Island City Budget Increases $144,546; Council Works To Be 'Conservative'
By Ryan Schlehuber

A $600,000 rehabilitation project at the old medical clinic building on Market Street, which is being converted into housing for seasonal police officers, and a 13% increase in electricity rates this year are two reasons the Mackinac Island city budget for the 2008-09 fiscal year has increased $144,546. A 2.85% increase in wages and a reduction in the city's insurance coverage are also included in the new budget.

The city council adopted the budget Wednesday, March 26, and the new fiscal year began Tuesday, April 1.

The general fund budget is $2,369,056, down from last year's amended general fund budget of $2,545,204.

A $17,000 reduction in the cost of insurance coverage, from $220,000 to $203,000, was a result of some employees being taken off the city's coverage, some of whom have multiple family members, said Mayor Margaret Doud's assistant, Kelly Bean.

"For example, someone with children came off our coverage and was replaced with a single person, so that makes a difference," said Ms. Bean at the finance committee's meeting Monday, March 24.

Michael Konicki, the city's auditor from Rehmann and Robson, said the Island is the only municipality he knows that has been able to reduce its insurance expenses.

The Island's 2008 taxable value is $187,417,669, a 2.3% increase from last year. The city collects 8.95 mills against that tax base, which generates $1,677,330.95 in revenue. (Each mill generates $1 for each $1,000 in taxable value, or $187,418).

That funding goes toward the general fund (7.0692 mills), road improvements (0.1 mill), Michigan Transportation Fund debt for Cadotte Avenue road work (0.1205 mill), fire hall debt (0.4371 mill), a firetruck debt (0.2232 mill), and solid waste (1 mill).

The city is approaching the end of its fire hall debt payments, having only three left, with the final one to be paid in June 2009, reported Ms. Bean at a finance committee meeting Wednesday, March 26. The other two payments are due in June and December of this year.

The fire hall debt millage results from a special fund established in 1996 for the construction of a new fire hall on Market Street.

The city's Michigan Transportation Fund debt payments will be finished in 2010, while its firetruck debt payments will be finished in 2013.

The $191,640 left over from the sale of one of the city's two condominiums that sold for $275,000 is being carried over into this fiscal year's general fund and earmarked specifically to help complete phase one of the former Medical Center building project, a $300,000 tab that includes revamping the second floor to include two, two-bedroom apartments, and reinforcing the walls and framework of the second floor.

The other two phases involve reconstructing the first floor and basement into dormitories for up to 16 people.

The second condominium is priced at $339,000. The city is hoping to use that money to cover the rest of the costs for phase two and three of the old Medical Center rehabilitation project.

Like last year, the budget reflects careful spending, said Ms. Bean.

"We are being extremely conservative," said Ms. Bean, who, with councilman and city finance committee chair Michael Hart, did much of the work of putting the budget together. "Franchise fees, for instance, were set at $255,000, even though we received $270,000 this year. We don't want to overshoot and only get $230,000, especially considering how expensive fuel prices are and the unpredictability of tourism."

Edison Sault Electric introduced a 30% rate increase last year that will be staggered over a threeyear period. This year, rates will be increased 13%, said Ms. Bean. The city budgeted $70,000 for electrical rate expenses this year; $50,000 was spent last year.

Funding for the city's public restrooms was reduced from $42,000 to $34,000, as one of four maintenance employees has been reassigned to care for the city's parks and the Stuart House Museum.

Contracted services for cleaning streets increased roughly 20%, from $145,711 last year to $154,728.

Ms. Bean said it is a result of Grand Hotel having to hire employees at a higher rate of pay, owing to losing its foreign national workers.

The city will pay Mackinac Island Carriage Tours $123,128 and Grand Hotel $31,600 to maintain and clean the Island's streets this year.

City of Mackinac Island Operating Budget for Fiscal Year