Ludington 2019 budget includes 5.5% increase in revenue.

November 26, 2018

Ludington 2019 budget includes 5.5% increase in revenue.


By Rob Alway, Editor-in-Chief.

LUDINGTON — The City of Ludington is expecting to see an increase in general fund revenues in 2019. City Council is expected to go over the 2019 budget when it meets Monday, Nov. 26 in regular session. Interim City Manager Steve Brock stated, in a pre-meeting memo, that the proposed 2019 budget reflects a $359,000 increase, or 5.5%, in general fund revenues from 2018. Tax revenue is projected to increase by $168,700 and building permit revenue is projected to increase by $5,400. Total intergovernmental revenues are projected to increase by $18,700, which comes from state revenue sharing and grant funds. Total refunds and reimbursements will increase by $49,000.

“The three year outlook for revenues in the general fund is trending upward,” Brock wrote. “We are projecting that total tax revenue, which is the general fund’s largest revenue source, will rise by $168,700 or 4.1 percent from 2018 to 2019. The increase in tax revenue for 2019 is mostly due to the increase in the city’s (state equalized value) and taxable values and new development.

“While we continue with the tradition of reviewing a three year plan, my focus is on 2019, as much could change over the next three years,” Brock wrote. “The main emphasis of these budgets for 2019 is investment in both human resources and physical infrastructure. Most of the line items in these budgets are usual year-to-year expenditures for normal operations. The department/division heads do a great job developing and implementing fiscally responsible budgets.

Brock outlined the budget’s objectives:

– Maintain a 25% fund balance in the general fund.

– Continue allocating funds for the repaving of local streets and major roads.

“It should be emphasized that the city will be receiving more revenue as a result of the increase in state gas tax revenue,” Brock wrote. “However, the increased revenue is still not sufficient to repave many local streets. It is barely sufficient to patch potholes and plow the snow. In order to repave any local roads, the major street fund must contribute to the local street fund.”

– Upgrade the water and sewer systems infrastructure in order to maintain compliance with the Michigan Department of Environmental Quality’s requirements.

“It is important to note that these two systems are funded through rates and not tax dollars. In order to avoid enforcement action and possible significant fines, the city entered into an Administrative Consent Order (ACO) with the MDEQ to address certain reliability issues at the water treatment plant and water distribution system. The plant ACO has been satisfied and investment in water distribution system will continue as established in the Asset Management Program required by the DEQ through the ACO.

“With respect to the sewer system, the MDEQ required outfall pipe relocation at the (Pere Marquette River) is complete.

“Two projects remain: De-sludging the lagoons for the first time in 40 years and upgrading the entire plant to modern standards. This project is expected to start in the winter of 2018/2019 and take 18 to 24 months to complete. It is estimated that the total project cost is $17 million (bids have yet to be received) which will be financed with low interest loans from (U.S. Department of Agriculture Rural Development). In addition the city has received a SAW grant (no local match) to pay for $888,330 in design engineering expenses for the project. There will also be an Asset Management Plan developed for this system as part of an ACO from the MDEQ.”

In summary, Brock said the general fund finances the personnel and operations of city hall, the police department, fire department, much of the Department of Public Works, a portion of the recreation department, sidewalk replacement and repairs, beach maintenance, beach patrol, city council, elections, city attorney, streetlights, some of downtown maintenance expenses, the cemetery, parks, and various functions.

A public hearing on the budget is scheduled for Dec. 10. at 6:30 p.m.

City Council meets at 6:30 p.m. at the municipal building, 400 S. Harrison St.

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