Houghton adopts balanced budget
HOUGHTON — The Houghton City Council approved a budget with a $3.7 million General Fund at its meeting Wednesday.
Wages will increase 3 percent. The employee benefit rate is 77 percent, one of the lower rates the city has had in recent years.
The General Fund is balanced at $3,686,498. The city will continue to levy 15.7 mills.
Tax revenue is expected to increase 2 percent.
About a third of the General Fund budget is made up of the police and fire departments, which will increase by about 2 percent.
All funds but Employee Benefit are balanced, said City Manager Eric Waara. That has a $151,490 deficit, in part due to a plan to spend down some of the balance in the fund.
The city planned an $85,000 deficit for the 2018 fiscal year, which ends June 30. That’s tracking at about $70,000, Waara said.
Health insurance costs are projected to rise 11 percent for the same coverage, Waara said. He said he would talk with the city’s agent Thursday to look at other options.
The city is negotiating with three unions, which Waara said has been complicated by the rise in premiums, a mandatory retirement contribution from employees through the Michigan Employees Retirement System (MERS).
“That’s proving to make negotiations a little more difficult than usual,” Waara said.
Waara said the city’s retirement program is among the 10 best-funded in the Upper Peninsula, at about 85 percent.
“While we’re in good shape, we’re not at 100 percent funded,” he said. “That’s why MERS has set up this contribution for employees that’s going to have to start coming in in order to smooth us back up to where it’s fully funded.”
The major street fund is balanced at $1,023,819. The biggest portion — about 65 percent — is for maintenance. About $146,000 is budgeted is for paving.
“The way paving prices are going for this year, it’s a bit scary,” Waara said.
Local street is also balanced at $517,254. About $46,000 will go to paving. Winter maintenance accounts for about 56 percent of the money.
The Tax Increment Finance Authority budget of $750,965 includes work on a new subdivision at Sugar Maple West, as well as work on a new access road to Houghton Elementary School at Schoolhouse Road.
The $178,000 Downtown Development Authority budget includes work on walkways and more facade mini-grants.
The $120,000 Parking Improvement Fund received an even amount from Michigan Technological University and the General Fund for sidewalks on Upland Road and Fairview Lane.
The $374,450 parking budget includes $200,000 in parking deck work.
The sewer budget is $1,930,500. Sewer flows in the city have been consistent with other years, Waara said.
The city’s share of charges to the Portage Lake Water & Sewage Authority for treatment has declined since the city’s last large-scale project. The coming year is anticipated to include major projects on Houghton Avenue and possibly Prospect Street.
The water budget of $1,105,300 includes looking at replacing the 25-year-old roof of the water plant. Houghton Avenue and Prospect Street projects may also take place in the coming fiscal year.
The Equipment Fund includes $954,052 includes $246,000 for new equipment — a Zamboni, sander box and bucket truck.
No members of the public commented during the hearing.