City Commission Holds Special Meeting to Study Audit

IRONWOOD, MI - by Keri Singleton - Friday, December 18, 2009 - A Special Meeting of the Ironwood City Commission was held Thursday, December 17, 2009, at 5:30 PM, in the Women’s Club Room at the Memorial Building, Ironwood, Michigan. The reason for this meeting was to discuss the 2008-2009 Fiscal Year Audit.

1.The meeting was called to order and roll call taken. Present from the commission were: Mayor Bob Burchell; Gemma Gorilla Lamb; Kim Corcoran; William Lucius; and Rick Semo had an excused absence.

Also present were Julie Fredrickson, City Treasurer; Dean Beaudoin, representing Joki, Makela, and Pollack, PLLC; City Clerk, Karen Gullan; and City Manager, Scott Erickson.

A presentation of the 2008-2009 Fiscal year Audit was given by Dean Beaudoin, representing Joki, Makela, & Pollack, PLLC.

Mr. Beaudoin gave an overview of the City Audit.

It was explained that the loss in the general fund for this year, $485,230.00, is due to street projects. Due to falling interest rates, there was $70,000 in less interest income, city-wide is expected to be $140,000 more interest loss, Community Development spending is up $70,000. Mr. Beaudoin explained that the loss in the general fund was intentional to transfer money to support the major street fund. Also, included in the report, the general fund paid out $1.1 million to major street funds and non-governmental funds.

Mr. Erickson said that last year the city adopted a policy to maintain a certain level of fund balance. It is to support three months of operation, about $400,000.

The next section dealt with the Civic Center, which has a positive balance of $68,000, which all agreed is a nice change. They have a small amount of funding to the City to pay off, and then be debt free.

Water and sewer are doing well, with trying to build up reserves for future projects.

Scott Erickson said that the incremental increases over the last four years have been so that when the City of Hurley and Ironwood Township come off the system, there won’t be one huge rate increase.

Mr. Beaudoin said he is not surprised by the approximately 2 million-dollar pension fund decrease, about a third, due to the change in market value for investments.

The City is changing pension companies, with a liquidate amount of $8 million. Julie Fredrickson said the new company advised transfers right away, as money begins being earned upon that happening.

The City Commission has the right to change plans, not retirees, according to Julie Fredrickson, City Treasurer.

Various upcoming City projects were discussed, including the Jessieville Project, many other improvements, and back-up water lines.

Mr. Erickson explained that engineering and design dollars have to be spent up front for projects before loans or grants are received. No contracts can be entered into unless everything is approved.

Mr. Beaudoin added that usually it is done this way, with engineering money done first.

Much effort allowed the city to benefit greatly from stimulus money.

Julie Frederickson explained that much water and sewer debt would roll over into a Rural Development Loan. The Memorial Building will be paid off in 2015. Julie explained that this coming year, payment of bonds that had been borrowed in 2000 would free up $100,000, basically general funds, to be used for major streets. Very little money is given by the state for local streets.

Gemma Lamb said the people are happy that projects are being done.

Some Local streets will in part be funded by the CDBG (Community Development Block Grant), the City is trying to get.

Scott Erickson said the majority of people on the recent four-mile stretch of repairs are very pleased, which was the biggest local project for a long time. The City will be working on the quality of the streets.

The expenses for the cemetery are higher than the revenue. Part of the reason, said Julie, is that burials used to happen year round, where now they are closed in the winter, forcing storage of bodies, using natural refrigeration. Gemma Lamb said it would be good to enclose costs of the cemetery in the newsletter that goes out to help people understand the numbers.

Many other issues were discussed and the Board was encouraged to look over the report. The complete report can be found at Michigan’s State website, under Treasury and Financing.

There was a motion to receive and place on file the 2008-2009 Fiscal Year Audit by Joki, Makela, & Pollack, by Kim Corcoran, supported by Gemma Lamb.

Motion supported by all.

Meeting Adjourned.