HOUGHTON — The Houghton City Council approved resolutions Wednesday authorizing the city to sell up to $1.5 million in bonds to help fund the upcoming demolition of the Lakeshore Drive parking deck, and subsequent restoration and site work.

The council previously approved the bond amount in June. Because the original resolution included 2022 as the year of the bond sale, the council is required to pass an amended version.

Last February, the council approved issuing bonds to fund the demolition, along with applying to Michigan Economic Development Corp. for grants to leverage the bonded amount.

MEDC notified the city of a $1 million Revitalization and Placemaking (RAP) grant in September.

At the time, the city estimated a $2,131,200 cost for the project, taking into account future increases in costs. Costs kept rising; conservative estimates now put the cost at more than $2.5 million, City Manager Eric Waara said in a letter to the council.

“The current construction industry bidding climate is severely affected by inflation, supply chain delays, labor shortages and the like,” Waara said in the letter. “These factors, as observed over the last year or so, have caused many, if not most, construction project bids to vary widely from what was once considered a solid estimating base.”

The city is exploring ways to reduce costs of the project. Some scope items, such as water and sewer work items requested by the Department of Public Works, could be funded by the city.

By ordering benches, trash receptacles and other items on its own, the city could also avoid sales tax and contractor markups.

The parking deck will be coming down this spring. Bids are expected to be in hand by March.

The DPW has been taking down selected items from the deck, Waara said at Wednesday’s meeting.

Councilor Mike Needham pointed out that had a proposed development by The Veridea Group of Marquette occurred on the parking deck site, the company would likely have footed much of the cost for demolition. The Veridea Group of Marquette, which had been in talks with the city over sale of the property for development, withdrew from consideration at the start of 2021, citing uncertainty in direction from the council.

Councilor Robert Megowen said the development would have resulted in tens of millions spent locally.

“It would be good from here to Copper Harbor to Marquette to Ontonagon,” he said. “Economic development has stopped.”

Mayor Pro Tem Joan Suits disagreed, saying, “Economic development has not stopped, I think it’s changed.”

In other action, the council:

• Approved requesting funding for a feasibility study for consolidating Houghton and Hancock’s transit systems. Potentially, the cities would be able to save money, increase efficiency, and expand transit service to neighboring townships, Waara said in a memo. Hancock approved a similar measure at its most recent council meeting.

• Approved allowing food trucks for the upcoming Jibba Jabba Rail Jam, which starts 6 p.m. Feb. 18.

• Heard from Waara there would be snow statue building at the Mattila Square pier at 5:30 p.m. Wednesday. Houghton Rotary is working with the city to bring back Brewfest, which is tentatively scheduled for Aug. 19.

• Heard from Police Chief John Donnelly the department will be advertising for a new police officer position. The new hire is planned to work with Houghton-Portage Township Schools as a school resource officer.

• Heard from Waara that the city’s annual lead and copper testing for water pipes found no sites with actionable levels.

• Approved the annual transit department budget. Estimated revenues are $556,300 ($100,200 federal, $192,400 state and $263,700 local) with the same amount of expenses.

• Met as the Zoning Board of Appeals to schedule a public hearing for a variance request at 501 Memorial Road. A site plan presented for the building, which has hosted Hardees and other restaurants, would require variances for setbacks on the rear and side yards.

It also appointed Needham as chair and Robert Megowen as vice chair.

• Advised Waara to call a meeting of the city’s garbage and recycling subcommittee.