City Of Muskegon Commissioners - Regular Meeting

Good evening, good folks, and welcome to the City of Muskegon City Commission work session for this Monday, June 8th, 2026. May we have a roll call, please?

Commissioner Jackson? Absent. Commissioner Cochin? Absent. Commissioner St. Clair? Here. Mayor Johnson?

Here.

Commissioner Kilgore?

Here.

Vice Mayor Keener? Absent. Mr. German.

Here. All right, we have quorum. We're going to proceed with new business. We have one item, which is the fiscal year 2026 to 2027 budget. Our city manager has presented on this previously, as well as held a public hearing at our last commission meeting. So we're going to be revisiting this, and I think he has a more finalized proposed budget. And this is on our agenda for tomorrow night, on the consent agenda for formal approval. Mr. Manager, take it away.

So... Yeah, we do have the budget. That will be up for tomorrow night. Allergies are getting the better of me this week. We are looking at running a deficit budget for next year as I presented This does have to do with some changes that we had in various revenue streams in some other areas that we're looking at not having quite as good growth. We do know that on our property income tax side, we are projecting that both of those areas will grow, and we're going to actually take another look at the income tax again for this fiscal year, which you'll see that fourth quarter reforecast at our second meeting in June. The budget is largely the same as it is for this current fiscal year as far as percentages, where we're doing investments and things like that, and that is because it's a pretty static budget as far as revenues go from the fiscal year that we're currently in that ends at the end of this month and the fiscal year that we'll be starting on July 1st. So it's pretty much a status quo. I think the biggest thing to point out is on the general fund side or on the parks and recreation side is this is the last six months of arpa expenditures so you will see in the budget on uh on parks and rec we're spending trying to get down to that page really quick about uh 1.3 almost 1.4 million dollars of arpa funds in the parks before december 31st of this year and then as always we're continuing the 150 000 out of the public improvement fund for Parks Capital, so $1.5 million of Parks Capital for this year. Next year, in fiscal year 27-28, that number will be significantly decreased because of the ARPA being spent down. we also this year a difference in the budget that I talked about during my budget presentation is our other post employment benefits or what's called OPEB and that is currently about a hundred and twenty percent funded is what we're projecting we're going to end this fiscal year at and therefore we do not have to be adding contributions to OPEB for fiscal year 26-27 That does give us some flexibility considering that we were seeing a flat budget and we do have increasing expenses on the staffing side of the equation with negotiated union benefits and health care cost changes. So it's nice to know on that one that OPEB is above funded. In our long-term budget forecast, we do project that we will be starting OPEB contributions back up in fiscal year 27-28 at a reduced rate from what we've done this year just to keep us at or above that 100% funding level. And that is really our health care costs for employees who qualify for that benefit between retiring and reaching Medicare age. We have had that closed for 17 years director grant OPEB about 17. Um, so the number of employees who still qualify for that is, is decreasing, um, which is a good thing, uh, as far as long-term liabilities go, uh, which makes it easier to know what that number is, um, as people move, uh, from the employee retiree healthcare to Medicare. Um, the other thing we talked about, uh, which is a big, um, I want to say drain on the budget, but a large expense in the budget is our pension obligations and the percentage of that that is taken up within the general fund. So going into fiscal year 26-27, we're looking at about $5 million of our $45 million budget being taken up by... MERS retirement benefit costs for pension, and this pension's been closed even for longer than OPEB. We will be getting our 25 calendar year MERS report in early July, and hopefully this will continue the trend that we've seen that the peak year continues to get closer this year. It's two years out. Hopefully for the following budget, it'll be a year out from there, and we'll plateau and then start to get more flexibility Just for quick reference, in fiscal year 24, the pension obligation was just under $3 million, and now we're at $5 million. So it's gone up pretty significantly in the past couple of years, and that has to do with a variety of different factors, including market returns. There's a five-year smoothing average that they use to get those average market returns. They're shooting for a 6.8% to 6.9% return to hit that higher funding level. And we have been exceeding that, which is great. But because of the smoothing average, 2022, which was a not great year in the market, continues to have continues to have a drag, but it's almost out of the equation now. So that is great news. We will be having a discussion a little bit later about some of the revenues in the general fund as it relates to Brownfield and then looking at what our long-term projections are in the budget right now. The 26-27 budget, we are looking... At about a $600,000 deficit, that still keeps us well above the 13%. Bring us just under 15% for our funding level. Then 27-28, we would look at another deficit budget. Right now, if all things stayed the same, still keeping us above the 13% at about 13.8%. And then we start moving into into years with budget surpluses moving forward that's taking into account. Things like our bond paint or not our bond payments, but our finance payments for some fire trucks things like that that will start to fall off and the. expiration of the LDFA payment coming off as well, taking all those factors into consideration. And this is assuming status quo in everything in the budget, including maintaining current assets and things like that. So, questions?

Thank you, Mr. Manager. Commissioners? Is that a hand? Okay.

I don't know.

All right. Commissioner Cochin.

Yes. So, Mr. Manager, you had mentioned towards the very end there the LDFA payment. Can you kind of expound on what that is?

Sure. So that's a development tool that existed and was created in the, I believe, the late 90s and was used for Harbor 31 primarily. And now that we've come to the end of the life of that, we no longer have to subsidize paying back that debt. So that was debt that the city incurred expecting the development down there to occur in a more rapid fashion than it has. And as is the case, we put the full faith and credit of the city behind it if it didn't pan out, which it didn't. So we were making those payments on behalf of the LDFA.

Thank you.

Yep.

Right. I'll just use that as an opportunity to piggyback on that just to reinforce why I personally think it's a preferable, and this is what we have been doing for several years now, is that for those... infrastructure build-out, which is what the financing was for over at Harbor 31, at that point known as Smart Zone or Edison Landing, Smart Zone. I have a few different names. But the way that was approached is the city bonded for the infrastructure and put the money up first with the expectation to get paid back over time as development happened. And we ended up being left holding the bag paying several hundred thousand dollars a year. Community Foundation did kick in for earlier years a small portion to help defray that cost. But since at least Terrace Point Landing onward, which was approved in 2013, the city has set it up for Brownfield TIFs whereby the developer is paying for these things and they get reimbursed for the eligible expenses. based upon the performance of their own projects. If the project succeeds and it grows tax-based and they're able to get paid back and we're not in position of holding it back. So I really wanted to reinforce those two different approaches to doing brownfield TIFs. One way is putting more of the risk on the developer. Another one is putting more of the risk on the city. So Commissioner Kilgore.

Thank you. I have several questions, and I think that our due diligence, if we're in a deficit year, we should ask as many questions as possible, like what are things that we can do to lessen that, lower that for our following year, or things that we can do in our current year. We have previously talked about the marijuana tax being down and that's a small, very small portion of our revenue generated. But when I look this over, one of the categories that from the budget looks like that we operate in a deficit in is sanitation. So in sanitation, it says sanitation costs us $3,061,083 a year, where our sanitation tax is only $2,370,000.

And so sanitation is covered through both a tax and a fee. And so we adjust the sanitation fee based on what that difference is there. So when you pull in that other fee, then it does end up breaking... Director Vander Heide is giving me sign language that I'm not picking up on. Oh, 101. You were saying 101.

Good evening. Dan Vander Heide, Director of Public Works. The unfortunate sign language was that based on the current amount that the sanitation contract, which also pays for street sweeping, between those two items we do expect that there will be a fee increase in the sanitation fee that will come in probably the second meeting in June, similar with when we set the water rates and things for the year as well.

So if it stayed like it is, we would be in a deficit. So we have to raise fees to not be in a deficit in the overall sanitation.

Correct.

And I know earlier this year we voted on the street sweeping company, one that was significantly higher than another for the reasons why we chose them, is a couple of questions. One, is that street sweeping contract year to year, or was it a several year contract? It's a three year contract. Three year. And then our contract with Republic Services, how long is that contract?

The most recent extension, I believe, was a five-and-a-half-year extension, and it expires, if memory serves, it's in 2028. I don't recall if it's, I believe it's June 30 of 2028 because we're trying to get it on a fiscal year renewal instead of a calendar year renewal.

Okay. And the sanitation fee is attached to water bills, is that correct? Yes, yes. Okay. Um, thank you. I do have a couple other things. Um, Mr. Manager, um, parks and recs, parks and rec. So with parks and rec, um, we're spending down the last of our ARPA dollars. Um, parks and rec was at, um, I have it. I had it right here in front of me. Um, Sorry, one moment. Sorry. So parks and rec was at about 8% of our yearly budget. Moving forward, is our parks and recs, two questions, I guess. What percentage of our parks and recs budget could you guesstimate is Pure Marquette versus all of our other parks combined?

So round numbers, Pure Marquette maintenance annually is about $500,000. No, more? Okay. So that's the old one.

I think it's an outdated number. That's an outdated number. Maybe, I don't know.

Again, Dan Vanderhyde, Director of Parks and Rec. And the current number to take care of per marquette in round numbers is about $900,000.

Total Parks and Rec's budget is around... $3.57 million.

That includes all the different components like forestry and cemeteries and some others. So I think parks and rec itself, recreation included, is 3.1 or 3.2?

It's 2.9 for park maintenance and 430 for rec. Okay, so just under 3.

So maybe about a third, just under a third, the beach versus the rest of the Parks and Rec's budget, so that we can continue to have beautiful parks and a beautiful beach in the city of Muskegon. How are we funding that, or is it just general fund dollars?

So we... It's all through general fund dollars. There is the parking revenue that comes in as well that comes into the general fund. So like I've talked about in other budget presentations, it's really hard to say where a dollar in the general fund comes from. We're dumping cups of water into a large bucket, and then we're taking other cups and filling those with that same water to do programming. And the... The park's budget is overall, which includes the forestry maintenance and the McGrath Park, as I said, almost $3.6 million, and that's all within the general fund. There is a caveat there that the McGrath Park maintenance, a portion of that is funded through community foundation fund that is dedicated to McGrath Park, and that fluctuates some from year to year.

Thank you, because I... I have been having conversations this so far, beginning part of 2026 with Muskegon County residents who are not city residents about maybe some sort of discount or something. But that's one of the reasons why I asked about how much is like park versus beach and how much we spend and all that. So one of my last questions for now is, can you explain... In as much detail as you would like to, the transfer to other funds amount, what's that from? And where are we at with that?

So transfer to other funds. Thank you, Director Vander Heide. The transfer to other funds is made up of a few different things. Right now, what we're looking at is the ARENA fund getting a chunk of that, the engineering department getting a chunk of that. And I think those are the only two for next year because the LDFA fell off. Oh, a MARINA fund would have a little bit of that as well. So ARENA, MARINA. engineering engineering the the way that works is that's a department within the Department of Public Works when they're not working on projects that are specific to road water and sewer where we can build those hours to an enterprise fund their hours are backfilled by the general fund and that's what that is and those are for city employees so that's basically what that's going for so just like any other department The arena, that's about $440,000 that we're budgeting for next year, a slight decrease from what we've done, from what we budgeted for this year. Jake LeMay does a great job at the arena keeping track of budgets and trying to increase revenue there, but that's still at a deficit. The marina is looking at having a transfer as well for this coming year. We did a larger transfer, I believe two, Last year or two years ago, I can't remember now. Two years ago. And we're using that as a budget surplus to do some projects. We kind of saved up for it over time. So the current fiscal year was a smaller transfer, and this coming fiscal year will be a slightly larger one. So this year, Marina is about... This year, I think the Marina transfer is actually... It's relatively small as far as the current fiscal year that we're in that ends the end of this month. For the next fiscal year... I'm trying to find that page here just a second. Ken, are you able to bring up the 999 line? Okay. Okay. Okay. Oh, and Marina's not on there? Okay. Okay, so Marina this year, because we're using the fund balance that we have to do the project, there's still enough money to cover that without transferring.

So it's engineering and arena. Okay. A follow-up question then on engineering, build hours, kind of a sub-department from DPW, 390,000, are there specific projects that we're working on? $390,000 for overtime? Is it just overtime hours?

It's not overtime hours. Director Vander Heide explained how the engineering department works. He is. Sure.

Dan Vander Heide, Director of Public Works. So a good portion of that is pension and other post-employment benefit costs. However, when engineering works on general fund-related projects for the parks, for cemeteries, for some of the other funds that don't have their own revenue sources, that sits within the general fund as well. So some of those costs are related to projects that are not supported by special revenue funds as well.

Perfect. I think that's all I have for now. Thank you, Mr. Mayor.

Thank you, Commissioner Kilgore. Mr. Manager, can you speak to, because we heard your reference as a deficit budget, as I recall from your previous presentation, we are not an operating deficit, but in order to fund some of our capital projects, we are pulling from reserves to pay for those capital projects, those one-time projects, and that's what's putting us in a negative situation for the year.

So, yeah, if you were to look at our either transferring out for transfers to other funds or one-time project expenses, then that's what starts to kick the general fund into the negative. If we were just paying our people and doing sort of the bare minimum of what we needed to do and not having to transfer to other funds... then we would be operating in, we would just be operating in the black. So we don't have these.

Transfers as well as the one-time capital projects.

Yes, yes. So we don't, the general fund itself, doing what the general fund is supposed to do, we don't have a structural deficit. And when you look at our five-year plan going forward, you can see how we're, even with us transferring to other funds and keeping those projects, we're building out into a budget surplus. So we're going in the right direction in that deficit number is decreasing. And that's without taking other more extreme measures. One of the things that we did do this year to try to bring things into line, because the initial budget number that we were looking at was with requests and things of that nature was higher than what what we're proposing now, and we dialed back the non-staffing costs by 7% to try to bring that down. So we did reduce some one-time expenses. We moved some expenses out, delayed some expenses. So there's things like replacing the roof here at City Hall. We didn't do reconstruction of the parking lot here at City Hall, not doing this fiscal year, those two things. $700,000 there, Trinity Health Arena seating is $500,000. Those are all needed maintenance projects that we delayed. But in addition, we did things like we looked at reducing professional development costs. We looked at reducing contractual services costs that we looked at. We did do those things to bring that number down into line where we were doing just the minimum things that we thought we needed to do to move forward. Um, as far as projects and investments.

Okay. And then the one-time capital projects we are moving forward with ours, the roof, uh, replacement at one of the fire stations, as well as the updated and body camera, um, yes. Equipment for our police officers. Yep. And was there anything else?

Um, so those, we moved into the four, four or five and those ones are moving forward. Um, I'm trying to get back to that list here. Just a second. Um, There was a third thing. Oh, election equipment. Thank you. Yes, election equipment. And that one's a big one. That's a $300,000.

Unless we can get the state to step in and give us some resources to defray those costs.

So that $300,000 for election equipment is in the general fund. It is not in the 445 fund.

But that is a one-time expense.

That is a one-time expense, which is not. That's our estimate. Okay.

And when does that equipment have to be purchased? Does it have to be purchased before this coming election or is it by next year's election cycle?

It will be after the November election.

Okay. So there may be an opportunity then after the November election cycle to secure some state resources to help defray that cost?

Pete's been working really hard on it.

If not sooner, yeah. Okay. We might have a more receptive.

It will bend to Pete's wills. Sorry, Ben. Bad dad joke.

All right. Thank you for the additional insights, Mr. Manager. Commissioners, Commissioner German or Commissioner St. Clair, do you have anything to ask at this time?

Yeah, I was trying to answer this, but one of the questions I was going to ask is what strategies are being implemented to maintain long-term financial stability and minimizing the burden of taxpayers' dollars? talked about some of the cuts and strategies where some of the funding was coming from but a follow-up to that would have been which programs or services are receiving increased funding this year and what is the outcome expected sure so most of the increase in in any department budget is really related to staffing and personnel cost as has been negotiated with our unions and

And then taking into account healthcare costs, we've looked at ways to make sure that we're, you know, even from the computer programs that we use with the contractual services that we have, are we actually using them the way that they are intended to be used? Do we need them? Can we make cutbacks? Things like that. We didn't, there were some requests for additional staff that were not met this year because we were looking at the long-term costs stability of the budget and we didn't want to add in more additional staff, knowing that that would delay us getting into a more favorable budget situation. The overall goal of mine and of the senior staff as we work together is looking at that five-year budget and making sure that we're moving towards fiscal sustainability and we're being conscious of how we're making those decisions. And one of the the most important things you can do when you're looking at that is your current staffing costs. And so what we've talked about the last two fiscal years is that we've really been conscious of where, if and where we're adding staff and really focusing on public safety is that's been an area where there's been a consistent desire to make sure that we're meeting the needs within the public safety department. So we did add three firefighters this past year. We did get a safer grant. which covers two-thirds of the cost of those three firefighters for two years. The third year, there's a reduction, and then at the end of the third year, it's full freight for us. That works within our five-year budget plan. We also want to make sure that we're maintaining 72 police officer positions. So we continue to budget for that, even though right now we're slightly below that. There had been requests in other areas to add staff, which we didn't do because that would prolong or delay when we start moving into surplus. Our long-term objective to your question about fiscal sustainability, from my perspective, is I want to get us to a point in the next couple of years where we have budget surpluses and we take a chunk of that budget surplus and move it into the public improvement fund, the 445 fund that we talk about so that we can start saving up for capital projects and we don't have a situation where the general funds expenditures are competing between operational and staff costs and capital costs. If we can actually build up our capital budget to a way where we can plan moving forward so that those capital projects can be done outside of the general fund, it will give us a lot more flexibility within the general fund to look at making sure that we're maintaining our parks to the levels that we want. We're staffing public safety at the level that we want. We have the most robust development services team that we can have and that we're looking to make sure that here on the administrative side, the teams are supported the way that they need to be supported to serve our residents. And right now, And this is not unique to the city of Muskegon. A lot of our capital projects are competing for dollars every year in the general fund. And that makes it really hard to do those long-term investment and planning. And so through this budget, we're creating the housing fund. which moves housing investment outside of the 445 fund, which allows us to plan for that moving forward on its own and kind of become a revolving fund. By the nature of building and construction, things move quickly, prices change, and that can impact those funds. If that's separated out and then the 445 fund, the public improvement fund, truly becomes a capital fund, we're able to plan in the long term. And so as I'm looking at this, you know, I'm looking at in year – uh, you know, three years out from now, we're starting to get to a point where we can start adding money into, um, into the capital improvement fund at a rate of either, you know, half of the surplus or a quarter of the surplus, whatever the commission would determine. And that starts really building up that, uh, that fund in addition to the, um, Murma payments that we get into there every year.

So a couple more questions. Um, If I heard you correctly, I think you said some of the cuts would be around professional development, which I think is real essential when it comes to growth in an organization. So how much are we looking to cut, and what areas are we looking to cut in?

So I asked each department and division to look at doing a 7% reduction. And they were the ones who chose where within that budget that they reduced. It wasn't like Director Grant and Deputy Manager Mike saw and I told them they had to reduce here, here, and here. It was we're looking for this percentage. Please look within your budgets to figure out where it's at. One of the things we did within the city manager budget was professional development was cut back a bit. It was not eliminated. We've not eliminated anything. Um, but we've, so there is still professional development opportunities, but we took a, we took a, um, closer look at it to determine what the, um, what the flexibility there was and where, where we could be a little more, um, surgical about things. And so that, that was just one area, you know, supplies also received a reduction. Um, you know, we looked at just a variety of different areas. If there were some one-time projects, that we wanted to delay or not do those were looked at as well. So it wasn't just, um, professional development.

So I'm looking at holistically, um, when someone wants to do professional development growth within the institution organization. Um, so how that would impact, you know, future, um, employees. So, and last one, okay, I'll go back to the, uh, parks and, um, look like we're working with about a 500, $1,022 budget. Now, I know once that parking charge was implemented years ago, that was supposed to sustain the fees and the contractual services and salaries for the park. But if I heard correctly, Director VandeHei said that has increased about $900,000 to service the parks and rec, is that included with the forestry department?

No, so what you see in the budget when you look at the whole for parks, it's broken up into recreation, McGrath Park, park maintenance, which park maintenance is really what most of you would think as the park's operating budget, and then forestry. So within parks maintenance, which is about just under $3 million, about $900,000 of that, as Director Vanderhyde pointed out, is Pier Marquette beach maintenance. So that has gone up over time. Our parking revenue brings in a little more than $1 million a year, so it does cover the park maintenance there. We do have other expenses that are associated with parking. including just maintaining the parking program that we had prior to beach parking coming into place and doing parking enforcement in other parts of the city. From the analysis and presentation that I did, I think it was back in March on that topic, the differential there is we are covering those costs. In general, as I said, everything's in the general fund. It's a big bucket of water, so it's hard to say this penny goes here or there. Um, but in general, we look at, um, you know, that, uh, $500,000 is kind of what, what we had started with as, as what we were trying to cover for, uh, pure Marquette. Um, and that, that has gone up over time. And then the actual operational budget I'm trying to remember for the parks mate for the, um, parking staff is like two 50 or 200 a year, um, in that range. Um, So we're trying to do a lot of different things with very thin funding streams. But overall, the parks budget is increasing by about 6.7% over this past fiscal year. A lot of that has to do with some staffing cost changes. Our contract with Good Temps did increase some, so that had an impact there. But also the McGrath Park number increased because of the grant. So that's not necessarily – so those aren't general fund dollars per se. Or those aren't tax dollars, I should say.

Okay. All right, thank you. Well, fees didn't increase, did they?

We did not increase. So parking fees we increased last year and not this year. But that is not a revenue that you're going to see in parks. Okay, thank you.

Yeah.

IT JUST SHOWS UP AS GENERAL FUND REVENUE.

WE'RE NOT COUNTING, WE'RE NOT, BECAUSE YOU GROUP TOGETHER TO GIVE IT, BECAUSE WE ASKED WHEN WE, AFTER WE FIRST ESTABLISHED THE PARKS AND RECREATION DEPARTMENT, RATHER THAN HAVING ITS OWN DEDICATED DEPARTMENT AND BUDGET BECAUSE OF A NUMBER OF DIFFERENT COMPLEXITIES AS TO WHY WE DIDN'T GO THAT ROUTE, BUT WE ASKED FOR IT TO BE SEPARATED OUT SO WE COULD HAVE, YOU KNOW, UNDERSTANDING OF REVENUES GOING IN AND EXPENSES COMING OUT. AND SO THE REVENUE FOR Paid parking is not being reflected in Parks and Rec revenue bucket?

So we don't separate out parks revenue. We only separate out parks expenses. If you go back and look at the past budget books, this is the same table that we've used since I've started because parks doesn't have its own necessary revenue stream. There's parking revenue, and it's not dedicated to parks because the parking program is citywide. We have some fees associated with parks programming or rental of pavilions and things like that. But that comes in under our larger revenue stream for fees. Thank you. And so they don't have their own revenue stream that's coming in there. It's part of those larger revenue streams that are there. So we don't have any... dedicated park revenue.

Okay, this is going to prompt me to want to revisit, maybe not right now, but want to revisit establishing its own dedicated department with its own dedicated budget so we have clarity in terms of revenue going in and expenses coming out. I understand what you're saying here, but it's not the level of clarity that I've heard from some members of this commission or that I've heard from our community. And so I think that could be beneficial. I understand there have been some complexities in doing that and internally administratively But I think for clarity sake it could be helpful So before I go to any follow-up to commissioners commissioners Claire.

I want to give you an opportunity to thank you Many of my questions have been answered already, so I appreciate that I I appreciate that this is a really digestible budget. It's not always easy for non-accountants or finance people to read a municipal budget. I appreciate the work into breaking this down into a user-friendly format. So just to clarify, the parking fees bring in about a million dollars, and Pier Marquette costs us about $900,000 a year. Correct. So we are running a very small surplus on that, but not enough to do infinite things with that.

So, yeah, our estimate's about $1.3 million for the revenue on that. But, yeah, it's not substantially more than what the costs are there, especially when you take into account how much it costs to run the parking program.

One of the things that you mentioned that I'm wondering if you can expound on a little bit more is talking about a designated housing fund. Sure. What would that look like?

What does that look like? So this would be the 447 fund within the budget. And the objective with that, as Director Ekholm presented in April, I believe, is to essentially establish a revolving loan fund in a place where tax capture dollars can go that will allow us to continue to invest in building homes in the community but then also looking at sort of innovative solutions for other housing challenges that we have. The housing that we've done so far that we have paid for has always come out of the capital improvement budget, which traditionally has been to save revenue for, or sorry, save up to buy things like fire trucks or replace roofs or things like that. So this allows a fund to be completely established on its own that will be a little more fast moving than what a general general fund budget would be to be able to build houses and what our objective would be in this fund is like we did with our investments in the 445 fund we did housing is to maybe sell these houses at a bit of a loss put them into the scattered site brownfield and then recapture that over time that money that we would have had otherwise so it's a way to make sure that we're still leaning into the housing challenges that we have here in the city of Muskegon in a meaningful and thoughtful way moving forward to make sure that we're meeting those housing shortfalls that have been identified. We've also, as Director Atcomb talked about in his presentation, there'll be a small market rate project as part of this too, proposed for on the site of the former 880 First Street site to build some townhouses there. and try to recapture what we've lost, or sorry, what we've invested in that property so far over the past 10 years to try to recapture that. And then those other projects would be scattered throughout the community.

So this would be a self-replenishing revenue stream focused exclusively on housing?

Yes. So initially what we would propose to do is... to do it most likely a direct placement or some type of a bond that would be repaid for with Brownfield TIF capture, which for this next year I believe we're projecting at about $300,000 into that fund, $250,000, $300,000. Closer to five. Oh, closer to five.

This year, this coming year.

Okay, 315. And then the proceeds from the property sale would go to pay back the loan as well. And then over time it would become a self-replenishing fund. And then we would also be putting the brownfield monies in too.

And that would allow us to do some extremely low-income housing or some things that are very challenging to fund in other ways? Yes. Thank you. I love that. I believe that is all of my questions. Thank you.

Thank you, Commissioner St. Clair. Follow-up? Commissioner Kochan.

Yes, thank you. I wasn't prepared to ask all of the questions at that moment. I was just going to ask you to clarify because you gave that acronym and didn't explain what it was.

Oh, yeah, no, you're good.

I had other questions, but they have mostly been answered now. And thank you very much to everybody else who has asked those questions. I would also like to echo the mayor's sentiment about breaking that out with the parks budget and the beach funding. I think that's something that's important. So thank you for saying that. I also appreciate Mr. Manager, your concern about fiscal responsibility, because that's one of my big concerns. And, you know, whenever I get the budget, I go through it and I look at this and start thinking about like, why is this that? And why is that, you know, so much different? And some of the ones that popped out at me, I just want to ask you a couple of questions about. So one of them is something that goes into the general fund, the Fisherman's Landing project. uh, reimbursement last year was almost $34,000, 38, five 3.75. Um, this next upcoming year, we're only anticipating 28,000. Can you expound on why?

Sure. Um, so the, uh, the, our, our fiscal year starts July one. Um, so the, and the fishermen's landing season starts in April. And, uh, what we're projecting is that next year, um, for fiscal year 26, 27, Those reimbursements will only come through the first half of the fiscal year, and the second half of the fiscal year it won't be an operating campground. So that comes from electricity costs, utility costs associated with operating the campground, and the campground operator reimburses us for those expenses.

Okay, so we're not anticipating the campground operating at a certain point next year, and that's why it's slow. Correct. Okay, thank you.

The other question I had was... And I should also note that we wouldn't have those costs incurred with that. So there's a cost reduction on that side as well.

Okay. I appreciate that. Also in regards to Parks and Rec, are there any grants, state or federal, that we're looking at to leverage to make Parks and Rec more sustainable in the upcoming year? I know in the past we've talked about having a grant writer

So, I mean, we're always open to looking for grants for different projects. Usually they're project specific. I don't know that they would necessarily make the department more sustainable because grants in their nature are limited. And really right now, kind of what we've had discussions on are adjusting fees to cover the costs that we're incurring in a balanced way. And how does that look? But the, you know, there's grants to cover things like playground installation or like some type of specialized equipment or things like that we definitely look and take advantage of those when they become available and we do get grants for things like The Lakeshore Art Festival, for example, that gets a grant to help operate that.

Okay. In that same vein, though, are we anticipating having a grant writer this year under contract? We are not.

That's one of the things that we eliminated. That is one of the things we eliminated. Okay.

Thank you.

Just to interject, we still have a carryover balance, though, that we're spending down with that firm? Because it didn't spend the entirety of our budget? No, it is exhausted now?

Yeah. So, yeah, I mean, we're at the end of the fiscal year, so, yeah.

Gotcha. Yeah, just echoing other Commissioner's sentiments at this point, like I think that I would love to hear some more creative ideas as we go into the next year and several lean years that will be coming up because we are taking on more responsibilities, especially in the Parks Department area. So, thank you.

Two potential revenue streams that come to mind for helping to strengthen the sustainability of our Parks and Recreation Department are, one, a potential countywide millage that is being brought forward by a group of citizens, a community group, so-called Friends Of. They're being identified as the Muskegon Area Parks and Greenway Coalition, MAPGC, and they're advocating for a countywide millage to support Parks and Rec. including a revenue share with local municipalities. And I can't remember if it's the end of 30% or 35% is the proposal that they're bringing forward. And it's going to be up to the county commission to decide if they want to put it on the ballot. And then that would be on the ballot in November. And then the residents of Muskegon County would decide whether or not to approve that millage increase. But whether it's three-tenths of a percent or .35, or whether it's 30% or 35%, either is going to be a nice increase that would go to our Parks and Rec budget, and it'd be helpful too for surrounding municipalities and townships, those and the like as well, so they can leverage their share for matching components to go after grants themselves, or do comprehensive Parks and Rec planning themselves. because I know smaller municipalities don't have the resources necessarily to do some of these projects, and so having that could be helpful. And I think we're going to hear from, not campaigning, but I think we're going to hear from a representative from FGC this summer just speaking about the facts of what's being proposed and to be considered. And another potential revenue stream, which getting a brownfield reimbursement for our purchase of the railroad right-of-way was expected that be reimbursed for that getting that set up so that we get reimbursed for that and having that then be dedicated to parks and recreation these past conversations we were looking at potentially getting 1.7 million dollars reimbursed towards that and then we can go to the general funds it can be used however but the Commission could say this is something that we want to go into Parks and Recreation. Similarly, when we put up the money, the ARPA dollars, for finishing the Convention Center, because there were overtures there, we put up $2 million thereabouts to finish it, with the caveat that we would get paid back over time, and there was an adjustment with the naming rights, so the naming rights revenue would get paid to the city instead of the manager of the Convention Center. and that we then committed that, and have committed that, and it's reflected in the budget as well. You've seen it referenced. Except I've seen it broken down, that revenue number, because that specifically mentions $150,000.

Well, that comes into the 445.

Yeah, but it's earmarked for Parks and Recreation. Yeah. Like it's mentioned as that. But it's not. I digress.

Yeah, okay.

But anyhow, with that money, $150,000 earmarked for Parks and Recreation. Okay. And so... Those are two potential revenue streams that I see that could be secured to strengthen the sustainability. I see your hand, Commissioner Kilgore, for a follow-up.

Yeah. I mean, I guess just a curious... I have one curious question and then one other question. Looking at the date, so the numbers that we have are from April 30th, so being June 8th today, they're going to have change.

Yep.

my question was going to be like do we put a lot of things on the books at the end of the year because just looking at sure 2025-26 active versus uh annual budget or what was budgeted like there's a large gap there between the numbers but then i look and see this is a month later um and I'll let you answer that, and then I just have one other question.

Sure. So in some instances, yes, there are a lot of things. When you get to the end of the fiscal year, particularly on the revenue side, there are a lot of adjustments that happen in the month of June. So looking at the revenue numbers, those numbers change drastically in the last three weeks of the fiscal year, and then once the auditors get here, they continue to change, I would say, almost until September. is before we actually have our final numbers based on what those are. So there are a lot of those. We also have other departments, for example, the Parks Department, a number of DPW departments, Highway, that they start expending more once the weather gets warmer and you start doing cleanup. So the percentage that you have spent there is going to be a little bit different. You just have to pick a date when you print off these reports to get that reference point. And that's why when we look at these reports, we've got the most recent finished year that's audited. That's one of the lines, the budgeted. The year-to-date and then the proposed budget so that way you've got a couple different reference points Excuse me on where to hit with that number and then there's also You know, there's other departments that that things fluctuate to some departments are gonna have a lot more expenses Snow removal, for example, you're gonna have all those expenses in the in the middle of the fiscal year So if it looks like it's you know 80 percent 90 percent spent we're probably not going to be doing much with snow removal in the last two months of the fiscal year. So with a budget as complex as ours, that activity through the April 30th date, it's not always going to be 75% of the budget has been spent yet. It's going to actually be a little bit more than that. It would adjust a little bit.

On that same note, when would you say the best time for a commissioner to get a side-by-side then? to look at, we finished the year here, this was what was budgeted, would that be September?

That's the audit, yeah. So that's what the audit does. There are pages within the audit that actually show this is what was budgeted, this is what was spent, and that's where you can get that side-by-side to understand how that worked. I mean, we can also... really at any time once the fiscal year is done and the auditors are done with the books, and there's an actual date where the auditors close our books, from that point we can run reports based on what was budgeted and what the activities were and see where those shake out.

And then my last question is, do we know or is there a way for us to calculate how much... New tax revenue has been generated from new homes that have been built and appraised. They don't hit the books until they're appraised. Sure.

So that's a complicated question. You can... You've got your tax growth, but then because of Headlee, our growth is limited. And then there's the rollback. And so we might realize more tax capture, but because we can't capture more than adjusted for inflation, you'll see a rollback. And so like this year... we're rolling back three-tenths of a mil from 9.3 to about 9.0 mils because we were outside of that growth. So in theory, yeah, we can go through and look to see what we would be if that rollback hadn't occurred, but then that rollback occurs and the capture changes.

And then on that same note...

Sorry, there's one more to that. And then if it's within a TIF, we know what that TIF capture is. So we can see that growth too. I apologize.

Would things like possible voting millage increases... how would that affect that? Like if we were at a rollback number, we would have to roll back more if it was voted on to.

No. So if, um, are you talking about other jurisdictions or, or just the city? I mean, if the County one would include us, so. That would not. So, I mean, it would include us, but it wouldn't, it wouldn't impact our millage rate. Um, so it, so what our millage rate, our, our charter millage cap is 10 mils. And, um, that's only looking at what that 10 mils would have generated when that was put into place is what the rollback looks at. It doesn't look at any of the other taxes that are in place outside of that. So nothing with the school, nothing with the college, nothing with the county. It's looking at ours individually. And each one of those entities gets examined in the same way and could potentially have a rollback or an adjustment based on that. So if there was to be a new... recreation millage passed countywide, that would be its own thing and wouldn't roll back our operating millage. But for taxpayers, they would still pay ours and that one and whatever other...

Correct. Okay.

Yeah. And taxpayers, and that's a really good point, and it's something actually I didn't hit on the budget presentation this year and I should have. About a third of the total tax bill that you pay stays with the city. The other 66% goes to all the other taxing jurisdictions. So the majority of what you're paying in property taxes to the city, we do not keep. We pass on to other taxing jurisdictions. And those are big, big numbers that go to the school district and the county and the in the state and a community college, all those other jurisdictions that are there. So this, that total tax bill that somebody gets is not, is not the city of Muskegon. It's not the city of Roosevelt park or Norton shores or Muskegon Heights. It's everything, no matter what community you're in, it's all those things across the county. Um, and that's, and that's why sometimes if, if there's a, you know, a millage increase at the school or there's a millage increase at the county level, generally because of a vote, we'll hear, you're increasing my taxes. And it's generally because there was some type of a vote, because in reality, the tax rate that we're actually charging is decreasing. And this year, by three-tenths.

So we can say, it's not y'all, it's them.

Got it. Don't want to start any fights, though. Our city...

Base millage rate, general operating millage rate as well as our sanitation millage rate have been declining each year for the past few years now, like four or five years or so, little by little. So that's how we're down, yeah, basically 10% in our general operating and our sanitation has dropped by a similar percentage.

And that brings up a really good point. Like on the sanitation side, so the sanitation millage is what it is, but the cost for trash service and street sweeping and other things continue to increase, so you start getting more of a gap there. And that's why there's multiple streams associated with that.

And we as a city could have a couple ways to go forward if we wanted to raise revenues is to... do the Headley rollback and resetting it, or asking the voters to amend the city charter to raise our cap, which is capped at 10. Neither of those are on the table right now, just to be clear for anyone that's watching but are just sharing that that could be a way to raise additional revenue through the tax rate.

And just for... illustrative purposes, because this is not on the table, an additional mill would raise about $900,000 for us because our taxable value is just under a billion.

So last comment for me, like Mr. Mayor said, I am not campaigning for anything, this, that, or the other. But there are conversations at the state level, probably because it's an election year, to cut property taxes in general. So I do like the idea of kind of building our rainy day fund, building our surplus fund. Because if certain things are cut or lowered or we're unable to capture as much money from certain sources as we used to, we don't want to then have to cut more services or cut staff or stuff like that. I'd like to at least have a surplus to where we could maintain and not have to make major cuts at different places.

Thank you. Commissioners, anything else to ask or add at this time? All right. This is on our agenda tomorrow evening under the consent agenda for formal consideration and adoption. And so you'll have additional opportunity to ask questions, get input, additional opportunity for members of the public to give their input under public comment on agenda items before we vote on it. Also, we are about to be going into public comment on this evening's meeting if folks want to chime in now with regard to the budget. So if there's nothing else from the commission or Mr. Manager, anything else to share with us?

Not at the moment, sir.

Then we're going to move on to public comment. I don't see any takers in the audience for public comment. I'm going to go to the phones. The phone number is 231-724-6721. Please turn down any audio in the background when you're calling in. State your name. If you're a City of Michigan resident, which neighborhood you're calling from. If you're not a City of Michigan resident, which other township, village, or city you're calling from. And everyone has up to three minutes to provide their remarks. This is an opportunity to give input directly to the City Commission. You may pose questions, but we're not necessarily going to answer them right away or engage in back and forth dialogue. If you'd like to have a one-on-one conversation, we can arrange that for another time and place. Again, that phone number is 231-724-6721. We do have a caller. Good evening, you're with the City of Muskegon City Commission. Hello?

Hello?

Hello, you're with the City of Muskegon City Commission.

Yeah, I can't hear you too well.

Hi, is this Ms. Vander Mullen from Roseville Park?

Yes, it is.

All right, we can hear you. We've got a fan running in the background, so we're turning that off. Hopefully that will improve your hearing.

Okay, I can't hear you.

Can you hear us now?

Yeah. Yeah.

All right. We're going to reset that clock, and then you may proceed. You have up to three minutes to provide your remarks, Ms. Edermullen.

Okay, thank you. First of all, I wish the City Council would look into the female cop that wrote my report on Tracy Loren to make sure she wasn't bullied or fired. Also, I believe there are a lot of sick people who actually want my mom to get Alzheimer's so they can get me back for writing that report on Tracy or for calling CPF. Again, these are people in the community that other people, you know, they go to these doctors and whoever. My mom is beautiful and she's doing wonderfully. There are so many sickles out there. I believe I saw one of the creepy ladies who referred my mom to a certain lawyer in 2015 that might be part of this plot to get me back. This creepy woman was sitting in support, I believe she was sitting in support of a man being prosecuted for child porn. A lot of sickles out there. About two years ago, I called the cops on someone who was falsely accusing me of stealing my mom's checks and writing them without my mom knowing. My mom told her that this was untrue. This person was screaming at my mom about this. I thank God my mom didn't have a heart attack or stroke. If these people do anything to cause my mom to have a heart attack or stroke, they should be charged with murder. And that goes for anyone out in the community, like a doctor, a nurse, whoever. They should be charged with murder if anything happens to my mother. And again, they're trying to get me back for the report I wrote on Tracy and for calling CPS. I will always stand for children and I stand by my police report on Tracy. He chose to be violent with me. He made that choice. He also scared me with other threats. He was violent with me, period. No one should be trying to get me back for that. I stand by that report. No one in the community should be contacting lies about me and false stories about me and putting out false Facebook accounts on me as well. It's crazy. This community needs to accept that report and move on. People need people in the community. So guys at the bank, people at the bank, people in the doctor's office, they need to stop using my mother to get me back. If my mother gets any heart attack or stroke because of the way people treat her, they should be arrested for that. And so that better not happen. um again this i wrote the report i hope that cop that wrote it the female cop wasn't bullied or anything out of her job um i'd like to know about that i think the community should know about that this has been going on for 12 years i'm tired of it i'm tired of it i'm tired of it i'm tired of it this has got to stop stop trying to get me back for writing that report i'm not Again, I'm not accusing anyone on the city council at all. Thank you, Ms. Vandermolen.

That is your time. I appreciate you phoning in and sharing your comments from the city of Roosevelt Park. I think we had someone else trying to call in.

That is your time.

You're with the Muskegon City Commission. Good evening.

Hi, this is Brian from Ward 4. Currently, approximately 71% of public meetings for the city of Muskegon are not broadcast live and are not recorded for later on-demand viewing. This means that residents who don't have the privilege of attending meetings in person are prevented from remaining informed of city business. Residents who can't make it to City Hall do have the option to participate in the meetings via Zoom, but only if they are available to watch the meeting in real time. People who may not have the privilege of travel or schedule are effectively denied access to the discussion and relevant information that is shared at the vast majority of our public meetings. I have emailed the mayor and all commissioners suggesting we broadcast live and record all of our public meetings. I've included information in these emails that show how this initiative could be easily accomplished with the city's current technology stack and minimal effort from clerk Meisch and the relevant meeting chairpersons. It should be noted that several commissioners are absent from or arrive late to tonight's work session. If work sessions were not among the 29% of public meetings that are broadcast live and recorded for later viewing, the tardy and absent commissioners would have no way of reviewing the full discussion that took place here tonight. This would leave these commissioners in an informational deficit during the budget vote at tomorrow's regular commission meeting. This is analogous to the exact informational deficit that residents currently experience because, once again, 71% of public meetings are not broadcast live and are not recorded. I hope this example drives home the point with the need to broadcast and record all public meetings. I have sent Clerk Meish a draft standard operating procedure that once refined could be used to easily implement this broadcast and recording initiative. Thank you for considering these ideas as we work toward a quick and effective resolution to this problem.

Cheers. Cheers. Thank you for calling in and sharing your input. Did you see anyone else trying to call in? I didn't hear anything. We'll give it a few more moments.

We have another caller.

All right. Good evening, you're with the City of Muskegon City Commission.

Yeah, it's very distant, but I think I could hear you, Mayor Johnson. This is John Allen from Nelson neighborhood. Just calling to say it's well past the May 1st deadline that we were expected to have any form of progress. construction improvements around Hartshawn Park. But all I really see as usual is the forklift crossing the bike path with maybe a golf cart escorting it, which was We'll just say interesting to say the least during the pub pedal. But again, the deadline that we said we would terminate the cooperative use agreement was if the conditions were not completed with May 1st. It's now June 8th. That's what 37 days were passed. I believe legal counsel. is well within their power to submit a motion for a relief of state through the bankruptcy proceedings so that we can, as a city, protect our municipal assets and actually get what we're supposed to have, which is our own park, either under our control or to leverage the actual progress that we were promised when this awful, inequitable agreement was put forth. years ago um i hope that these proceedings are maybe a part of the attorney client privilege that's being talked about tonight or in previous um but again we're 38 days past the the deadline that mayor johnson you yourself said you know we will terminate i will terminate this agreement if it's not done and again there isn't so much as a shovel in the ground uh blue light um i mean literally none none of the park improvements uh have even BE GONE AROUND HARD, SHORN, SO I DO HOPE THOSE PROCEEDINGS ARE MOVING FORWARD. THANK YOU FOR YOUR TIME.

All right, that concludes our public comment. Get a motion ready.

Yeah, before I go to the motion, I'd just like to point out, take a moment to point out that the city of Muskegon goes above and beyond with complying with open meetings act. All of our meetings are open to the public. Even since COVID ended, we still allow phone-in comments, which a lot of municipalities don't. Every meeting where we have a quorum of the city commission, those ones are broadcast live. Our other subcommittees meetings do not have a quorum of the city commission. They may have a commissioner or two or the mayor placed on those subcommittees. But with that said, I move to go into closed session to consider materials exempt from discussion or disclosure under the state federal statute as attorney-client communication.

Support. All right.

We have a motion by Commissioner Kilgore, supported by Commissioner St. Clair. Roll call, please.

Commissioner Kochen? Yes. Commissioner St. Clair? Yes. Mayor Johnson? Yes. Commissioner Kilgore?

Yes.

Commissioner German? Yes. Motion passes.

Thank you.