Algonac Council approves year-end budget amendment

Bembas questions $10,000 for activity center

By Barb Pert Templeton

Six members of the Algonac City Council unanimously approved a final proposed budget amendment for the fiscal year 2025-2026 budget at a June 2 meeting. Councilman Ed Carter was absent.

The amendment, explained in a memo from City Manager Artie Bryson and City Treasurer Alysia Bugg as part of the meeting packet, reflected the following operational and financial adjustments.

· Creation of the Milford Jackson Fund –to establish a dedicated fund for tacking related revenues and expenditures.

· Increase the Activity Center appropriation by $10,000 – utility costs for electric and gas exceeded original projections.

· Increase the Capitol Outlay budget by $554,000 for pool construction payments #9 and #10 were not included in the adopted FY 2025-26 budget and must be recognized this fiscal year.

· Increase Transfer Out to Sewer Fund by $274,500 – required to cover engineering fees associated with the sewer plant project.

· Increase General Fund revenue – Higher than anticipated income was received across multiple accounts.

The memo also noted that due to the transfer made to the Sewer Fund for engineering fees, the General Fund will not close the fiscal year with a surplus on June 30, 2026.

Councilman Mike Bembas asked if the city’s not going to close with a surplus, what negative amount will they close the year out with?

Bugg, who was seated in the audience at the recent meeting, replied to Bembas by stating that they still have all of June to log so she didn’t have an answer yet.

Bembas asked for a projection and she replied that she didn’t have one.

Bembas then read the line in the amendment document noting the $10,000 increase for the activity center.

“Have we looked at other investors like we said we were going to after we turned down the chance for a private company to invest in it?” Bembas asked.

“I am looking,” City Manager Artie Bryson replied.

“Any leads or any luck?” Bembas said.

“A few but nothing concrete, nothing I can report back to you with,” Bryson said.

Bembas said he would feel more comfortable voting on the budge amendments suggested if he knew what the numbers are that they are looking at now.

“It’s never going to be a profit center,” Bryson said.

Bembas said he understood that but he’s frustrated that the council turned down a private investor interested in the center and now they have to spend $10,000 extra dollars when the city had a chance, even if a slight one, of having someone invest in the building.

“We knew the pool construction was going to be over and all that and we know our issue with the sewer fund,” Bembas said. “And I think I told you at the time – and this is me harping about that activity center – about finding investors since we turned down an investor trying to give us funds and trying to get funds from the state of Michigan.”

Bryson said the city did receive a grant to put in a trade school at the center and that could bring in revenues and income.

“But grants don’t last forever,” Bembas replied.

Mayor Pro Tem Dawn Davey said it’s been discussed from time to time that some agencies at the county might come down to their area.

“So that’s money, income that would come from the county should we get some agencies down here and which are much needed,” Davey said. “I know that’s something that I’ve heard about.”

Bembas then asked Bryson if perhaps they could have some numbers of what’s projected in the budget by the next council meeting.

“I’m not trying to harass you, just, I need to know,” Bembas asked and Bryson replied yes.

The motion to approve the budget amendment was made by Councilman Jake Skarbek and supported by Councilwoman Wendy Meldrum. Members of the council then unanimously approved the suggested budget amendment.

Algonac treasurer weighs-in

When contacted via email to find out if the city not having a surplus in the general fund at year’s end, June 30, meant there wouldn’t be a balanced budget as required by state law Bugg kindly responded in some detail and alleviated that concern.

She replied that the June 2 budget amendment was simply part of the normal year-end process to align the budget with actual revenues and expenditures.

“While the city may not close the fiscal year with an operating surplus, that does not mean the budget is unbalanced or that the city is experiencing a deficit beyond what was planned and appropriated,” Bugg said.

She added that it was also important to note that certain uses with fund balance are temporary. For example, the General Fund advanced $399,500 to the Sewer Fund, which is scheduled to be repaid beginning in 2028. In addition, the city expects reimbursement of approximately $463,500 once the SMUA bond financing is finalized. Those repayments will strengthen the city’s financial position in future years.

“In short, the city adopted a balanced budget, remains compliant with state budgeting requirements, and the June 2 amendment was intended to ensure that the budget accurately reflected actual fiscal activity through year-end,” Bugg explained.

Background on the private investor Bembas refers to:

A developer, Algonac Shores Limited Divided Housing Association, entered a purchase agreement with the city in 2024 stating if they were awarded tax credits from the state the $15 million housing project would take hold. After their applications continued to be turned down by the state, (four times) city officials voted to move on and seek new investors. The project would have brought $40,000 in tax revenues to the city every year going forward.

Bembas was the lone supporter of giving the original agreement for the Gar Woods Development, which was to include 25 senior apartments and 18 family townhouses, more time.

The city has to at least give the investment company time for the deal until they get tired of things and back out of it, Bembas said at a March 2026 meeting of the city council.