Ishpeming '025 '025: Gray, the city's financial director, briefed the council on the revenue-and-expenditure report for the period ending Sept. 30, 2025, and outlined items staff wants council to consider during the coming budget season.

Gray told the council the general fund is projecting an approximate $25,000 surplus at year end and reported an ending general-fund balance of $787,000 as of Sept. 30. Major-streets fund figures included a year-to-date net revenue over expenditure of $108,000 and an ending fund balance of $1,090,000, Gray said. He reported an ending water fund balance of $11,700,000 and said the report shows $2,000,000 in federal grant revenue recorded for September and $5,500,000 in DWSRF grant revenue for the month.

Gray explained that some large utility reimbursements from the Clean Water and Drinking Water state revolving funds are being booked on the balance sheet as liabilities until capitalized: "That is a product of the reimbursement that we're getting back from the CWSRF right now is not being booked on your income statement here. It's a liability. It's bond revenue." He said this accounting treatment makes utility operating statements show a current loss until the amounts are capitalized at year end.

On the proposed 2026 budget, Gray described the packet as a starting point and urged the council to consider longer-term planning: "This is the beginning step in our budget process for the coming year," he said, adding a suggestion to consider a library millage and to carefully evaluate additional permanent staff hires. He noted personnel services account for about two-thirds of the general fund.

Gray also recommended that council remember upcoming debt-service payments tied to CWSRF and DWSRF bonds when considering any one-time surplus or rate reductions: "That debt on all of this work that we're doing is gonna start becoming relevant to these funds as we move forward." He said a rate study will be part of future discussions and that capital debt service will reduce apparent surpluses in utility funds.

Council members asked clarifying questions about garbage contract options, DDA contributions to sidewalk snow clearing and whether the city's Treasury Department oversight tied to water debt reduction would continue; Gray replied that oversight likely remains for the life of the bonds.

Council later approved the 2025 third-quarter budget amendments in a single voice vote; staff said the amendments reflect realized grant revenue, equipment purchases and timing of invoices.

Key figures cited by staff

- Projected year-end general fund surplus: approximately $25,000 (projection).
- General fund ending balance (Sept. 30, 2025): $787,000.
- Major streets ending fund balance: $1,090,000.
- Water fund ending balance (Sept. 30, 2025): $11,700,000.
- DWSRF grant revenue recorded in September (as reported): $5,500,000.

Gray told council that staff will present more detailed budget discussions at the public hearing and in subsequent meetings, and that department heads will be asked to prioritize nonessential spending for the remainder of the year.