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Grosse Pointe City receives positive audit for past fiscal year

By: K. Michelle Moran | Grosse Pointe Times | Published January 29, 2020

GROSSE POINTE CITY — As Grosse Pointe City officials work on preparing a budget for the coming 2020-21 fiscal year, they can rest easy knowing that their financial books are in order.

Pam Hill, an audit partner at Plante Moran, presented the results of an audit of the 2018-19 fiscal year — which ended June 30 — during the Dec. 16 City Council meeting.

“It was once again an unmodified opinion, which is the highest level of assurance you can get,” Hill told the council.

Joe Kowalski, another Plante Moran audit partner who worked on the City’s audit, echoed Hill, stating that there were “no internal control deficiencies to report,” so officials could rely on the financial data they have.

Kowalski said there was a “slight change” in property tax revenue, which increased by nearly $100,000 between 2017-18 and 2018-19; the single largest revenue source for the City, it was $4,417,514 in 2018-19. But otherwise, Kowalski said general fund revenue trends “are pretty flat.”

He said the City experienced “a huge dip (in property values) during the recession,” and estimated that the City wouldn’t return to pre-recession property tax levels until around 2025 or 2026. Although homeowners have seen their property values rebound more significantly in recent years, state law limits property tax increases to 5% or the rate of inflation, whichever is lower.

“Unfortunately, (a resident’s) increased (home) value doesn’t necessarily mean increased revenues to the City,” Kowalski said.

The general fund balance saw a large increase last year — of more than $10 million — but that was because bonds were issued for new public safety, public works and municipal court facilities, Kowalski said. Hill said that in 2018-19, the City added about $650,000 to its fund balance, but that money was then transferred into the capital projects fund.

Hill thanked City Finance Director/Treasurer Kimberly Kleinow and her team, along with City Manager Pete Dame, for their assistance and professionalism.