By Jessica Mathews/News@whmi.com


The Howell City Council held a virtual work session Wednesday to review the proposed 2020/2021 budget.

Interim City Manager Erv Suida provided an overview of different funds, continued revenue challenges, different projects and potential impacts. The City is bracing for cuts to state revenue sharing, although it was stated the real problem will be in the years to come when the potential impact on property values and other issues from COVID-19 are clearer. Staffing levels will remain the same, although there were some changes due to reorganization, the anticipated hiring of a new city manager and recently filled communication specialist position. Suida said it’s a unique year and budget but staff has done an impressive job to maintain a lean budget – which he thinks hits some marks, prepares the city for a new manager and proves the ability to get through the times ahead although it won’t be easy. Suida said taxable values for 2020 are still quite a bit less than in 2010. While they’re seeing an uptick, he cautioned they still have a ways to go and there are concerns about the next few years.

Residents should prepare for water and sewer rate increases. It was noted that a 5% rate increase for both water and sewer was incorporated into the budget. A rate study has been completed, which recommended a 6.9 % increase. Suida commented times are different and difficult so they’ll need to be careful and the study will be brought to council at a later date for discussion but an increase is anticipated.

As for the rubbish fund, it was noted revenues and expenses remain pretty flat. The City’s refuse contract will be going up a set 2%, which will be the first increase in five years. It was noted the City should be able to maintain the same rubbish millage rate as last year and absorb the increase through other efforts. Since the garbage millage can only go toward refuse pick-up, the City’s general fund contributes $126,874 to offset the cost of leaf and brush pick-up. Council discussed potentially raising the refuse fee to offset or avoid the large general fund contribution but nothing was decided. Increasing the refuse fee could be done as budget amendment but it was suggested, and Council agreed, that more strategic sessions on the topic be held with the new city manager versus making any decision before.

Suida there are also potential impacts from COVID-19 and cuts to gas and weight tax revenue. It was noted there’s a fund balance in the major streets fund, which could pick up the reduction in gas and weight tax but local streets would have to come from a general fund contribution as it already supports local streets.

Council earlier discussed reducing the general fund balance down to the 24-25% range to allow for the pre-funding of a portion of the Clinton Street project, additional contribution to MERS and demolition of the Barnard Center. However, that does not include personal property tax revenues that are dispersed in May so the fund balance could actually be a little higher. The fund balance is projected to be over the targeted 20% but staff is leaning toward maintaining it a little higher due to current times but also to ensure the City is in a good position to manage and absorb potential impacts.

Funds are budgeted for the East Clinton and North National Street Project, which the City received a grant for with matching funds. As for major and local street funds, $50,000 was budgeted for each for asset management work which involves miscellaneous pavement repairs and crack sealing. Although not preferred, those areas could be reduced if needed. Some approved expenses in the current year were over and above what was budgeted and adjustments were made for the increases. Among the $665,000 in expenses include an additional contribution to MERS, pre-funding the Clinton Street project by $200,000, demolition of the Barnard Center, and waterproofing and HVAC repairs at City Hall. Items included as additional projects in the 2020/2021 budget are the council chamber sound system, some security camera and computer upgrades and various other improvements. Other general fund projects include sidewalk ADA improvements, which are based on a 2018 lawsuit and must be completed by December of 2021. Suida says they pre-funded that, which they anticipate happening in late fall of 2021. With the pre-funding done this year, he says there should be enough money in the sidewalk fund to complete that project and meet the court consent order. Suida said the City will hold off on a lot of proposed expenditures in the general fund until the winter and next spring, when they can get a good look at where things are headed financially.

The Wastewater Treatment Plant Improvement project is included in the budget and being funded through a low interest state loan and contributions from the City, Pepsi Company and Marion Township. Suida stated they will also be getting at least $1.1 million in debt forgiveness on that project that is much needed and will benefit the City for years to come. The budget also continues the meter replacement project, which replaces meters and meter reading devices and would also incorporate a data collector to be mounted on the north water tower. Suida said there’s a lot of benefit to that, adding the new system is working and meeting expectations. He says with the data collector, if anyone experiences a water leak they’ll be able to see that and notify someone before they end up with a hefty water bill.

A Central Business District or CBD ordinance update is budgeted for $12,500, which Suida said he thought was important as it will allow for more of a form-based code approach for the CBD similar to what was done on South Michigan Ave. He noted that with the Post Office relocating, the Washington Street property will be available and having a plan in place for how they want the area to look will be pretty important. Additionally with all of the current unknowns, Suida said they don’t know what the impacts will be on the downtown so the City needs to be ready for recovery and to move forward. There has also been interest and frustration with properties downtown that remain vacant or unfinished and permits that have stalled out. Suida said they’re looking into a possible ordnance to give the City a little bit more strength dealing with those situations but that topic will be discussed at a future meeting.

Some projects deferred that staff brought forward included globes for some city-owned street lighting in a subdivision, ADA compliant bathrooms at Scofield Park, a rehab of the Bennett Center tennis court and retaining and shrub work at Parking Lot # 3 behind Diamonds Restaurant.

The proposed budget will be introduced at the May 4th Council meeting. It will then be up for a public hearing and potential adoption at the May 18th meeting.