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Garden City council reviews budget pressures as health care and water costs rise
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Summary
City officials told the council that rising health insurance costs (about a 30% jump) and higher wholesale water rates are top drivers in the FY 2627 budget, while departmental presentations highlighted grant-funded lead-line replacement, a $1 million annual water-main CIP, and a Radcliffe Center operating turnaround. Council approved the meeting agenda 4–0; the draft budget will be prepared for consideration at the next regular meeting.
Garden City’s city council heard department-led budget presentations on March 16, 2026, as staff outlined major cost pressures and proposed steps to hold services steady for residents. Treasurer Shannon Shepherd said higher health-insurance costs and wholesale water-rate increases are the primary budget drivers, and department heads described grant-funded infrastructure work and program growth that will shape the FY 2627 draft budget.
Shepherd told the council that property-tax growth is limited by the Headlee Amendment and that state-shared revenue forecasts are down modestly. “The main drivers are the health insurance cost increase, the water rate increases, decreases in state-shared revenue, the Headlee limitation on property tax growth, and declining interest rates,” Shepherd said, adding the city is taking a conservative investment approach to preserve liquidity.
Shepherd and City Manager Gibbons said the city is budgeting for roughly a 30% increase in health-insurance costs, about $1.2 million, and is building that into the next fiscal year to avoid gaps in service. On water costs, staff explained Great Lakes Water Authority increases have pushed wholesale charges higher; the city plans to smooth changes for residents by applying an annual 5% commodity-rate increase rather than matching each wholesale spike.
Clerk Smith outlined election-related responsibilities and contingency plans tied to the statewide voting-equipment contracts that expire in February 2027. Smith said Garden City expects equipment upgrade estimates of about $15,000 per precinct and is planning staffing for the August primary and November general elections by engaging two experienced, part-time former clerk staffers to support election operations. “When it comes to elections, it’s all hands on deck,” Smith said, urging the council to protect election infrastructure in the budget.
Public-works Supervisor Brad Oman described capital and operational needs for water and sewer service, including a proposed $1,000,000 annual allocation for water-main replacements in the CIP. Oman said the city has replaced nearly 400 lead service lines since 2019 and currently lists 264 known lead lines and 354 services of unknown material. He noted recent grants from EGLE and HUD that fund replacement work and said the goal is to complete remaining replacements within roughly two years, with work paid by awarded grants.
Parks and Recreation Director Zach King reported program growth and a notable operational turnaround at the Radcliffe Center: staff reported the center was approximately $20,000 net positive as of March 15, driven by increased rentals and program registrations. King said the department plans to expand youth programming (including a My LEAP–funded summer camp) and consider modest capital and operational investments—such as outfitting the Radcliffe kitchen—to support continued revenue growth while keeping services affordable.
Family Resource Center Director Sean Hahn summarized the center’s grant and fee-for-service revenue streams (including a Wayne County YAP contract) and said the center can bill up to $250,000 on some contracts; he also noted recent service referrals from neighboring jurisdictions. City Manager Gibbons and staff highlighted community-development work administered through the DDA, online permitting increases, and use of state and federal grants (MSHDA, EGLE, Brownfield tax credits) to support downtown projects and ADA improvements.
Council took one formal action at the start of the meeting—approving the March 16 agenda by voice vote, recorded as 4–0 in favor. No final votes on the FY 2627 budget were taken; staff said the goal is to deliver a draft budget for council consideration at the next regular meeting and for deliberation over the coming month.
What’s next: staff will prepare the draft FY 2627 budget for council review at the next regular meeting. Departments will continue to refine CIP priorities, pursue grant opportunities for infrastructure and program support, and provide more detailed cost and revenue breakdowns for items council requests.
