Commission to consider 2020 budget
MARQUETTE — After four work sessions and over 10 hours of discussion on the proposed fiscal year 2020 budget, the Marquette City Commission will hold a public hearing before considering its approval at a meeting tonight. The meeting will be held at 6 p.m. in Marquette City Hall Commission Chambers at 300 W. Baraga Ave.
The proposed balanced general fund budget for fiscal year 2020 is around $22.03 million and will require a $436,000 transfer from the city’s reserves, but does not involve service reductions, layoffs or reductions in wages or fringe benefits, Marquette’s Chief Finance Officer Gary Simpson said.
This is in spite of “unprecedented challenges” to city finances such as tax tribunal cases, underfunded liabilities for fringe benefits and the closure of We Energies Presque Isle Power Plant, which once paid around $1.6 million annually in property taxes but now pays around $300,000, Simpson said.
“Once we got word that We Energies might be closing down its plant, we actually started preparing then,” he said. “We were trying to build up the general fund reserves because we knew we were going to be in this situation where we were going to have deficit budgets. We did that so we wouldn’t have to reduce staff or services. Now, we can head it off about another three years, based on what I’m seeing now, but if nothing changes between now and three years from now, we’re going to be looking at those types of things. But we’re also pushing economic development types of things to increase the taxable value. So we’re hoping in three years we’ll have made up the gap from We Energies or at least sustainably closed the gap.”
While the city is facing declining property tax revenues — which make up a substantial portion of the city’s income — the millage rate of 14.9225 mills is proposed to stay the same for fiscal year 2020. The city’s fiscal year runs from Oct. 1 to Sept. 30.
“We’re doing all of this without raising the millage rate,” Simpson said. “We do have room where we could raise the millage rate if we had to, but we’re not recommending that at all.”
However, increases to water, sewer and stormwater utility rates are included in the proposed budget for the second year in a row as part of a five-year plan developed with a professional rate consultant, Simpson said.
“We’re trying to take care of and replace the aging infrastructure,” Simpson said. “Unfortunately that costs money. And in years past they were not reserving any money that we could dip into to head some of that off.”
For stormwater and water, the proposed 2020 budget includes rate increases of 15.25% and 12.25%, respectively. Rates for these two utilities were raised by the same percentages last year, Simpson said. While sewer rates increased by 25% last year, the proposed sewer rate increase for fiscal year 2020 is 11.5%, he said.
“We don’t like doing it, but it’s a fact that we have to do it just to keep operating at the level we need to. And it’s really not a city of Marquette problem, it’s really a nationwide issue that a lot of cites and states are dealing with themselves,” Simpson said. “Even with these large rate increases, we aren’t anywhere close to the highest rates even in the U.P.”
If the proposed fiscal year 2020 budget is approved by the commission tonight, public hearings for the utility rate increase ordinances will be held at the city commission’s Oct. 15 meeting, with an effective date of Dec. 1, he said.
One of the major items included in the city’s proposed budget is around $4.37 million for phase one of the Lakeshore Boulevard relocation project, which will begin next construction season, Simpson said.
“In total, it’s going to be $11 (million) to 12 million project,” he said. “We’re just going to do phase 1 this year and then hopefully in the following year we’ll have grants lined up to pay for most of the remainder of it.”
The Lakeshore Boulevard Relocation Project is currently supported by a $2.5 million National Fish and Wildlife Foundation coastal resiliency grant awarded to the Superior Watershed Partnership to assist the city, Simpson said, noting he’s grateful for the SWP’s support in the project, as “they’ve been very helpful in helping us get these grants.”
To learn more about the proposed budget and view a draft copy, visit marquettemi.gov.
At tonight’s meeting, the commission will also consider a public participation plan, an economic development plan, a resolution authorizing 2019 capital improvement bonds, renaming Lakeside Park and a marijuana ordinance discussion.
Cecilia Brown can be reached at 906-228-2500, ext. 248. Her email address is email@example.com.