St. Clair Shores receives clean 2021 audit report

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published January 12, 2022

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ST. CLAIR SHORES — St. Clair Shores’ auditing firm, Yeo and Yeo, issued an unmodified, or clean, audit opinion for the city’s Fiscal Year 2021.

The report recognizes that the “information we believe presented in your financial statements has been clearly and accurately presented,” said Ali Barnes, principal with Yeo and Yeo, at the Dec. 6 City Council meeting.

Of the $39.4 million in revenues to the General Fund, 46% is collected via taxes, she explained. There was an increase of $2.4 million in revenues over the prior year to the General Fund. State-shared revenue and charges for service are the other two large pieces of the revenue pie, Barnes said. Federal grants in the fiscal year came in around $3 million, or 8% of General Fund Revenue, a reflection of pandemic-related funding that has come to the city.

In 2020-21, St. Clair Shores had $35.5 million in total expenditures from the General Fund, the largest chunk of which was attributable to public safety: $18 million, or 51% of expenditures. The city spent roughly $1 million more in Fiscal Year 2021 than it did in Fiscal Year 2020, she said, but the areas of expenditures are fairly consistent year to year. General government and recreation and culture make up the two other largest portions of spending, she said.

The city’s unassigned general fund balance was at $14.4 million in 2020 but is up to $18.4 million in 2021, she said. The utility fund had $28.7 million in revenues due to an approximately 2.5% increase in volume coming through the system, but expenses were down 5.5% to $22.8 million compared with 2020, which had included the expense of a $3.5 million lawsuit settlement.

St. Clair Shores’ pension systems and post-employment benefits are not fully funded, like systems in many other communities, Barnes said. The general employees’ pension system is 72.5% funded and other post-employment benefits (OPEB) are 24.6% funded. The police and fire pension system is 69.9% funded, and OPEB for those employees is 34.9% funded.

“Both of these systems had adjustments that decreased the overall liability due to differences in actual versus projected experiences,” Barnes said. “That could always change in the future. You did very well this time around.

“Funding status is all over the place between communities. Typically, we do see that the pension plans are better funded than the OPEB plans. You’re definitely on track.”

Barnes said the city’s finance team is “outstanding.” The only management comments the auditors had concerned the Indigent Defense Commission and the Tax-Increment Finance Authority funds, which had adopted budgets that would have put them into a deficit. Those areas of concern have been pointed out, she said, and she doesn’t expect them to be a problem in the future.