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Hibbing utility auditors issue clean opinion as commission reviews finances and long-term capital plan
Summary
ABDO LLP gave Hibbing Public Utilities an unmodified 2025 audit opinion and no internal-control findings while consultants warned the combined utility’s rate of return has fallen toward zero; commissioners adopted a 2026–2030 capital improvement plan to prioritize lead-and-copper compliance and coordinated city projects.
A certified public accounting firm told the Hibbing Public Utilities Commission on April 28 that the utility’s 2025 financial statements received an unmodified (clean) audit opinion and auditors disclosed no material internal-control deficiencies.
Bonnie Schweiger of ABDO LLP summarized the audit and said staff provided the evidence needed for the review and that compliance checks required by Minnesota statutes produced no findings. “We did not find any internal control matters to disclose,” Schweiger said.
Why it matters: while the audit found no reportable problems, outside consultants warned commissioners the utility’s combined rate of return has declined and depreciation is outpacing operating revenues in some departments, which could affect the utility’s ability to fund long-term capital replacement.
Bethany of Baker Tilly reviewed five years of financial metrics and said the utility’s consolidated rate of return was near zero in 2025, down from roughly 1% in 2024. She said unrestricted reserves are roughly seven months of operating revenues and that the utility has invested heavily in capital over recent years—about $23 million in 2025 alone, mostly in water and electric work.
“Your rates were designed in the study to gather a 5% rate of return,” Bethany said, noting that several departments’ returns have declined and recommending steps to reverse that trend so depreciation and future replacement costs are covered.
Commission action and next steps: commissioners unanimously approved acceptance of the audit and then adopted the 2026–2030 capital improvement plan, which prioritizes lead-and-copper compliance, tighter coordination with the City of Hibbing on projects, collection of better asset data, and strategic resilience initiatives. Staff said the plan will guide project prioritization and reporting and be updated annually.
The commission also voted to publish the full audit report on the utility’s website and asked staff to continue refining multi-year financial planning and rate analysis in upcoming work sessions.
