The City of Mackinac Island now can establish local historic districts following the adoption of a historic district ordinance Wednesday evening, October 21, during a regular City Council meeting. The decision also paves the way for Hubbard's Annex property owners to move forward with plans to have their area designated a local historic district.

The city council also moved ahead on converting its old medical center building into apartments for police and approved its annual audit.

Council's adoption of the historic district ordinance followed a month of public hearings, debates, and sidewalk discussions among residents since its introduction at a September 23 council meeting.

State and federal experts told residents in September that a designated historic district is a tool created to allow a community to manage change, while helping ensure that an area's culture and heritage are kept intact. Protection of the area is accomplished through regulations that are overseen by a Historic District Commission. Mayor Margaret Doud has appointed a study committee to consider such areas on Mackinac Island. The appointment of a commission occurs later in the process.

Historic districts to protect old buildings were first discussed a year ago when new owner Ira Green said the McNally house would have to be moved or demolished to make room for commercial development of the property. The city made no progress, however, until September, when plans were submitted to the planning commission to build a three story hotel and shopping center there. The proposal to demolish the house raised concern that continued loss of historic buildings could cause the Island to lose its National Historic Landmark status.

With the historic district ordinance in place, the city now has the ability to impose an moratorium on building demolitions for up to a year while it establishes historic districts. The city has not proposed any districts and council did not impose a moratorium during the meeting, and Mr. Green has said he doesn't plan to begin construction on his hotel until next fall.

About 25 residents braved strong west winds and a cold rain to witness council's action last Wednesday evening. The roll-call vote drew opposition from one council member. Alderman Frank Bloswick voiced a "no" vote and later told The St. Ignace News establishing a local historic district in the downtown area would hurt property values and cost the city lost tax revenue. Mr. Bloswick said he had discussed the potential impact on Main Street retail properties with assessor Joe Stakoe.

Property in the Mackinac Island State Park, including the Victorian cottages on the East and West bluffs, already are protected under park rules.

Police Housing

Council resolved to borrow up to $200,000 from its capital projects fund to pay for work on city-owned apartments at the old medical center building, now named St. Martin's Place, and to pay back the funds back by raising taxes. One mill would raise $192,000 in taxes.

The amount it will borrow won't be known until spring, but the city plans to reimburse itself approximately $45,000 a year. The city has about $500,000 in its capital improvement fund.

The building will be used to house police. The second floor has been remodeled into two, two-bedroom apartments. The next phase will remodel the first floor with a kitchen and four bedrooms.

Council also is looking at other winter projects, such as street light replacement.

2008 Audit Auditor Michael Konicki said the city has improved its financial picture during a struggling state and national economy, is carrying little debt, and has no deficit funds.

"When you look at municipalities throughout the State of Michigan, there aren't too many that have seen improvements in their overall fund balance position in their current year," said Mr. Konicki, of Rehmann LLC in Cheboygan.

As of March 31, the general fund balance was $500,161, an increase of $10,515 from the beginning balance of $489,646. Mr. Konicki said a conservative budget, staying within the budget, and increasing the fund balance all contributed to the positive financial picture.

The city operated on a $2,141,842 budget last year.

The city's debt is low, he said, compared to services provided. The city owes about $180,000 on the fire truck, which is expected to be retired in 2013, and about $20,000 in the Cadotte Street paving project, with a final payment in 2010 .

"Seriously," he said. "When you look a municipalities today, there aren't many that can operate within a budget."

The city's Department of Public Works (DPW), however, accrued more than $30,000 in unpaid water and sewer bills, much of it from transient residents, said Mr. Konicki. By ordinance, the department is required to turn over to the county any delinquent bills more than six months old, and the county will attach the delinquent charges to the customers' property tax bills. Once the taxes are paid, the county will reimburse the DPW the amount owed. The DPW, however, is not turning the bills over to the county and the noncompliance is considered a significant deficiency in the city's audit.

The problem was discussed during a Finance Committee meeting held prior to Wednesday's council meeting.

"What's going on right now is the tenants are skipping town and the DPW is out of money," said Mr. Konicki. "I believe the DPW is going to come to the city and say, 'We want to change the ordinance to say that it's the property owner's obligation for the water and sewer bill and not the tenant."

The audit also suggests the city come up with a recovery disaster policy to protect computer files. City computers are not networked, nor is there a back-up system in place to protect city files in case a computer crashes.

"Our concern is that if somebody's hard drive crashes and you lose all that data, you're not going to be able to go back and retrieve it," Mr. Konicki said.

The Finance Committee agreed external hard drives would be purchased and probably stored off-site in a safety deposit box.

Temporary Permits

In other business, the city approved two off-Island business licenses for Hoffman and Sons Landscape of Petoskey and, contingent upon receiving the license payment, Al and Jim's Tree Service of Harbor Springs.

Twenty-seven temporary motor vehicle permits were approved. Grand Hotel received two permits, four were issued to Al and Jim's Tree Service, 20 were approved for Belonga Plumbing, Heating and Cooling of St. Ignace, and one for Island resident Jack Armstrong.

Five temporary trailer permits were issued to Fettig Landscaping, Litzenburger Landscape, and Chippewa Hotel.

City council next meets Wednesday, November 4, at 5 p.m. on the second floor of Community Hall.