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Kingsford millage levy to dip

Hearing on Monday

KINGSFORD — Taxpayers would see the millage levy for Kingsford city government drop by 3% under the proposed 2020-21 fiscal year budget.

The decline is due to a reduction in the dedicated millage for public safety pensions.

A hearing on the spending plan will take place during Monday’s city council meeting, set for 6:30 p.m. via Zoom. Instructions are posted at https://cityofkingsford.com/.

The proposed city tax rate is 22.237 mills, or $22.24 per $1,000 of taxable value. The current rate is 22.932 mills, or $22.93 per $1,000 of taxable value. That amounts to a savings of about $31 on a home worth $90,000, with a taxable value of $45,000.

Although the tax rate is down, the council also will consider raising the garbage collection fee by $1 a month to $13. This would be the first increase in the fee since 2012, when it jumped from $6 monthly to $12.

At its May 18 meeting, the council adopted a monthly increase of $5.25 in water and sewer fees, which is expected to generate about $158,000 in additional annual revenues. The garbage fee increase would add about $25,000 yearly.

The proposed tax levy for the fiscal year budget also includes:

— 18 mills for general operating, the same as the current rate.

— 2.632 mills for police and firefighters pensions, a decline of 0.699 mills. The pension millage is based on actuarial calculations and certification by the Police and Firemen’s Pension Board.

— 1.105 mills for the public works facility debt, up by 0.003 mills. This millage is based on an amortization schedule.

— 0.5 mills dedicated for streets, the same as now. This marks the ninth year of the county-wide levy, which in Kingsford will generate about $64,678 for

local needs. Dickinson County voters renewed the millage for another five years in March 2016.

The total of all taxable valuations is $129.4 million, representing an increase of $906,000, or about 0.7%. With its lowered tax rate, city revenues from property taxes will total an estimated $2.876 million, a decline of about $69,000 from this year.

The general fund budget totals $4.25 million, up from $4.11 million a year ago. Part of the increase is a carryover in capital projects from a year ago, suspended for the coronavirus pandemic, including $41,000 in public safety building renovations.

The general fund balance is estimated at $2.1 million, up about $468,000 from what was projected a year ago. To meet spending needs in the upcoming year, $400,000 will be transferred to the capital fund, leaving a projected general fund balance of $1.72 million for June 30, 2021.

Kingsford City Manager Tony Edlebeck said portions of the budget are speculative, due to uncertain state revenues.

“We’re fortunate to have a pretty good fund balance right now,” Edlebeck said. The cushion will especially be needed if state revenues fall flat due to the pandemic, he added.

To that end, the city anticipates $517,050 in state revenue sharing from sales taxes, a decline of about $85,000 from the previous budget, or 14%. That number is “just speculating,” Edlebeck said.

The city plans no new spending for paving, instead dedicating its road budget to maintenance. If state funding comes through higher than expected, or a stimulus is awarded, projects are available and waiting, Edlebeck said.

A Small Urban Program grant has been approved to repave Westwood Avenue from Woodward Avenue to Brookfield Street. That project is scheduled for 2022, although 2021 remains a possibility.

For a third straight year, the city will update its dump truck fleet, replacing an early 1980s model at an estimated cost of $175,000. A basketball court surface is budgeted for Lodal Park at $15,000.

About $45,000 in matching funds would be needed if the city is awarded a Michigan Department of Natural Resources recreation grant to add pickleball courts and new playground equipment at Lodal. The total cost would be $180,000, with the work budgeted for 2021-22.

Kingsford’s water and sewer rates rank among the lowest in the U.P. but more increases will likely be needed.

After the Flint water crisis, Michigan directed communities to replace all lead service lines by 2040. For Kingsford, the cost for removing about 1,480 “gooseneck” connections over the next 20 years could be about $10 million, Edlebeck said.

“We’re looking at a lot of different options,” he said. That includes hiring contractors, exploring methods to potentially reduce costs and developing an overall funding plan.

During next year’s construction season, about 135 lead connections in the Heights area are set to be replaced under a project to update water services lines. The planned work includes street reconstruction and replacing water mains and connections for an area on Wilson, Harrison and Cleveland avenues; Saratoga Street; Bell Court; and Rexford Street.

GEI Consultants of Iron Mountain was hired in March at a price of $179,814 to design and oversee the project, including helping borrow through the Michigan Drinking Water State Revolving Loan Fund.

This year’s water fund budget, which has $1.7 million in reserves, includes $460,000 for a meter replacement program.

The city will need to be flexible on all of its capital spending, Edlebeck said, due to the uncertainty of revenues.

Jim Anderson can be reached at 906-774-3500, ext. 226, or janderson@ironmountaindailynews.com.

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