Harbor Springs sees new budget, Capital Improvements Plan before voting next week
HARBOR SPRINGS — The Harbor Springs City Council met on Monday to discuss the city’s annual Capital Improvements Plan and budget.
The meeting gave the council and the public an opportunity to see the budget, ask questions and allow for any changes to be made before voting on it during their next meeting, scheduled for 7 p.m. on Dec. 18.
The Capital Improvements Plan is a six-year projection of big projects planned for the city. City manager Victor Sinadinoski said the plan only includes projects that will cost the city more than $10,000. Having a plan is a state requirement as a part of the Michigan Planning Enabling Act.
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Sinadinoski said that if the council approves the plan, they are not locked into following through with those projects, and they are not locked into any specific timeline for completing those projects. The plan is rather an opportunity for the city to get a good look at what projects they may like to see included and opens the city up to future grant opportunities.
In the Capital Improvements Plan for 2024-2029, the city is looking at 69 projects with a projected cost of $21,570,500. The city is seeking grants and donations for at least nine of those projects.
More than half of that budget is being paid for through the electrical fund, as one of the larger projects — the new substation — will be paid for through that budget. The electric fund is expected to be charged $12 million. Water and sewer is the second largest portion of the budget, paying for just 14.7 percent of the expected expenditures.
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Sinadinoski told the council the plan is not a commitment to doing the projects on any specific timeline, and there's more flexibility for the projects in the later years of the plan, beyond 2026.
“There’s flexibility,” Sinadinoski said. “Things are very fluid.”
The years where the most money is expected to be spent are in 2025 and 2026, again, primarily based on the new substation being built.
The Capital Improvements Plan is meant to align with the city’s Master Plan.
Different projects included in the plan include extending the Little Traverse Wheelway, the boardwalk replacement, upgrades to Kiwanis Park, landscaping at the new skatepark, and more.
Other plans expected to be needed in the coming years include a roof replacement at city hall, as well as new carpeting, Sinadinoski said.
The three main goals for budgeting, as listed on the presentation during the meeting, include:
Covering costs of government services and operations.
Maintain or replenish fund balance to cover services and operations due to unexpected loss in revenue or in emergency situations.
Replenish reserve funds for capital infrastructure projects.
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In response to changing rates, the city is expecting a $625,000 loss in revenue compared to 2023. While the city is expecting increases in operating millages, administrative fees and a public safety millage, there is a total loss of $790,000 in grants and donations, though the city is expecting to earn some of that money back, Sinadinoski said. Much of that $790,000 were in donations made for the reconstruction of the skatepark and the boardwalk.
When it came to the actual budget, Sinadinoski said he wants to see an adjustment to budget expenditures to accurately reflect how much money should be put into the general fund.
Administrative fees are what the general fund charges other funds, Sinadinoski explained, saying that he is not always working on "general fund" activities, but often works on electric fund activities, including trips to different conferences and meetings related to electric fund projects.
He said the city has never had a policy or formula for determining a fair way of charging other funds for that split time, and when calling around to other cities regarding the same process, he said the different cities said they would just move money over from other funds if there was a deficit.
In Harbor Springs, 13 percent of revenue comes in from administrative fees, while Petoskey's is around 20 percent, and Boyne City sits under 5 percent, he said.
"We want to get away from just transferring administrative fees so we don't end up in a deficit, we want to have an actual formula that's representative of what we're spending," Sinadinoski said.
The new formula resulted in an increase of $50,000 in administrative fees coming into the city from different funds.
The budget draft and 2024-2029 Capital Improvement Plan can be reviewed at cityofharborsprings.com/documents/city-documents. The council will vote on the budget at the Dec. 18 meeting.
— Contact reporter Karly Graham at kgraham@petoskeynews.com. Follow her on Twitter at @KarlyGrahamJRN.
This article originally appeared on The Petoskey News-Review: Harbor Springs sees new budget, Capital Improvements Plan before vote
