Shelby Township: Shelby Township 2020 Audit Shows Proof Of Board Policy's Financial Stability, Success

Press release from Shelby Township:

08/10/2021 4:22 PM

At its presentation of the 2020 audit for the Charter Township of Shelby, Plante & Moran, PLLC affirmed the township’s sound financial standing with an “unmodified, best-opinion audit,” which means the township’s financial accounts and records follow best practices.

“This is the best opinion you can get,” said David Herrington of Plante & Moran at the July 20 Board of Trustees meeting. “The Finance Department, Treasury, DPW are all doing an excellent job. You’re getting good numbers so you can make sound decisions going forward.”

Plante & Moran outlined an increase of revenue of more than $1.58 million in property tax revenue funds in 2020. The increase in property tax revenue resulted from an increase in taxable value as the tax rate for local services was unchanged from the established rate of 9.2999 mills.

“The township’s largest revenue source, property taxes, did increase by about five percent,” Justin Kolbow of Plante & Moran said. “The millage rates have not been increased. That is just a result of increased taxable values.”

The increase in property tax revenue helped offset shortfalls in other revenue streams because of the COVID-19 pandemic. Because of revenue reductions from service charges, fines, permits and investment income, the township’s overall governmental fund revenue in 2020 was $2,485,294 less than in 2019. The township reduced its total governmental fund expenditures by $912,305 in 2020 compared to 2019. The governmental funds represent all of the township’s funds aside from the Water and Sewer Fund and the pension and retiree healthcare funds.

This reduction in expenditures came despite the township pledging an increase of more than $1 million to its pension contributions and debt service and roughly $4 million for road improvements.

“Shelby Township is in excellent financial condition,” Herrington said. “That is defined by the strength of your funds as well as addressing your legacy costs, which has been a big commitment for a long time here.

“Your (retiree) health care fund is at 78 percent, and you’re in a very small group of folks that are over 50 percent. To be at 78 percent is phenomenal, and the trend is outstanding. That strict discipline to address these legacy costs allows you to look at your strategic plan and use your funds for the township in a wise way.”

Overall revenues for 2020 totaled $89.2 million, with $75 million in total expenditures across all township funds. As a result, the township's combined net position increased by $14.2 million in 2020 from $203.3 million to $217.5 million.

“There’s been a lot of volatility in our funding, which makes long-term planning very difficult,” Shelby Township Supervisor Rick Stathakis said. “But, partnering with (Plante & Moran), we’ve got through this. Our Board has done a lot of work, and Finance Director Allan McDonald is super. Our goal is budget stability, and, one way or another, the budget will be balanced without bonding or borrowing. If we don't have it, we don't buy it."  

This press release was produced by Shelby Township. The views expressed here are the author’s own.