Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Three Oaks audit shows stronger fund balances; council approves reserve investment
Summary
Contract auditor Derek Hall reported healthy fund balances and an A- audit rating while noting three procedural findings; council approved Resolution #04-2025-01 to place reserve funds in Michigan CLASS for liquidity and higher yields.
The Three Oaks Village Council heard an audit overview Tuesday that showed higher year-end balances across the villages funds and approved a resolution to invest reserve funds in Michigan CLASS.
Contracted auditor Derek Hall told the council that most of the villages funds finished the fiscal year with net gains. He reported a $186,000 net gain in the General Fund, bringing that fund to about $2.2 million. The Sewer Fund, which will underwrite a major upcoming bond-financed project, showed a roughly $3.4 million bottom line with about $1.6 million in cash and investments; the Water Fund was essentially break-even with about $2 million in cash. Hall said street funds spent about $150,000 on infrastructure this year but still rose about $55,000 overall.
Hall said those results reflect growth in taxable values and careful preparation for the sewer and bridge projects that are imminent. "You have put yourselves in the position you need to be to be able to continue to move forward," Hall said.
The auditor also identified three findings the council should address: continued municipal reliance on the contracted auditor to prepare financial statements (a common practice for similar-sized entities), a lapse in maintaining the capital asset list during staff turnover, and unclear wording in December 2023 closed-session minutes that did not explicitly document the meeting's purpose tied to an employee request. Hall rated the audit overall as an A-.
On the same night the council unanimously adopted Resolution #04-2025-01, authorizing the village to invest reserve funds in Michigan CLASS, a local-government liquidity pool. Hall described Michigan CLASS as a liquid alternative to certificates of deposit and said participating municipalities he works with have seen yields in the range of about 4.75% to 5.25%. He noted Michigan CLASS's AAAm S&P Global rating and that funds can be made available quickly when an emergent need arises.
Village President Graziano asked for any comments prior to the vote; there were none, and the resolution carried on a unanimous vote among members present.
The councils next steps include addressing the auditors procedural recommendations (particularly the capital asset list and minute wording) and continuing financial planning as the sewer and bridge projects move from planning to construction.
