Marine City adopts 2025-2026 budget

Q & A with city manager on city’s financial outlook

By Barb Pert Templeton

A May 15 regular meeting of the Marine City Commission had officials adopting the budget for fiscal year 2025-2026.

A public hearing held prior to the agenda item for the budget didn’t prompt any questions from the floor. When the item came up on the agenda City Manager Michael Reaves and Finance Director Katy Posey both addressed the commission about the budget plan.

A document provided in the meeting packet shared lots of budget numbers. The general fund reflected revenues of $3,637,400 and expenditures totaling $4,017,735 leaving a deficit of $380,335 which was then taken from a restricted funds account that balanced the budget.

The major and local street funds both finished the year with surpluses. Revenues for Major Streets was $420,000 with expenditures of $369,964 leaving a $50,036 surplus. Local Street revenues were $360,500 and expenditures were $268,755 which created a surplus of $91,745.

Total revenues for the Water & Sewer Fund were $14,492,600 with expenditures of $14,535,083 leaving a deficit of $32,483 which was covered by a water/sewer restricted fund.

An error with the video recording of the May 15 commission meeting left out the budget discussion. So, Blue Water Healthy Living contacted Reaves via email asking him to respond to some questions about the state of the city’s finances.

Blue Water Healthy Living: Marine City has had some difficult financial times the last few years, how would you characterize the 2025-2026 Fiscal Year Budget recently adopted by the city commission?

City Manager Michael Reaves: We are still experiencing budget difficulties as the cost of providing services do not match up with revenues. Last year the budget revenues were greatly enhanced with ARPA funds – which helped significantly. We worked extremely hard as a team to assess our expected revenues from a very conservative viewpoint; as well as determining

expenses in the same manner. Historically, one of our issues has been the lack of capital planning (Which we are addressing this year) We have been funding capital items from our general fund.

BWHL: The general fund notes revenues of $3,637.400 and expenditures of $4,017,735 leaving a deficit of $380,335 – where did the funds come from to balance the budget?

Reaves: The deficit was covered from the general fund balance to make the budget balanced as is required by law.

BWHL: Can you share some information about the overall fund balance being reduced (from to $304,000 to $231,000 saving $73,000) due to reductions or changes in the cemetery and fire funds?

Reaves: Yes. Upon further review we utilized existing funds in one of our cemetery funds that we could utilize to cover the shortage in the cemetery fund. These funds were already designated for cemetery use -so it made sense. Additionally, we are planning on buying a new mower that will be utilized almost exclusively much of the time at the cemetery -hence it made sense to use those funds instead of the general fund balance.

BWHL: Can you explain how your four percent raise as city manager, plus an additional $1,000, came about when you’ve only worked for the city for seven months? (Was it built into your original contract or?)

Reaves: It was not in my contract. When I completed the budget – I had made sure that all employees outside of the collective bargaining units received wage increases for the work that they do. (Collective bargaining units had planned wage increases) I did not put a raise for myself into the budget. When the Commission reviewed the budget and realized that I did not include myself – they decided to give me the same wage increase that I allotted to the department heads. The Board of Commissioners have been very supportive and appreciative of my efforts here in Marine City and felt that I deserved a raise as well -even though I have only been here since Oct. 2024. We have certainly accomplished a lot in a short period of time.

BWHL: What areas of the budget would you say still need improvement over the coming year? Reaves: Our revenues need to increase, and we will have to remain very diligent about staying with our planned budget going forward. We must remain focused on available grants to the city making good applications that have a serious chance of approval. What causes us issues and concerns all the time is the unexpected expenses – the emergency purchases or needs, the broken-down systems or parts – those un-planned budget activities can wreak havoc on a budget plan. We are completing a water/sewer rate study that we will present in August of 2025 to the BOC -where we will determine water and sewer rates going forward.

BWHL: Are there things you and your staff can do to make those improvements happen?

Reaves: Yes. We are currently amid a WWTP Capital needs study. We have a multi facilities assessment on-going as well as an internal equipment, vehicles, and acquisitions review. We plan to merge all these capital needs studies and plans together -so that we can adopt future budgeting of capital needs going forward. Making good decisions at the department head level on cost containment and being resourceful with our revenues. Our daily goal is great service levels provided to our residents, businesses, and visitors.

BWHL: How big of a role do you feel grant monies play in continuing to move the city forward?

Reaves: Huge. The receiving of the MEDC-Rap grant for the Guy Center was a great start. We have multiple other grants applications in, with more planned. We believe we are a finalist with the State of MI for an IT grant; we already received a SCC Comm Foundatiuon grant for the guy center for IT/Security needs, and we will be bringing another application forward soon. We recently hosted the Ralph C Wilson Jr Foundation here in town twice – and we hope to announce

something on that grant soon. Additionally, we have made application to all our State Senators offices and our Congresswoman’s office for Congressionally Directed Funding requests.