Finances, fund balance in good shape, according to latest Grosse Pointe Woods audit

Grosse Pointe Times | Published December 17, 2024

Shutterstock image

Advertisement

GROSSE POINTE WOODS — Grosse Pointe Woods might have new leadership in its Finance Department, but the city’s audit shows that the city remains on the same steady path.

Plante Moran Audit Partner Bill Brickey and Audit Senior Josh Dunn appeared before the Woods City Council during a council Committee of the Whole meeting Dec. 2 to deliver the results of an audit of the 2023 to 2024 fiscal year, which ended June 30.

“The city did receive an unmodified opinion,” Brickey said. “That essentially means the financial statements are in compliance with all regulations and they can be relied upon. That is often referred to as a clean opinion.”

This was the first audit with the Woods under the financial direction of Treasurer/Comptroller Steven Schmidt, who was sworn into office June 3.

“He did a fabulous job,” Brickey said of Schmidt. “We were really appreciative of all of the work he did.”

Schmidt had previously been the assistant Woods treasurer/comptroller.

“Thank you to the auditors,” Schmidt said. “It was great working with them. I also wanted to thank all of the other departments” for providing reports and other information.

Schmidt also thanked Woods staffer Latoya Bishop for her work.

This is the 51st year the Woods has received the Certificate of Achievement for Excellence in Financial Reporting — often referred to as the CAFR — from the Government Finance Officers Association. The honor is given to audit reports that go above and beyond state standards, Brickey said. They tend to be more user friendly for people without a background in finance and contain useful information about the city and its projects and expenditures.

“It really just shows the city’s commitment to overall financial transparency,” Brickey said.

As the audit shows, property taxes continue to be the largest source of revenue for the Woods, followed by state-shared revenue.

The city ended the year with a fund balance in its general fund of roughly $9.2 million, of which $1.8 million was assigned — or already committed to projects or purchases — and $7.4 million unassigned. The unassigned fund balance represents approximately 46% of the budgeted expenditures for the 2023 to 2024 fiscal year. That’s well above the minimum recommended fund balance of 10% to 15%.

“Overall (these are) very positive results for the city,” Brickey said. “You’re really able to (manage) costs and retain your fund balance.”

The pension is shown in the audit to be just over 65% funded as of the end of the fiscal year June 30. Brickey said that’s up substantially from 2020, when it was about 43% funded.

“You’re doing the right thing,” Brickey told Woods officials of their efforts to increase pension funding. “It’s going to take time to get to where you need to be.”

Another legacy cost is retiree health care. Brickey said that’s about 9% funded now. It was about 2% funded as of 2018, he said.

“The city has continued to make additional contributions to fund this,” Brickey said of retiree health care, which Michigan municipalities used to cover on a pay-as-you-go basis. “It’s a large liability. It’s going to take time to get that funded.”

Officials were pleased by the audit results and the work done by the independent auditors.

“We really appreciate your efforts,” Mayor Arthur Bryant told the auditors.

Bryant also said officials “really appreciated staff’s efforts,” which have helped them get to a good place financially.

“The staff did a tremendous job,” Bryant said.

During the Committee of the Whole meeting, the council voted unanimously to send the audit report to the council. The audit was accepted by a unanimous vote of the council at the council meeting that followed the COW session Dec. 2; the vote came during approval of the consent agenda.

Advertisement