Audit: Mount Clemens finances heading in ‘right direction’

By: Julie Snyder | Mount Clemens - Clinton - Harrison Journal | Published December 9, 2015


MOUNT CLEMENS — The city of Mount Clemens is heading in the right direction financially, according to its 2015 fiscal year audit report.

Presented last month by representatives from Plante Moran, the result of the audit is a favorable future thanks to last year’s successful charter amendment.

“Finances are heading in the right direction,” said Ken Mero, Plante Moran CPA. “You should be very proud.”

Plante Moran representative Dave Harrington said the passage of the charter amendment saved the city from a bleak future.

The charter amendment, passed by voters in August 2014, allowed city officials to increase its maximum millage rate from 15 mills to 20 mills for general municipal purposes, including fire protection and law enforcement.

As a result of that passage, Harrington said, the city’s general fund revenue for fiscal year 2015 was $8.7 million, which was up from $8.3 million in 2014.

Property taxes were down by approximately $100,000, but there was an increase in state-shared revenue and federal grants from  $1.9 million in 2014 to $2.1 million, and charges for services increased from $1.2 million to $1.6 million.

Harrington said the largest component of the city’s expenditures is for public safety; specifically, fire services and services from the Macomb County Sheriff’s Office, which increased from $4.4 million in 2014 to $4.5 million in 2015.

Expenditures in general increased from $8.7 million in 2014 to $9.5 million in 2015. Also within expenditures were the costs of insurance and pensions, which increased from $1.7 million to just over $2 million in 2015.

Mount Clemens’ general fund expenditures in the fiscal year 2014-15 exceeded revenues by approximately $1.1 million, which forced officials to take money from its $3.5 million reserves fund — ultimately dropping it to $1.7 million for 2015 — to maintain the status quo for service levels.

Harrington explained that the city’s general fund balance from 2012 to 2015 was on a steady decrease, starting at $4.1 million and falling to $2.3 million by 2015.

“This was primarily due to a loss in property tax revenue,” he said. “It was on a downhill spiral trend, then was on an uptick between 2007 and 2010. But without the charter amendment, there was a tremendous loss predicted, and the city would have had to cut services dramatically.”

With the passage of the charter amendment, the city is projected to have a general fund balance of more than $3.4 million by 2019, which Harrington said will allow officials to fulfill pension obligations, make “pay-as-you-go” obligations on legacy costs, and start to address the delayed spending on capital projects, which has been suppressed for almost a decade because of the significant reductions in property tax revenue faced since 2008 until today.