The Charlotte City Council adopted its 2019-20 operating budget Monday, June 10. However, there is still much work to be done on capital improvements, such as streets and water and sewer infrastructure in what City Manager Gregg Guetschow said is a pretty bare-bones budget.
Council will resume discussions June 24 on a proposed 22 percent increase to the city’s water and sewer rates. Discussions were tabled June 10 in order for Guetschow and DPW Director Amy Gilson to provide council with potential alternatives to the increase, including phasing an increase in over a two-year period.
“The biggest investments we are going to be making, besides streets, are in the utilities area,” Guetschow said. “We need to spend about $1 million per year on infrastructure. That goes along with reconstructing our streets. For example, reconstructing Lovett Street, there’s 1885 water main under there that has to be replaced. There are asset management plans, to make sure we keep our facilities up.”
Guetschow said the city has done a good job in managing its assets, but is being forced to be more formal in its planning efforts for water and sewer asset management by state regulations. Mandates from the Michigan Department of Environmental Quality make up nearly 20 percent of the utilities budget.
“We’ve been warning that it’s time to look at an adjustment to the utility rates,” he said. “We’ve proposed a 22 percent increase, which would result in about a $10 per month increase to the average user.”
Councilmembers will likely finalize a rate increase at its first meeting in July. Any increased rates will not be reflected on water bills until October at the earliest, Guetschow said. The council last approved a rate increase in 2015.
“We want to provide the best solution that is both fiscally responsible and politically palatable,” Guetschow said.
Streets are another big concern for community members, and the adopted budget includes more than $1 million for reconstruction and rehabilitation projects. However, Guetschow said the city needs to look at creative ways to generate revenue to tackle the city’s poor streets, which is an estimated $50-to-$75 million problem.
“We can’t cut our way to get these streets done,” said City of Charlotte Mayor Tim Lewis. “We’re not growing at a rate where growth is going to be the answer in terms of streets. We’re going to take a really serious look at what the options are. Just saying ‘if you cut the budget more we’re going to get ourselves out of this.’ It’s just not going to happen.”
Guetschow said there aren’t many places, if any left to cut.
“There are some areas we do need to and are going to be spending a considerable amount of time on, our costs for pensions and health insurance are higher than are sustainable in the long run,” Guetschow said. “We have some of those areas, but they’re not going to be enough to fund a truly aggressive street reconstruction program. The dollars just aren’t there.”
Lewis said he is confident in city leadership that solutions will be found.
“We have a combined total of 175 years of experience in all of our departments,” Lewis said. “These are highly professional people, who when sitting down with the budget, it’s very clear to them that the council is very interested in maximizing the tax dollars, and they are in agreement with that.”
The council’s June 24 meeting begins at 7 p.m. in council’s chambers, located on the second floor of City Hall. The 2019-20 budget can be found on the city’s website, charlottemi.org.