By Barb Pert Templeton
A Jan. 7 meeting of the Algonac City Council included a 27-minute presentation from the city’s auditing firm, McBride, Manley and Company PC. The city received a clean unmodified audit opinion 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, 2024.
McBride said that the ‘clean unmodified” rating is the 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.
The audit was presented via a slide show by McBride. He began with the balance of the city’s general fund noting that it derives its revenues from property taxes, state shared revenues and state, local and federal grants. The general fund had $4,790,000 in assets on hand at the end of the year but had $886,000 in liability so it finished June 30, 2024 with a $3.9 million ending fund balance.
Under the general fund statement of revenues and expenditures McBride shared the income statemen for the general fund as compared between 2023 and 2024. He said the general fund generated about $3,183,000 in revenues in 2023 and it generated $3,685,000 in 2024. The increase was from property taxes and state revenue sharing.
“Interest revenue is a big one, you generated about $42,000 in interest in 2023 and that jumped up to $118,000 in 2024, we all know interest rates went up during 2024,” McBride said.
As to expenditures against the $3,685,000 in revenues in 2024 he said the city spent $3 million dollars so the increase to the general fund balance level was $685,000 for 2024.
As to property taxes, they increased from $1,628,000 in 2023 to $1,772,000 in 2024. McBride said the property tax rates did not increase but instead taxable values throughout the city increased.
“Again, distributions from the state, increased state revenue sharing, increased; so, your general fund is primarily supported by property taxes and your state revenue sharing, those two revenues account for 63% of revenues in general so your general fund is heavily dependent o those two revenue sources,” McBride said.
As for expenditures, those increased from $2,861,000 in 2023 to about $3 million in 2024 so that’s an increase of $139,000. The increase mostly fell to the general government areas going from $744,000 to $818,000. Those areas include the city manager’s department, the city clerk, the treasurer and the general administrative expenditures of the city.
Public safety costs increased from $1,419,000 to $1,470,000 and public works increased from $503,000 to $518,000.
“The general government, public safety and public works, those three departments, make up about 93% of expenditures in your general fund and you would expect that,” McBride said. “A city that has contracted police services and a fire department and DPW, which are very labor-
intensive departments, you would expect those department to have a large portion of your expenditures and that’s normal in the city of Algonac.”
McBride shared many more numbers including looking back at historic figures for fund balances for the city going back quite a few years. He also shared dollars related to streets plus water and sewer funds, to name a few.
Towards the conclusion of his presentation McBride said he wanted to draw attention to a section of the budget that falls under a federal grants program. He said they recommend the city adopt a federal grants policy because it will be critical to all the projects currently going on in the city.
McBride said the funds are from the federal government, not the county or the state, so each grant program has specific requirements of how the funds can be used so the city needs a documented procedure process in place.
He said the city has a lot of great things going on like the pool project, the community center renovations and the TMF Grant, awarded through EGLE which originated via the federal government.
“The city will have a substantial amount of federal funds coming through the accounting records for 2024-2025 fiscal year,” McBride said, noting that once they spend enough federal funds they have to go through an independent audit, beyond the one he does, to make sure they are in compliance with the federal program.
Commenting on the audit process he said City Manager Denice Gerstenberg and City Treasurer Alysia Bugg were great to work with and they provided everything requested by his firm.
“It was a very positive process on our end and the whole city office should be commended on that,” McBride said.
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.
