The City of Alpena increases its savings by nearly $1 million
ALPENA — Alpena is in good financial health and was able to increase its savings by just under $1 million which it says it is going to invest into needed projects.
That is news the Alpena Municipal Council received from its auditors during Tuesday’s council meeting.
The city was able to increase its savings across its government accounts so drastically because of a decline in its long-term pension obligation, Straley Lamp and Kraenzlein P.C. Chelsea McConnell said.
At the end of June, the city had about $3.9 million in its general fund savings, which is 38% of its general fund expenses. The city’s policy is not to let the fund balance exceed 20% of the general fund expenses.
The city’s savings is enough to run the city for 140 days if all revenue dried up.
“That is about 23 more days than what you ended with at the end of June in 2020 and it shows the general fund is definitely in good health,” McConnell said.
City manager Rachel Smolinski said she was pleased with the financial update and added that the city intends to utilize the money to provide more services for residents and for projects to improve their way of life. She said she is proud of how the city was able to operate responsibility through the ongoing COVID-19 pandemic.
“It is good that we as a city, even during challenging times, were able to keep our bottom line healthy for all of our operations so we don’t have to cut any services,” she said.
Smolinksi said the added money to the fund balance could be used to check projects off the city’s capital improvement plan. The plan is a five- year list of projects that are listed by priority. The CIP is updated annually and each year the council plugs some of the projects into its annual budget.
“We have many, many projects in our capital improvement plan, so we would target some of that fund balance to complete some of the projects that were put off in the past,” she said. “We’re working on that right now.”
The city’s budget runs from July 1 until June 30. At the end of June, the city ended its budget year with revenues of $10,011,767 but only spent $9,215,200 to end the fiscal year with a $434,964 surplus in its general fund budget. McConnell said the large drop in expenses was due to the lower obligation to the long-term debt. She said at the end of June, the city’s pension obligation was 88% funded.