Traverse City Record-Eagle

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April 29, 2014

Storm sewers flush tax rebate

TRAVERSE CITY — Looming concerns over Traverse City’s storm sewer system helped wash away hopes for a property tax rebate.

Mayor Michael Estes’ suggestion of using the city’s over-stuffed fund balance to give property owners a one-time rebate met some opposing voices and no vocal support during a Monday budget discussion. Estes instead suggested the city set aside $280,000 for future storm water infrastructure improvements.

“If we can fund some of it out of the general fund without a tax increase to our residents we should consider it,” Estes said.

The city recently received a $2 million asset management grant to map and film the condition of the sanitary and storm sewer systems. City manager Jered Ottenwess included $80,000 in the budget to hire a geographic information systems administrator to work on the mapping for the study and other city projects.

Commissioner Barbara Budros used the hiring to raise questions about what comes after the study, which likely will expose a need for large and expensive corrections.

“How are we going to implement an asset management study if we have no money?” Budros said. “We are going to have an employee, but no money.”

Sewer and water lines have a source of funding through user rates. Ottenwess called storm sewers “orphans” that are often neglected because they lack a funding source.

Commissioners agreed to set aside $250,000 from their fund balance to address future storm water issues but failed to agree philosophically on a fund balance target.

The city is expected to finish the current fiscal year on June 30 with a more than $4 million balance in its general fund, almost 28 percent of general fund expenditures. The city’s goal historically was to reduce the fund balance to 25 percent, or about $3.7 million.

But Estes and Commissioner Gary Howe proposed a reduction to 20 percent, or about $3 million.

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