BRIDGMAN – After two previous meetings on the subject, the Bridgman City Council passed its 2019-20 budget at the June 17 session, but not without one last-minute change.
A budget item of $5,000 for a new LED enhanced stop sign at the intersection of Lake and Church streets was added to the operating budget following complaints from residents that the intersection is unsafe. This replacement was discussed at previous meetings.
The approved budget calls for $4.3 million in general fund expenses, which City Manager Juan Ganum described as “fiscally responsible.” This amount includes the use of $212,135 from General Fund reserves to balance the budget. Despite the use of reserves, the city will maintain a fund balance of 55 per cent which exceeds the minimum of 40 percent as required by the city’s fund balance policy.
Following a June 3 public hearing on the budget at which no comments were made, department heads gave an overview of budgeted expenses.
City Treasurer Debbie Lambrix went over the highlights noting that property values went up slightly, helping to keep millage rates down. She said state revenue sharing was up slightly but said the state has held back more than $1 million in revenue sharing to balance its budget. Lambrix said total revenues are $4.1 million for all funds, which has increased by $37,500 from last year.
Police Chief Daniel Unruh noted that 89 percent of the police budget is labor, with a current force of one police sergeant, three full time officers and three part-time officers, down from five. He discussed his request for four patrol vehicle radios and one portable radio for about $10,000, replacing 18-year-old radios.
Fire Chief Joel Buist said there were not a lot of changes in his budget, which includes a $6,000 contribution towards a shared training facility that will cut costs by a third when finished. He requested three sets of gear per year at $3,500 per set and one additional water rescue gear. Buist said rather than planning to replace the ladder truck at $1 million, he is seeking refurbishing bids to hopefully extend its life by 15 years for about $300,000.
Some of the more infrequent expenditures which are being undertaken during the year were reviewed by Water and Parks Superintendent Tim Kading including the reconstruction of Fire Department driveway (phase 2) at $35,000; computer server replacement for $9,500; City Hall energy efficient lighting upgrade for $8,000; furnishing modernization for $5,500, and laptop replacements for two city council members for $1,000.
During special workshop meeting on Monday, June 10, there was a lengthy discussion on the state of the sewer fund that laid out the likelihood of a $15 to $20 monthly increase to sewer customers in the near future and the challenges of how to communicate this to the community.
“I don’t like to be the one to raise rates but we have to do it. Unfortunately, it has been neglected for too long and now we have to come up with a plan and resolve it. We have to address it now,” said Mayor Vince Rose.
Currently, the sewer fund has a negative $4,000 balance. The budgeted cost to be repaid this year to the other city funds is $256,000 and operating expenses were expected to be $450,000, with the yet unknown effects of this spring’s rainfall.
The causes for the needed rate increase were explained by Andy Campbell of Baker Tilly Municipal Advisors, as part of the study being done under the city’s SAW (Stormwater, Asset Management and Wastewater) Grant from the Michigan Department of Environment, Great Lakes and Energy.
Complicating the discussion are the unknown effects of this spring’s heavy rainfall on the amount the city will be billed by the Galien River Sanitary District, which transports and treats the city’s sewage at its plant in New Buffalo Township. The unnecessary leakage of rainwater from inflow and infiltration into the sewer system is one of the problems contributing to city’s sewer expenses. This leakage is largely due to the age of the system and the illegal connection of residential sump pumps to the sewer system.
Aside from age and leakage, the city also is faced with correcting a short fall in sewer revenues to cover the operating costs and debt service. Historically, this shortfall has been covered through loans from the city’s general fund and its water fund.
Despite a 57 percent increase in sewer rates three years ago from $4.53 to $7.12 per 1,000 gallons, sewer revenues are not enough to repay the loans to the other city funds and also keep up with rising operating costs and expenses, the largest part of which are bills from GRSD. Nor is the automatic 2.4 percent cost of living yearly increase to sewer bills enough to cover the shortfall.
Campbell told the council that the sewer fund should be managed like an enterprise fund with enough revenue to cover expenses, just like a business. The bottom line is they have to do something with rates get them in line with expenses. Campbell added that ongoing inflationary increases should be part of any rate plan to avoid recreating the same situation in the future.
Campbell said Bridgman falls right in the middle of municipal sewer rates charged by other municipalities. He said the situation comes down to a decision on how much the city is willing to tolerate in terms of an increase and gave different scenarios amounting to the $15 to $20 monthly increases. He said no matter what percent increase it chooses, it would not overshoot it the needed amount. Choices the council must make include how much debt to forgive the sewer fund and how much interest to charge on the remaining debt.
“We just had a huge increase after 27 years of no increases. We missed out on compounding factors over the years. It’s simple arithmetic,” Council member Rick Fuller said.
Council member Stacy Stine said she thinks it will take time to create understanding and awareness in the community and urged quick action now that the council was made aware of the situation.
City Manager Juan Ganum said he believes the best thing is to educate the public and get homeowners’ support in addressing the solutions. The discussed sewer rate increases are not reflected in the 2019-20 budget.
During council comments at the June 10 meeting, Council member Sarah Buist said she was embarrassed by equipment playground and picnic tables at Toth Park during a recent graduation party she hosted, adding that the council needs to look beyond the beach and put some focus on the hidden gem at Toth Park.
Separately, her special events application was approved for the annual Celebrate Bridgman! parade on July 13.
Saying he was not satisfied with conflicting explanations about the personnel situation and safety conditions at Weko Beach, Fuller proposed that council members individually check out the situation and bring back reports as a starting point for further discussion. The city has begun searching for a new parks and recreation director to replace Joan Guilfoyle who resigned right before Memorial Day.
Fuller also volunteered to have the city’s sandbox be relocated from the parking lot adjacent to the tracks on Lake Street to Sandpiper’s property. The city had recently received a letter about the enjoyment found by young students at the sand box.
The council approved a contract with Indian Michigan Power Company to convert all existing mercury vapor and sodium vapor streetlights to LED at no cost to the city.