Houghton City Manager Eric Waara discusses the city’s budget during the council’s budget work session Wednesday. (Houghton Daily Mining Gazette photo)

HOUGHTON — The Houghton City Council heard an overview of projects in the general fund and those for major and local streets during its second budget work session Wednesday.

The general fund is projected for a balanced budget of $6,398,560, leaving the fund balance unchanged at $2,115,418.

The size of the general fund is about $2.3 million more than the current fiscal year. Most of that comes from pass-throughs, including an estimated $1.2 million in bond process for the demolition of the Lakeshore Drive parking deck. Others include $320,200 in Public Act 87 funds, which will be used for repairs for the Father’s Day flood at the Kestner Park seawall.

But the city did also see some organic growth in revenue. One of the few municipalities in the Upper Peninsula to grow in the 2020 census, the city saw property taxes increase by about $100,000.

With a fourth recreational marijuana retailer expected to open in the city, state revenue sharing from recreational marijuana was budgeted to increase from $169,360.32 to $190,000.

Waara cautioned the council that the state’s increased revenue sharing could be a product of the temporary cash infusion from the federal government through the American Rescue Plan. Once that passes, the state could return back to its “broken” revenue-sharing model, he said.

“Whatever we’re going to do with this windfall, we want it to be sustainable, of course, but we should put those dollars into things … which are going to benefit the taxpayers, because we haven’t had some of these opportunities before,” he said.

Planned hiring includes another full-time equivalent office position, which is envisioned to be filled by a potential successor to the current clerk or treasurer. Another potential position in community/business development would be covered by the Downtown Development Authority and Tax increment Finance Authority budgets.

In response to council requests for additional sidewalks throughout the city, money was budgeted for determining routes, engineering and surveying.

Spending on sidewalks and curbs increased from $23,400 to $50,900, which will include replacements on Shelden Avenue.

Beach and RV park spending went from $87,700 to $167,200 to fund maintenance and improvements at Chutes & Ladders. Residents had suggested a stairway, so parents and grandparents “don’t have to go through a tunnel to retrieve a three-year-old,” Waara said.

The city will also look at adding topsoil and grass on the west side of the hill to prevent erosion.

“I’m not saying we’re going to do all that in one year, but we’ve really got to look at the beach down there, because that is kind of the lifeblood of the waterfront, and it gets a lot of use,” he said.

Dee Stadium has repairs and improvements budgeted for the coming year, where spending is budgeted to increase from $179,300 to $230,200. Glass will be extended at the end of the rink to prevent people from being hit by errant pucks.

A control system for the compressors failed last year; the city was able to get by temporarily with one control system regulating both compressors. Old carpeting in the lobby will be replaced with a rubber floor; similar upgrades were done in the locker rooms.

In park maintenance, $50,000 was put in contracted services for paving sections of the Waterfront Trail. Some sections are planned for the coming fiscal year, with additional paving next year. The city is looking at a long-term fix for potholes between Michigan Tech and Portage Cove, Waara said.

“We have these funds right now, let’s put that into these things that make this a great place to live,” Waara said.

The city also has increased funds for road repair. The Act 51 formula governs how much the city receives from the state gas tax.

Houghton’s population increase and higher rates per mile of road have led to increased tax capture in the major street fund (up 24%) and local street fund (up 21%). However, Waara forecasts less revenue from the state for snow removal. The amount is based on a three-year rolling average, which could suffer after two light winters before this year, Waara said.

In major streets, the city is budgeting $235,000 for road work. Waara and Department of Public Works Director Ryan Avendt are watching prices to see how much paving can be done this summer.

The city is budgeting slightly more for winter maintenance next year and supplies, taking into account higher prices for sand and salt resulting from rising trucking costs.

In local streets, the city is planning about $127,400 for paving. Maintenance, including pothole patching and line painting, will rise slightly from $109,000 to $122,200. Winter maintenance costs are budgeted at $339,400, down $300 from last year’s budget.

“Even with the massive amount of snow that we got this year, they actually spent a little less than we budgeted,” Waara said. “With any good fortune, as we get to the end of the fiscal year, both of these funds are going to show we’ve got money left in this, we’ve got money left in that. Those are the dollars we issue the next fiscal year for paving.”

The final budget work session is scheduled for 5:30 p.m. May 4.