Escanaba council backs ballot question to repurpose 1965 gas-sale proceeds for pension debt

Escanaba City Council on Aug. 7 approved a resolution to place a ballot proposal before voters that would remove a restriction on the principal from the city’s 1965 gas utility sale, allowing the principal rather than only the interest to be invested against the city’s unfunded pension liability.

City staff told council the principal has been effectively restricted to capital-improvement uses since the sale; today the account yields only modest interest (roughly $30,000–$50,000 annually) and staff argued that investing the principal alongside the city’s pension portfolio could produce higher returns and reduce the outstanding defined-benefit pension unfunded liability, which the city’s valuation showed at about $11.5 million as of the June 30, 2024 valuation.

The measure, if approved by voters, would not increase current pension benefits, staff said, but would permit a lump-sum payment from the fund toward existing pension debt. Administration told council the principal balance is “just a touch over $1 million” at present and that using that principal against the liability could reduce long-term costs to taxpayers by lowering the unfunded balance.

Councilors voted in favor of placing the resolution on the ballot; the resolution will proceed through the city’s election process and staff said they expect follow-up work to clarify timing and presentation to voters.