2011 Audit Shows Growth in Birmingham's Net Assets

It was a good year for Birmingham — at least financially — according to the city's audit for fiscal year 2010-11, which was presented at the Nov. 14 City Commission meeting.

The city's financial statements include not only the city of Birmingham, but also the legally separate , the , the Corridor Improvement Authority and the Brownfield Redevelopment Authority. An audit is conducted annually.

For the fiscal year ending in 2011, the city took in $48.6 million in revenues and spent $43 million. Meanwhile, the city's total assets exceeded its liabilities, growing 3.4 percent to come in at $168 million.

According to the audit completed by accounting firm Plante Moran, the city took in more revenue than expected last year, a fact attributable to many sources. The city saw a 16 percent increase in the number of building permits this year over last, and as of the audit date, there were 13 new housing permits in various stages of review.

"The city's strong financial position is attributable to continued good financial performance, maintenance of fund balance levels and prudent proactive management of the city's operations, supported by conservative budgeting," a report written by City Finance Manager Sharon Ostin and City Manager Bob Bruner reads.

However, to make up for a loss in investment income, Birmingham also has made cuts in recent years, including a 30 percent reduction in city staffing since 2000.

Revenues

The following is the revenue sources for Birmingham's general government funds. The remaining revenue is made up of propriety and fiduciary funds, which are mainly used by the city for internal purposes.

Expenditures

As for expenditures, city departments stayed below budget in fiscal year 2010-11, mainly as a result of reduced personal costs, unsettled contracts and earlier-than-anticipated retirements. The Quarton Lake dredging project was also delayed until FY 2011-12.

The result was the total expenditures for general governments funds was $1.5 million less than expected.

Fund balance

Looking ahead

Property tax revenue for 2011-12 is estimated to come in at $18.4 million, a decline of $903,490 — or 4.99 percent — from the previous year. According to Plante Moran representatives, this decline is due to the continued slump in the real estate market, though Oakland County's economic forecast is looking up.

"The local economy seems to have stabilized and an upturn is now underway," Bruner and Ostin said in the financial report. "After going through the worst economic period in modern times, the area's economy is poised for continued improvements although at a slow pace."

Legacy costs for retirement and retiree health care expenses increased by 10 percent in 2010-11 and are expected to continue to climb.

Clarification: Information was added to this article to reflect that the revenue sources and expense charts reflect Birmingham's general government funds.