the city’s website at cityofalgonac.org.
