Gladstone introduces city budget

GLADSTONE — Budgets and post-retirement benefits were discussed during the Gladstone City Commission meeting Monday night.

The city’s 2019-2020 fiscal year budget was officially introduced. A public hearing for the budget was scheduled for March 25 during the next regular city commission meeting.

City Manager Darcy Long explained there are two documents that make up the budget — the actual budget and the Community Investment Plan (CIP).

The CIP is a list of future projects from all the different departments ranked by priority for the city to accomplish.

“The reason (the CIP) is tied to the budget is because those are financial obligations the city has to make. We have to plan for them like everything else,” Long said.

He explained the CIP is a living document because priorities can change when funding from grants becomes available, someone donates for a certain project or if something happens and a certain project needs to be addressed sooner rather than later.

When looking at the budget, Long noted the upcoming 9th Street Project is one of the largest capital expenditure the city has done in a long time.

The estimated cost for the project, that also includes work on 4th Street and Minneapolis Avenue, is almost $4 million.

The 9th Street project is a joint project of the Downtown Development Authority and the city. Because the 9th Street project falls into the DDA’s jurisdiction, the DDA will cover the cost of 70 percent of the project and the city will cover the remaining 30 percent.

The DDA and city are looking into a 15-year capital improvement bond to fund the project.

The one-year reconstruction project is slated to begin in May. Long said another citizen engagement meeting on the project will take place sometime in April.

He said there will be a comprehensive presentation of the budget during the public hearing on March 25.

During the meeting there was also a motion for Long to find a facilitator as soon as possible for a special work sessions meeting to discuss post retirement health benefits with retirees.

The city of Gladstone recently cut post retirement health benefits for retirees and some current employees. The way the cuts were handled has caused many retirees to voice their concerns at city commission meetings.

Retirees were recently notified by Long that changes were made to their health care post-employment benefits.

In December 2017, the Michigan Legislature passed Public Act 202, also known as the “Protecting Local Government Retirement and Benefits Act.” This new law required all local municipal governments in Michigan to report to the state treasurer the status of pension systems and retiree health insurance benefits.

PA 202 requires a minimum 60 percent funding level standard for pension systems and retiree health benefits to be 40 percent funded. Gladstone’s pension system was not in compliance with the requirements, so the city had to create a corrective action plan.

City commissioners decided the best course of action to meet the new pension funding requirements was to make changes to post-employment benefits.

Changes included ending all lifetime medicare supplement benefits, which affected two retirees, and all other retirees will receive a stipend placed into a Health Reimbursement Account (HRA) of $602.01 monthly or $7,224.12 yearly for up to 10 years or until age 65.

City commissioners approved of the plan and submitted it to the state. The plan was reviewed by the Michigan Treasury Municipal Stability Board and accepted.

The day and time of the special meeting was not set because a facilitator is needed.

The meeting will be used to create a platform for the city commission and retirees to discuss the retiree health benefit changes, how it was handled and what can be done moving forward.

In other business, the city commission:

– accepted the tentative agreement with 906 IBEW on a wage re-opener for supervisory employees.

– accepted the reappointments of members of the board of review.

– heard an update presentation from TJ Thomas of the Delta County Economic Development Authority.

– tabled the quiet zone issue for South Bluff Hill until more information is cultivated.