Birmingham receives highest audit opinion
The city's auditors from Plante Moran presented the fiscal year 2019-2020 audit at the Birmingham City Commission meeting Monday, November 23, giving it an unmodified opinion, which is the highest form of assurance.
Douglas Bohrer, Timothy St. Andrew, and Aaron Sarver gave a presentation of the city's fiscal year which ended June 30, 2020, noting that there were changes in some numbers due to the COVID-19 pandemic, however the city remains in sound financial shape.
Sarver said the general fund continues to be financially sound, with a fund balance that increased by $2.4 million. Approximately $11 million was invested into city infrastructure in the last fiscal year, he said.
As of June 30, 2020, the pension system was 78 percent funded, and the retiree health care system was 75 percent funded. The city has maintained its AAA bond ratings from both Standard & Poor's and Fitch's rating services.
Commissioner Stuart Sherman noted that about five years ago the pension and retiree health care systems had been fully funded, and the auditors concurred, but the percentage had fallen as there have been more retirees and investment income has not kept up with expenses.
Sarver noted that COVID “definitely had an impact on fiscal year 2020,” with a $500,000 decrease in building permits, $1 million decline in parking revenue and other lost revenues.
The outlook for fiscal year 2021 shows general fund revenues expected to be under budget by $800,000 to $1 million, with water and sewer funds the only ones likely to not be impacted. The parking system is expected to have an operating loss of $600,000 to $700,000, and state revenue sharing and state transportation fund having small increases in the budget.
St. Andrews said the city has had increased and steady levels of taxable values since 2013.
City finance director Mark Gerber, reflecting upon first quarter finances, said the city will likely receive $1 million in CARES Act and FEMA revenue which was unbudgeted.
“It will offset a lot, but not all, of the revenue shortages,” he said.