Council reviews streets budget, moves road preservation money to planned projects and discusses trail funding

City council members and city administration at a budget workshop on Feb. 1 reviewed proposed changes to the streets budgets, including shifting money from the road preservation reserve into specific construction projects, confirming a Transportation Improvement Program (TIP) grant for the Iron Bell Trail and discussing whether state marijuana excise tax revenue should be used to support the city’s 50/50 special-assessment road-repair match program.

The discussion matters because the council’s decisions will determine which road projects move forward this year and how limited local funds are allocated. Administration staff said the draft budget reassigns about $3.4 million of the road preservation account into two identified construction projects and leaves a reduced preservation balance on paper until final estimates are posted.

Administration staff said, “When we developed the proposed budget, we did not have the estimate in yet, so I placeholed $500,000 there, and then I put 1.5 for Genesee. Now we have the estimates, and I'll be moving the money from that road preservation of 5,300,000.0 into those line items,” and listed project estimates that administration had just received. The projects named in the workshop and the figures discussed were: placeholders of $65,000 each for two preliminary items (Genesee Road Court to Davidson and Belsey Road, Lapeer to I‑69); Covert (Davison to city limits) estimated at $1,200,000; and Genesee (Atherton to Court) estimated at $3,200,000. Administration said the road preservation line shown in the draft budget at $5,300,000 would be reduced to about $2,900,000 on the final budget book after those moves.

Council members also asked detailed questions about the Iron Bell Trail (TIP-funded). Administration said the city’s TIP award covers 80% of construction costs, and the city is responsible for its share of design and right-of-way work; administration said, “It’s a paved pathway. So it’s gonna be asphalt.” The planned Iron Bell Trail segment discussed would run from Maple to Hemphill and use the recently acquired Southmore property for part of the alignment. Administration noted the city committed to the TIP application in the 2023–2026 cycle and expects construction in the 2026 program window.

Council members pressed administration on the condition of certain local roads (for example, Term Street between the cut and After 10) and on how the city will maintain new paved trail segments. Administration said ongoing maintenance of paved trails would be the city’s responsibility because the trail will be within city park property; construction funds cover the trail itself and related storm-sewer work or property impacts needed to build the path.

The workshop also included a detailed discussion of special-assessment repayments and the 50/50 road-match program. Administration reported the road-repayment line in the draft budget showed $565,823 but that after applying a recently approved Harmony/Melody special assessment the visible balance would decline to roughly $191 (administration used the working numbers shown in the draft). Administration explained that repayments of special assessments reduce a liability on the city’s balance sheet rather than appear as discrete revenue in monthly operating reports: “As the payments are collected throughout the year, I do a transaction once at the end of the fiscal year for what was collected, both principal and interest, and then pay down that liability.”

Council members asked about the city’s marijuana excise tax revenue, which administration estimated at $590,000 for the year. Administration said that excise tax receipts are currently rolled into the general fund and not earmarked for the 50/50 road-match program. Members discussed whether to direct some or all of that marijuana revenue to replenish the 50/50 match fund if demand returns; no formal direction or allocation was made during the workshop. Administration said the council would need to decide in the future whether to dedicate marijuana revenues to that purpose.

Other budget-level changes discussed included modest operating adjustments: increased estimates for pavement marking, reductions in some traffic-control materials lines, and an overall 11% reduction in operating expenditures in the presented draft for the streets division. Administration also noted a projected PCB settlement payment of about $5,000 with no planned expenditures against that fund.

No formal votes or ordinance adoptions occurred in the workshop segment of the meeting; multiple council members asked for clarifications and flagged items for future action. Administration said the draft budget figures would be updated in the final budget book, including correcting temporary negative balances that appear while construction estimates are refined. Councilmembers indicated they expect to revisit funding allocations, including whether to direct marijuana excise revenue toward the 50/50 special-assessment matching program if requests increase.

The council concluded the budget workshop portion after addressing questions about maintenance responsibilities, the accounting treatment of special assessments and the schedule for TIP-funded trail work. The administration identified forthcoming steps: finalize project estimates, adjust the draft budget in the final book, and return to council for further direction on any earmarking of marijuana excise receipts or changes to the 50/50 match policy.