Page 12 - The Wayne Dispatch

Council receives and discusses financial audit

By Carolyn Marnon lions and millions of dollars prob- water main, sewer slip lining, sewer pension obligation to MERS. Subse-
“June 30 was seven months ago, lems and those stem from the pen- inspection system, and two trucks quently, MERS filed a lawsuit against
so a lot has happened over the sum- sions. The pensions, unfortunately, for Water and Sewer. In total, the the City of Wayne for breach of con-
mer and through the fall and into the are very difficult for us because we City added $2.0 million of new capi- tract. Ultimately, that lawsuit was set-
winter and so the audit, it’s a little bit don’t have a magic ball. I think every- tal assets.” tled in Wayne County Circuit Court
of old news at this point, but it does one probably understands that by It continues, “In May 2020, the on November 12, 2020 when the
bear going over it,” said Brian this point. We’ve had people collect- City approved the original budget for Honorable Judge Edward Ewell
Camiller of Plante Moran when dis- ing pensions for 45 years plus. the new fiscal year beginning July 1, mandated a judgement property tax
cussing the results of the City of That’s a problem. It’s not that they 2020 (FY2021). That approved levy be placed on the City’s Winter
Wayne Financial Audit conducted by don’t deserve it, please don’t get me budget, based on the amended 2020 tax roll for $4,753,409.”
Alan C. Young and Associates, P.C for wrong on that. But what city can sit FY2020 budget at that time, as- Finally, “The City continues to
the budget year that ended June 30, and pay a pension for 45 years when sumed FY2020 would finish with the look for ways to reduce costs inter-
2020. taxes are fluctuating as much as they City’s General Fund having only nally, share services with surround-
A financial audit provides an have, and they are going to continue $38,765 of remaining fund balance. ing communities, and other cost
opinion on whether the financial to fluctuate because our economy is Approved revenues and expendi- saving initiatives; however, these op-
statements of an entity are being very unstable. Our economy has tures for the original FY2021 budget portunities are very limited. The City
fairly and accurately portrayed. been showing instability for many were $15,165,150 and $19,000,856, of Wayne has been dealing with sig-
“The City continues to have a years. You lose 45% of your tax base respectively. As adopted, this budget nificant financial hardships dating
structural deficit. That means you back in 2008 that is very difficult to for FY2021 projected an ending fund back to the beginning of the Great
have expenses that you can’t get away recover. I don’t know if it’s even pos- balance deficit as of June 30, 2021 Recession in 2008.”
from that are greater than the rev- sible to recover from that recession. of ($3,796,941). A deficit of that mag- You can find the Financial Audit
enue that you can count on. Between So we have to be creative. We cannot nitude would result in the General on the City’s website:
the people and the legacy costs and afford to bring back retiree health Fund running out of cash before the https://www.ci.wayne.mi.us/index.ph
the overhead, when you start the care.” She stressed that the City has end of FY2021. As such, the City p/city- departments/finance/2-
year you know you’re going to spend already made a lot of hard decisions made the determination to begin pay- u n c a t e g o r i s e d / 3 5 - f i n a n c i a l -
more than you take in.” and will have to continue to do so ing only 25 percent of its monthly dashboard
The General Fund ended up while also looking for additional rev-
doing better than was budgeted. This enue streams, whether that be a 345
was because some of the open job millage or a merger with another city
positions in the City were not filled, on services.
department heads are doing well According to the 2020 Financial
with staying under budget, DPW has Audit conducted by Alan C. Young &
been directing their activities to Associates, P.C., “The City’s primary
those within the water and sewer revenue sources, property taxes and
fund and the streets fund and trying state-shared revenues, continue to
not to utilize general funds, the grow at approximately the rate of in-
COVID pandemic “helped” to reduce flation, 1.5% to 3% annually. Unfor-
certain spending, a refund in the tunately, this is not sufficient to
spring from the MMRMA (Michigan eliminate the structural deficit the
Municipal Risk Management Author- City has in place. The massive tax-
ity) and delayed capital improve- able value losses the City incurred
ments. “All of those things helped not during the Great Recession cut tax-
spend as much as planned, but it’s able values in the City by approxi-
not enough to get you back to even mately 45 percent. The City
for the year. It’s good; we didn’t lose continues to cut costs or freeze
2.5 million, but we still lost a million, spending where it can, but remain-
so it’s only so much good,” said ing expenses such as pension contri-
Camiller. butions continually increase. Even
In six of the last nine years, the with the changes to retiree health-
City has spent more than it’s taken care benefits noted earlier, the City’s
in in the General Fund. revenue streams are not adequate.
City Manager Lisa Nocerini The City of Wayne has a revenue
noted, “The City is definitely moving problem, not an expenditure prob-
in the right direction. I don’t suggest lem.”
robbing Peter to pay Paul ever again. The audit also reported that “New
That’s what this City did for many additions and improvements in-
years. It’s a really bad thing to do. cluded road resurfacing, police and
Don’t get back into that practice. We fire equipment, security cameras,
have to fix our structural deficit by election equipment, a new roof for
looking in other directions. We have the library, repairs to the Fire station
not $50,000 or $25,000 or parking lot, the beginning of the new
$100,000 problems; we have mil- Veteran’s Memorial, Mildred Street

12 · March 2021 · The Wayne Dispatch