Alma City presents balanced preliminary FY 2025–26 budget; public hearing set for May 13

City staff presented a preliminary, balanced fiscal year 2025–26 budget to the Alma City Commission and asked commissioners to set a public hearing for May 13, 2025, at 6 p.m.

The budget presentation, led by a city staff member identified in the meeting as Chris, showed total projected revenues and expenses of $6,250,000 and used planning assumptions that include a 3% cost‑of‑living adjustment for nonunion employees, step increases for eligible staff, and a 5.5% increase in fringe‑benefit costs for health and pension. The city manager and staff framed personnel as the largest ongoing pressure: personnel costs account for roughly 68% of the general fund budget, operating expenses about 27% and capital roughly 3.5% in the preliminary proposal.

Why it matters: staff said the city can present a balanced budget this year without using fund‑balance reserves, but rising labor and benefit costs and constrained capital funding will force policy choices. The presentation flagged several near‑term decisions that would affect long‑term capacity: whether to bond for a multi‑year parking‑lot replacement program, how to treat vacant positions, and how to fund capital needs for the library, wastewater lab renovations and municipal roofs.

Key details from the presentation: - The library debt millage will end this year, producing a 0.75 mill reduction to city millage collections when the debt is retired, a change staff described as a “net positive” for taxpayers. The presenter noted the library still faces about $500,000 in needed capital improvements over the next five to six years and currently does not have a formal depreciation set‑aside for future capital. - The general fund includes the assumption of continued, but likely not repeatable, elevated investment income after recent higher interest rates; staff cautioned against relying on similarly high interest earnings going forward. - Staff recommended considering bonding for the parking lot replacement project but warned that a bond payment could consume $180,000–$200,000 a year and would reduce available capital for other projects for 10–15 years. - The budget did not restore any full‑time vacant positions; one planned full‑time fill was cut back to a part‑time position in the preliminary budget to preserve balance. - A cemetery rate study is underway and expected in the spring; staff said cemetery expenses had risen over past years and warranted review of rates and service levels. - Infrastructure projects in the capital plan include continued work on Pine Avenue, upcoming construction on Moyer and Charles avenues, planned lab renovations at the wastewater plant, and bonding discussions for station roof projects (estimated combined preliminary cost around $1.7 million). - Staff reiterated the city’s practice of timing large street projects to match available state and federal funding, and warned that major street projects may require short‑term borrowing within city funds because project spending sometimes precedes receipt of millage or grant proceeds.

Staff also discussed utility rate planning: the five‑year rate plan remains on the table but staff suggested a potential swap of small amounts between water and sewer readiness‑to‑serve charges to position the city better for bonding sewer upgrades if State Revolving Fund (SRF) funding is not available. Staff noted that Alma received some loan forgiveness on water projects but had not received SRF support for the wastewater plant upgrades and therefore may face higher borrowing costs if SRF funding is not obtained.

Transit and other enterprise funds: staff reported decreasing transit ridership and reduced transit revenue after a millage reduction and said department leaders will return with follow‑up explanations. Enterprise funds for water, sewer and refuse showed mostly stable operating trends but highlighted higher maintenance needs at older wastewater facilities.

Next steps: the commission voted to set a public hearing on the proposed FY 2025–26 budget for May 13, 2025, at 6 p.m., and authorized several potential special meetings for additional review if needed (dates discussed during the meeting included April 29, May 10, and May 20). Staff will return with follow‑up materials on transit ridership, the cemetery rate study and bonding options if commissioners request further analysis.

“Right now we’re in a good position,” the presenter said, while urging elected officials to weigh trade‑offs between ongoing personnel costs and one‑time capital needs.

The meeting packet and staff presentation were received into the record by commission vote.