December 12, 2013GROSSE POINTE FARMS — Accountants may as well have shimmied down the chimney at city hall to deliver the annual audit report.
Auditors from Plante Moran's Southfield office concluded that Grosse Pointe Farms has an unrestricted general fund balance equaling 26 percent of annual operating costs.
The $3,368,335 balance — a rainy day fund — increased $160,000 from the year before and represents a 6 percent cushion beyond the level auditors advise cities.
Farms officials credit the percentage for the city's high bond rating.
"We're at AA+," said Shane Reeside, city manager. "They want you to have at least 20 percent of general fund operating costs in fund balance."
The city received a clean opinion in the audit for fiscal year 2012-2013 ending June 30, presented at the Monday, Dec. 9, council meeting, the last one of 2013.
All city departments operated within their budgets last fiscal year, despite a 1.6 percent decline in general fund expenditures compared to the year before, according to Councilman Louis Theros, chairman of the finance committee.
He credited the city's financial standing to "30 years of good fiscal management, even with cutting taxes and millage rates five times over seven years."
Theros said, "Our public safety pension is 109 percent funded. Our general employee pension is 80 percent funded. That is exceptional."
Farms finances allowed spending $1.2 million last year in capital improvements, such as $627,000 for road repairs and $145,000 for parking improvements, Theros said.
"The majority of city roads are categorized as in excellent or good condition, with no streets in poor condition," according to a report by Reeside and John Lamerato, city controller and treasurer.
The Farms' 14 mill operating millage consists of 11.5 mills ($7,879,985) for operating purposes, 1.0834 mills ($742,341) for debt service and 1.4166 ($970,655) for rubbish removal.
Residential property taxes comprised 72 percent of city revenue.
The cost of operating the public safety department declined $266,701 from the year before.
"Public safety expenditures decreased due to the restructuring of employees and a reduction in overtime," according to Reeside's report.
Spending for public safety last year represented 32 percent of overall municipal expenditures.
Costs went down nearly 9 percent for parks and culture due, in part, to staff cuts.