Thursday, February 20, 2020

Wayne receives ‘unmodified’ audit, but still faces $1.5 million deficit

Officials in the City of Wayne received an “unmodified opinion” of their financial audit for last year which shows the city facing an upcoming $1.5 million budget deficit in 2020-21.
Brian Camillier of the Plant Moran auditing firm presented the financial report at the regular meeting of the city council earlier this month.
Camillier told the council members that the contents of the financial report was accurate with a minor deficiency on a grant report which he said was a compliance issue, not a financial issue. He told the council members that the city department heads had all managed within their respective budgets and said the efforts of the city to cut expenses by not filling employment positions had helped improve the financial condition of the city.

With the lack of new revenue sources, however, he said the city will still face a deficit in the 2020 budget.
“Even if you hit the budget numbers on the head, even if you do better than the budget,” he said, the city will be short $1.5 million next year.
The city has $14.7 percent in the rainy day fund which, Camillier said, is “below my comfort level.” He said the state minimum state recommendation is for municipalities to have $16.7, or two months operating expenses, in the rainy day fund.
He praised the city efforts to cut expenses and curb spending and noted that the decision to close the Community Center and then outsource it to a private operator was the correct move. He said the center had been losing $1 million each year.
Camillier also noted other changes in city expenses including the reduction in capital outlay for city equipment in several departments along with the reduction in city staff.
He said while these measures were helpful, the predicted budget shortfall was the result of a decrease of $60 million in property tax revenue from 2010 to 2019.
“The city has adopted cost containment strategies, but the options to increase revenue are limited to property tax,” he said. “The city has addressed this to the best of your ability, you just don't have resources.”
He said that a 45 percent decrease in tax revenue since 2008 was indicative of what the city has had to do.
“There is money for some road projects,” he said and added there was a balance in the water and sewer fund.
“You have an aging water and sewer system . You need to evaluate that both long and short term,” he said.
Overall, Camillier had praise for the efforts of the city.
“The city has prevented state intervention with tough decisions,” he said. “Your options are limited and you need a new revenue sources. You are losing ground”
He added that the city could not absorb the loss of the revenue should the upcoming police and fire millage on the March ballot fail.
“You can't stand to lose $350,000,” Camillier said. That is the amount 1 mill of property tax generates annually in the City of Wayne.