Traverse City audit finds $25.7 million net increase for fiscal 2025

The City of Traverse City reported a $25.7 million increase in net position for the fiscal year ending June 30, 2025, lifting total net position from $174.1 million to $199.8 million, a 14.8% gain. The improvement strengthens the city’s fiscal cushion and affects how officials prioritize services, capital work, and ongoing operations.

City finance documents show the general fund, which pays for day-to-day operations, ended the year with an unassigned fund balance of $11.4 million. Revenue shifts cited in the audit and accompanying coverage identify several specific contributors to the stronger position. Marijuana excise tax receipts are called out as a notable contributor; the city budgeted $711,000 from cannabis taxes for the current fiscal year, and this is the third year the city has benefited from the state’s adult-use marijuana program. Voter-approved emergency medical services funding also arrived in full for the first time - a 0.9884-mill EMS/Ambulance levy generated approximately $1.28 million, providing stable funding for fire and emergency medical services.

Federal American Rescue Plan Act dollars remain in play. City materials indicate the administration plans to complete spending about $1.6 million in ARPA funding during the current fiscal year. City enterprise operations - including water, wastewater, and parking systems - are described in the audit coverage as also showing strong performance, though the provided excerpts do not include detailed enterprise fund totals for FY2025.

Property tax levies shifted slightly between budget years. The general fund levy was 11.6322 mills in 2024/25 and moved to 11.5775 mills for 2025/26, with 1.0 mill continuing to be dedicated to street projects and sidewalk debt service. The audit coverage also notes significant infrastructure investment during the year, though itemized capital spending and project-level details were not included in the provided excerpts.

Readers should note that some documents included with the audit bundle are component-unit financial statements from earlier years. The Downtown Development Authority’s audited statements for the year ended June 30, 2022 show a total net position of $8,352,267 and a net position increase of $2,560,433 for that period. Traverse City Light and Power’s component-unit statements for June 30, 2022 (with comparative 2021 figures) show total net position at $81,066,855 for 2022, with operating revenue and expense lines detailed in those statements. Those component-unit figures are separate from the citywide FY2025 totals and are presented here for context.

City commissioners will review the audit at a study session on February 9, with a formal motion to accept the audit scheduled for the regular City Commission meeting on February 17. For Grand Traverse County residents, the net increase means stronger reserves and clearer revenue streams for essential services and capital work; the commission’s upcoming review will determine whether the city shifts priorities, increases investment in infrastructure, or earmarks funds for long-term obligations.