Ishpeming’s audit shows declining revenue
The Ishpeming City Council heard the city’s 2012 audit Friday morning.
The city could run into financial trouble if changes to the budget are not met.
The audit shows that while the city still has revenue, the city’s general fund, sewer fund and water fund have been decreasing over the last four years.
“Your revenues are going down and your expenses are going up and you’re not covering any costs,” Anderson, Tackman & Company CPA Michael Grentz said. “Just the operating portion of the sewer fund has a loss of $274,000. What that’s telling me is you’re not charging enough to cover your plain operations of the sewer system.”
The council said they will most likely have to make tough decisions to fix the city’s finances.
Options for the council to increase revenue are increase sewer and water taxes, and increase millage rates.
If changes are not made, the city will run into a deficit.
“You’re at the tipping point,” Grentz said. “You can go one way and make some changes and you can get the finances so you don’t end up in a deficit, or you can go the other way and have one or two more years like this and be in a deficit and be really struggling.”
The council will meet on Wednesday to discuss analysis of new sewer lines. They also decided to have goal setting meetings on how to fix finances.