Roseville sees positive budget gains in audit

By: Kevin Bunch | Roseville - Eastpointe Eastsider | Published December 30, 2015

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ROSEVILLE — Roseville ended its past fiscal year with an unexpected net gain to its financial accounts, according to auditors from Plante Moran.

The auditors gave the city an overall favorable opinion during their report at the Dec. 15 City Council meeting. Auditor Beth Bialy said that while the city expected that it would have to delve into its general fund balance — essentially its rainy day fund — to help balance the budget for fiscal year 2014-15, it instead ended up adding money to the general fund balance.

She did caution that the gain essentially was because of one-time items that the city cannot count on going forward.

The other Plante Moran auditor, Kari Shea, said the city’s revenues ended up increasing over the previous fiscal year by about 2.5 percent, from $31 million to $33.1 million. While some of that came from those one-time changes, the other big increase came from state and federal funding. That increased from $4.5 million to $5.2 million.

“That is your federal grant money,” Shea said. “The city has always done a great job of looking at the grants out there.”
In total, the city’s general fund balance ended the fiscal year at $14.4 million. This is a smaller amount for emergencies than Plante Moran auditors would like to see — Shea said it is about 13 percent of the total annual budget amount, which is enough to keep the city running for about a month.

She said an ideal amount for emergencies would be between 20 and 25 percent of the annual budget, but she noted that the hits the city took before and during the recession in property taxes and state revenue sharing have drastically reduced how much revenue the city takes in.

Due to state limitations on how much the city can raise through property taxes — along with state revenue sharing — Shea said the city has little control over revenues outside of the federal grants it pursues.

On the expenditure side, the city did see an increase, though Shea said part of that came from firefighter wages through the city’s SAFER grant, and another part came from an increase in capital projects from $500,000 in fiscal year 2014 to $1 million in fiscal year 2015.

Bialy said that overall the city seemed to be going in a good direction.

“If I was coming in cold and trying to assess how is the city doing, I think the fact that you do have fund balance that’s less than 15 percent, but that you have fund balance and the trend is upward, is good,” Bialy said. “You have no deficits, you’re paying down your debt, you’re making investments, you’re making pension payments, and you have some money set aside for retiree health care, which is not the case in some communities.”

She said retiree health care likely will continue to be a long-term challenge, but Roseville otherwise appears to be holding its own and showing improvement.

City Manager Scott Adkins said the City Council and administration are hoping to eventually get the city’s general fund balance up to that ideal 20-25 percent range.

“We’ve done an exceptional job in light of circumstances that so many other communities were unable to do it; we hear it all the time with emergency financial managers and chaos and changing,” Adkins said.

Shea also suggested that the city segregate some financial duties; she said the city controller should not be the check signer and also have control of that account, nor should the controller and city treasurer both be able to wire money.

Adkins said the administration has plans to change both of those arrangements.