St. Clair Shores receives clean audit

At its final meeting of 2025, the St. Clair Shores City Council received a clean audit report from the contracted firm of Yeo & Yeo CPAs & Advisors. 

According to the presentation at the meeting on Dec. 15 by Ali Barnes, managing principal with Yeo & Yeo, the city’s audit was given an “unmodified opinion,” which is the highest level of assurance that everything was filed correctly. No material weaknesses were identified in the report.

St. Clair Shores Finance Director John Walters started the presentation by saying they added money to most of the funds in the city. 

“With over a million dollars added to the general fun which is pretty good,” Walters said. 

He also said the city’s two pension plans and retiree health care plans also improved funding percentages. 

According to the report, the city’s general employee pension plans stand at 63.21% funded and its police and fire pensions stand at 61.74% funded. Barnes said both of the funds are over the 60% threshold required by the state. Other post employment benefits or OPEB stand at 35.62% funded for general employees and 44.22% funded for police and fire. Barnes said a lot of municipalities are still working to get to the designated 40%. 

“(The city is) making some good progress on that side,” Barnes said. 

For the fiscal year spanning from July 1, 2024, to June 30, 2025, the city had $55,305,217 in revenues and transfers added to the general fund. The revenue came from the following sources: $22,419,590 in taxes, $9,155,966 in federal grants, $8,343,968 in state grants and shared revenue, $5,932,272 in other expenses, $5,442,387 in charges for services, $2,036,480 in fines and forfeitures, and $1,974,554 in licenses and permits. 

Barnes said that is up around $9.5 million from previous years. She said the majority of the increased funds comes from federal funding including American Rescue Act Plan dollars. 

“But that does obviously kind of skew the percentages we’re used to talking about relative to the rest of the city funding,” Barnes said. 

She said most of the other funds didn’t change significantly. 

The city also had $54,291,348 in expenditures and transfers. The expenses were recorded as follows: $23,583,178 for public safety, $9,179,376 for general government, $9,128,478 for transfers out, $6,365,348 for recreation and culture, $3,102,197 for other expenses and $2,932,771 for judicial expenditures. 

Barnes said that increased around $7.7 million from the previous fiscal year. All of the increase comes from transfers out for the capital project fund for the public safety buildings. 

“Total transfers out were about $9.1 million for the fiscal year and the majority of that was for the capital project,” Barnes said. 

She went on to say this would also skew the percentages they are used to seeing. 

Barnes said the core expenses in the general fund without the big transfers decreased slightly. 

She repeated what Walters said in the beginning, stating that the fund balance in the general fund increased by around $1 million. The fund balance ended the fiscal year at around $18 million. It is split into categories with non-spendable funds at around $1 million, assigned funds at around $600,000 and unassigned around $16.9 million. 

“(There is) a healthy amount of unassigned fund balance for you to work with,” Barnes said. 

The city recognized a little more than $12 million in federal expenditures with a little under $10 million in American Rescue Plan Act funding. The ARPA program was audited as well and Barnes said there were no findings of consequence related to it. 

Barnes said in previous years, the police and fire pension millage fund had a deficit and that it was completely erased this year. 

“You ended up being about a year ahead of schedule on your deficit elimination plan that was filed with the state,” Barnes said. “So excellent work getting that fund out of that deficit. We’re happy to see that.” 

A management item or significant deficiency and noncompliance issue had to do with bank reconciliations. Barnes said not all findings are from the current fiscal year but could happen due to trends within the municipality or company. 

“The last couple years really there has started to be more of a struggle in getting the bank reconciliations completed timely,” Barnes said. “The state would really like to see them done within about 30 days to six weeks or so after month end throughout the year.” 

Councilman Dave Rubello acknowledged the amount of work the audit takes and thanked members of the city’s staff. He asked about the bank reconciliation and how to fix it. 

Barnes said the city’s finance department needs to go back to the original entry points and find out which points could be remedied during the month. 

The full, detailed report is on the city’s website at scsmi.net. 

Call Staff Writer Alyssa Ochss at (586) 498-1103.