Ishpeming council adopts 2026 budget, shifts funds after $1.4M 3rd Street change order; approves city-hall boiler replacement

Ishpeming — The City Council voted to adopt the 2026 city budget and an amended capital-improvement plan on Nov. 4 after staff warned a $1.4 million nonparticipating change order on the 3rd Street project has created a material funding gap.

Gray, the city’s finance presenter, told council the 3rd Street change order passed earlier in the year is entirely a city responsibility and has left an estimated shortfall of about $360,000–$500,000 in identifiable funds, noting the city had previously identified roughly $750,000 for storm-sewer work and other related project line items.

"That 1.4 that got passed for storm sewer in July is all city responsibility," Gray said during the discussion, and he urged caution on noncritical spending for the remainder of the year.

The budget debate included a direct discussion of how to cover that gap. Staff recommended several options, including diverting some public-improvement dollars previously allocated to the Carnegie Public Library heating project, pursuing grant opportunities, or short-term financing. Council members expressed reluctance to take on frequent short-term borrowing but acknowledged it may be necessary for large capital needs.

At the same meeting, council approved emergency replacement of the city-hall boiler system after public-works staff warned of an imminent safety inspection. William, who presented the DPW update, described Prime Mechanical’s quote for two new boilers and pumps and said a SEMCO grant could contribute toward the cost. "If you guys approve this tonight, they will stop calling," William said, adding that "the boiler is gonna get red tagged the next time that we visit" if the replacement is not approved.

Council voted to waive competitive bidding and accept the Prime Mechanical proposal for the city-hall boiler replacement, with the funding source moved to the general fund as staff recommended. The motion passed.

Library heating system: repair or replace

Council also debated an aging steam boiler in the Carnegie Public Library. Staff described two approaches: a temporary repair (estimated at about $250,000, with no guarantee of long-term life) or a full conversion to a hot‑water system (estimates discussed in the meeting ranged higher and staff used a working figure of roughly $500,000 for planning purposes). No final vendor quotes were presented at the meeting.

A motion directing staff to issue an RFP for a hot‑water heating system at the Carnegie Public Library carried, with council members asking staff to return with firm quotes and financing options — including potential grants and a short-term loan option — for a future funding decision.

Other related votes and items

The council also: continued SNAP benefits as previously adopted through the December meeting; declared DPW Unit 175 (2015 backhaul) surplus pending delivery of a replacement; and approved a $13,487.50 contract to Lindbergh and Sons to finish landscaping and topsoil around the new skate park, waiving competitive bidding for that small restoration contract.

Why it matters

The budget and CIP decisions reallocate scarce local resources to absorb unplanned costs tied to construction change orders and aging systems, and they set the city’s capital priorities for 2026. The library-heating decision will require identifying outside funding or approving debt if council cannot find sufficient grant support.

What’s next

Staff will return with vendor quotes and specific financing options for the library heating project and other large items; the council recessed to a closed session later in the evening to discuss a separate real‑property matter.