Committee reviews January financials and advances renewal of city audit contract

Committee members reviewed the city's January revenue and expenditure report and raised concerns about fund balances and past‑due receivables. The chair noted that the general fund and utility fund appeared as zero on the chart even though bank balances exist and that the major road cash balance is low after covering certain expenses tied to water and sewer projects.

City staff said the city previously repaid approximately $1,000,000 for work deemed ineligible under state reimbursements and that about $500,000 remained to be covered — a liability staff said the state of Michigan identified when reviewing reimbursements on prior projects. Staff described higher utility fund expenses compared with the prior year, in part due to legal costs and litigation.

A clerk clarified a $420,000 item was not in the January balances because it had not been approved until February. Staff also explained the city had an outstanding legal bill with the law firm handling water‑related claims; at the time discussions began the city owed about $334,000 and that additional invoices of roughly $33,000 had arrived. The city reported it was on a payment plan of $50,000 per month.

Separately, a resolution to extend the city's audit agreement with the current audit firm was presented. City staff recommended renewing with the same firm and said they had compared fees using the State Intergovernmental Purchasing Act and found the price reasonable; staff argued bringing on a new auditor would cause material time loss as a new firm learned the city's systems. The committee moved the audit extension forward by consensus.

Committee members asked staff to prepare a budget timeline and calendar for the next meeting.