Birmingham audit shows fund balance increase
By Grace Lovins
Birmingham’s 2021-2022 fiscal year audit was presented to the city commission during its meeting on Monday, December 5, showing a general fund balance increase of roughly $4.4 million.
After the city’s fiscal year ended on June 30, city staff partnered with Plante Moran to conduct the fiscal year audit, which showed growth in the city’s revenue and taxable value. The financial statement audit, including the implementation of lease recognition, and single audit of federal funds both had unmodified opinions, which is the highest form of assurance regarding the financial statement audit.
Tim St. Andrew of Plante Moran noted that the single audit, or the audit of federal expenditures since the city had spent over $750,000 in federal money, looked primarily at FEMA grants. Birmingham received $1.3 million in federal grants, $1 million of which came from FEMA grants. The single audit had an unmodified opinion and yielded no findings, according to the report.
The financial statement audit found that the city’s legacy cost had decreased relative to the market performance year-to-date. St. Andrew reported the city's pension system is 79 percent funded, which decreased from 96 percent in the previous year. Similarly, the retiree healthcare system is 80 percent funded, a decrease from 95 percent last year.
Spence Tawa, an auditor from Plante Moran, explained that with the city’s total taxable value, approximately $2.8 billion for 2022, the city has recovered from the Great Recession, where the taxable value decreased between 2011-2013. The total taxable value has been growing at an average rate of five to seven percent per year over the past five years, Tawa said, which can be attributed to continued redevelopment in the city.
Tawa also presented the city’s revenues and expenditures over the past six years for governmental funds, including the general fund, solid waste, parks and recreation and the capital projects fund. This year, the city’s governmental funds had operating revenues of $45.9 million and expenditures of roughly $45.7 million. Additionally, Birmingham’s strong financial position has allowed the city to levy less millage than the Headlee Tax Limitation Amendment maximum allows, saving taxpayers money over the last few years, according to Tawa.
Similar to the past five years, the city’s actual expenditures have come in lower than the budgeted amount, roughly by seven percent this year. Expenditures reportedly were lower this year than previous years, explained Tawa, as a result of personnel and contractual services coming in lower than estimated. General capital investments remained around $10 million, similar to last year, with depreciation on those investments staying relatively consistent over the last three years. Capital investments enterprise funds, including water and sewer, parking and golf course funds, remained at around $4 million, with continued improvements during ongoing road construction projects.
Following the presentation, commissioner Clinton Baller gave credit to the city administration for completing the audit and said the city should be proud of the results that show part of what makes Birmingham a desirable community.
City manager Tom Markus followed, echoing a point made earlier by Tawa that it is the reinvestment in the city’s properties that allows them to capture 100 percent of the growth that is what causes the values to continue to increase.
The presentation was informational and required no action or vote by the commission.