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Alpena staff lay out FY27 budget showing multi‑fund deficits; council adopts proposed water and sewer increases
Summary
City staff presented the FY27 draft budget showing a projected general‑fund shortfall and multiple capital projects; council voted to include proposed utility rate increases — 3% for water and 7% for sewer — to rebuild fund balances and cover maintenance and contract costs.
City finance staff presented the draft fiscal year 2027 budget to Alpena City Council on April 20, 2026, projecting a general fund revenue estimate of about $13.44 million against proposed expenditures of about $14.5 million, leaving a projected deficit in the general fund near $1.86 million. Staff outlined capital projects across funds (streets, water, sewer, equipment, DDA façade grants) totaling several million dollars and noted that fund balances are planned to fall toward the city’s policy floor of 15 percent of operating expenditures.
City Manager Rachel Smolinsky and finance lead Anna reviewed fund‑level details: the sewer fund balance is projected to decline and the water fund includes large ongoing projects (a clear‑well upgrade is near completion). Anna noted the city’s American Rescue Plan funds and other one‑time sources to complete projects that must be spent by year‑end. A public budget hearing was scheduled for May 4, and staff said final adoption is anticipated on May 18.
As part of the budget discussions, City Engineer Steven Schultz recommended a utility rate change to begin rebuilding water and sewer fund balances and cover rising operating costs, including a recent 3.8% increase in the city’s water/sewer operations contract. Schultz recommended an overall 5% combined increase, split as 3% on water and 7% on sewer. He said the proposed changes would raise roughly $2.4 million for water and about $2.3 million for sewer at projected usage levels and that the increases would be phased into the budget.
Council voted to incorporate the proposed water and sewer rate table into the budget (3% water / 7% sewer). Council members and staff said they will continue to review user fees (including marina and cruise line fees) and will return with any necessary clarifications before final adoption. Staff also noted some corrections that will appear in the final budget document (for example, boat launch seasonal fee amounts and small arithmetic edits in fund balance tables). The budget presentation was received and filed for further consideration; the council directed staff to return with amended language for any specific program allocations — including the proposed $5,000 addition to the humane‑society contract to support TNR efforts.
