HANCOCK — Hancock’s general fund position and the police department budget were the main topics at a budget hearing Wednesday.

The preliminary budget shown to the council Wednesday showed general fund expenditures of $3,674,072. The fund balance was projected to shrink by more than $225,000 to $467,446. However, City Manager Mary Babcock expected that deficit to turn into a surplus once the city received updated tax information from the county.

Real and personal property tax revenues are projected to increase by 5%; the real property and fire department debt tax revenues are expected to be higher than that amount, and could even increase more by the time of the actual budget adoption in June, Babcock said. Taxable value went up 11.3% overall in the city, thanks in part to Finlandia University properties going back on the tax roll, Babcock said.

The general fund balance had fallen from nearly $1.5 million last June, partially due to city work on the Maasto Hiihto trails and the upcoming Business and Technology Park.

“Those were two huge things the city paid out of their coffers without getting a dollar on,” Babcock said. “We originally planned on getting a $500 to $600,000 loan to do the business and tech park, but we had the cash available to us so we just paid it — which I think is great. I’m really happy that we were able to pay that, but it has made us a little tighter in cash than we have ever been before.”

Babcock said the city will be in a stronger position financially once FEMA pays the $1.3 million the city is owed. FEMA is “99.9% sure” it will get the money this year, Babcock said, but it will require a convoluted mechanism where the money first passes through the Michigan State Police, then back to the federal government and again to the MSP before going to the city.

“I’ll probably take a loan out to cover some of our general fund expenses if we don’t get this back,” she said. “Because probably $900,000 of this is general fund cash, which is a huge amount of money for us.”

Looking at the long-term debt, Babcock said the city debt was at 22% of capacity. Bonds for the city building authority are set to expire in 2027.

In appropriations, the majority of the meeting was spent discussing the police department budget. Babcock said unless the city sees a large increase in tax revenues, she is not planning to fill Police Chief Tami Sleeman’s request for an additional officer. The department has 10 officers, including Sleeman, and a school resource officer funded through a grant received last year.

A potential officer is currently undergoing training at the police academy.

“You don’t want to hire someone and let them go,” Babcock said.

Babcock said the department would need to reduce the number of hours it had logged, citing data showing officers had worked 1,168 more hours in the first four months of this year than in 2023. About 300 of the hours were attributable to the new school resource officer position, which had not been in place for the full period at this time last year, Babcock said.

While council members said they supported the department, they questioned the hours.

“Eight-hundred and sixty-eight hours in four months is ridiculous,” said Council Richard Freeman Jr. “I know the city is doing more now where police have to be present, but it’s not 868 hours… and they only hired one extra trainee.”

Babcock said she had a target of 320 hours per week for the hourly officers; Sleeman is the only member of the department who is salaried. Babcock said it would be too difficult to ask voters to pass another police millage; voters approved one in 2022 used to pay for a new officer.

“I’m giving them a budget amount of hours, and they’re going to have to work from the hours that I gave them, because this is totally out of whack,” she said. “Even last year seems a little bit squishy. But you have to understand, in defense of everybody down there, we’ve gotten rid of officers, we’ve gotten new officers, we’ve had very little stability in two years. And so we have to see where it plays out. But they really feel to be fully staffed the way they deem adequate is to have another officer.”

Council members suggested ideas that could reduce the number of situations where one of the department’s officers is called out, such as asking the Copper Country Intermediate School District to apply for a grant for a school resource officer.

Babcock said if tax revenues come in higher, the council could put the money towards an additional officer if it wanted.

In an interview Friday, Sleeman said she felt bringing in another officer would ultimately save the city money by reducing the amount of overtime. If the officer who graduated only gets a part-time job with the department, he will likely leave for another department where he can work full-time, she said.

She said the department would typically have 800 to 1,000 overtime hours in a year.

Sleeman said there was no single explanation for the difference in hours, but said the call load can vary dramatically, and officers were filling a variety of roles, including responding to walk-in traffic at the department. She said she was focused on ensuring the department remained staffed 24/7 and could operate in a safe, effective manner.

“I see it with that extra person on how you can cut that overtime,” she said. “Mary and I are working on a way to see how, but at this point, it’s getting the shifts covered, and everybody has the right to their time off, too. We’re one of those entities where you may be staffed and a critical incident happens … overtime will never go away in this line of work, because sometimes when a major incident happens, you need everybody.”