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Baker Tilly gives Monroe a clean 2025 audit; city's unassigned fund balance fell after an unbudgeted $1.58M industrial-park land purchase
Summary
Baker Tilly presented the 2025 financial audit, issued an unmodified opinion, and reported a material reporting weakness tied to the firm's role preparing the statements. The auditor attributed a large drop in unassigned fund balance mainly to the city's unbudgeted purchase of about $1.58 million for 50 acres in the industrial park; utilities remain financially strong.
Baker Tilly principal Justin Hoagland presented the City of Monroe's 2025 financial audit during the council's June meeting, saying the firm issued an unmodified (clean) opinion on the city's financial statements while noting a material weakness the firm records when it prepares a client's financial statements.
Hoagland walked the council through the report's key figures. He said the general-fund breakdown included roughly $862,000 in non-spendable balance, about $45,000 restricted for specific purposes, $3.7 million committed (the city's working-capital policy), about $200,000 assigned and $243,000 unassigned. He told the council that the unassigned balance fell sharply from over $2 million the previous year because the city bought 50 acres in the industrial park for about $1.58 million that had not been budgeted: "That was the main reason that your expenditures were higher than budget," Hoagland said.
Hoagland also reviewed the city's debt profile and utilities. Monroe's legal general-obligation debt capacity was presented at roughly $64 million, with about $24 million outstanding (around 38% of capacity). He said the water, wastewater and stormwater utilities all reported operating revenues above operating expenses and healthy cash-on-hand metrics: Hoagland cited roughly 17 months for water, 39 months for wastewater and 24 months for stormwater.
Council members asked whether the wastewater plant project would be bonded or paid from reserves. Administrator (speaker 6) said some wastewater fund balance had been built up to help with the project and that the city will pursue a clean water fund loan; Hoagland cautioned against rapidly depleting cash and urged balancing borrowing and reserve use.
Hoagland noted Baker Tilly saw only a few audit entries (fewer than typical for many municipalities), and encouraged council members to view the audit committee resources and reporting packages Baker Tilly provided. He highlighted investment-income gains that contributed roughly $866,000 more than budgeted and higher building-permit revenues that offset some of the year's net loss. The audience had follow-up questions about cash-reserve targets and comparative trends among municipalities.
What happens next The audit and the finance-policy amendment the council later adopted (clarifying how the 25% fund-balance target is calculated) will be incorporated into the city's financial policy, and staff will continue project planning for the wastewater improvements with bond/loan options being explored.
