Introduction to the Ungoverned Money series
Every year, the Sturgis City Council makes decisions that will affect the city for years to come. Money is transferred between accounts, projects are approved, and agreements are made that may take decades to fulfill. Some of these decisions attract public attention. Others receive little notice beyond the council chambers, eventually finding their way into the city’s financial statements.
Those statements are hardly exciting reading. Most people have better things to do than spend an evening examining municipal audits, trying to make sense of transfers, liabilities, and outstanding obligations. Yet buried in those pages is a history of Sturgis that seldom gets told. It is a history of the decisions made with public money, the circumstances that led to those decisions, and the consequences that followed.
Over the past several weeks, I have been working through Sturgis’s budgets, financial audits, council records, and other municipal documents. What began as an effort to better understand the city’s recent financial difficulties gradually became a much larger investigation. The records revealed practices stretching back years, financial arrangements that deserve a closer look, and questions that could not always be answered from the documents available.
Some of what I found was ordinary municipal business. Other records raised concerns about how certain decisions were made or whether the city had adequately accounted for their long-term consequences. There were also instances where an initially troubling figure became much less concerning once the surrounding records were examined.
That last point is important. A number that looks suspicious in isolation may have a perfectly reasonable explanation. The challenge is determining what the records actually establish, rather than what we might initially suspect.
This investigation has become Ungoverned Money, a new series from The Curious Historian examining the financial history of Sturgis and the decisions that have shaped it.
A City Facing Difficult Decisions
In August 2024, Sturgis officials publicly acknowledged that the city was facing financial difficulties. Expenses were outpacing revenues, cash reserves had come under pressure, and departments were being asked to reconsider their spending.
The city pointed to several contributing factors, including the $1.4 million purchase of the Richards’ property in 2022 and infrastructure investments associated with tax increment financing districts. Those investments had committed resources that would take time to recover through future tax revenues.
There was nothing inherently unusual about a city having to make difficult budget decisions. Revenues fluctuate, expenses rise, and infrastructure needs rarely arrive at convenient times. But understanding the city’s financial condition requires looking beyond a single difficult year.
The records show that some of the practices affecting Sturgis’s finances had developed over a much longer period.
The 2025 budget, for example, acknowledged that years of transfers from the Water, Wastewater, and Sanitation funds to the General Fund had depleted much of those utilities’ reserves. The city proposed eliminating those transfers for the year so the funds could begin rebuilding.
The same budget disclosed that revenue reconciliations from 2024 remained unfinished when officials prepared it. A third-party CPA contractor was working to provide a clearer picture of the cash position of each fund.
Neither disclosure establishes wrongdoing. The transfers were recorded in the city’s financial statements, and unfinished reconciliations do not mean money was missing.
But they raise questions about how the city managed its resources. How much had Sturgis come to depend on revenue from its municipal enterprises? What policies governed those transfers? And how did officials determine whether the utilities could afford them?
These are the kinds of questions this series will explore.
Following the Records
A city budget tells us what officials planned to do with public money. An audit examines what was recorded after the fact. Council minutes, contracts, ordinances, and resolutions can help explain why particular decisions were made and who authorized them.
The difficulty is that no single document tells the whole story.
A budget may include money for a project that is never completed. A council may approve an agreement that is later amended. An audit may identify weaknesses in accounting procedures without establishing that anyone stole or misused funds. Even a properly recorded expenditure can raise questions about whether it was necessary or financially wise.
That is why the documents must be read together.
One of the subjects this investigation will examine is the movement of money between municipal funds. Sturgis operates enterprises such as Water, Wastewater, Sanitation, Liquor, and Ambulance, each with its own revenues and expenses. Those operations also interact financially with the General Fund, which supports many of the city’s ordinary government functions.
These arrangements can be legitimate and necessary. But they can also create financial pressures if money needed for one purpose is repeatedly used to support another.
Another subject is tax increment financing, usually called TIF. Cities use these arrangements to help finance development and infrastructure, with repayment generally tied to future increases in property tax revenue.
Sturgis’s 2023 audit reported that its Water Fund had advanced approximately $4.9 million to TIF funds. The audit identifies those advances as loans to be repaid, with stated interest rates and repayment periods. It does not establish that the money was missing or improperly spent.
Nevertheless, it is a substantial financial arrangement involving money associated with the city’s water operations. Understanding which projects received that financing, how repayment was structured, and what the arrangement meant for the Water Fund requires a closer examination of the underlying records.
Accounting practices will also be part of the investigation. Audits, reconciliations, and internal financial controls may not make for exciting subjects, but they determine how reliably officials and residents can understand the city’s finances.
Some of these stories may reveal decisions that were financially sound. Others may expose mistakes, questionable priorities, or weaknesses in how the city managed its money.
The evidence will determine the conclusions.
What We Can Know
There is an unavoidable limitation to this investigation. While I have access to a substantial collection of budgets, audits, council records, and related documents, that collection is not complete.
Some later financial statements, reconciliations, and supporting records have not been available for verification. That means there will be occasions when the records explain how a decision was made but do not establish what ultimately happened.
The absence of a document from my research collection does not mean it does not exist. Nor does an unanswered question establish that anyone acted improperly.
I intend to be clear about those limitations throughout the series.
There is also an important distinction between financial mismanagement and criminal misconduct. A city can make an expensive mistake without anyone breaking the law. A decision can be legally authorized and still deserve criticism. Weak accounting procedures can create financial risks without proving that those risks were exploited.
Those are different questions, and they require different evidence.
The purpose of this investigation is not to treat every accounting discrepancy as a scandal. It is to understand the decisions, explain what the records show, and identify where legitimate questions remain.
Why This History Matters
Sturgis faces challenges that are not quite like those of many other cities of its size. For a brief period each year, the motorcycle rally brings an enormous increase in activity. The rest of the year, residents still need streets maintained, utilities operating, emergency services available, and public facilities cared for.
The city’s financial decisions must account for both realities.
A transfer between funds may help balance a budget today while reducing what remains available for future needs. An infrastructure project may provide benefits immediately while its financing continues for decades. A property purchase may serve a legitimate public purpose but still affect the city’s ability to respond to an unexpected expense.
These decisions become part of the city’s history long before anyone thinks to write about them.
And they matter to residents.
People should be able to understand why public money was spent, what officials expected to accomplish, and whether those expectations were met. They should also be able to distinguish a genuine financial concern from a rumor that has grown larger through repetition.
That requires context, not simply a collection of alarming figures.
The name Ungoverned Money reflects the central question of this investigation: how effectively have Sturgis’s financial decisions been governed, documented, and held accountable?
It is not a declaration that public money has been stolen or that city officials have acted unlawfully. Those would be conclusions requiring evidence that must be established, not assumed.
The first installment examines the utility reserves that Sturgis acknowledged had been depleted through years of transfers to the General Fund. Future articles will look at other parts of the city’s finances, including TIF arrangements, accounting practices, and individual financial decisions that deserve closer examination.
Each article will identify the records on which it relies and distinguish documented findings from questions the available evidence cannot answer.
Sturgis has a history worth telling. That history includes the people who built the town, the businesses that sustained it, and the events that made it famous. But it also includes the decisions made around council tables, the projects financed with public money, and the obligations carried from one budget to the next.
Those decisions are part of our history, whether anyone writes about them or not.
I intend to write about them.
Editorial note: Ungoverned Money draws on available municipal budgets, financial audits, council proceedings, and supporting records. Where evidence is incomplete, those limitations will be identified. Findings may be updated as additional documentation becomes available.