Dexter Receives Clean Audit Opinion, Strong Financial Position

City remains financially strong with increased fund balance, stable enterprise funds, and strategic debt management.

At the Dexter City Council meeting on January 27, auditor Rana Emmons of PSLZ LLC presented the city’s annual audit and financial statements for the fiscal year ending June 30, 2024. The city received an unmodified audit opinion, signaling a clean report with no exceptions or disclaimers.

“That’s the one you want, the clean audit opinion,” Emmons said. “No, no exceptions, disclaimers, nothing bad to report.”

Revenue and Expenses
Dexter saw a 5.9% increase in property tax revenue, attributed solely to taxable value growth rather than a millage rate increase. However, state revenue sharing remained flat, with an unpredictable reduction in personal property tax reimbursement.

The city capitalized on high short-term interest rates, significantly increasing its investment earnings. Meanwhile, total expenditures rose by $600,000 compared to the previous year, driven by three key factors:

• An increase of $165,000 in fire-related expenses
• An additional $200,000 spent on the Mill Creek Park project
• Substantial contributions to the senior center

Despite the spending, the city remained financially responsible. “Ultimately, you came in under budget on your expenditures, $157,000, and you added $446,000 to the general fund balance,” Emmons said. “And, you know, thank goodness, because we don’t know what the future’s going to hold.”

Debt and Pension Liabilities
The city paid off its 2014 Capital Improvement Bonds, eliminating $1,477,000 in principal between the general government and water/sewer funds. Meanwhile, Dexter’s pension liability decreased by $188,000, and pension investments performed well.

“You had a net investment gain this year of $490,000 on the pension trust funds alone,” Emmons explained. “The year before, fiscal year 2023, not a great gain… we actually had a significant loss the year before of about $520,000. Now, we’re up $490,000.”

Dexter’s net pension liability stands at $883,000, with an 84.5% funding level, which Emmons described as “all very positive.” The city’s net other post-employment benefits (OPEB) liability is overfunded at 155%.

Enterprise Funds and Future Planning
The city’s enterprise funds—including water, sewer, and rubbish—also remained stable. Water and rubbish funds had positive cash flow, while the sewer fund saw a minor $42,000 dip.

“Nothing to get excited about. It’s pretty normal,” Emmons assured. “There’s no alarm to sound here.”

Looking ahead, Dexter will conduct a new water and sewer rate study, with past recommendations suggesting steady rate increases to cover future debt obligations.

When asked about areas for concern, Emmons said there were no financial red flags but acknowledged an upcoming transition. “Other than your finance director wanting to retire. That’s number one on my list, she commented.”

Overall, she praised city leadership for its financial stewardship. “Your operating expenses are nice and stable. So, you know, thank goodness for that. Then you can plan out anything.”

Emmons emphasized that Dexter is well-prepared for the years ahead. “From an accounting standpoint, we look 12 months out. However, from a planning perspective, I’m thinking more in the three-to-five-year range.”