City maintains budget despite revenue shortage
ALPENA -The Alpena Municipal Council received the city’s audit results for the 2012-13 budget year and the city again had to overcome a decrease in revenue and rising expenses. At the end of the fiscal year auditors Straley, Ilsley & Lamp said the city’s finances remained level, although it did manage to add $ 35,990 to its fund balance.
For the 2012-13 fiscal year the city had revenue of $8,742,022, with expenses of $8,322,966. That would put the city was $419,056 in the black. However $383,066 was delegated to other financing uses, leaving only $35,990 to add to the fund balance.
Accountant Mark Sandula said Alpena is in the same position as most communities, and has weathered the financial storm better than many the last few years. He said the city has more than $50 million in total assets after an estimated $1.7 million in depreciation.
Sandula said the city only added $245,000 in new infrastructure. He said there also was more than $326,000 in the city’s health care liability and provided services worth $12.3 million from the governmental activities area, as well as $4.2 in water and sewer services.
Overall there was $3,131,728 in the fund balance or 35.9 percent of the total expenditures from the year. The fund balance has enough funds in it to sustain city operations for 131 days if need be. Sandula said the numbers show the city didn’t make a significant amount of money, but also didn’t go into the hole.
“You pretty much broke even,” Sandula said. “Most of the challenges you face are universal to those in the state of Michigan right now. Every year the revenues go down and the only way to combat that is by lowering expenditures. The declining property tax values have also hurt, but I think that is beginning to turn around a little bit. That puts an enormous strain on a city when the values drop.”
Clerk Karen Hebert said she was pleased with the audit report and the 2012-13 budget year ended where she hoped it would. She said looking ahead the city’s finances are going to continue to be an issue for some time and being cautious will be important.
“It sounds like the state has a good year, so maybe there will be a trickle down effect, but I still think we are three to five years away before we get back to solid ground,” Hebert said. “I thought we would come in close to our budget and I’m very pleased that we were able to come in flat.”
Sandula said there isn’t much the city can do to raise revenue other than raise taxes, which it hasn’t done. He said it must continue to ride out the storm until the economy improves.
“You’re in a leaky boat just like everybody else,” Sandula said. “The city has a fine staff and they work hard to stay within budget. We’re not talking about massive deficits and the worst thing that happened is you broke even. There were many other governmental entities that went way south on expenditures. I want to compliment the city on holding the line.”
By having a comprehensive annual financial report the city has earned a Certificate of Achievement from Excellence in Financial Reporting for the 19th consecutive year.