MARQUETTE — Marquette City Manager Karen Kovacs led a work session with the city commissioners this week to give them an overview of the budget for fiscal year 2025.

Commissioners were pleased, and impressed, that city staff presented a balanced budget in its proposed plan for 2025.

The proposed budget is $24.3 million, with $20.1 million in unrestricted funds.

Kovacs pointed out that property taxes are the city’s main source of revenue.

“We are in an unusual position in Marquette in that 50% of the property in the city are non-taxable, such as the college and churches. It presents a unique challenge and puts a bit more on our taxpayers,” Kovacs said.

State-shared taxes adds up to $3.5 million, which is slightly less than las year, according to Kovacs.

“We saw a decrease in our population growth, which I don’t think is correct,” she said. “We are trying to get an adjustment on that figure.”

The city also receives payment in lieu of taxes with some entities, including $2.5 million from the Marquette Board of Light and Power.

In an effort to address the shortage of housing in Marquette, the city has worked with several developers on subsidized housing projects. Kovacs said engaging with developers has added to staff’s workload.

“We are subsidizing about 200 units of senior and lower incomes housing,” she said.

“Several different housing projects with different payment in lieu of taxes arrangements are going on or in the works,” said Commissioner Paul Schloegel.

Deputy City Manager Sean Hobbins noted that the city has moved some bonds from the General Fund to separate fund accounts to be more clear.

In other revenue, marijuana tax revenue brought in $295,000, but the city has budgeted conservatively for $200,000.

The proposed budget also reflects $3 million for debt service; $9.2 million for wages/salaries, which is up from prior years. Payroll, taxes and fringes equals $3.8 million, and $3.6 million in pension contributions.

Although there is a large staff, no contracts are up for renewal this year, Kovacs noted.

“In addition to payroll and FICA, we offer very good health insurance, which is important for recruitment and retention,” she said.

For pensions, the city is contractually obligated for $3.6 in the budget, which is only a slight increase over last year.

“We recognize the hard work and tough decisions that had to be made to come up with a balanced budget, Kovacs said. “We take incredibly serious increases for the taxpayer. If we make cuts, we always weigh how it will affect services.”

“Our total debt from 2,000 to 2022 of $66 million was an investment in the city. That debt now stands at $38 million,” said Hobbins. “Being conservative has allowed us to pay down our debt.”

Kovacs noted that the city is in good shape with general funds due to careful planning and conservative budgeting. “One catastrophic storm or a fire truck breaking down can significantly change things.”

But significant bond pay downs has freed up some funding. FY 24/25 will see about $350,000 freed up, said Kovacs.

A public hearing will be held at 6 p.m. on Sept. 9 to review and adopt the budget for 2025.