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Romeo auditor gives village a clean opinion but flags $1.9M cash drawdown and long-term pension costs
Summary
An independent auditor gave Village of Romeo an unmodified (clean) opinion on its 2024 financial statements while noting a $1.86 million short-term fund-balance decrease driven by street capital projects and long-term pension and retiree-health liabilities of roughly $8 million that create a deficit net position of about $1.58 million.
Joe Verlin, auditor for Gabri and Company, told the Village of Romeo Board of Trustees on Jan. 27 that his firm issued an unmodified, or "clean," opinion on the village's fiscal 2024 financial statements but also cited key fiscal pressures. "The financial statements present fairly in all material respects the financial position of the village as of June 30, 2024," Verlin said, adding that short-term cash flows and long-term liabilities require attention.
Verlin said total revenues on an accrual basis were about $9.8 million and expenses about $6.9 million, producing a $2.9 million increase on a long-term basis. On a modified-accrual (cash) basis, however, fund balances across governmental funds fell by about $1.86 million for the year, largely because the village invested roughly $3.5 million in street and other capital projects that were capitalized under accrual accounting.
"When we change the focus to short term, your fund balance decreased by about $1.85 million," Verlin said. He also reported that the village's net pension and retiree-health (OPEB) liabilities together total about $8 million and are the primary drivers of a deficit net position of roughly $1.58 million as of June 30, 2024.
The auditor noted that the village's general fund unassigned balance remained robust on a point-in-time basis (about $4.38 million, roughly 118% of general fund expenditures and transfers), but he cautioned that upcoming capital expenditures should be evaluated against that balance once the capital-improvement plan is released.
Trustees asked clarifying questions during the presentation; an attendee later urged trustees to press more on audit details. President Panski said the audit and the forthcoming capital-improvement plan would be used together to assess the village's fiscal resilience. "It's important to look at unassigned fund balance in conjunction with upcoming capital expenditures," Verlin said.
The board voted to accept the audit report as presented. "We appreciate the work done by Gabri and Company," President Panski said after the vote.
What happens next: trustees were advised to review the capital-improvement plan when published and to monitor pension and OPEB funding trends as part of annual budget planning.
