City audit fund balance increase

ALPENA -For the 18th consecutive year the City of Alpena has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association. The recognition is earned in part for the city’s insistence on having a thorough comprehensive annual financial statement done.

On Monday during the Alpena Municipal Council meeting, Philip Straley and Mark Sandula shared audit findings for the fiscal year 2011-12. The city got high marks, as even though it faced a significant loss in revenue it still managed to add $620,000 to its fund balance due to reducing expenditures. The fund balance at the end of the fiscal year was at $3,095,738, or 37.2 percent of the 2012 expenditures. The money on hand is enough to run the city for up to 136 days.

Sandula said it is rare to see a governing body add such a significant amount to their fund balance in today’s economic climate. He said the city paid down debt and reworked bond rates, which also helped. He said the city is currently on solid financial ground.

“To add that much, for a city of this size, is really exceptional,” Sandula said. “We find in the world of government if you have 10 to 20 percent of equity carried over your doing well and you have 37.2 percent so that is exceptional.”

The total amount of revenue the city had in 2011-12 was $8,945,431, which was down more than $400,000 from the previous budget year. The city spent $7,744,035 and as a result had a surplus at the end of the budget. Clerk/Treasurer Karen Hebert said a good portion of the lost revenue was due to the decline in taxable value, which ultimately cost the city about $170,000 in lost tax funds. She said the fund balance is in good shape, but it was by design, as some capital plans have been held back on. She said some of those plans will have to be addressed soon.

“We kept our expenses in line pretty well, but we did lose property tax value and we are hoping we can stay level with that this year and not go down any more. That would be very helpful to us,” Hebert said. “It is good to come into the year with a good solid fund balance so we can react to all of the unknowns. We will lose personal property tax and we have increases in cost in healthcare and pension, so I think at the end of next year you could see it at 23 or 24 percent. We put off a lot of capital and as you know we have a lot of work that needs to be done on streets, buildings and bridges.”

In other business:

* the council agreed to enter into a memo of understanding with the Alpena Farmers Market for use of the pavilion in the city parking lot. The structure is owned by the farmers market and the group hopes to make a larger facility that could be used year around.

* the council appointed Susan Nielsen to sit on the HUNT Board and reapportioned Phil Wiser to sit on the retirement board.

* the council voted to accept a FEMA grant for $8,550 that will be used to purchase a thermal imaging camera for the fire department. The grant covers 95 percent of the cost. The city’s match is $450.

Steve Schulwitz can be reached via e-mail at or by phone at 358-5689.