Proposed projects for the coming year in Houghton include park improvements, such as amenities for younger children at the East Houghton Park. (Houghton Daily Mining Gazette photo)

HOUGHTON — Park improvements, parking deck repairs and lower insurance premiums were part of the Houghton City Council’s second budget hearing Wednesday.

In the public improvement fund, City Manager Eric Waara is proposing putting the city’s remaining American Rescue Plan Act funds into improvements at the city’s neighborhood parks.

Additional seating and shade would be added at Edwards Street and Woodhaven Park. At Garnet Street, plans are to improve the children’s play area and make the park more accessible. The tennis court would also be resurfaced.

At West Houghton Park, improvements to the play area and accessibility would be joined by repairs to the rink area.

The plans are concentrated in the neighborhood parks uphill, with the exception of the East Houghton Park. The “tot lot” by the skateboard park could have playground equipment and other amenities.

“A lot of the commentary of late has been that, OK, big brother and big sister are down there skating, but as a toddler that’s not ready to be on the skate park yet, we’re looking at a feature for them,” Waara said.

In the sewer fund, the city is expecting to see charges from the Portage Lake Water & Sewer Treatment Plant increase slightly. The charges are split between the municipalities based on total volume. Houghton’s share, to which Portage Township contributes, is about 65%; Hancock has about 33%, with the remainder coming from Franklin Township. With recent repairs to leaks in Hancock’s system and the closure of Finlandia University, their share is expected to drop.

Year-to-date figures from residential and Michigan Technological University are on pace with last year’s, Waara said; the city budgeted for a 1.3% drop in revenue from MTU, and a 1.9% increase in residential. The estimates do not include Michigan Technological University’s new dorm, which is planned to open in 2025, Waara said.

Portage Township added sewer customers on Green Acres Road, adding to the township’s sales. The township’s payments to Houghton are expected to increase by $10,000.

This year’s sewer fund balance of $69,300 and another $50,700 from the sewer fund will be transferred to the public improvement to pay for sewer work to the Lakeshore Drive project.

“We’re going to do what we can afford to do — fix some manholes and set ourselves up maybe the future that we’re lining those sewers or something instead of replacing them,” Waara said.

Income in the water fund is expected to drop 4.4% from last year’s budget, which had anticipated a 5% rate increase that was put off because of other increases such as trash pickup.

Waara said he would like to see the council revisit the water rate in the coming year. Pipes are more expensive than sewer, and it’s also more electricity-intensive, he said.

The water rates also prevent the city from getting Rural Development grant money, rather than a loan, Waara said.

“In some cases, our sewer work is eligible for up to 75% grant with USDA,” he said. “According to USDA, where our rates are based on their averages, we can still afford more money for water.”

One expense in the parking fund will be hiring a new Houghton Police Department staff person for parking enforcement. The people who had been in the position left for another job; another person filled the position temporarily, but is now at the police academy.

The city is also awaiting a report on the condition of the garage by Subway, which is expected to have recommendations for immediate maintenance items. That should come in about two to three weeks, Waara said.

Preliminary findings list more than $2 million in future maintenance items at the garage. At some point, the council will need to have a meaningful discussion on what to do about the 100-year-old building, Waara said.

“It really was never a parking deck — it was a garage, a two-level garage,” he said. “Just considering the type of construction, the age of the building and all that, we’re going to have to have some conversations about what the future could hold.”

Smaller maintenance items are also on tap for some surface lots, the Isle Royale deck and the Quincy deck.

As for winter maintenance, the city is budgeting for a normal winter next year, Waara said. With little plowing required this year, the parking fund is carrying over a fund balance of about $24,000.

Just because we have one light one, I don’t think it would be wise to assume that we’re going to get two of those in a row,” Waara said. “If we do, it creates a fund balance next year, too. We’re certainly not going to call a shutout halfway through the game on that.”

The city is expecting the gross amount of insurance costs to go down. The city is switching from its current provider, who had indicated a 14.8% increase in premiums, to the Western Michigan Health Insurance Pool.

The 44,000-person pool has other members in the Upper Peninsula, such as Marquette, L’Anse, and the Houghton and Keweenaw County road commissions. The benefits would be “very, very similar” to those offered under the current plan, Waara said.

“If we can lower our health insurance costs, we don’t have to keep raising our employee benefit rate to cover it, we don’t have to keep raising the amount that employees are charged or contributing to their health insurance coverage,” he said.

A drop in equipment fund income from the light winter was offset by reduced fuel and maintenance costs.

The council must approve a budget for the upcoming fiscal year by the end of June.

After more union negotiations have been held, the council may hold an additional hearing before then on an updated draft of the budget, Waara said.