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Auditors issue clean opinion for St. Clair Shores

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published December 10, 2019

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ST. CLAIR SHORES — Representatives from Yeo & Yeo presented the fiscal year 2019 audit to the St. Clair Shores City Council at its Dec. 2 meeting, pointing out that the city’s financial books are in good shape.

Dave Youngstrom, a principal with Yeo & Yeo, said that St. Clair Shores has received a clean audit, which is the highest level of assurance that the firm can issue for a financial statement.

“We had a lot of challenges this year. Some changes, new faces,” he said, referring to the retirement of Treasurer and Finance Director Doug Haag, as well as the departure of another member of the Finance Department during the year.

St. Clair Shores had $39.3 million in revenues and $37.1 million in expenditures for the 2018-19 fiscal year, which means that the city was able to add about $2.1 million to its fund balance at the end of the year. St. Clair Shores saved more than $3 million in expenditures over the course of the year to make that happen.

Youngstrom reported that revenues were fairly consistent with the prior year, with a 2% increase in public safety spending, but a 1% decrease in spending for general government.

There was an “increase in revenue and a decline in expenditures, which is a good sign for us,” he said.

Youngstrom said that it is good policy to have 20-25% of the operating budget saved in fund balance. While the city had a fund balance that could sustain about 70 days of operations in 2017, it could now sustain 113 days of operations with its fund balance, he said.

“It’s always nice to have money in your rainy day fund because once it’s gone, it’s gone. It’s hard to get back,” he said.

Challenges come from funding pension plans for general employees and police and fire, as well as funding for post-employment health insurance, he said.

Youngstrom said the city is trying to move forward with continuing to increase the percentage that those are funded, but that it is difficult as costs continue to rise. The city is moving in the right direction, he said.

“Those pension and other post-employment costs, down the road those are coming. We’ve got to pay for it some way,” he said, explaining that health care costs rise about 6%-7% each year, compared with the rate of inflation, which is 2%-3% annually.

“We put in $8 million and our obligation went up,” Youngstrom said.

The city is doing a good job of planning for the repair and replacement of aging infrastructure, like roads, he said.

“We’ve got an aggressive road plan. Our residents agree with it. They approved an increase in the millage rate,” Councilman John Caron agreed.

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