Alpena presents FY2026 budget showing multi‑year deficits; council approves several capital items and a $50,000 cemetery fund withdrawal

Finance Director Anna Sork presented the city of Alpena’s proposed fiscal year 2026 budget at the May 5 council meeting, showing projected general fund deficits for two consecutive years and a falling fund balance that will require policy or revenue adjustments in coming years.

Sork told the council the general fund is projecting revenues of about $13.8 million and expenditures of about $14.8 million for fiscal 2026, producing a planned draw from fund balance of approximately $992,978. The presentation showed a general fund unassigned balance of about $4.8 million at June 30, 2024, projected to fall to about $2.9 million by June 30, 2026 (roughly a 16–17% unassigned balance, compared with a policy minimum of 10% and a maximum of 20%).

Council received and filed the budget presentation by motion. During the presentation staff emphasized steps under way to limit the decline in reserves and noted several significant capital projects funded by a mix of grants and local dollars.

Major capital items discussed included a planned water production plant clearwell replacement (project cost cited at roughly $5.42 million for the water fund portion), reconstruction projects (Taylor Street, Third Avenue), and equipment purchases and outfitting (plow truck outfitting and loader replacement). The presentation listed total projects over $50,000 at about $12.3 million across funds; staff noted many projects leverage grant funding.

Council took three discrete fiscal actions during the meeting:

- The council approved a motion to withdraw $50,000 from the City's Evergreen Cemetery Perpetual Lot Care Fund, invested with the Community Foundation of Northeast Michigan. Finance staff said the withdrawal uses available investment earnings — the corpus is non‑spendable — and that proceeds will be deposited to the city account to offset cemetery maintenance costs.

- The council approved a one‑year renewal contract for residential bagged lawn and leaf curbside pickup with A1 Tree Service through Dec. 31, 2025. Staff said the city is phasing a requirement for compostable lawn‑waste bags in 2026 and encouraged residents to begin using compostable bags this season.

- The council awarded the Culligan Plaza reconstruction project to MacArthur Construction (Hillman, Mich.) for the base bid and approved alternate 1 pending Michigan Economic Development Corporation approval of contractor and subcontractors; the reported base bid plus alternate will fund plaza reconstruction, a new public restroom, and plaza amenities.

Council also discussed marina fuel supply and bids. Staff recommended awarding a fixed annual price contract to Blarney Castle so marina pricing would be stable through the boating season; staff noted Crystal Flash submitted a lower non‑fixed (market‑based) bid but that daily price volatility complicates revenue tracking and pump pricing. A motion to accept a fixed annual price from Blarney Castle was made and seconded, but the record does not show a completed vote at the May 5 meeting.

Sork reminded the council that a public hearing on the budget is scheduled for the next meeting (May 19) and that adoption is expected at the first June meeting, leaving time for additional adjustments. Staff also noted water and sewer rate proposals will be presented at an upcoming meeting.

Council members asked staff to continue work on balancing measures, confirm grant awards, and finalize water/sewer rate proposals before adoption of the final budget.