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Auditors report healthy fund balances but flag water fund operating loss
Summary
Siegfried Crandall delivered a clean audit for fiscal year 2025, noting a $4.6 million general fund balance (79% of annual expenditures), roughly $2.9 million in restricted street funds and capital reserves, but an operating loss of about $400,000 in the water fund and a police pension funded at 64% of target.
Dan of audit firm Siegfried Crandall presented the city—s annual audit and management letter, saying the auditors issued an unmodified (clean) opinion and made five adjustments, mostly related to capital assets and recording payables.
"You have good people managing your finances," Dan said, noting the general fund balance is about $4,600,000, representing 79% of current-year expenditures. He called the fund balance "a very healthy place to be" compared with typical Michigan municipalities.
The auditor flagged the water fund—s position: an unrestricted net position around $1,000,000 and an operating loss of about $400,000 this year, exceeding depreciation. He recommended a water rate study and potential rate increases to address sustainability. Dan also noted the defined benefit police pension plan is funded at 64% and suggested consideration of increased contributions to approach MERS—s preferred funding level (~80%).
Council moved and accepted the auditor—s report on a voice vote after the presentation. Dan offered to answer questions and said auditors remain available throughout the year.
The auditor presentation was accompanied by a management letter that lists recommended internal control improvements and explains the adjustments that were necessary to reach the clean opinion.
