St. Ignace City Council received some good news and bad news during its annual audit for fiscal year 2005 by its financial advising firm, Rehmann Robson, during its regular meeting Monday, May 1. As expected, the city's

water and sewer rates, raised last July to erase a $775,000 budget deficit, were not lowered.

Annette Eustice of Rehmann Robson highlighted the city's 2005 fiscal year, pointing out that its water and sewer cash reserve requirements relating to bond offerings for water and sewer system repair and replacements are under-reserved by $278,607 and $172,035, respectively. She reported that the city will

enjoy an increase of $27,410 in its fund balance, however, the state is seeking reimbursement of overcaptured Downtown Development Authority tax amounts of $270,000 over an 11-year period. The city contends it owes only $206,105 and has set aside approximately $170,000 in anticipation of the state's claim, reported Ms. Eustice.

As of December 31, 2005, Ms. Eustice reported that Silver Mountain Ski Area Fund and the Community Center Fund had deficit fund balances of $1,397 and $4,262, respectively.

In other matters, Council postponed any decision to help the City of Mackinac Island protest proposed electricity rate increases until council members can hear the electric company's side of the issue. The City of Mackinac Island has asked that St. Ignace join the island in a legal protest against Edison Sault Electric Company's proposed rate increase.

Mr. Dodson said Sault Ste. Marie is also debating the issue.

Mackinac Island contends that Edison's proposed rate increase is based significantly on the company's voluntary termination of a joint operating agreement with its parent company, Wisconsin Electric Power Company (WEPCO), which the city says is not reasonable.

"The new agreement allowed WEPCO to make substantially more money by selling the electricity on the open market at higher rates," stated Mackinac Island city attorney Tom Evashevski in a letter to Mr. Dodson. "The new agreement also caused Edison to have to purchase electricity on the open market, which was more expensive than what it would have paid pursuant to the Joint Operating Agreement."

Mr. Evashevski explained that if Edison Sault were to be allowed by the Michigan Public Service Commission to raise its rates, Mackinac Island residents could see a $100 hike in their electricity bills. Without propane or natural gas, electricity is the primary fuel for heating homes on the island.

Councilman Don Gustafson said he would be hesitant to proceed on a decision before hearing Edison Sault's side of the story.

"Edison Sault has cooperated with the city many times on projects," said Mr. Gustafson, pointing out that the electric company donated a transformer last month, free of charge, for the city's marina construction project.

Mayor Grondin asked Mr. Dodson to invite a representative of Edison Sault to attend council's next meeting to explain the company's decision to raise rates.

Council adopted its recreation plan following a six-minute public hearing during which only one comment was recorded. The city is required to update its recreation plan every five years to be eligible for state grants.

Downtown Development Authority (DDA) Director Deb Evashevski reported that resident Kirk Stage-Harvey had asked Council to postpone adopting the revisions until after the city hires a new recreation director, but she said postponing the action is not necessary.

"We can make changes later on down the road," she explained.

Councilman Willie LaLonde asked why the proposed basketball hoops and nets have not been placed near the former McCann Elementary School, which is now tribal housing, and Department of Public Works Director Les Therrian said he will look into the matter.

Mrs. Evashevski said she also will seek approval by neighboring township boards who participate in the city's recreation programs.

Maverick Construction was awarded a contract to install a concrete base on the Railroad Dock for the steel lighthouse the city acquired two years ago. Maverick was the lowest bidder for the project, at $15,950.

Glashaw Electric will install the electricity to the dock improvement project for $10,900 and was the lowest among four bidders.

Harbor Authority Director Gene Elmer said the lighthouse should be installed by June 9, although the lights may not be operational by then.

The lighthouse will be equipped with a light will be visible 14 miles across the water. A cover will block the light from homes on the mainland.

Norris Contracting was awarded the DDA's contract to repave the city's parking lot behind the downtown stores. Norris outbid three other contractors with a bid of $47,881.

Mayor Grondin appointed Paul Fullerton to the city's Zoning Board of Appeals, replacing Dean Baker, who accepted a position on the Mackinac County Economic Development Corporation, which meets at the same time. Councilman Tom Della-Moretta was appointed to the Cemetery Committee by Mayor Grondin, Councilman Merv Wyse was appointed to the Investment Committee, and Mr. Grondin will serve on the Insurance Committee. He dissolved the city's Windmill Committee, stating that it has not conducted any business for at least a year.

Dennis Kundinger Sr., owner of Kundis Fireworks Display Shows in Sebewaing, was issued a permit to display fireworks at St. Ignace's Fourth of July celebration this year for approximately $7,500, just as he has been paid in past years.

Mr. Kundinger will use close to 500 kinds of fireworks, which will be fired from the mill slip.

Council adopted a resolution supporting Let's Get Moving Northern Michigan 100-day wellness program, which is aimed at getting people in northern Michigan up and moving. Several council members discussed each purchasing a pedometer to count how many steps they take throughout the day and competing with other groups to see who accumulates the most steps during the month.

The program is also being supported by the fourth grade class in St. Ignace, which sent a letter to Council informing it of what the students will be doing for exercise during the month of May.