Plante Moran representatives Kristin Hunt and James Haapala share city financial audit results during a Dec. 6 presentation to the Lincoln Park City council.
ARPA funds help; water loss, court revenue decline hurt
By SUE SUCHYTA
Sunday Times Newspapers
LINCOLN PARK – While federal pandemic relief funds have taken a burden off of the city, excessive water loss, court revenue decline and pension funding have the city operating at a loss.
Kristin Hunt of Plante Moran said at the Dec. 6 City Council meeting that overall, the city had a good year in the general fund, which was driven by the additional coronavirus relief funds.
“Normally, whenever you get federal grant funds, you use those for some other specific purpose,” Hunt said. “These funds allowed you to use those to pay existing public safety salaries, so that really helped the general fund this year, because it took some of the burden of that off.”
Hunt said it has allowed the city to get its fund balance up to a safer level, allowing the city to build up some reserves for unexpected events.
“If there are any unanticipated expenditures that you would have, you have a little bit better position now to be able to respond to those,” she said.
James Haapala of Plante Moran said the city’s total revenue increased by $1.5 million over the previous year.
He said property tax revenue, the city’s largest source of income, has remained relatively stable over the past five years.
“This year it increased roughly 6 percent, due to increases in the city’s taxable value,” he said. “Intergovernmental revenue increased by approximately $1.78 million, due to increases to the state’s shared revenue and also the coronavirus relief funding grant.”
Haapala said the fines and forfeiture revenue from the 25th District Court decreased about $710,000, with the remaining revenue components remaining relatively stable over the past year.
He said the city is in an operating loss position until the depreciation, which is a non-cash item, is excluded.
Haapala said the city’s water loss for the year remained at 36 percent, which is considered a high amount.
He said a proposed class action lawsuit was filed in circuit court for basement flooding that occurred April 30 and May 1, 2019, and it could potentially include 800 houses in the city. In addition to the city, Wayne County, the Wayne County Drain Commission and two Drainage Districts are named as defendants.
He noted that while the cause of the flooding has not yet been ascertained, the determination will impact which parties are responsible for the financial damages. He said it is a relatively new case, and the city has not yet made provisions due to the uncertainty of the outcome.