Audit finds Eastpointe to be financially stable

By: Andy Kozlowski | Roseville - Eastpointe Eastsider | Published January 6, 2016

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EASTPOINTE —Eastpointe is on course to be financially stable for the next 20 years, according to an audit by Plante Moran that was presented at a City Council meeting Dec. 8.

City Manager Steve Duchane said that while recent years have been plagued by challenges due to the economic recession and subsequent funding loss, the city should be stable thanks to the public safety millage passed in February, which will run for 20 years. The millage essentially fully funds the Police and Fire departments, which frees up money for the city’s other expenditures.

The millage reduced the amount that the city needed to pull from its general fund balance — essentially a savings account for the city — to finish out its fiscal year ending June 30, according to Finance Director Randy Blum. The city had projected using $3.8 million from the fund balance, but used only $1.5 million by the end of the fiscal year.

Blum added that the city was able to reduce its expenditures by $1.5 million, with $500,000 of that coming from rebates and the remaining $1 million in lowered expenditures from city departments — especially unmanned positions in public safety.

“This shows we’re back in (the) black, but it also shows we can’t be doing spendthrift activity,” Blum said. “We still have to be constrained on spending.”

Auditor Dave Helisek said Plante Moran gave the city an “unmodified opinion,” the highest level of assurance that the auditors can give financial statements.

“What that means is these statements, as presented, fairly reflect the financial position of the city for the fiscal year ending June 30, 2015,” Helisek said. “This is an opinion the city strives for on an annual basis, and one we were once again happy to supply the city as a result of our audit procedures.”

Auditor Tim St. Andrew said the city’s general fund revenues for the last fiscal year came in around $16,499,000, while expenditures were $17,782,000.

In total, the city ended the year with its general fund balance around $6,099,000. In the 2013 fiscal year, the city’s fund balance ended at $8.8 million, according to a graph from St. Andrew, and $7.3 million in the 2014 fiscal year.

“Despite efforts to reduce costs, (your general fund balance) did decline $1.3 million, which is better than you budgeted,” St. Andrew said.

“Without those efforts to reduce costs, these declines you’ve seen the past three years would have been much deeper.”

He said the city’s water and sewer fund saw operating expenditures surpass operating revenues in 2015, as rate increases failed to keep up with the expenditures.

St. Andrew added that the city’s water and sewer working capital dropped significantly this year, as the city used money saved up for the past several years to invest in and upgrade the water system. In total, he said the city has done $18 million in work on the system in the past several years, with $4 million of that coming as loans from the state’s revolving funds.