2018-10-11 / Local News

Slow marina sales in 2017 shows up in Northport Village audit

By Alan Campbell
Of The Enterprise staff

The good Lord giveth, and the Lord taketh away.

The phrase works for Northport Village finances, but in reverse order.

A $220,000 decrease in village funds reported in the 2017-18 audit was blamed on the effect of a cool summer on village marina receipts. But funds lacking from marina business in 2017 showed up in this fiscal year, which ends on Feb. 28, 2019. Marina slip rentals and fuel sales increased substantially this summer.

Village Council members last week were visited by certified public accountant Mary Krantz, who said that village books were found to be in sound order — if a little light in the bank account heading into the summer of 2018.

“The big reason, you may recall, was the summer of 2017 was cool," reported Krantz. “All my hospitality clients had a bad year, too, because it didn’t heat up like it did this year.”

The 38-page audit was provided by long-time village accounting firm Dennis, Gartland & Niergarth of Traverse City. The Village Council has voted to seek proposals for its state-required audit and legal representation.

So how much did marina revenues slip? An exact figure for the drop-off is not provided in the audit., The only comparison between fiscal years involving the marina includes more than one operation under the category of “business-type activities.”

However, that category fell from from $820,419 in 2017 to $709,283 in 2018 — nearly 14 percent.

Some of that loss was offset by a $25,541 drop in expenses, mostly due to purchasing less fuel due to a lack of sales at the marina.

Figures provided for 2017-18 marina operations show a net loss of $54,170. However, the calculation includes nearly $214,000 in depreciation. The marina made a $159,410 profit without depreciation.

However, clerk Joni Scott said the marina bustled this summer. “One thing I can say for sure is that the marina has done better,” Scott said.

The audit offered little insight into a loan to build the municipal sewer, the biggest financial burden facing the village. The village and Leelanau Township are both drawing $60,000 annually from their respective general funds to help make those payments, which were designated to be paid by sewer users. Projected growth was built into the repayment schedule; that growth has not occurred.

The audit did state that the outstanding debt as of Feb. 28 was $6,283,845. The village portion of the original 20-year loan taken out in 2007 was $10.2 million.

Under “Known factors affecting future operations,” the audit states: “The sewer system has been completed. Assessments and connection fees were levied and payments will be received over the next twenty years. These payments will be utilized to repay the SRF (State Revolving Fund).

Also “findings” were issued about financial policy that routinely show up in audits of the village. One is that the small size of staff in the village office does not allow segregation of duties and oversight. Also, no staff member is a CPA, which means that external auditors must rely on bookkeeping information provided by village employees who are not certified as accountants.

Other information provided in the audit includes:

• Property tax income increased about 3 percent to $394,893, and remained the largest revenue source for the village. The village levies 8.5 mills.

• The cost of providing “general government” services also increased, from $284,226 to $310,135, or a little more than 9 percent.

• The village general fund made a healthy jump, from $755,303 to start the fiscal year up to $840,386 on Feb. 28, 2018. That’s an 11.3 percent increase.

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