NEWS RELEASE 12/29/2011
|2011 FISCAL YEAR AUDIT REVEALS CONTINUED FINANCIAL STRESS FOR THE CITY OF FLINT|
FLINT, Michigan - December 29, 2011 -The accounting firm of Plante and Moran today released its audit of the City's Comprehensive Annual Financial Statement for the fiscal year ended June 30, 2011. The financial statement encompasses some $567 million in expenses, including Hurley Medical Center, the City's water and sewer systems, and the General Fund. $141 million of this amount is related to general governmental activities including public safety, roads, parks, transportation and community development. The category of general government activities includes the City's General Fund, which accounted for $67 million. Expenditures from the General Fund go to providing primary support of basic municipal services including police, fire, 9-1-1, courts and other general government activities|
The City's General Fund, which had a $14.6 million deficit at the beginning of the year, ended it with a $7.3 million deficit. The reduction in the deficit is due solely to an $8 million Fiscal Stabilization Bond issued by the city in March 2011.
The City's Water Supply and Sewage Disposal systems also reported losses of $5.5 million and $12.2 million. Increases in water and sewer fees have been implemented since the end of the fiscal year in an effort to forestall additional losses.
City of Flint Finance Director Jerry Ambrose says the audit substantiates that the city continues to experience severe financial challenges.
"The numbers are very telling. If the city had not issued the Fiscal Stabilization Bond, the General Fund could have ended the fiscal year more than $15 million in the red," said Ambrose. "What the audit reveals is that in spite of past efforts, there continues to be a significant gap between revenues and expenses. The challenge for us moving forward is figuring out how we close the gap and still provide quality services to residents, businesses, and visitors."
Ambrose says the audit did show one area of improvement in the City's finances. "While most of the General Fund revenues failed to meet their budgeted amounts, we took in $14.4 million in income taxes; approximately $3 million more than budgeted." The 14.4 million is nearly $1 million greater than the previous year, but still substantially less than prior years. The increase may be an indication that employment in Flint is beginning to stabilize.
For a complete look at the FY-11 audit please visit www.cityofflint.com.
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