ESCANABA — The Escanaba City Council was given a presentation on the city’s last financial audit Thursday.

“What we have issued is called an unmodified opinion. That is essentially the clean audit opinion, which is the opinion you want to achieve during the audit process — that yes, we believe these financial statements are accurately stated,” said Paul Matz, of the auditing firm Rehmann, who attended the meeting virtually.

The audit covered the 2023-24 fiscal year, which ended June 30 of last year. While there is a significant gap between the end of that fiscal year and the end of the current fiscal year that will wrap up at the end of June 2025, the audit had unique value, as it showed the impact of the city exiting the Michigan Municipal Employees Retirement System for pensions for the majority of city employees.

Between the end of the 2022-23 fiscal year and the end of the 2023-24 fiscal year, the city’s net position — which includes the total of all assets and liabilities held by the city — increased by $15,242,600, largely due to the city managing its own pension investments for employees that do not work in the public safety department starting in 2024.

The liability for general employee pensions decreased by $5,422,422 as a result of the city exiting MERS. Because that liability was a burden shared by each department fund with employees that qualified, the impact rippled, increasing not just the city’s net position but the financial position of most city departments.

The individual funds also faired better in the 2023-24 fiscal year than in the prior fiscal year as a result of increased revenues. Expenses also increased across most city funds, but not as a rate significant enough to reduce their fund balances.

Only one city enterprise fund — a fund designed more like businesses that aims to generate revenue — was identified as having a worse fund balance than the previous fiscal year. That fund was the marina fund, which operates with a significantly smaller budget than the water, wastewater or electric funds.

In other business, the city

— Approved changes to the city’s net metering policy. The policy sets the rules for how much electric customers that produce power through renewable sources like solar can be credited on their electric bill. The changes allowed for larger power generating systems for commercial customers, changed the formula for credits given to customers to reflect the increasing cost of the city’s renewable energy credit purchases, and added language to open net metering to customers that had not previously qualified to participate.

— Approved the purchase of ten Scott Air-Paks, which are the self-contained breathing apparatus used by the city’s firefighters for a cost not to exceed $62,195. The air packs are being purchased to replace existing equipment that recently fell out of compliance with state regulations for firefighting equipment.

— Held the first of five public hearings on the city’s upcoming fiscal year budget. No members of the public participated in the hearing.