Negaunee audit shows finances improving

NEGAUNEE – A recently completed audit of Negaunee’s 2013 finances shows the city continues to make improvements to its economic situation.

At last week’s city council meeting, Michael Grentz, a partner at Marquette-based accounting firm Anderson, Tackman & Co., told the council the city’s general fund balance continues its five-year upward trend.

Grentz said the general fund ended 2013 with a balance of $1.3 million, an increase of $162,000 compared to 2012.

“What we can see here is your cash has been going up. Along with that, your fund balance has been going up,” Grentz said. “They’ve been going up together because you’ve been making net increases in equity over the last five years. So you’re bringing in more than you’re spending.”

Much of the positive results come from a better use of accounting principles, Grentz said, including allocating costs to the proper accounts, setting aside funds for capital improvements on utilities and making fewer transfers between accounts to cover losses.

Grentz said the city had about $3.4 million in revenues last year, down about 8 percent, or roughly $400,000, over the past five years.

“The main reason in looking at that decrease is you’re not transferring as much in from other funds as you used to; that makes up almost 100 percent of the decrease in total revenues,” Grentz said. “So what was happening in 2009, you were bringing in $360,000 worth transferred in from other funds to support the operations of the general fund. This year, you only brought in $71,000 with the transfers in, to cover your expenditures. … That’s definitely a positive thing.”

Another reason the city’s finances are improving is a dramatic drop in expenditures – related in large part to paying off debt, resulting in a decrease in capital outlay and debt service. Expenses dropped from $4.1 million in 2009 to about $3.3 million in 2013.

“The first (reason for this) is, transfers out,” Grentz said. “In 2009, you transferred out roughly $470,000, so you took that much money and transferred it to other funds to help support them. In the current year, you were down to $175,000. So the other funds are supporting themselves now going forward.”