Westland city officials received a positive audit report during a council study session Jan. 19.
Auditors from Plante Moran issued an “unmodified opinion”, the highest rating available, stating that the June 30, 2020 financial statements of the city are fairly presented and accurately reflect the financial position of Westland.
The city General Fund rainy day balance showed a slight increase to more than $6.1 million while complying with all requirements issued by the State of Michigan. City COVID-19 cost containment efforts proved helpful, with nearly all departments coming in under budget for the year, auditors noted, while the report also showed a decrease in total outstanding bond debt of approximately $2.7 million.
“The city was able to outperform the General Fund amended budget by approximately $1.6 million, despite certain revenue recognized in 2020 being under budget,” commented Alisha Watkins, CPA and partner at Plante Moran “Westland's proactive pandemic cost containment efforts certainly had a favorable outcome on the budget results.”
“Despite a year full of unique and unprecedented challenges caused by the COVID-19 pandemic, the city was still able to reinvest more than $11.2 million on various capital improvements, including water and sewer line repairs and upgrades, various road and park improvements, and new public service equipment and vehicles during the 2019-20 fiscal year,” commented Mayor William R. Wild. “We will continue to be fiscally responsible as long term financial effects from the pandemic are realized.”
In accordance with Public Act 202, the city opened a retiree healthcare Trust Fund in 2019 in an effort to help address the unfunded portion of the retiree healthcare benefit obligations. The city has committed to budgeting $500,000 annually to the trust to offset the unfunded liability. The Westland liability has been reduced from approximately $232,750,000 at June 30, 2018 to approximately $155,750,000 as of June 30, 2021, representing a reduction of $77,000,000 or 33 percent.
“The city continues to make positive progress on the outstanding legacy costs,” commented Steve Smith, Westland finance director. “The overall unfunded liability in total for the pension funds and the retiree health care fund (OPEB) was reduced by over $67 million in 2019 and an additional $9.5 million in 2020.”
