Township Board - Regular Meeting

Flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Laura, would you please take role? Council member Ratitz, here. Mayor Prom Smith here. Mayor Sullivan here. Council member Kek here. Council member Gabowski here. Council member Ruska here. City Manager here. City Attorney Via Teams here. Um, DPW director here. Finance director here. Community development director here. Police chief here. Fire chief here. City engineer here. Roll call complete.

Thank you. Disclosure of conflict of interest. Any council member with a conflict of interest regarding an agenda item should disclose at this time. Buddy. Public hearings. Public hearing for establishing an obsolete property rehabilitation district for 471 Water Street. A request has been received from Healthy Harbor Holdings LLC to establish an obsolete property rehabilitation district for the property located at 471 Water Street pursuant to public act 146 of 2000 as amended to facilitate the rehabilitation of this property. The affected property owner has received formal written notice of the public hearing and the public will be provided with an opportunity to comment. No action is anticipated at the conclusion of this public hearing. However, this matter is on the agenda for consideration later this evening. Is there any public comment on this item? We'll close. Oh, go ahead.

You certainly are.

Uh good evening, uh city council members. I want to first uh thank you for the opportunity um to come in and tell you and and formally introduce you to uh Manaceasty Performance Gym uh which will be located at 471 Water Street. I also want to thank you for your consideration of the district uh as I'll I'll talk about briefly. It's it's very important to what uh we're trying to do in building our dream here uh in the city of Manaste. So, my name is Brian Gatowski. This is my wife Jackie. Uh Jackie is a certified personal trainer and a certified nutrition coach. Uh the story of Manasty Performance Gym uh we've been quietly planning this for several years uh and then more loudly planning it over the last year or so. Uh and the biggest thing for us was uh trying to find the right location uh and the right building uh to do this in. As you can imagine with a gym, we're looking for an open open building with a lot of space. Uh and we wanted the right location, something that was visible and accessible not just to the residents but people who might visit u Manasty as well. So, I looked at some different properties, but then uh when we uh toured 471 Water Street, it really was the perfect combination of a great location uh and the right type of building that we were looking for. Unfortunately, 471 Water Street, as you probably know, has sat vacant uh as basically personal storage for uh many years and had developed a significant uh roof leak. Uh so uh what that has forced us to do is to to uh invest a lot more in bringing that property, rehabbing it, and bringing it up into serviceable and usable condition. Um and so it's uh cost a considerable amount more than we initially anticipated. Um that's why I really appreciate the council's consideration of this district. Um because as a you know, we're not a large corporation. Uh we're not uh backed by financial backers. We're a family of four with two young children who are are investing uh in this small business here in the city of Manaste. So, um every dollar uh that we can save for as long

as we can save it is really vital to the success of of the dream we're trying to build here. Um and then just briefly, I won't take up a ton of your time, but at Majesty Performance Gym, we're trying to be more than just a workout facility. Uh I think uh what our dream is is to not just have it be someplace for people to work out but to really cultivate a sense of community uh not just within the facility but also be invested uh within um Manaste as a whole. Uh I Jackie and I have been passionate about fitness for many years now. We built our own gym at our house uh during the end of COVID. Uh and so uh being able to bring this to our community is something we're both very passionate about and we're we're both very excited about. Um at our facility, the the front room or if you remember as I do from the Thomas interior days, the kind of showroom area that he had there uh will be uh cardio equipment, so treadmills, ellipticals, weightlifting machines. The rear room will have squat racks, uh deadlift platforms, a small turf patch for for sled work. Uh, and then I think the thing that the thing that really sets us apart from other fitness facilities is our recovery room, which will be in the back. Uh, we'll have a male and female sauna, um, red light therapy, massage chairs, uh, which I think is really going to set us apart uh, in this space. So again, I just want to thank the council for uh, your consideration of this um, and tell you how much we really appreciate your support.

Thank you. Thank you. Thank you.

Anybody else on this one? This public hearing is closed. Public hearing for obsolete property rehabilitation exemption certificate application from Healthy Harbor Holdings LLC. An application has been received from Healthy Harbor Holdings LLC for an obsolete property rehabilitation exemption certificate for the property at 471 Water Street pursuant to public act 146 of 2000 as amended. No action is anticipated at the conclusion of this public hearing. However, this matter is on the agenda for consideration later this evening. Any public comment on this one? Okay, this public hearing is closed. Okay, we have a few changes to the agenda. Um, new business item I, consideration of the sale of city-owned property, Renaissance Park lot number one and item K, consideration of appointment to the downtown development authority are being removed from tonight's agenda. Citizens comments on agenda related items. Any citizen correspondence to be distributed to council should provide items to city clerk prior to the start of the meeting or after the meeting has adjourned limited to five minutes. Anybody with public comment?

There's a couple. I don't know. Is it on something that's on the agenda? I haven't read the whole agenda, but I did make a packet for all the commissioners and I wondered if you received it. A packet on what? What's the packet referring to? Um the sign at the senior center. Okay. So you would be at the five minutes at the end of the meeting. Five minutes at the end of the meeting. At the end. Yes. Okay.

Good evening. I'm Katie Grinberg. I'm the county planning director and I'm also the project manager for the Lambake Authority. And I just wanted to take a minute to um share my support for the zoning amendment that's coming before you tonight. I think the economy efficient dwellings is a step in the right direction to allow for more variety um for housing types and potentially more affordable options and to make valuable use of non-conforming lots. Um so I hope that you guys look favorably on that amendment. Thank you.

Thank you. Okay. Consent agenda. All items marked with an asterric are considered by city manager to be routine matters prior to approval. Any member of council may have an item removed and taken up during regular portion of the meeting. Items include approval of minutes, cash balances, revenue, expenses, balance sheet, consideration of ordinance 20-26-01 to amend chapter 650 anti-blate and chapter 606 animals and rep repeal chapter 415 open storage disabled, inoperable junk and abandoned motor vehicles and chapter 1454 dangerous, unsightly or unsanitary conditions of the city of Manaste, Michigan codified ordinances. Notifications regarding next study session. Consideration of proclaiming April as Parkinson's disease awareness month. Consideration of proclaiming April 24th, 2026 Arbor Day in the city of Manaste. At this time, council could take action to approve the consent agenda as presented. Is there a motion?

I'll make that motion. There a second. I'll second. Laura, would you please take role? Council member Ratitz, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gowski. Yes. Council member Reska. Yes. Motion passed.

Thank you. Um, now we are also going to hold on a second. Move up the report from the housing commission. So, Mark, good evening. Um, I'm Karen Goodman, uh, county commissioner and, um, vice chair of the city of Manaste Housing Commission. Just want to introduce, of course, you know, Mark Schnaki, who has been our consultant in the past, it's been three years now, and he has uh, brought us along uh, quite well over the last three years. And our new um member is our director uh Shiloh War who I am going to turn this whole presentation over to Mark and Shiloh so they can w you with their ideas.

Shiloh, you have the clicker, right? I do.

All right. Thank you. Um good evening, mayor and council. Just wanted to go share a few slides with you um for our annual report. Um go to the second one. Oh, if you look at the first one, you can see a little bit of the improvements we did. We cleaned up the terrace and installed some solar lights. I think it looks pretty good at night. Um I'll let you know because I'm going to be docked right across that in another month while um so next board of commissioners. Karen introduced every or us. But here's the board. Um we have one uh member that's not with us tonight, Sum who is our resident commissioner that lives in the scattered site apartments. Um next Shiloh is the staff. Um there's some changes now we we're going backwards a year. So Lori uh who did this presentation is the former director. Um Shiloh's taking those reigns now. So but she'll be in a consulting role for a while.

Uh technically she's been offering role as a deputy director. So she's going to stay on uh for that time at least at that role so we can transition over time and and still maintain the progress that's been happening. Yeah. So, um maintenance staff, we're uh we have two maintenance, uh staff members right now and and they'll there should be a third added uh hopefully sometime this year. Um one of the things that we did this past year was received a grant from the community foundation for a shoreline improvement feasibility study um funded by um the foundation. So we came up with a plan which is the next slide. Um to to better utilize the riverfront we you know we have such a great riverfront but it's really inaccessible to the residents. There's really no good way to get to the shoreline. So uh we did this feasibility study that Spicer Group did with with the grant from um the foundation. Um so you can see we kind of created a riverwalk. I know Lori had worked with Bill a little bit on this process and the city. Um, so keep going. Shiloh. Let's see. Next one.

There we go. So there's kind of a some uh conceptual images of what it could look like. Um, and of course the big unknown is, you know, where's the funding sources coming from? So I think that's the next challenge. And I think the estimate is um approximately 1.8 million to do that. So um so that's Shiloh's challenge for this year is to take on that task. So um next slide is just some demographic information. So, we have 275 folks that live within the housing commission's um properties. And you can see just some um average aggregate demographic information of all the properties. Of course, there's 167 units at Century Terrace and Harborview and 47 scattered sites. Um couple of things that we did last year, installed some deadbolt locks in all residents. um did some tree removal especially in some of the parking lots where there were some uh falling trees and limbs. Um the website is now functionable and applicants can apply online and you can see the website address. Um occupancy is good. Uh we're at a 98% uh with four vacancies at CTHV and one vacancy within the scattered sites. and in the stand the only vacancy currently has to do with a fire that happened. So there has been bids proposed for insurance purposes and such for procurement. So uh that that's all moving forward but that's the only vacancy in our public housing. One of the issues that came to light last year uh is the flood that we had at Century Terrace. Um, so I know we've talked um with Bill and and uh DPW Director Jeff about, you know, issues. So we're going to work together to try

and and come up with a solution to that. Um there's an 8 in, I think, storm drain that drains the streets and the property. And so we have to figure out a better way to to manage the water. So that's another project that Shiloh is going to get to work on this year. And then there's just some of the the water just poured right in the um the uh main entrance of Century Terrace. Feels like the storm drain probably was big enough for the property itself, but there's a lot of flow from the streets around it. Looks like it goes down to that area and it just seems like it's too much water for for the current drain system is what it looks like.

Yes. So, one of the big um projects that we worked on this past year is there was we we we um did an RFQ for development services or for development partner for the scattered sites. So, we we just in the March meeting selected senior solutions um to be our partner on the scattered sites. Now, this is a process that we'll go through. It'll be similar to the last process with um Century Terrace and Harborview. We want to do a RAD conversion, but we need to we need to uh and the and the commission did a very good job. I will say they they were thoughtful. They interviewed um three different develop potential development partners. Uh none of them of which were the the last development partner. Um so there's just a little timeline that we hope to meet. I mean it's pretty optimistic. Um but there's a lot of work to go on I mean and determine feasibility and you know can we renovate some of the units and can we construct new units and if we can construct new units we've been uh meeting with the ad hoc committee for housing looking at potential sites to redevelop. So that's a that's a process uh that we're working on but we need to really figure out what the best approach is and what is really financially achievable in the process. So,

and the reason this is so important is because they're in section 9 public housing now and in that program it's really hard to pull funding because it's not a constant flow of money and so this rack conversion uh transitions it over uh into PBR which is a different funding source so that we can have constant flow of money so the banks will loan on the assets. So it is a big process there's a lot of undertaking but it's necessary to be able to get money from them to be able to maintain Yeah. And it and it also opens us up to the capital markets to private equity, private investment, too. So with that, I'm going to turn over to Shiloh. He's up.

Thanks. Appreciate it. So anyway, Mayor Council, nice to meet everybody. Um, I'm only about a month, month and a half in. So really, I've just been working on trying to see where everything's at, stabilize a few of the things that I can see. Uh, but really I'm just going to gather information base, trying to meet some people, make some new community relationship kind of type stuff. Um, and with Lori still there and Mark still in the picture, um, you know, we can keep carrying forward and I can kind of go in another direction, which is start to work with the public and try to maintain those relation or obtain and maintain those relationships. So, uh, still very much anformational gathering phase trying to uh, evaluate processes and procedures and such and hopefully I can bring, you know, a bunch of those things to the table. I've only had one uh, meeting with my uh, commission so I don't have a lot to present tonight just because I haven't had a lot of time to present to them. Uh but I do have some ideas and and right now it's just uh being patient, listening and learning. So it's a pleasure to meet everybody.

Thank you. Thank you. I'd like to say though since the years of where we we moved past executive directors and you guys have changed his place around great. I mean I'm impressed with the everything you are doing over there. I go to all the meetings when I can and it's it's really something that what happened over there. I'm excited to follow in their footsteps. It sounds like they've done a lot for sure. I know he's been working really hard. So, thank you. Thank you.

A consideration of establishing obsolete property rehabilitation district for property located at 471 Water Street. A request has been received from Healthy Harbor LLC to establish an obsolete property rehabilitation district for the property located at 471 Water Street pursuant to public act 146 of 2000 as amended to facilitate redevelopment of the property. A public hearing on the request was held earlier in this meeting. At this time, council take action to approve a resolution establishing an obsolete property rehabilitation district for the property located at 471 Water Street. Is there a motion? I'll make that motion. Second. I'll second. Okay. Any discussion?

So, I was tell you there.

No, I was asked by the city manager to add a little more context, especially as we moved into the next agenda item to actually approve the certificate. Um, this district is within the downtown development authority. And so from a tax implementation standpoint, it's really affecting the downtown development authority, not the city's tax base in any way um by having it frozen at the taxable value where it's at currently. Um so that is why the DDA made a motion and recommendation on this in our last meeting in March and you have been provided with a memo that I drafted up that gave a little more context. Uh, additionally, this is the first uh, tax incentive that's been discussed since we approved the new tax incentive policy that the city implemented. Uh, I believe it was back in the fall. And so, kind of an exciting opportunity to do a test run through our scoring matrix. Um, Bill Gamble and Ed Bradford and I uh, have met and you I did the scorecard for this. Uh, as Brian said, this isn't a big corporation coming in investing, you know, millions of dollars into, you know, a multif family housing unit or anything like that. It is a local entrepreneur trying to make their business work. And when we review their business plan and the way revenues scale up, uh, this Oprah is definitely needed to just make that margin a little bit greater and being able to reinvest into the business. That kind of needs to happen in those first couple years of starting up a business. And so, um, the DDA recommends the approval of the Oprah certificate. Um, the board realizes how important this property is in the district. you know, the vacancies that we have in downtown, one of our goals is to eliminate as many as possible. And so the downtown development authority is willing to lose some tax, you know, lose

some future tax revenue um in light of filling a vacancy because we realize um the burden of this investment, the size of this investment coming from a small entrepreneur and the impact it's going to have on the rest of the district, especially in relation to projects like the streetscape and a couple other redevelopment projects that we have or soon will have coming down the pipeline on the west side of uh River Thank you. Thank you, Andrew.

I guess the only thing I would like to bring up is I know it said 12 years, but looking at our budgets and, you know, I get the DDA thing, but they need money, too. Changing it to 10 years. That's the only thing I could I mean certainly believe that we should support them, but I'm not sure going out 12 years is Aren't they asking for eight? Yeah, the recommendation is eight years. The next item. Okay, I'm sorry. I don't know where I got 12 from. Okay, we'll take we'll take 10. Yeah. 12 going once. Okay. Are we are we good on this one?

Okay. Laura, will you please take a roll? Council member Ratitz, uh, enthusiastically, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion passed.

Thank you. Consideration of application for obsolete property rehabilitation exemption certificate from Healthy Harbor Holdings LLC for the property located at 471 Water Street. An application has been received from Healthy Harbor Holdings LLC for an obsolete property rehabilitation exemption certificate for the property located at 471 Water Street. Pursuant to public act 146 of 2000 as amended with the property being located within the DDA, the Oprah incentive is limited to new tax revenues that would otherwise be captured by the DDA rather than the city's general tax revenue. A public hearing on the request was held earlier in this meeting. This is this item could be considered if council took action to establish the Oprah district in previous agenda item. At this time, council could take action to approve a resolution to approve obsolete property rehabilitation certificate application for Healthy Harbor LLC's for the property located at 471 Water Street for a period of 8 years. Is there a motion?

I'll make that motion. Is there a second? Second. Okay. Any discussion on this one? No. either or Laura, would you please take role? Council member Radits, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gowski, yes. Council member Ruska, yes. Motion passed.

Thank you. Okay. Consideration of obsolete property rehabilitation act memor memorandum of agreement healthy harbors holding LLC. Earlier this evening, a public hearing was held on proposed obsolete property rehabilitation exemption certificate for the property located at 471 Water Street and owned by Healthy Harbor Holdings LLC. As part of the approval process for this project, a memorandum of agreement between the city and the property owner needs to be approved. At this time, council could take action to enter into a memorandum of agreement with the Healthy Harbors Holding LLC and further authorize the mayor and clerk to execute this agreement. Is there a motion? I'll make that motion. Second. I'll second. Any discussion? Laura, would you please take role? Council member Radits,

yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion passes.

Thank you. Consideration of budget amendment 2026-2 for fiscal year ending June 30th, 2026. The city of Manaste is required by state law to ensure the actual expenditures do not exceed budgeted amounts over the course of the current fiscal year. Unanticipated and unbudgeted events and/or city council approved expenditures ha have or will occur. The proposed budget amendment addresses expenditures associated with these events to ensure compliance with the state statutes regarding appropriations. At this time, council could take action to action adopt budget amendment 2026-2 for fiscal year ending June 30th, 2026. Is there a motion? I'll make that motion. Second. I'll second it.

Any discussion? Yes. I'd like to know more about this fire deal that's in the budget. How can we approve that uh without knowing more facts?

So, this is part of that resolution that council passed the other um last council meeting. Um the other the other townships who are talking with us to form the fire district also passed the resolution. Um part of that was an allocation of 5,000. So we have five entities who contributed 5,000. So this is um putting that that money into an account to be able to use towards establishing the fire district.

Okay. Are we supposed to end up discussing this budget tonight or passing the whole budget? So this is just the budget amendment for the current fiscal year. So the uh we've already received some funds from from Strronic Township. So this is basically just amending the budget to accept those to put that those funds in basically have a revenue and expenditure for this new thing because this was not this was something that was established over the course of the year that wasn't part of the budget um last year. So this isn't the this isn't the current this isn't the proposed budget for 2027. This is a budget amendment to the current budget. So what are we approving here? And this I see professional services

for the professional services. So we Yeah. So basically you're putting the 25,000 for a consultant to work on the fire district um the fire district project. So they're contributing. We talked about things like a website, things like that um for information sharing. So this is this is 5,000 that communities have given towards this project that the city is is basically housing um and working with the entities because basically the 25,000 is the city's acting as a fiduciary for the for the group. Correct. Right. Correct. And we've contributed five. Yeah. So the 25,000 is total the professional services is is the total.

Right. Okay. All right. I have a question. Um, I guess I'm curious why, you know, we had significant property sales this year and why there isn't a budget amendment for that, you know, around like 300,000 in revenues and where that was placed. Okay. So, that was put into the um was put into local streets and Ed can talk about this. This is just a general fund, but I guess to the point I don't know if it goes into a general fund revenue off the bat.

So, we don't do budget amendments for revenue. I do projections for revenue, but the proceeds from the property sales first go to the general fund and then they get transferred to the local street fund. So, you may see one coming up um for the transfers out. I think the first one that we did earlier had that. Um, but if not, there'll be one before the end of the fiscal year to account for those transfers. I know this has come up before, but why does it go to the local streets funds? Because there was a resolution by council to do that. But I couldn't find that. If somebody could send that to me. Sure. Because I I did find where there was one instance with a land sale. Council moved to move that sale, but it wasn't like a continuing resolution.

Yeah, we we can get that to you. Okay. Thank you. Wait, good. Yeah. Laura, would you please take role? Council member Radits, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion passed.

Thank you. Consideration of approving resolution for an addition to the Act 51 street map. State of Michigan requires additions and deletions to the official Act 51 map on annual basis. The street administrator has performed an audit of the map and has identified a correction. At this time, council could take action to approve the resolution to add lighthouse circle into the city's street network and include act on the act 51 map. Is there a motion? I'll make that motion. Second. I'll second that.

Any discussion? Where was It's in Lighthouse Landings, the condominium development at First and Cherry Street. And if you look at the map on your screen, it's the the last phase, phase four that was added. Uh council accepted that. Not sure back then why it wasn't added to the map. Um simply when we were doing PAR ratings last fall, uh the crew that was doing that noticed that that wasn't in the map. And so this is just correcting that. Okay. Thank you, Jeff. Laura, would you please take role? Council member Ratitz, yes.

Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion passed. Thank you. Consideration approving a license agreement for the right-of-way encroachment. The redevelopment of 141 Washington Street requires installation of a new electric and gas meter banks. Project architects have identified the north face of the building as the only feasible location for this equipment. As proposed, the installation would encroach into the Lincoln Street right ofway. To address this, the city attorney has prepared a license agreement authorizing the encroachment. At this time, council could take action to approve a license agreement with 141 Washington Street LLC and further authorize the mayor and city clerk to execute the document. Is there a motion? I'll make that motion.

Second. I'll second. Okay. Any discussion? Yes. Um, so it when I look at these pictures, it shows Lincoln Street and Jeff's memo shows Lincoln Street. But if you go to um page 107, it says Washington Street. So I just want my It's Lincoln Street. If the uh page 107 where the last drawing is append uh exhibit B

right there right there it shows Washington Street. It should be Lincoln. Okay. So it's Lincoln Street. It is Lincoln Street. That's all I wanted to know. Two of my favorite presidents but easy easy to mix up. Thanks Laneie. Well, mayor earlier boo boo. Anything else on this one? Nope. Laura, would you please take role? Council member Radits, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion passed.

Thank you. Consideration approving an educational affiliation agreement with West Shore Community College. The educational affiliation agreement with Westshore Community College will establish the Manacey Fire Department as a clinical training site for students enrolled in West Shore Community Colleg's emergency medical services program. The agreement outlines rules, student eligibility, and safety requirements and confirms that student participate solely in a supervised educational capacity. At this time, council can take action to approve the educational affiliation agreement with Westshore Community College and further authorize the mayor and clerk to execute the document. Is there a motion? I'll make and I'll second any discussion.

Yeah, I'm super excited about this. I think this is amazing. We have such a great paramedic and uh EMS team and what a great opportunity to get perspective uh medical care workers into our our city. So, thank you, Chief. Yeah, amazing work. You Laura, would you please take role? Council member Ratitz, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes.

Motion passed. Consideration of zoning ordinance Z26-01 to amend the Manaste City zoning ordinance. The city has identified both a shortage of housing and a need for diverse housing options. There are a number of existing lots with the largest residential district that are currently unbuildable due to non-conforming with minimum lot size requirements. The community development department has coordinated with the county planning department and tiny developers incorporated to explore opportunities for smaller, more attainable housing options in the city. The proposed zoning ordinance would allow for construction of smaller homes on non-conforming lots in the R2 district. economy efficient housing overlay amendments as follows to allow for smaller minimum living areas and non-conforming lots in the R2 district Z26-01. Amend article 2 definitions by adding economy efficient dwelling. Amend section 300D by adding economy efficient housing overlay district. Amend table 3-1 by adding subsection L. Amend section 301 official zoning map by adding economy efficient housing overlay district. Amend section 903A by adding subsection one. Amend by adding section 905, economy efficient housing overlay district. Amend section 2301 by adding subsection H. As an ordinance, two separate readings are required. If this ordinance is introduced at this time, it could be adopted at the next regular meeting. At this time, council take action to introduce zoning ordinance Z26-01. Is there a motion?

I'll make that motion. Second. I'll second. Any discussion? I brought a little presentation. Um, thank you, mayor, for reading that lengthy piece.

Um, this is something that's been in discussion for quite some time, um, prior to my starting here at the city. This came to the planning commission for the first time a little bit over a year ago, last winter. And I brought it to you guys at the joint meeting this past December. Um, I'm going to go through a bit of the language. I think that with multiple things happening and multiple discussions happening about this tiny housing initiative at once, I want to make sure that um everything is clear what what this ordinance would do and how it could affect our community and um make sure that that's clear to start. Um, again, this tiny conversation has been happening for a while, but I think it's important to look at how it fits each community differently. Um, I think that tiny and building smaller housing is becoming a best practice in pushing new housing initiatives forward and making housing a priority. That being said, it doesn't necessarily fit every community. And so, this could be this was a problem identified separately that I think the smaller housing could be a solution for. Here is a map of the non-conforming parcels across the city in respect to the 6,000 square foot minimum lot size. Um, as I don't have a map of R2, you guys saw that at the joint meeting them compared, most of these do fall in the R2 district. Um, one thing, so this specific map, you guys got two different maps in your packet. This is the 2500 to 6,000 square ft. This is what the actual minimum language we are putting forward for lot size is 2500 square feet. However, we do have a 20 foot minimum width and then 5ft setbacks on the sides. And so, ideally, we are looking at more of the 3,000

square foot lots, half-size lots, which is what we commonly see across the city. Um, but by putting it at 2500, that accounts for lots that maybe don't have 100 feet in the length, but they do meet that 30 foot width requirement just to be able to um account for additional lot sizes. Looking at the housing need, um, we did have a housing assessment done by Housing North back in 2023. It was a couple years ago, but I think it is safe to say that these numbers are still pretty accurate and reflecting what the community needs. Um, we identified a rental gap of 525 units and a for sale gap of just over,300 units. Looking at building smaller, um, I think that the ideal range here is going to be middle income. Sort of that missing middle idea, looking at 100 80 to 120% AMI, so area medium income. Uh again looking at sort of building the square footage, who could that be ideal for and what, you know, what market are we targeting? Just based off some numbers off Google and just generally building a pretty basic residential home, you're looking at roughly $200 per square foot up to probably about 300 if you're building slightly nicer. Looking at a 440 ft house, that's our minimum for single family. That puts you at a home price of about $136,000 if you're looking at 60% of your cost being that building fee. Upwards to the current minimum $960 ft. That would be about $298,000 home price. Um and then down we have the 80 to 120% AMI um affordability rate for a for sale unit, which would be 21,000 to 302,000. Um, if you bumped that building cost up

to 300 square foot per unit, you would be looking at 220,000 to 480,000 um, between that 440 and 960 ft range. So, it does pretty well fall into that 80 to 120% AMI um, range, which is what um, ideally we'd be targeting here. Goals and objectives. So, sort of combining that housing need with the identified lots. Um, we'd be addressing those lots that are currently unbuildable. Um, bringing new housing options to the city by building smaller and addressing that specific group, building more affordable, by build building smaller, reducing building costs. We ideally would target these towards potentially younger populations looking to um get out of rentals, purchase their first home, retiring populations looking to downsize. Um these are going to be smaller units and acknowledging that that this is sort of who we would be targeting. Um again bringing in younger crowd and then also um retaining older populations postretirement and having those housing options available. Why an overlay? So again, this has been in discussion for a long time and the overlay overlay direction came from that non-conforming lot. I don't think that at this time there is a desire to reduce these minimums in the R2 district or in residential districts overall. And that's where I come in saying that I think this is a good opportunity to fit the community needs as they stand right now. um if it is something that is beneficial, you know, that could always be looked at. Is this something we want to expand into R2 as a whole, but by identifying these lots currently and only applying this to those non-conforming parcels that are already smaller in existence, I think that um it

fits two needs at once for the community. So, I gave you a pretty long list of amendments. Um just a general breakdown here of what each of those would actually be doing. Um for the most part adding the definition that's a separate amendment in itself. Anytime that R2 district standards are listed, we have adding um just a sub subsection to refer you back to this specific ordinance, adding it to the table of land uses, adding it to the map, um adding it to the short-term rental section and then adding it to the actual R2 zoning section as well, which would be the largest amendment, which is section 905. And then I've got each of the actual amendments coming forward broken down. This is the bulk of the language that section 905 that we would be adding. Um purpose and applicability. This would be to address non-conforming specifically um allow for these only on those non-conforming lots using this new definition of economy efficient housing. Um targeting new build homes and duplexes with the um newly provided setbacks. I do have it in there that anything that is not explicitly stated in these new um amendments refers back to what R2 originally says. So lot coverage, any accessory structures, things like that are going to just refer you back to what R2 says. And then again just stating that these are existing non-conforming lots, not necessarily being able to take a current standardized lot, splitting that in two to build two houses. I think that this is directly targeting the issue that we face currently. Dimensional and setback standards. Um

like I said earlier, we'd be reducing the minimum lot size to 2500 square ft. It's currently 6,000. Um a number of the lots are at roughly 3,000 square ft right now. They're just standard half-size lots. Um, like I said before, by doing 2500, that would sort of give some lenience to lots that maybe don't meet the length to quite hit that 3,000 ft, but they have the 30ft width. Minimum living area. This went back and forth. Um, I think originally it was 240 ft. At the joint meeting, we bumped it up to 400 and the planning commission bumped it up further to 440 for single family and 400 per unit for duplexes. Um we reduced parking by one spot. So right now it says you need two parking spaces. We've reduced that to one per unit. So one for a single family, two for a duplex. Um our setbacks are 5T on each side. This is a reduction 15t in the front, 10t in the rear. This is remaining um I believe the same. And then minimum width of 20 ft. Again, meaning you need essentially to have a 30ft lot to apply for this um overlay. Permitted uses, we're looking at single family and duplexes. Um, again, this was something that was up for quite a bit of discussion and I'm happy to talk about this more with any questions, but I think this is a really good best practice to put forward and to put forward in this specific limited sense. And so this does allow for a bit more regulation on that. Currently, um, there are very few lots where you can actually build a duplex in the city. And I often have people call and ask and I have to, you know, explain to them that it is going to be essentially a $2,000 process between the variance and the special use permit. And I find that people often end up looking elsewhere and are really stuck on that duplex idea. So again, this could be a

way to slowly introduce that and um be able to monitor it. Uh the last section is short-term rentals. This was another thing that bounced back and forth between discussion a lot. Um, ideally this is a housing initiative and I think that the concern was by allowing these smaller houses, um, a wealthy developer could come in and very easily build a large number of these, fill our cap of short-term rentals and not allow this to go to housing. And so just by including that in there, um, the current ordinance states that tiny houses are not eligible. We're not using the tiny house language. This is the economy efficient language, just slightly different. um we don't quite meet I I don't think we meet the true definition of a tiny house for minimum square footage and so adding the economy efficient dwelling in that section as well ensures that um these do not apply to that program and that's all I've got and I'm sure you've got questions. Yes. How many young people starting out can afford to use one of these typically? How many older people can afford to buy one of these houses?

Let me go back to the to the income table. So 80 to 120% AMI is 60 to90,000 a year in income roughly and and of course you know this is situational and depends on every person but um I think that that is what what the math says and it again I am I looking to buy a house right now? No, but in a few years will I probably be in that range of to purchase a smaller home. It is very likely. A lot of people moving in here are trying to find homes and they can't afford that.

Well, and I think the other thing is that um and this is something that I've I've shared a couple times, but in doing this, it is sort of that missing middle income aspect. And so people who are currently in rentals and looking to move out of rentals maybe opens up those rentals for those who can't afford to buy a home yet. And it's it is very hard to find a rental in the city right now. And I think that there is a need for that. And this could transition people out of rentals who are ready to invest in a property and want to and fall in this income range and could potentially afford to build something small and open those apartments up to um

younger families or younger individuals looking to make that transition. I'm agreeing with you, especially with a duplex, you have the opportunity to own your side of the house and be able to rent out long-term the other side of the house or to have a co-housing arrangement, too. I'm so grateful that the the commission and everyone involved allowed that duplex option so that um that can allow home owners uh to exist side by side. And I I think the duplex um is is good for the rental aspect too, even if they're both rentals. Yeah. Um there is still that that renting need. And so a lot of duplexes do serve as rentals in the city. And that is really common that both units at least both if not one is being rented out. Um and this could be a good opportunity to provide more of those again because it is really hard to find. I don't know if there is a lot out there that exists to build a duplex right now in R2. Well, Traverse City went through a lot of that. If you read the papers, they were having a lot of trouble trying to put duplexes in single families and and they went up there. So, I just I think duplexes aren't going to work. And I has anybody checked with people in the neighborhoods? A lot of neighbors do not like these things.

Well, I don't know that people have an option in the neighborhood. I wasn't given a choice in my neighborhood when a duplex was built. No, but just so you get some idea what's Well, why why wouldn't I want a duplex? I don't want to live outside of somebody. Because Well, and you then you don't have a duplex. That doesn't mean that the guy across the street doesn't want a duplex. Well, everybody's entitled to what they want. I have what might be a really stupid question, and I don't know where the answer is going to come from here. How did these become nonconforming lots?

Just in the way that they were platted and divided and then the ordinance was written that for a hundred years these this town has been very large houses. Why are they all of a sudden not able to hold that large house? Our ordinance is from 2006. Okay. And so I don't um

that answers a lot. I think before that I don't it was maybe a 1990 ordinance and both of those had the 6,000 ft² minimum at some point. I mean these house most of the houses in the city are far older than that and so zoning just probably wasn't in place or enforced and those lots were divided to be half size just to fit more houses likely. And when you say one parking spot per, is that a driveway or is are you preparing the roadway to be able to accommodate street would have to be a driveway

and that's what the ordinance says for new builds right now is you need to provide off- streetet parking. Um, and something I didn't mention and you talked about the the smaller lots and um, I appreciate Katie speaking and in part and she has been a big conversation and a big supporter of this through the land bank is that a lot of those lots that the land bank has acquired through the blight enforcement are these smaller lots that you can't build on otherwise and so and these are going to come on an as requested basis. I mean, somebody's not like you say, we don't want it would be subject to the same the same review process and so they would come.

I as a build or I as an owner or looking for a new home. I come and say I'd like to buy that lot. Yeah. We're not building on that lot first and then trying to sell. No. No. And and that stands the case right now. And that's why we end up telling a lot of people that this lot is too small or okay. or I want to I'm buying this old house and I want to redo it in the future. You might want to take into consideration um your limitations and that and that's that's a pretty frequent conversation we do have. So I don't have a problem with the whole tiny home, but I don't understand why economic efficient.

No. Yeah. Okay. Economic efficient. You're right. Um I don't like the sounds of tiny home myself, but

Well, But I'm not why we wouldn't take the problem we have with duplexes. You know, I want the city to be able to have houses on these non-conforming lots. But I got to tell you, this duplex thing, I don't understand why we wouldn't look at making it easier to build duplexes on regular lots instead of putting him in a tiny home lot. I don't understand the I think it's a negative uh to have a small lot and build even a smaller units rather than trying to make it a better option if that's a need on regular lots. So George from Tiny did bring um sort of that proposal to the planning commission in partnership with this and I from a general standpoint did not get that they were super interested in pursuing that. Um, I also think that and again, you know, 440 and 400 are very strict minimums and so I don't foresee many being built exactly to that size. And a lot of communities who implement these initiatives set maximums. And so to be an economy efficient dwelling, you need to fall between these two. And we don't have that. It's really subject to the setbacks. And so you very well could build much larger than 440 ft or an 800 ft duplex. Um it's just that those are minimums and I think again I want to push the the best practice idea forward and that allowing duplexes and again this would still minimize the the parcels and where duplexes could be placed. Um, I know that George from Tiny has a couple of sample duplexes that could fit on these smaller lots that he has shared where they have their own driveways and and they seem separate and they he's got one

Kaziasco that's on a corner and you it's a landbank property and so from each different side it it really doesn't look like a duplex. You know, I I think it's a this is one of the issues that's been plaguing know this city for at least the last three or four years that I've been on council. You know, every single uh candidate forum, it's bringing jobs, it's housing, it's child care are three of the big things. And I think it's a fantastic idea. I love the overlay idea instead of just making it a blanket. R2 do what you want. Um the work on this that everybody's done is impressive. Um outstanding. I'd say well thought out and there's no perfect solution for for the housing crisis or the housing shortage, but kind of like the short-term rental. It's a start. We can alter it if we need to, but we need to

I'm going to use a phrase I hate using when I hear the video, kick the can down the road yet again. Let's not do that. Let's pass this and let's get this going. Thank you. Thank you. Else Laura, would you please take a role? Thank you, Patty. Council member Radits. Yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, no. Council member Ruska, no. Only because of the duplexes. Motion passed.

Thank you. Consideration of the sale of city-owned property 6th Avenue parcel 51-211105-01. The city has received an offer to purchase city-owned property 6th Avenue parcel 512111051 for 80,000. The city is requesting a utility riverwalk easement to eventually connect to the Riverwalk to the east of the property. At this time, council could take action to authorize the mayor and clerk to execute the purchase agreement and and all other necessary documents to finalize the sale of city-owned property 6th Avenue, parcel 512110501, contingent on city attorney final approval. Is there a motion? I'll make the motion. Second.

I'll second. Any discussion? Laura, would you please take role? Council member Ratitz, yes. Mayor Prom Smith, yes. Mayor Sullivan, yes. Council member Kek, yes. Council member Gabowski, yes. Council member Ruska, yes. Motion pass.

Thank you. Consideration of applications to boards and commissions. The city clerk has taken action to advertise vacancies on the compensation commission, downtown development authority, neighborhood restoration and beautifification commission, tree commission, and zoning board of appeals. Mayor and manager appointments require a motion. second in council voted support. Nominees for council appointments do not require a second after all nominations are made. Council votes on the nominees until one nominee receives a majority of support. The following applications have been received. The neighborhood restoration and beautifification commission. Two vacancies termed ending 43029. The purpose to identify, research, and recommend opportunities and resources to help prevent remediate and eliminate blight and help beautify the city of Manasty Council appointment. We have Mark Whitliff, 363 Tentth Street, and Andrew Stafford, 275 First Street. At this time, manager and council could take action to make appointments noted the NRBC two vacancies. Is there a nomination?

I'll make you nomination for Andrew Stafford. Laura, would you please take role? Council member Radits. Stafford. Mayor Prom Smith. Stafford. Mayor Sullivan. Stafford. Council member Kek Stafford. Council member Gabowski. Stafford. Council member Ruska. Stafford. Thank you. Is there a second nomination? I'd like to nominate Whitliff, 363 10th Street for the NRBC term ending 43029. Thank you, Laura. Would you please take role? Council member Radits. Whitliff. Mayor Prom Smith. Whitliff. Mayor Sullivan. Whitliff. Council member Kek. Whitliff.

Council member Gabowski. Whitliff. Council member Ruska Whitliff.

Thank you. Introduction of the fiscal year 2026 budget. Uh, Mr. Bradford. All right, mayor, members of council. Um, today we are giving the first look at the city of Manasty budget um proposed for fiscal year 2027. Just a reminder, tonight is basically just to kind of introduce the budget and go through a highle overview. Um we've got a number of work sessions um and other uh opportunities for council to have discussion and to receive input from the public and we'll go through that um timeline at the back uh once we get to the last slide. Um so just a a quick overview of the entire citywide budget which comprises all of the funds including the general fund and the utility funds and enterprise funds and things like that. The total budget this year is about 24.2 2 million which is an increase of about 753,000 or about 3.2%. Um you can kind of see the pie charts those are also in your budget that show the city budget by area. Um obviously the biggest piece of the city's budget is the general fund. Um and then you know by type of expense. Our operating expenses are about 77%. And that's to be expected because the city provides services and you need people to deliver those services. So that's why the um the operating expense is the biggest part of the overall city budget. So uh continuing on this um assessed value increased this year by 31.6

million or about 7.8%. Um that's on the heels of last year where it increased by over $30 million. So really over the last four to five years we've had a at least in my tenure an unprecedented runup in the assessed value of properties and that's because there's been a tremendous real estate market over the last several years and there's been lots and lots of sales that drive those assessments. Um taxable value increased by 12.6 million or about 4.6%. That's a result of those sales and uncappings, but also the limit in taxable value increases for people that are in their home, their primary residences. Their taxable value can only rise at the rate of 5% or inflation, whichever is less. Um, this year we had a millage declined in the general fund of about84 down to 17.6850. That was due to a Headley override, which we'll talk about a little bit more. You can see the chart on the right there. It shows the millage rates going back to 1995 um for total city millage whether that's refuge, general fund or any voted debt. And we're at the lowest um point in that uh time frame. So going back about 30 years. Um the rate increases are in line with the rate sufficiency study. Um for an average homeowner, it'll be about a 3.5% overall increase. Um there's no rate increase proposed this year for refu recycling because the fund is doing very well. um which is a welcome relief I think for the residents. We have about eight and a half million dollars in capital improvements and this budget proposes reducing full-time headcount by one FTE. This is new this year. Uh I tried to introduce it. It's a citywide budget health scorecard, so to speak. Um it kind of gives council an idea of where the different funds are. Um and it it runs from excellent to good to average

to poor to terrible. Uh we don't have that fortunately. But um you know in my tenure here at the city you know we've always had challenges with different budgets over the years. Um but you know with the exception of I would say the general fund which is still average most of our funds from a financial standpoint looking at different metrics are doing quite well. Um, and we can talk about that a little bit more uh when we go through each of these, but I thought this was just a quick snapshot to help you and the public kind of get a gauge where at least from the finance director's perspective, the the different funds are doing um from a financial standpoint. Okay, general fund overview. So, the balance comes in um that was proposed to be uh at 8.47 million. Um however there were again this year as there was last year significant adjustments that were needed to balance the ledger. So when all the department heads put together their budget requests I total them up. We you know double check them make sure there's nothing double counted but there was about a $354,000 deficit when all those requests came in. So uh the department heads and the city manager met over two days to kind of go through the budgets and make adjustments to assumptions. um maybe there's things that I didn't get or things that got left out or uh more information. So, it's kind of a brainstorming session and uh through that process, we're able to balance the budget through a mix of um revenue increases and and expense decreases. Um as I mentioned, the budget does reduce one FTE position and the total general fund employment is at 49.5. Um, I want to emphasize that for now this budget maintains services and that's important because that was one of count's priorities and uh the general fund health rating from a financial standpoint I would say is about average. So key issues, there's a issue page in the budget that talks about general fund

sustainability. And um given what's going on with the environment, um you know, it's my opinion and the city manager's opinion that the general fund budget is becoming unsustainable and has what's called a structural imbalance. Um it's it's the beginning of it, but it's going to get worse. Um the definition of a structural imbalance is that the organizational structure andor the services being provided by the the city can no longer be sustained by the available revenues. And when you have a structural imbalance, you either have to bring revenues up or you have to decrease your expenses to get those two in line with each other. Um we have several revenue issues. That's one of the primary causes. Um we've had rollbacks in five of the last six years. Um, and that again is due to the way the state of Michigan structures local units of government's finances, but it's also directly related to the number of property sales where we have and the number of uncappings that we have. When we have those, that gets held against you. You don't get to realize that additional revenue through the formula. You have to roll back your millage rate. And we'll talk a little bit more about that. Um, the state support for local units of government um, in the form of revenue sharing has been and continues to be inadequate. We are still well below the amount of revenue sharing that the city received in 2001. We're getting less money from the state of Michigan now than we got in 2001 and it's 25 years later. Um the other piece of that the other sources of revenue because uh the millillage which is affected by the Headley and the revenue sharing are the vast majority of the general fund revenues. the other sources um are doing kind of okay, but they're variable and they're also constrained. There's only so much we can do with those. So, we we kind of have on the revenue side some challenges on the expense side. Um we've got a number of issues as well. though in the labor market um with with the

high inflation that we've had since 2020, you know, there's just been a natural creep up in wages because it's it's been demanded uh by the unions um through negotiations and um also we've had to increase some wages to be competitive to uh acquire employees whether it's police, fire or what have you. Um licensed people in the water and sewer department, those positions are in high demand and there's not a big enough supply. Um, we've had health insurance and pension expense increases. And like I said, the commodity and supply inflation has been up about 25% since 2020. And equipment purchases especially got hit hard by that. And we'll talk a little bit more about that when we talk about the motorpool. Um, the city provides very high levels of service um, similar to what you would expect in a larger community. We hear that all the time. Um, people are amazed that you can get your brush picked up and get your leaf bags done and how responsive the DPW is and how great the police department is and the fire department. Um, and I think there's two reasons for that. One is a historical artifact. Um, you know, our service level and our service model kind of evolved when this community was much larger. I mean, we were a city of 20,000 people at one point and we're down to 6,200. And also um kind of out of necessity because um what we see in Manasty County is because it's a rural county there's just fewer county services than there might be in a in a more urbanized county and there's also fewer private service options. Um and so the city beind kind of becomes a service provider of last resort in in many instances. Um however with a structural imbalance not all priorities can be funded. um excuse me nor services maintained um when that structural imbalance exists.

Yeah.

So the last sentence that we have here, this is um in the in the budget document itself and I'll just read it because I think it's really important. Um absent a significant inflow of new and sustainable not one-time operating revenue, the structural imbalance that has been building will get worse. This will require adjustments to the workforce services provided and/or outside services funded. The beginning of these adjustments can be seen in the proposed budget where general fund employment was reduced by one FTE and two seasonal park positions were eliminated. Future headcount reduction is likely inevitable and should be expected. Again, absent some changes in the in the revenue situation. Um, and I don't want that to scare anybody, but I I do want to make sure that council is aware of that. um we did go through a very similar situation as we're having right now right after the great recession in 2008. Um if you look at the area of this chart that's highlighted from 2008 to 2012 we lost a significant number of employees and that wasn't by choice. That was because we couldn't afford them because of the crash in the property values and the extreme strain uh on the city's budget. our general fund workforce was reduced by about 12% over that time period. And fortunately, the vast majority of that reduction in headcount was through attrition, not through laying people off. Um, that's always the preferred way to do it. If somebody retires, you just don't fill the position, you restructure to to accommodate. And that's what was done. And then you can see it was very flat for uh over a decade. And then we did have a spike more recently where we brought some services that we had outsourced back inhouse. But this is something that the city has been through before. Let's talk a little bit about general fund revenue. Again, our continued uh we are having continued slow revenue growth about 2.5% overall in the general fund.

Uh property taxes. So, we did have a headley roll back and that caused a loss of about 1.1% of our operating millage this year. Um, which is equates to about $48,000 annually. The city charter authorizes the city to levy 20 mills. Because of the state statutes, that's been rolled back over the time. So, now we're only levying about 82.7%. So what that's saying is we've basically lost 20% of our taxing ability because of um cumulative effect of headley roll backs. Our millage has been reduced by about 1.23 mil or about 7% since 2021. And you can see that on the graph on the right hand side there, the part that I have highlighted in the oval. I mean that's reductions in our millage rate because of those five heavily roll backs. and that equates to about $320,000 annually that we don't have because of those rollbacks. The budget has an issue page that talks about um a Headley override. We're not suggesting a Headley override. That would some be something that you'd have to take to the voters, but it is an option to recapture some of that lost taxing power that that um the city has experienced. Uh continuing on the revenue just to kind of take a little bit deeper dive. Um our interest revenue is expected to decline a little bit this year as uh the Federal Reserve has cut interest rates. Um that trend is expected to slow but continue. Our revenue sharing is expected to decline um primarily because of the funding formula for the new street program. It did impact um some of the sales taxes that fund uh revenue sharing. Um and so those are expected to go down. You can see that chart on the right that tracks historical revenue sharing. The blue line that trends up is constitutional. That is guaranteed by the Michigan Constitution. The red line

is what's controlled by the Michigan legislature. It's called statutory revenue sharing. And you can see how that has dropped and never recovered. And so the combination of those two again is less than what we were getting in 2001. Our marijuana revenue is expected to increase this year because we did get a new fifth license back. We had lost one of those licenses and that did negatively impact the budget last year. However, there is significant market uncertainty both on a statewide basis because the market's totally saturated and also here in the man and we realistically expect to support five retail outlets um for an extended period of time. Nobody has that. I personally don't think that will happen, but for this year, hopefully we'll get that fifth retail license and get credit for that. Um, we're getting a little bit lower personal property tax reimbursement because of the formula that the state put into effect over 10 years ago. Some of that's starting to roll off now. Um, however, in this year's budget, um, we did try to get creative. Um, this is this last item here is one of the reasons we were able to bring in a balanced budget and um give a lot of credit to the city manager and to uh chief glass working with central Wellness um where hopefully there'll be a memorandum of understanding coming to council here shortly that will talk about reimbursing the city for the cost of an officer plus some of their equipment um to kind of be a what I'll call a mental health officer. I think uh Josh calls it a crisis intervention officer. It's not a new position, but it funds or reimburses the city for one of its existing positions, and that will be, you know, presumably well over $100,000 a year. So, that was a big piece of that additional revenue that you saw when we when we balanced the budget. So, kudos to them for uh for being creative and it's modeled after what they're doing in Benzy County and I think many of the communities northwest Michigan are going to be looking at doing similar things. Moving over to the expense side, um I just kind of run through the highlights

here. Again, it maintains services. Um we talked about the headcount reduction. The operating budgets for the general fund departments are starting to become very tight um because over the last two years they've had to make reductions and uh but the inflationary pressures are not going away. Um the council compensation commission recommendations from previous uh were put into place this year. There were union contractual increases. Um there were MS pension cost increases. And this last one here I'll talk about the health insurance cost increase um just came in a couple weeks ago and it's at 28.1%. Well, obviously that's not going to work. The budget builds in 10% split half between employees and half between the city. and our health insurance agent is working on getting us some different quotes and um seeing if we can bring something in more more reasonable and we'll talk a little bit more about that. Um street light costs continue to rise. I don't know if you just noticed Consumers Energy had a 200 plus million dollar rate increase that they're pushing through, but the rates have been going up um consistently every year. We we have LED lights. We do what we can, but um the the street lighting cost does go up. One thing that the budget did do, which was a council priority, is to maintain partnerships. Um, you can see the organizations mentioned there. Um, we've maintained funding for all of those except for we did drop our last little contract with Housing North that's not proposed to be renewed. And the Saints did ask for a funding increase, but that was not uh didn't make it into the manager's recommended budget. These charts, which also are in your in your budget copy, just kind of show expenses by the area in the general fund. Um if you look at the left side, you know, we've got three big departments. Police, DPW, and fire as you would expect. Um administration is everything that's the manager, finance, clerk, assessor. So there's a number of

departments built into there. Um expenses by type, again, wages are about 45% and benefits about 24. So again, about 70% as I mentioned are people. That's what that's what the city uses to deliver services. Couple key issues in the general fund. Um fire and EMS. This is a repeat from last year. Um you know, we're exploring collaboration and possibly creating a fire authority or district. Um hoping to finalize that plan in the coming months. Um we know that we need a ladder or pumper truck replacement. Um that could look a little differently if we do enter into a fire authority or fire district. So it's kind of on hold right now. um if that doesn't go forward and we're going to have to at some point probably uh do a voted bond to pay for those um and we would uh we would cross that bridge when we get to it. That's that's the plan that's been in place for a while, but it's just kind of on hold right now. And then there are still some fire station needs. Most of the main exterior work has been completed. The building looks great. Um I think Chief Hernand's very happy with that. There are several other projects planned. There's still some exterior site work that's going to get done. So um you know trying to maintain that building which was just recently added to the national historic register health insurance. So we talked about the increase we got this year. We moved to Priority Health several years ago from a Blue Cross Blue Shield plan because they had big increases and we've had very manageable premium increases um since then and we have a cost sharing formula in place but this renewal was just kind of out of left field. We were expecting it to be high but not anywhere near that high. And based on the data that we reviewed, which isn't complete because we are a small group, so we don't get a perfect look at our at our utilization. Um, our group demographics experience are fairly favorable, we thought, and so did our broker. So that kind of came out

of left field. But Michigan planners, um, they're experts. They're going to be looking at alternatives. They're going to bring that to us. I think we meet with them on the 15th. Um, one thing to keep in mind, and this has not been an issue for the city, is there was a statute passed um, a number of years ago that basically caps the amount of money that a public employer can pay towards health insurance. And, um, you know, there's a lot of provisions in that statute, but we're basically, even with our cost sharing in place, which has the employees paying over 20% of their health insurance premiums, um, with an increase like this, we're going to bump into those hard caps. And at that point, it all goes on the employees. So depending on what comes out of the meetings and and what we can kind of come up with a plan design, um we may need to have city council consider opting out of the PA152 limits to give some flexibility um for both union negotiations and some relief to the employees. The county currently does that. They opt out every year. U they still have cost sharing. They're not paying 100% of it, but not even close. But they it gives them the flexibility. We've not had to do that, but this might be the year that um that's considered. Okay, moving on to water and sewer utility. Um you can see that nice picture there in the top right. That's uh the finished waste clean water recovery facility. It's um running very well. Um we're still learning to to run the plant and uh you know get it certified and all that sort of stuff. So that's one of the goals. Um both the water and sewer funds are funding needed capital upgrades. It's primarily water mane replacements and then on the sewer side upgrades to the original plant which didn't have much done to it when we did the the big upgrade. Um I give the the general or the the water and sewer utility from a health rating. The water is excellent and the sewer health rating is good. And this is my subjective measurement looking at a number of factors. So I look at what's the fund balance, what's the ability to

raise revenue in this fund, what's the trends for revenue looking like, how well are we able to fund our capital needs, how well our are our operations under control. So I don't have this comprehensive checklist that I go down, but it's, you know, my 25 years of doing this, the these funds are in fairly decent shape. And the primary reason for that is two things. one, city council's commitment to sticking to the recommendations and the rate study and having nice, orderly, reasonable inflationary increases every year that allows this utility to operate and not be in a crisis mode like many places are. And then secondly, um the timing of our bond issues. We had on the sewer side all the the sewer separation bond issues kind of fell off. At the same time, we took on all the debt for the clean water recovery facility. So, we didn't have to raise rates at all to pay for that new $20 million in bonds because the old ones were falling off and we had the cash flow for it. So, well managed, wellrun. Um, and and I think they're in they're in a good place uh financially, healthwise. um rates this year. Again, the the rate sufficiency analysis um is is being implemented and it's uh for a typical 6,000galon customer, it's a 3.5% um increase, 370 a month or 444 per year. Key issues, um the water and utility is going to have to issue a bond. I suspect that will be coming to city council sometime in the next 6 to 8 months. It's about a four-month process. And the reason for that is is we have to um have money available to uh basically replace the water man under US 31 when MDOT's doing that reconstruction. Uh it's very old and needs to be taken care of so we don't have problems once all that work is done above it. There's also significant water man work under McKe Street and Fourth Street, but we've planned for this. We've known about this

for a long time. it was built into the rates efficiency analysis and um we should be able to handle that without having you know any kind of large rate increases or anything. So that'll be coming in front of council at some point. Um the sewer utility we're going to look at that a little closer. We may have to piggy back on that a little bit and there's another possibility down the road of a water bond but that's uncertain at this point. But again those were all taken into consideration when we updated the rates with the rates efficiency study. Moving on to the refuge fund. Um, good news here is not proposing any rate increase this year. Um, normally we do that to offset contracted and service cost increases, but we don't need to do that this year. So, that's uh that's good news for the rate payers. Um, everything will remain the same. Um, curbside recycling program that we put into place last year um is still continues. That's kind of uh settled down. We're we're understanding it a little bit better on what the revenues and the cost structure looks like. So, that'll continue to evolve, but is in a good spot. Uh, we still have the PAS issues. Um, we have $100,000 budgeted to again to do additional response work or investigation. Um, still waiting from Eagle to kind of see exactly what we need to do. I think we're going to be doing some more test walls this spring to to kind of delineate the plume a little bit more and hopefully Eagle will finally accept that and then we'll know is there anything else we have to do for continued monitoring. So I I give the health rating for the refuge fund here excellent. Um with a caveat because something really unforeseen happens with the PAS that could cause issues but right now it's doing very well. Uh moving on to the street funds. So we mentioned last year that the the state um passed a new funding package and there was a lot of information out there. We're finally starting to get real information from MDOT with in terms of official estimates. And that's what I use to to budget off of. I don't I don't try to guess. I want to see it in

writing from MDOT. Um MD DOT's estimates are that we're going to get about $300,000 additional dollars in year one up to $453,000 in year three. And it's called for neighborhood roads. Um there's two caveats here though. Uh one, they haven't provided any final guidance on that. Um so right now we have the neighborhood road funds u being recorded in the local street fund. They haven't said if we have to record those separately. Um they also are a little bit uncertain if their estimates of when the funds are going to come in is actually going to pan out because of some issues with litigation on marijuana revenue that is supposed to be part of this funding source and also the timing of when these payments come in. So those numbers could slide a little bit out, but um it's the best information that we have right now and that's been very helpful for the local street fund. Um calendar year 26, we've got about $3.2 million of street investment and about 2.2 million of that is leverage. So twothirds of that is not city funds. It's either grant funds um or MDOT funds. Um this budget aggressively funds asphalt overlays for poor street segments. I know Mr. Mula is very happy about that and I think they're preparing the list right now. Um I think the the residents found that to be a good use of dollars the last time we did that. US 31 reconstruction engineering planning is well underway. I know the city's been attending monthly meetings for that. Um there's a traffic study around the new middle school that's being funded. That should happen here relatively soon. Um and for these two funds I'm giving them a health rating of good. And that's not to say our streets are good. What's that that's what that is saying is it's a relative measure. Our funds have the funding coming into them is better than it's been in my entire tenure here. And our and our plan and our and our process for putting together street projects is better than

we've had it before. And it keeps evolving. So we're doing we're we're maximizing the amount of street work that we can do given the funds. We don't have enough funds. So, if you're only looking at it through the lens of, well, our roads are still not we're not gaining. Yes, that's not good. But we're doing the absolute maximum that we can with what we have and the amount of money we're getting is increasing. So, that's what I think warrants the good rating. Um, this is in your budget. It just takes a look of the project that are kind of pencled out. We really don't have fiscal year or calendar year 29 kind of uh finalized yet. So there's overlays in there, but no no real projects at this point. Um, but we definitely have a lot going on in 26, 27, and 28. I think the I think the community is going to get tired of road construction is the is the kind of the comment that we've been talking about between US 31, um, the detour route, the overlays, some of the other projects we have. There's going to be a lot of road construction in the next three years. And, um, but that's a good thing because the streets need it. And that map that's in there kind of shows the years when stuff is going to get constructed. Um oil and gas fund. I give this an excellent rating. Um this has worked flawlessly since 2008. And um I think everybody's really rowing in the same direction with this. But um you know this year the amount that is going to be available for the capital improvement fund is up about $6,000 from what it was last year. So it's doing exactly as it's supposed to. Um, you can see in the chart on the right, the blue section on the bottom is the accumulated royalties. You can see those really aren't growing very fast. Um, because those wells productivity has has really gone down, but the red part is the what we call the accumulated earnings. Um, and so it's basically pretty much doubled what what we have there um because of the way we've been managing it. So that's very positive for uh for city capital projects. A lot of communities don't

have these. I talk to my peers all the time. They struggle to fund capital projects. They just don't have the money to do it. And so this is really a nice um asset of the city uh for future generations to have. I'm happy to report the marina's doing well. The marina struggled for years. Um just it it just seemed like people would skip over it. You know, they'd go to Lington and then up to Frankfurt. But I think um because of a number of issues, a beautiful new facility, brand new docks, a very competent manager, uh an attentive staff, a vibrant downtown, um they don't they don't hop over us as much anymore and and the the marina has been busier and busier and busier. Um one thing that's really nice is the debt that we had on the Marina building is falling off and in 2027, we no longer have any debt. So it'll all get paid off this fiscal year. So that does two things. One, it lets us reduce the subsidy that was coming in from the capital improvement fund. But because the slip sales and the gas sales and stuff have have really ramped up, the marina is self-sufficient. Um so that's very good. I think I think it's doing as well as it has ever. And we do have a pumpout grant um that we're working through. I think we're close to getting that bid out for this fiscally to replace the pumpout facility at the marina, which again is just another nice amenity there. Um I can say the same thing with the boat launch. We've had two or three really good years. Um this is one that's interesting because there's three things that determine voters. Weather, fishing, fuel. Those are the three things. Um we got an uptick I think after COVID. Um but we've had we've had really good years. We're building a fund balance in this fund. Um there's some large capital needs and and maintenance needs. The First Street parking lot, um improvements at the Ninth Street boat launch, but we're we're slowly building some money to be able to do that for

grant matches and that sort of thing. Um we did install late last year a brand new auto attendant. Um the one that was there was fully depreciated, but but served us well. This new one has a lot more functionality, should uh should not be down as much as the other one was, and so we're excited to kind of put it through the paces this year. So, um, boat launch is doing well. Our capital improvement fund, um, you know, it's also doing doing good, I would say. And the reason I say good is because there's always way more demands for capital projects than this can be funded through this. Um, but because the money going into it is increasing and some of the obligations like the marina transfer are falling off, we're able to do more. And so this year we've got about um $487,000 of expense budgeted. Some of it is uh debt service, but other other ones listed here and in the budget are are just projects that um you know we wouldn't be able to fund in the general fund this year for sure. So all that stuff we're seeing there is is things that we wouldn't otherwise be able to do. Um and they're all worthy projects and they're kind of spread around between, you know, uh buildings and equipment and parks and and that sort of thing. Uh, Motorpool. This is one that gets an average rating. So, the only two funds that I rated average are Motorpool and the general fund. And the Motorpool is an interesting creature. Um, it was never designed to be totally self-sufficient. Uh, we're very fortunate to have it. It helps to buffer year-over-year changes so that we can more accurately and smoothly budget expenses. Um, it was running into an issue. Um, we we increased the contributions from the general fund to it over a three-year period and we were on a really good track and then the in rampant inflation hit. We saw the cost of police cruisers go from 55,000 up to 80,000 and and almost across the board the cost of this equipment has just gone

through the roof. So, we've managed Jeff does a really good job and his mechanic and in extending the life of these vehicles. Um but you can see on this one um you know the first one push six years past expected life for a for a plow truck a tree chipper push three years past its expected life. So we're not just replacing this equipment when the schedule says oh time to replace it. They evaluate each and every piece of equipment um to make sure that yes it it needs and a lot of the times um we'll run this equipment to failure and and we you know we've seen that so we know we're getting you know the absolute maximum out of it. So that's what's uh scheduled to be budgeted in the motor pool this year. Um obviously uh one of the constraints on this is you know we have we have intentionally increased the contributions every year from both the water and sewer utility and the general fund to try to stabilize this and I think we've been growing those contributions at 5% a year. That may not be sustainable. We may have to back that off. But the caveat there is that's what we did after the great recession. That's part of what got the motorpool into some financial struggles. So it's it's a trade-off. Um the downtown development authority budget has to be approved by city council. It is included in the budget document. Uh showed a modest surplus. Um Andrew can answer questions about specifics about what's being funded or what has changed and so I would direct you to to him if you have any of those questions. Um the charts there just kind of show where the DDA gets its tax capture and the vast majority of it like 60% is from the city but 40% of it's non city. all the county taxes and and things that it can capture. So, the city gets to leverage those in its downtown because of the the nature of a tiff capture. Okay. Um this is the the schedule for the budget process. Very similar to prior years. Tonight, we introduced the budget. Um there's a budget study session next Tuesday. Um on the 21st,

there is a budget public hearing and also a budget study session. And then uh we've got some optional study sessions uh scheduled. One is the day after that on the 22nd if needed and then one in the following Tuesday on the 28th. Uh budget is scheduled to be adopted on May 6th and it has to be adopted by May 15th according to charter. So um we try to we try to make this document as user friendly as it can be. There's also a capital improvement fund that same thing. Um if if any of members of council have questions, please feel free to reach out to me or the city manager or a department head um prior to, you know, kind of having a study session on the 14th. I think that's always useful to get some of those questions answered. It's not that we don't want to answer them in a public session, but it might help with understanding and help that meeting to go a little bit better. So, um we're open for that. Um with that, I'll turn it back over to Bill. I don't know if he has any comments or not.

Like to thank Ed and the department heads for all their work on this. We're very fortunate to have Mr. Bradford. Um, having worked in other municipalities, usually it's just solid numbers. You don't get that narrative and perspective in a budget document, which I think is very helpful. Um, so I would like to have if if I would appreciate questions from council if you know, we received the binders last week. Um, as Ed said, getting those ahead of time, we can make sure that everyone gets the same information. It helps the meeting go better on Tuesday. um just to kind of have those ahead of time, make sure we get all those questions answered and get the information you need. I look forward to working with council to pass this budget. Um there's some concerning trends, but it's not something the city hasn't dealt with before. Um the general fund, we're allowed to levy up to the 20 mills as as Ed said, we're about 60 and a half with all the roll backs that have happened over the years. Um, so yeah, we'll want to just do that introduction, but we'll we'll kind of leave questions till the the next meeting, but if you can get those to us perhaps by Friday as a goal, that would be nice. But, um, obviously we're going to have a good budget discussion on Tuesday. There's a couple other items that are going to be on there ahead of time. Um, the amphitheater discussion, also the journey's discussion. Some things were scheduled for that date. So, we'll handle those, then we'll kind of get into the um the meat of the of the study session, which is the budget.

Thank you. Okay. Citizens comment. This an opportunity for citizens in attendance to comment on municipal services, activities, or areas of city involvement limited to 5 minutes. Letters submitted to council will not be publicly read. Dave Milky from Harbor View. It's my residence. Um, basic my request, I think the counselors all have a packet. Yes.

Information and I would like to see some enforcement done on the issue. This is just a comment section. It's not a question and answer. So, if you have a comment on this, you can Yeah. Yeah. The the signage is inappropriate and illegal. Okay.

Basically, so I'm asking for some enforcement. I went through the FOIA process. Uh I cannot find where this organization is a 501c3 where it belongs where it's where its home is. Uh the only thing you can find is what's uh written on the billboards that's supplied like $18,000 over the last few years to this group to uh I don't know further their goals. So, I don't see where they've got any uh skin in the game over there at the senior center and I would like to see that enforcement is done on that issue.

Okay. Thank you. Yep. Anybody else with public comment? No. Mr. Gamble? Nothing at this time. Thank you, Miss Brasa. I'm all set. You better write this one down. I did, Mr. Kowalsski.

Yeah. The only thing I'd like people to know is the uh the water means that they'll be connecting when they do the highway out there. This is what's really putting the prices up on on the highway. when you get in 294,000 for one intersection estimated cost 3,600,000 for uh under US 31 doesn't say what what street is intersecting it and then you get another one that's uh 910,000 uh so these streets are really costing a fortune to do this highway so the budget's got to be reduced to some Thank you, M. Kek.

I'm good. Thank you very much, Miss Raza. Or I'm sorry, Mr. Rat. Sorry, I'm just making sure you didn't have anything. Miss Radits. No, I just want to thank Ed for uh the presentation tonight and the opportunity for us to take a look at that and get any questions or specific concerns that we have via email by Friday. Mr. Smith. Oh, said exactly what I was gonna say. Good job on the budget. It's you know that the packet or the binder is easy to read, easy to understand. Appreciate it and I'm sure we'll have a a good time chewing through it and discussing it next week. Okay. Yeah. One more thing. I want to I finally see that gateway is finally started. They got some work going down there.

Took it four years of them coming up here and us asking them things to get started because for a long time I was told they weren't going to get going. Finally. Thank you. Uh I just got a quick question. Isn't the Isn't the senior center a county maintained building? It is. Okay. So, we can get Mr. Mel the information that he needs for that. Okay. Uh motion to adjurnn. Make that motion. Cop.