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Audit shows $45 million in city net position, flags fund-timing and motor-pool deficit
Summary
An auditor told the Ishpeming City Council the 2024 audit records about $45 million in net position but reflected timing-driven swings from grant revenue, a general fund loss near $180,000 and a motor-pool deficit that requires a state plan.
An auditor presenting the Anderson Tackman 2024 audit told the Ishpeming City Council that the city’s financial statements show roughly $45,000,000 in net position, with about $2,000,000 in unrestricted funds and a net pension liability of about $2,800,000.
The presenter (Speaker 4) said a large grant recorded in the sewer fund drove a one-time increase to the bottom line: “you added $8,800,000 in grant dollars in the sewer fund,” and so the reported gain reflects capitalized project costs that will be depreciated over time. The auditor added that the $9.3 million aggregate movement on the bottom line is “kinda skewed” by how capital grants and assets are recorded rather than reflecting spendable cash.
On the general fund, the auditor said the city ended the year with an approximate $180,000 loss but finished about $70,000 better than the final budget, leaving a fund balance near $743,000. The report noted most revenue carries come from property taxes and that revenue and expense variances were generally small relative to the overall budget.
The auditor flagged pension funding as a material context item: the city’s overall pension position has improved, with the police and fire pension reported below full funding (police pension described at roughly 70% funded). The presenter said the pension plan is “riding the wave” of market returns and noted improvements since bond actions taken in prior years.
Staff and the auditor also reported a motor-pool fund loss (about $180,000) and an unrestricted deficit that triggered a required plan filing with the state. Staff said the motor-pool operations were transferred at year end and that future statements will show those activities closed out.
Council members asked about the timing of grant reimbursements for a project referred to as Partridge/Departures Creek. Staff explained the reimbursements were received after the statutory cutoff for recognizing 2024 revenue, so the dollars are recognized in 2025; “nothing went wrong with the project,” staff said, and the timing explains the apparent shortfall on the 2024 statements.
The audit presentation concluded with the auditor reporting no new significant audit findings beyond recurring reporting items and with council members thanking the presenters. The audit will be part of the council’s public record as the city proceeds into 2026 budgeting.
