GPCRDA gets another clean bill of financial health

By: K. Michelle Moran | Grosse Pointe Times | Published November 27, 2018

GROSSE POINTE SHORES — Santa dropped off a gift a little early to the Grosse Pointes-Clinton Refuse Disposal Authority.

During a meeting Nov. 13 in Grosse Pointe Shores, the GPCRDA Board learned that its audit for the 2017-18 fiscal year — which ended June 30 — came back without any problems or corrections.

“It’s a clean opinion,” said certified public accountant Lynn Gustafson, who handles the financial records for the GPCRDA. That’s the best opinion they could receive on their audit, which was performed by Rochester Hills-based CPA Ramie E. Phillips Jr.

Gustafson said there were also “no management letter items” from Phillips, which is also positive.

“Job well done,” GPCRDA Board Chair Brett Smith told Gustafson. “It sure is nice to see (this report) with no check marks. You do a good job, and we appreciate that.”

Because the GPCRDA increased its administrative fee from $1 per ton to $3 per ton, starting with the 2017-18 fiscal year, the audit shows that the authority ended the year with income of $22,427. In the past, the GPCRDA had operated at a loss, using reserves to make up the difference. With those reserves dwindling and uncertainty about the future of the former incinerator parcel in Clinton Township that the GPCRDA still owns, officials decided to increase the administrative fee to stop operating at a loss. The GPCRDA had been charging $1 per ton since the incinerator shut down in 1999.

“It’s profitable this year, which is due to our (new) administrative fee,” Gustafson said of the net cash increase instead of loss. “It means we picked the right number (for the fee).”

The GPCRDA also benefited financially in 2017-18 from the fact that it didn’t have to make a payment to the Municipal Employees’ Retirement System, or MERS, which manages the GPCRDA’s pension plan. It had budgeted $25,615 for a pension payment, but the closed pension plan is funded at 133 percent, so no payment was needed. Because the pension plan is closed — there are no employees contributing to it now, because the incinerator is no longer operating — the authority needs to maintain assets “equal to 120 percent of the actuarial accrued liability,” according to the audit report.

As to not having to make a pension payment this past year, Gustafson said that’s a function of the financial market.

“It’s the market coming back from (the recession in) 2008, so we’re finally back to where we should be,” she said.

The board voted unanimously Nov. 13 to accept and file the audit.

The GPCRDA handles trash disposal for the five Grosse Pointes and Harper Woods.