City Council

MANISTEE CITY COUNCIL STUDY SESSION AGENDA Tuesday, April 12, 2022 - 7:00 p.m. – Council Chambers I. Call to Order. II. Study Session Items. a.) PUBLIC COMMENTS ON STUDY SESSION RELATED ITEMS. b.) PRESENTATION OF SWIMSMART – Jacob Soter, Founder, SwimSmart Technology LLC. c.) DISCUSSION ON THE 2022-2023 BUDGET AND CAPITAL IMPROVEMENT PLAN – Finance Director Ed Bradford and City Manager William Gambill. d.) OTHER. III. Adjourn. WG:km Attachments SwimSmart Warning Systems FY 2023 Budget Introduction City of Manistee Leaders, SwimSmart Technology LLC was created out of an apparent need for new solutions to water safety challenges. SwimSmart is actively involved in the Great Lakes Water Safety Consortium (GLWSC) where we learned about the many issues beach managers and water safety experts face. Our new technology was created in response to those grievances. SwimSmart is the first, and only, of its kind business actively selling and maintaining electronic beach safety systems of this nature. There have been small projects in the past similar to that of SwimSmart’s designs. Notably, Dr. Chin Wu of University of Wisconsin Madison created a similar rip current nowcasting system that uses different forecasting technology (https://www.jsonline.com/story/communities/northshore/news/port- washington/2019/05/22/light-signals-warn-port-washington-beach-goers-rip- currents/3705877002/). However, Dr. Wu’s system is maintained as part of a NOAA-university collaboration grant, and it is unknown what will become of the system when Dr. Wu is no longer with the university. Dr Wu is also part of the GLWSC which provided inspiration for the development of SwimSmart’s products. SwimSmart is the first, and only, company to create a mass-producible, scalable, UL certified product that can be purchased on the open market. While it is certainly true that there are many companies that can create a software controlled red, yellow, and green traffic light. SwimSmart is the first, and only, to tie such hardware directly to the National Weather Service Swim Advisories (https://www.weather.gov/safety/ripcurrent-forecasts), designed such a system with emphasis specifically on water safety, and built to survive in a marine location. SwimSmart’s software is also the only known third-party software that tracks the National Weather Service’s swim advisory forecasts for the entire country. And SwimSmart’s phone application is the only known software application that links the two together. This is our second year in business and we have not yet found any direct competitors in our space. SwimSmart is the leader in innovative new water safety technologies. We look forward to the opportunity to work with the City of Manistee to provide much needed upgrades to water safety infrastructure throughout the Great Lakes and beyond. Any questions can be addressed to, Jacob Soter Manager SwimSmart Technology LLC Jacob.soter@swimsmarttech.com +1-734-819-8789 City of Manistee 2022-2023 Budget City-Wide Budget Highlights • General fund (exclusive of ARPA) is balanced but contributes $100,000 of reserves to Motor Pool • Taxable value increase of 5.4%. • Headlee Rollback decreases millage rate from 17.5533 to 17.2443 • 3.5% water & sewer rate increase. • 4.3% refuse rate increase. • Proposes 0.5 mill increase in refuse millage for PFAS remediation. • Funds $9,676,800 in Capital Improvements – Staff is at capacity on projects Budget Issue Pages • ARPA Funding • Blight • Parks & Riverwalk Maintenance • Riverwalk Improvements • PFAS Issue at Old Landfill Site • Fire Aerial Lift & Pumper City-Wide Budget Overview • Total budget is $22,915,314 • Decrease of $3,011,011 from last year • Reduction due to lower capital outlay General Fund Key Points • Total budget is $7,340,415 or 32% of total • Invests $100,000 fund reserves for Motor Pool • Stable full-time staffing • +2 seasonal employees • No service reductions • Recognizes all, and uses some, ARPA revenue – restricts remainder • Increased Parks, DDA & Riverwalk maintenance General Fund Revenue • Overall: +6.5% $630,355 • Taxes: +5.0% $182,700 • State & Fed: +26.4% $293,240 • Sales & Fees: +0.9% $ 5,100 • Interfund: +10.0% $137,000 • Other: +19.3% $ 12,315 General Fund Revenue General Fund Revenue General Fund Revenue ARPA Revenue • $642,500 total (FY 2022 & 2023) • Treasury Final Rule allows for $10M to be deemed “Revenue Replacement” • Can be used for any service or activity traditionally performed by government – Can “supplant” already budgeted funds • These supplanted funds then become unrestricted to the City • Recommendation: 1. Pass resolution applying ARPA funds to normal wage expense for FY 2022 & FY 2023 2. Use $140,000 in FY 2023, $40,000 in future 3. Restrict remaining funds $462,500 pending Council decision on ultimate use General Fund Revenue ARPA Recommendation: General Fund Revenue Marijuana Excise Tax • A portion of the State marijuana excise tax is distributed to communities that have retail outlets • FY 2021A 1 license $ 28,001 • FY 2022B 5 licenses $100,000 • FY 2022A 5 licenses $282,267 notified March after budget • FY 2023B 5 licenses $ 80,015 • Future revenues highly uncertain due to a variety of factors General Fund Expenses • Up about $449,100 or 6.5% General Fund Expenses Funding Highlights • Council strategic plan facilitation • Master Plan re-write • Police accreditation • Parks seasonal employees increased by 2 • Parks beach amphitheater study (ARPA) • Parks contractual landscaping maintenance • Parks bench upgrades and DDA clock repairs • Appropriations Housing North (new, 3yr ARPA), Chamber of Commerce (increase, ARPA) • Motor Pool contributions increased per plan • High inflation impacts fuel & supplies • Health insurance estimated at 12% (cost sharing in effect) but slightly exceeds hard-cap  Downtown Development Authority • Budget included with City budget • Invests fund balance for streetscape design, Riverwalk Plaza and event coordinator • Considering future bond for streetscape Water & Sewer Overview • Water budget is $2,861,771 or 12% of total • Sewer budget is $7,612,865 or 33% of total • Proposed rate increase is 3.5%, as recommended by rate study • Increase of $3.29 per month or $39.48 per year Water & Sewer Key Points • Complete WWCAP construction • Commission new CWRF plant • Ongoing lead and copper monitoring\remediation • Complete Rate Sufficiency Analysis • Complete DWAM grant • Various capital projects including water main and sewer main work, repaint water towers and wireless infrastructure Marina • Marina operations continue to struggle to generate enough income, but slight improvement in recent years • Revenues dependent on weather, fishing and fuel prices • Reduces support from Capital Improvement fund by $5,000 to $60,000 • Patio improvement expected to be complete by early summer • Experienced marina manager to run day-to-day operations • Remaining old docks to be replaced prior to start of season Boat Launch • Boat launch is self-sustaining • Vulnerable to downturn in fishing conditions & fuel prices • Arthur St. renovation loan paid off in FY 2022 • Replace First St. auto-attendant in a few years • Accumulate reserves\leverage grant to improve Ninth St. Boat Launch • Large parking lot will need resurfacing at some point Oil & Gas Fund • Accumulates the royalties received from City-owned mineral rights • Charter Section 2-1(B) protects the principal and royalties of this fund from being spent without a vote of the people • Aztec has sold to Hound Resources • Accumulated royalties at about $7,630,000 • Value of Portfolio about $13,590,000 (6/2021) • 3.5% spending rule $422,281 - highest yet even with lower % • Compounded annual return since March 2009 of 9.8% Oil & Gas Fund Total $408,000 CV $663,500 RAA $23,200 Streets Streets TIP Streets Proposed Work Streets - Future • Significant investment in Street over last several years has slightly improved condition of streets • Conditions have declined as focus has shifted to Reconstruction w\ Utilities • Not enough money to make progress community wants • Two Options for Future Consideration • Headlee Override • Bond Issue Refuse • Rate increase 4.3% • Rates adjusted annually to offset contracted and service cost increases • Fund reserves previously excessive and drawn down • PFAS at City landfill site poses significant risks and unknowns • Funds some new trash receptacles for Downtown & Parks Refuse Millage • Budget proposes raising millage by 0.5 mills for PFAS • Will generate about $100,000 • Millage can be evaluated annually and adjusted accordingly once the costs and risks associated with the contamination are better understood • Total millage would still be less than two years ago due to rollbacks • 2021 18.9112 • 2023 proposed 18.8944 Motor Pool • Motor pool funds the purchase of equipment and vehicles • Receives rent payments from the general fund and water & sewer Capital Improvement Fund • Revenue is from the Oil & Gas fund • Prior Commitments $243,000 • Current Street Allocation $80,000 • Current Projects $226,000 Capital Improvement Fund Budget Path • 4/5/2022 Budget Introduced • 4/12/2022 Budget Discussion • 4/19/2022 Budget Public Hearing Budget Discussion • 4/26/2022 Optional Budget Discussion • 5/3/2022 Budget Adoption