GLADSTONE - The Gladstone City Commission introduced a proposed city budget Monday night - the result of work by city staff during budget meetings held earlier this month.
Residents who wish to voice their opinions on the proposed budget will have an opportunity during a public hearing at the March 10 commission meeting at 7 p.m. at city hall.
"I don't think the public hearing for the budget is going to be an easy process. I think we're going to have to have a lot of comment among ourselves about where we're going forward," said Mayor Joe Maki.
Under the proposed budget, the city's general fund - which funds a variety of city departments including public safety, parks and recreation, and city hall operations - is over budget by roughly $157,500. One concern expected to be discussed at the public hearing is how to address the issue without cutting services.
"It's no secret, we have flat revenue," said City Manager Darla Falcon. "There's no new revenue in the general fund. The money that we're getting from the State of Michigan - it is what it is, and that's what we need to live within in our budget."
Funding for major and local street maintenance is also expected to remain flat in the 2014-15 fiscal year. No major construction projects are planned for either fund, however, some curb and gutter and minor resurfacing projects are planned.
"The formula that's used for the city to receive money for the street fund is the gas and weight tax of 19 cents per gallon. It's been 19 cents per gallon for many, many years and that's just not keeping up with inflation on the cost of maintaining our streets," said Falcon.
To make funds balance, the city is proposing putting almost $20,000 into the major street fund and taking $26,000 out of the local street fund.
"After putting almost $20,000 into the major street fund we would have $157,000 in fund balance, which we're probably going to be dipping into right now because of the winter we had," said Falcon, referencing the costs incurred by the city for road maintenance and snow removal. "We're pretty much done with our budget for the year, and we have another month to go."
When the city installed the new harbor docks it was required to remove harbor operations from the general fund and create a fund exclusive to the harbor. In addition to the creation of a harbor fund, harbor usage fees are now set by the state.
"There is going to be an increase - a minor increase from last year, but last year was really the main jump when the state rates came into effect," said Falcon. The city chose a rate tier that costs users less than neighboring communities, Falcon noted.
Residents will also be seeing an increase in fees related to solid waste. Both the composting fee and the garbage pick-up fee will increase, making the combined increase $16.
"When Commissioner (Dave) Olsen was here he sat on a committee to determine if we should stay in the business of picking up solid waste and overwhelmingly the cost would have been a lot more to contract it out," said Maki.
Under the proposed budget residents could expect to see a 25 cent per 1,000 gallon increase in both their water and waste water bills. No electric rate increases are being proposed for residents.
The equipment fund, which receives money from other funds only when equipment is used, is currently budgeted at a deficit. However, the city plans to dissolve the fund on March 31 in accordance with a deficit reduction plan it submitted to the Michigan Department of Treasury. The plan is required in order for the city to continue receiving the maximum amount of the Economic Vitality Incentive Program, commonly known as EVIP, payments.
"This really won't be a fund next fiscal year," said Falcon, noting many operations supported by the fund would be absorbed into the general fund.
In other business, the commission awarded the project for a non-motorized trail planned for the shore along Little Bay de Noc to U.P. Engineers & Architects. The trail will eventually connect Gladstone to Escanaba for bicyclists and pedestrians.