Department of Treasury withholding much less from Muskegon Heights than previously reported

Andrew Trzaska | November 22, 2010

The amount of revenue sharing money being withheld from Muskegon Heights by the Michigan Department of Treasury is much less than previously published, according to City Manager Natasha Henderson.

The Muskegon Chronicle originally reported that over $740,000 would be withheld in the final months of 2010 from the city.  The true amount being withheld is $132,920, according to Henderson’s report to the city council at Monday’s city services meeting.  The incorrect figure was to misinformation and not actual revision of figures.

Henderson noted that the drastic correction from nearly three quarters of a million dollars to less than $150,000 should also clear up misgivings about the city’s true financial state.  The city is currently undertaking a five-year deficit reduction plan to remove a deficit of $620,000 created in 2008.  Henderson stated that if the original figure was correct, questions might have arisen as to where that large, hypothetical chunk of money may have been going and why the deficit was not being paid off sooner. The correct figure indicates the accurate status of the city’s financial abilities.

The delay is due to an incomplete audit of the city’s 2009 finances, which was due on June 30.  However, the payment will be recovered once the audit is completed.  Henderson stated that the city hopes to have it completed in December.

Henderson cited the long, 9-month process of completing the audit combined with a second one required for litigation the city was involved in as a reason for the delay.  At Monday’s meeting, Henderson stressed that she felt it was best to follow through with the litigation even if it caused this delay, and said the city is in good shape looking forward.

“Things are going well for the city in the sense we have been very professional about the litigation.”

The payment is also only for the final few months of 2010, and not for the whole year. Henderson says that since the revenue sharing funds are not lost but are only being withheld and since the audit is nearly complete, the delay with the audit should not have long-term effects on the city’s operations or budget.  The final report will be submitted to the city’s auditor on December 6 at the next committee-of-the-whole meeting.

Muskegon Heights city officials are currently developing the city’s 2011 budget.