City council authorizes $40,000 payment to reduce county fire department deficit

GAYLORD — The Gaylord City Council Monday night approved a nearly $40,000 payment in part to help eliminate a budget deficit at the Otsego County Fire Department.

City manager Kim Awrey said the department discovered a deficit when an audit was completed on the fire department's books last summer.

"They had more expenses than what they had planned for," said Awrey. The fire department also paid for chargebacks on property taxes that occur when someone succeeds in reducing their tax bill.

"They get tax refunds and then it comes from the county to us to refund that money as well. For about six years they were charging the fire department for (the chargebacks) instead of the city. So the fire department paid about $21,000 for chargebacks that they shouldn't have. We reimbursed them $21,000 so it covered a $17,000 deficit," Awrey said.

However, looking forward the fire department anticipated another deficit. Gaylord and the other communities that contract with the department for fire services are being asked to come up with about $160,000 to help the department end the fiscal year (June 30, 2024) with a surplus of about $72,000. Gaylord's share comes to $39,872, and that's why council approved the payment.

Awrey said the volunteer fire department has also experienced some bookkeeping problems. To help the department keep more accurate financial records, the city will begin performing much of the department's accounting.

"We have started the process so that their checks will be paid out of here and next year's budget will be done from our offices," Awrey said, noting the city can utilize the software it already has so there shouldn't be any extra expenses.

"There is some time involved in getting things set up but once they are set up it should be a relatively easy process," she said.

Separately, upgrades are needed for Gaylord's wastewater treatment plant that could cost around $10 million, prompting council to approve hiring Donohue and Associates to help it sort through options on how to pay for it and complete the work on the facility.

Council approved an engineering service agreement with Donohue, an employee-owned consulting firm specializing in drinking water, wastewater, stormwater and civil engineering services.

"They will help us find the funding to take care of the plant," Awrey said. "There are some avenues that we can go through with like USDA (United States Department of Agriculture) low-interest loans and there are state revolving funds that have grant and loan opportunities. They can also help if we have to look at a bond issue."

Awrey said the firm has walked city staff through a capital improvement plan with specific suggestions on upgrades.

"They have made recommendations on the upgrade portion of it and my assumption is we will have this relationship with them that will transpire over into more engineering things with them," she said.

Because the city won't be eligible for the state revolving fund in 2024, it will formally begin to look for funding sources starting in 2025.

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Finally, Awrey told council that the city has been awarded a $485,000 grant from the Michigan State Housing Development Authority (MSHDA) through its CDBG Housing Improving Local Livability (CHILL) Program.

"We applied for this grant with Northern Home Community Development Corp. of Boyne City," said Awrey. "They are a nonprofit that does housing initiatives. We are teaming with them to demolish two abandoned homes in the city and then rebuild with single-family homes."

Northern Home has contractors to handle all of the work Awrey said. Northern Home serves Antrim, Charlevoix, Cheboygan, Crawford, Emmet and Otsego counties.

— Contact Paul Welitzkin at pwelitzkin@gaylordheraldtimes.com.

This article originally appeared on The Petoskey News-Review: City council authorizes $40,000 payment to reduce county fire department deficit