Petoskey council reviews Downtown Management Board budget, sets transient merchant fee and agrees to clean up solicitation rules

Petoskey — City Council held a public hearing on the Downtown Management Board’s proposed 2026 programs and services budget and later approved two related resolutions: one to proceed with the proposed assessment district and another setting an annual transient merchant license fee at $100. The council also discussed local rules on door‑to‑door solicitation and municipal restrictions on handbills and asked staff and the city attorney to amend or remove provisions that may be unconstitutional.

The public hearing and budget

Amy Tweeden, Downtown Management Board director, presented the DMB proposed programs and services budget for 2026. The board proposed total revenues of $214,721, reflecting a 2.6% increase in the special assessment levy that would add roughly $3,175 in assessment revenue. The proposed budget uses $35,945 of prior fund balance; staff projected a year‑end DMB fund balance of about $189,000 at the close of 2025.

Tweeden described program line items: marketing ($44,700), events ($72,005) and administration (salaries/overhead) at $91,821. She said beautification expenditures were proposed to move to the parking fund and the board proposes to reduce some event and economic enhancement spending. The proposed first‑floor assessment rate in the packet was 22.19 cents per square foot; the board also provided examples of what the assessment change would mean for a 1,500‑square‑foot ground‑floor business.

Councilmembers asked about the fund balance history and transfers; Tweeden and staff said the fund balance rose after COVID as events were curtailed and staffing shifted. No members of the public provided comments during the hearing, and the council closed the public hearing.

Assessment district and fee actions

Council approved by roll call a resolution to establish the programs and services assessment district and to prepare an assessment. The motion passed 5–0.

Later in the meeting the council considered the new transient merchant ordinance (recently amended by council) and a proposed fee schedule. The clerk compiled fee comparisons with other Michigan cities; survey examples included Cadillac ($100 initial, $50 annual), Holland ($50/day), Charlevoix (season $255) and Traverse City (various summer rates). Council voted 5–0 to adopt a $100 annual transient merchant license fee.

Solicitation, handbills and next steps

The city attorney and outside counsel provided legal guidance that local governments may not impose permit or fee requirements on political, religious or other constitutionally protected canvassing; they advised the council that some existing local restrictions (for example an evening/time restriction on distribution of handbills) are likely unconstitutional and should be removed or revised. Council direction was to:

- Remove the ad hoc door‑to‑door application that staff said exists administratively but lacked ordinance backing; staff will discontinue that form. - Instruct staff and the city attorney to amend Chapter 3 provisions that prohibit distribution of handbills after 6 p.m. and on holidays, because counsel advised those time restrictions are likely vulnerable to First Amendment challenge. - Consider a “do not knock / do not solicit” registry and monitor whether future enforcement mechanisms or an ordinance are needed; councilmembers expressed mixed views and ultimately directed staff to monitor and report back rather than to adopt a new local permit regime immediately.

Votes at a glance

- Resolution to establish the Downtown Management Board assessment district (prepare assessments): approved 5–0. - Resolution setting the transient merchant fee schedule at $100 annual: approved 5–0.

What was not changed

Council did not adopt a new do‑not‑knock ordinance at this meeting. Members signaled reluctance to regulate solicitation broadly and instead asked staff to clean up outdated or constitutionally vulnerable language and to report back if door‑to‑door activity becomes a persistent enforcement issue.

Context and public interest

Council members and the Downtown Management Board emphasized the role of DMB events and marketing in downtown economic activity and the need to balance program funding with a healthy fund balance. The board’s proposed use of fund balance for some 2026 programming drew questions about the sustainability of using reserves rather than raising assessment revenue further. Members also asked the clerk and city attorney to research whether vacant properties should be assessed differently in the future; staff agreed to research the legal and procedural constraints for changes that would take effect prospectively.