HOUGHTON – The Houghton City Council wrapped up its budget work sessions Wednesday with funds including water, sewer, equipment and employee benefits, as well as discussion of spending down some of the city’s fund balances.

The council also revisited general fund items, lowering the employee benefit rate from 87 percent to 85 percent. After consulting with the city’s auditor, it was determined that the fund is generating enough cash, City Manager Eric Waara said.

Councilman John Sullivan said at about $7 million across all funds, the city should spend down “about 75 percent” of it.

“If you have three months cash operating expenses in each of the funds, that adds up to $2.3 million,” he said. “That’s a lot of cash.”

Waara said the city would look at paving projects this summer after looking at what winter bills look like.

“I don’t disagree that we should be spending some of that money,” he said, noting that work on Dodge Street will be put out to bids out of last year’s fund balance.

Clerk Ann Vollrath said the surplus had been built up gradually by former City Manager Scott MacInnes, who inherited several funds in deficit-reduction plans.

“It really took a long time to get parking and (Downtown Development Authority) and employee benefit out of that,” she said. “When you’re in that, it takes a long time to get out.”

Waara said he is looking over two years worth of cash flow to determine the average amount for three months cash flow.

“Then we’ll see where the peaks and valleys are, and make sure we don’t run into a hiccup,” he said.