Houghton holds budget meeting
HOUGHTON — The Houghton City Council likely wrapped up its budget meetings Wednesday, as City Manager Eric Waara ran through the parking, water, sewer, equipment and employee benefit funds.
Employee benefit, previously planned to be raised by 2%, was instead raised by 5%. In recent years, the city had purposely tried to lower the balance rather than balance the budget. This year had already seen a higher drawdown of funds due to the reduced overtime resulting from the lighter winter.
The city did not have to perform the same level of services for the state as it would do during the winter, but were still staffed and equipped for that level of work, Councilor Mike Needham said.
“That light winter is always a blessing and a curse … yeah, it’s nice, but we also count on that work to refill the funding tank,” City Manager Eric Waara said. “That’s something we count on every year, and certainly we have to count on a normal winter because if we don’t budget for a normal winter, we run out of money that way.”
The employee benefit fund budget also includes planned reimbursements from the coming American Rescue Plan money, one purpose of which is to reimburse COVID-related expenses. The city had about $100,000 in those expenses from the employee benefit fund last year, Waara said.
The fund had a $2,300 deficit, which council members said was within bounds. The fund has a projected balance of $420,354.
Sewer revenue is estimated at $1.91 million, down about 5.8% from last year. While residential use has been stable, Michigan Technological University revenues declined with less campus activity and many employees working from home. The same trends are present in the water fund, where revenues are budgeted to decrease by 6.1%.
In the sewer fund, the decline in MTU revenue is projected to be partially offset by decreased fees to the Portage Lake Water & Sewage Authority, thanks to a bond being paid off. The savings are being split between Houghton and Hancock. That should result in lower fees for at least two years, Waara said.
With the sewer project on Green Acres Road in Portage Township going to bid this year, the city is expected to see $75,000 more in revenue, Waara said.
Money from the sewer fund is also slated to go towards sewer improvements as part of the Mattila Square project, which the Michigan Economic Development and city have approved with a revised cost.
The city also budgeted money to correct any lead service water lines if found during phase three of the city’s water and sewer project. The third phase is also hoped to uncover any unmetered connections, Waara said.
“That’s an old area of town, and the last time we touched anything was 1973,” he said.
The Department of Public Works will also reroof the water plant.
The parking budget includes $54,100 for general maintenance on a case-by-case basis. Because of the lighter snow removal needed, it is projected for a deficit of $50,000 to spend down the balance. Some of that savings, $30,000, will go to the city’s pier project. The fund will also provide $25,000 towards the project.
Miscellaneous revenue was budgeted to drop $10,000 to $45,000, as Michigan Technological University might choose to rent less parking from the city after its lease expires this year, Waara said.
Another city budget hearing is scheduled for May 18, though it is not expected to be necessary. Waara said the council should wait an additional week before canceling it in case of unexpected news.
The city is expected to receive half of its ARP allocation by May 31, Waara said. The city has still yet to receive a firm total on how much it will receive, or firm rules for spending.
Preliminary guidance included COVID-related health care expenses, as well as utility systems that lost money because of lowered use.
Needham suggested earmarking money for things such as picnic tables and umbrellas that would allow more restaurants to allow outside dining.