ESCANABA — Escanaba’s City Council got a taste of what city departments want and need in the next fiscal year this week. Here are a few highlights from the first budget meeting the council had with staff Tuesday.

THE GENERAL FUND

A major concern for the city’s general fund — which contains the funding for all city activities that don’t have a fund of their own — is inflation.

Some of the inflation burden will be passed on to taxpayers through a 3.1% change on property taxes that is tied to inflation and approved by the state, but it is possible, if not likely, that the increase in cost for goods and services needed by the city will outpace inflation in the coming year.

Other sources of funding may also fall short. Funds from Public Act 51, the state law that provides cities with revenue for street repair and upgrades collected from tax dollars, has historically fallen short of providing enough funding to meet the expectations of citizens.

It’s also unlikely that the city will benefit from federal programs like the American Rescue Plan Act (ARPA), which provided large amounts of money to local units of government in the wake of the COVID-19 pandemic. Without a major event like the pandemic, large injections of federal funding are simply too rare to count on.

“We’ll always be opportunistic. We’ll be trying (for grants), but I think it’s going to diminish quite a bit,” said City Manager Jim McNeil.

But it’s not all doom and gloom for the general fund. In late 2023, the city exited the Michigan Municipal Employees Retirement System to manage pension investments independently. When the

city left MERS, the city’s pension plan was about 61% funded, but under the city’s management that number rose to 73% funded as of June 30. Now, McNeil believes the number is closer to 75% based on market values.

“(It) has been one of the biggest budget headaches for years,” he said while telling the council about the progress.

PUBLIC WORKS

Escanaba Public Works Director Kent DuBord has an ambitious plan to modernize the city’s fleet. He wants to purchase four plow trucks and one garbage truck in the next two years, a goal he believes is possible by spending about $800,000 this year and $500,000 next year.

“I know it’s a lot to ask. We’ve got the employees to do it, but stuff’s going to happen. We can’t go out and shovel by hand,” said Dubord.

For this year’s budget, DuBord has his eyes on one tandem plow truck, one single-axel plow truck, and a garbage truck.

“We spent $100,000 last year on parts for garbage trucks. If we can get through three or four hours of the day without a garbage truck pulling in the shop, it’s like a miracle that it happened,” he said.

As for work, the department will be busy in the coming year, replacing playgrounds and restoring streets that are disturbed by city’s water and sewer projects.

WATER AND WASTEWATER

“My main plan for next year is survival. Pure survival,” Escanaba Water and Wastewater Superintendent Jeff Lampi told the council Tuesday.

According to Lampi, his department is looking at $30 million to $35 million worth of construction projects in the coming fiscal year. These projects include the continuation of the lead service line replacement program, major sewer work that must coincide with a streetscaping project on Ludington Street, and work that must be orchestrated to take place along side work being done by the Michigan Department of Transportation in the area.

The two departments are also facing a number of environmental mandates. In the next few years, the city will be required to meet certain dechlorination standards. Also looming, are regulations limiting the presence of per- and polyfluoroalkyl substances — commonly known as PFAS or “forever chemicals,” due to their inability to breakdown in the environment or human bodies.

“PFAS is going to be the next lead, the next mercury,” Lampi told the council, explaining that meeting the yet-unknown regulations could be costly for the city.

ELECTRIC

In the coming year, Escanaba’s electric department will continue replacing aging underground conductors, replacing defective wood utility poles, completing the streetlight pole replacement on Ludington Street and continue work at the Westside substation and on the city’s Supervisory Control and Data Acquisition (SCADA) system used to monitor electric activity and outages.

The biggest challenges for the department, however, are outside forces. The department is working on a new renewable energy plan that must be filed with the state and preparing for the cost impact of state rules that mandate 15% of all energy used in the city come from renewable energy starting this year.

The renewable energy requirements will become more strict as time goes on. By 2035, 60% of all energy in the city must come from a renewable energy source, and by 2040 100% of the city’s power must come from a source of clean energy. Escanaba Electric Utility Director Gerald Pirkola is hopeful that the city will be able to access power from nuclear sources in the future, which have been designated legally as clean energy.

Residents also may see a change on their utility bill this year that is not a traditional increase. The state has updated the rules on the Michigan Energy Assistance Program (MEAP), which requires electric utilities across the state to provide energy assistance to low-income households for gas, propane and electric. Communities with less than 45,000 customers can run their own programs, but funds must still be collected from residential customers to help low-income customers pay for electric and home heating needs.

The council expressed frustration Tuesday that funds would be collected from all residential electric customers and then a large portion would be sent to DTE Energy for natural gas customers. However, Pirkola’s plan to opt out of the state program and run a program for Escanaba residents was supported. If Pirkola’s early plan of charging residential customers $1 per month — potentially as much as 25 cents less than the state — is adopted, $66,000 would be raised for the program each year.

RECREATION

A few upgrades are planned for the city’s park system in the coming year, including new playground equipment — being installed by the city’s department of public works — and the resurfacing of basketball courts.

The resurfacing project was budgeted for in the last fiscal year with the intent being that the recreation department would attempt to resurface the courts in-house as a cost-saving measure. That’s still the plan for the department, which will be looking for more funding if the first court resurfacing is successful. No decision has been made as to which court would get the first treatment, but the courts at Royce Park, Ludington Park, and Rose Park are all slated for resurfacing.

Much of the discussion Tuesday revolved around the planned splash pad, which has been slated to be built at the site of the now-closed Webster Wading Pool since 2018. The project has hit a number of snags since it was first proposed and has been repeatedly delayed.

“I am still very disappointed with the splash park, how long it’s been taking. That money was announced and the expectation when it was going in — the town was going crazy, happy as can be, and now every year it gets delayed another year,” City Council Member Tyler DuBord told Parks and Recreation Director Kim Peterson.

Peterson expressed her own frustrations with the project, which was delayed by the COVID-19 pandemic, the loss of an engineer, a complete redesign, and requests for bids from contractors that went unanswered. The project has also been delayed due to requirements that the Michigan DNR Trust Fund approve all plans because in 1981 the city accepted a grant for a shelter house on the site that tied the land to the Trust Fund.

The council asked why the former wading pool had not been demolished by the city’s public works department to prepare for the project. Peterson said the pool was being left in place to ensure that anything that could be reused or repurposed was available to future contractors.