Mount Clemens audit shows improved fund balance, flags retiree health liability
May 29, 2024 | Mount Clemens, Macomb County, Michigan
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Plante Moran presented the City of Mount Clemens' fiscal 2019 audit to the commission, reporting an "unmodified opinion" on the city's financial statements and noting that the general fund's position improved year over year.
Lisa Planca, a governmental auditing partner with Plante Moran, told the commission, "our results of our audit is what is referred to as an unmodified opinion," saying the audit showed the city's financial report is "materially correct" and in accordance with applicable governmental accounting standards.
City staff received several slides summarizing the financials. Audit manager Joe Werner said total general fund revenue for the year ended June 30, 2019, was $11,900,000 — roughly $1 million more than 2018 — and general fund expenditures were about $10,400,000. "The city did increase its fund balance again this year," Werner said, noting the fund balance rose to approximately $6.6 million.
The auditors highlighted drivers of the improvement: stronger property tax values, increased state shared revenue, CDBG receipts and construction-related permit fees tied to the McLaren Hospital project. They also flagged cost pressures, including public safety contractual increases and pension and insurance costs.
Plante Moran pointed to a shift in the pension plan's net position from a slight asset to a liability for 2019, driven by changes in actuarial assumptions. The report described a substantial other postemployment benefit (OPEB) liability that had been recorded in recent years; auditors said the city established a trust to fund future benefit payments, which contributed to a notable decrease in the recorded OPEB liability for 2019 from previously reported levels (the auditors described the prior figures as about $51,000,000 for 2017 and 2018).
The auditors concluded the city is "well positioned" in the near term but emphasized the need for continued strategic planning to address deferred capital needs and long-term retiree health costs.
The commission took no action on the audit presentation itself; the auditors thanked the commission and left the report on the record.
Lisa Planca, a governmental auditing partner with Plante Moran, told the commission, "our results of our audit is what is referred to as an unmodified opinion," saying the audit showed the city's financial report is "materially correct" and in accordance with applicable governmental accounting standards.
City staff received several slides summarizing the financials. Audit manager Joe Werner said total general fund revenue for the year ended June 30, 2019, was $11,900,000 — roughly $1 million more than 2018 — and general fund expenditures were about $10,400,000. "The city did increase its fund balance again this year," Werner said, noting the fund balance rose to approximately $6.6 million.
The auditors highlighted drivers of the improvement: stronger property tax values, increased state shared revenue, CDBG receipts and construction-related permit fees tied to the McLaren Hospital project. They also flagged cost pressures, including public safety contractual increases and pension and insurance costs.
Plante Moran pointed to a shift in the pension plan's net position from a slight asset to a liability for 2019, driven by changes in actuarial assumptions. The report described a substantial other postemployment benefit (OPEB) liability that had been recorded in recent years; auditors said the city established a trust to fund future benefit payments, which contributed to a notable decrease in the recorded OPEB liability for 2019 from previously reported levels (the auditors described the prior figures as about $51,000,000 for 2017 and 2018).
The auditors concluded the city is "well positioned" in the near term but emphasized the need for continued strategic planning to address deferred capital needs and long-term retiree health costs.
The commission took no action on the audit presentation itself; the auditors thanked the commission and left the report on the record.
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