Independence Township got great reviews from auditors Joe Heffernan and Chrystal Simpson at Plante Moran for the 2015 fiscal year audit.
“An unmodified or a clean opinion on the financial statements,” Simpson told the township board at the May 24 board meeting. “That’s the highest level of assurance we can provide.”
Trustee David Lohmeier said he’s “happy with the progress” they’ve made over the years.
“The idea of the audit committee is a fantastic asset added to the whole process, so we don’t all have to be – quite frankly – nervous,” Lohmeier said. “It’s a long way from where we were a few years ago. And it’s much appreciated to our staff that’s doing better and it makes it easier on the auditors coming in.”
Trustee Andrea Schroeder agreed.
“I have a high degree of confidence in (Finance Director) Wendy Hillman and (Accountant) Cheryl Culpepper in particular,” she added. “We would not have to have an audit if it was not legally required and be confident our books are not just ‘in order’ but assessable and transparent as well.”
The township has $18.7 million in revenues for all governmental funds, which includes general fund, police, fire, and all other funds other than sewer and water, or internal service funds.
Property taxes of $10.7 million fund 57 percent of total revenue.
The revenue increased from 2014 by almost $450,000 due to increases in taxable value. State-shared revenue also increased by a couple thousand, to about $2.7 million, Simpson said.
Total expenditures for all governmental funds was approximately $17.8 million, with the biggest expense $4.8 million for fire. This was an increase of $275,000 from 2014, for salaries and healthcare.
The second largest expense was police, about $4.7 million, increased by $29,000 from 2014. That was primarily related to equipment purchases.
Simpson said the township’s revenue declined for each of the last three years, but went up in 2015.
“This is again primarily related to property taxes,” she added. “Expenditures have fluctuated primarily based on the township’s needs, so when capital outlays were purchased, etc.”
“Governments lag two years behind the rest of the economy, so as the economy started going down in 2008 and many businesses started reacting to it, governments didn’t notice it until 2010,” Heffernan said. “As businesses started coming up, governments didn’t start noticing that either.”
“We noticed and reacted pretty quickly,” Lohmeier said.
Heffernan agreed.
“Most governments that only look one year ahead, the expenditures dropped also a year or two after revenues dropped, so their fund balance started dropping. That didn’t happen here,” he said. “The governments that were in fact able to look further than one year ahead and think through ‘how is this going to impact us?’ adjusted their expenditures at the same time revenues went down.”
Heffernan said that’s the difference between the governments doing well today and the ones that aren’t.
“Every single government that is doing well today saw what was happening before it actually happened, so they could adjust for it,” he added. “Independence Township did and that’s why you’re in such good financial shape.”
The ending fund balance was about $16.1 million for all governmental funds. Approximately 35 percent or $6.2 million of the township’s fund balance is unassigned, which Simpson called a “healthy level.”
The township’s total debt was approximately $26.9 million at the end of Dec. 2015. About $3.2 million was unrestricted and $4.7 million was invested into capital assets.
The 2015 water fund operating revenue decreased about $22,000 from 2014, bringing it to about $3.1 million. Operating expenses also decreased approximately $841,000 from 2014.
“This was because in 2014 you had the water tower painting as well as some water main repairs that did not recur in 2015,” Simpson explained. “The unrestricted net position for this fund increased by $396,000, again a positive note.”
The sewer fund increased just over $500,000 in operating revenue from 2014, bringing it to almost $5 million. Expenditures in sewer also increased $351,000 bringing it to about $5.4 million.
“The primary increase was related to additional contractual services and then some additional repairs in maintenance that were not in 2014,” Simpson said. “Unrestricted net position for this fund increased $636,000 and was about $9.3 million at the end of 2015.”