Romulus receives ‘tremendous’ financial audit

Mayor LeRoy Burcroff

City of Romulus officials received some good news and high praise with the annual financial audit report last week.
Stacy Reeves of Plante Moran explained the details of the audit findings to the members of the city council during a special session just prior to the regular meeting last week. During the regular meeting, Reeves told the assembled audience that the city had a “tremendous result” on the audit “as a result of several years of sustained efforts to rebuild the fund balance lost during the economic downturn.”
Reeves said that the pro-active approach that Romulus officials took to find new sources of revenue without sacrificing city services had increased the fund balance in the city to $4.9 million, the state financial model of 25 percent.

Reeves also said that the impact of the economic downturn on property tax revenue on the city would take 25 years to return to the pre-downturn level.
Mayor LeRoy Burcroff said in a later interview that the current financial stability in the city is the result of a team effort and an approach of “must haves” rather than “want to haves.”
“We are facing the same challenges as every other community and we still face the issue of legacy costs for health care and pensions,” Burcroff said. “We offered buyouts and shaved $25 million off that balance, but we still have a huge obligation to fund funding for. I doubt many other communities reduced that obligation by $25 million,” he said.
Burcroff admitted that the legacy costs were the “keep me up at night” financial issue in the city, but he said he was very gratified by the audit results.
“We have regular meetings to find opportunities for revenue enhancements, we bring in the city attorney the Plante Moran people,” he said. “We have a score card and we look at metrics to be sure we can lessen any surprises by looking at the critical spending data,” he added.
According to Reeves, the approach has worked remarkably well for the community.
“The economic environment is challenging,” she said but Romulus managed to increase the fund balance to the recommended levels.  She also mentioned the current $5.7 million remaining pension and retiree health care deficit, and said the state is requiring communities to submit plans for funding  those obligations.
Burcroff said that one of the major factors in improving the city financial position was the approval by voters of the public safety millage last year.
“That is a crucial piece of the financial picture,” he said. “To me, that amounted to trust, the people trust us, like what we are doing and are willing to pay a little more for it. The millage certainly doesn't fund all the public safety costs, it is more a sustainability plan although we were able to open a small station in the Northeast corner of the city,” he said.
“Everybody is dealing with the same (economic) problems,” Burcroff said, “We're just ahead of the curve on dealing with these issues.”