IRON MOUNTAIN — A public hearing will take place today on an Iron Mountain budget that keeps the tax rate for city government flat but increases sewer and water charges.

Water rates will rise by 3.5% and sewer rates by 5% under the proposed budget. The city council will meet at 6 p.m. today at Iron Mountain City Hall.

For usage of 1,000 cubic feet, or 7,480 gallons, the resulting water and sewer increase on an average bi-monthly bill will be $3.77, City Manager Jordan Stanchina said. The increase includes a $1.30 rise due to an adjustment from the Iron Mountain-Kingsford Wastewater Treatment Plant, he noted.

Garbage collection fees will remain at $10.10 bimonthly, but for those who request an additional cart, the extra fee will be $4 per month, up from the current $1.50.

The proposed general fund budget for the fiscal year beginning July 1 totals $9.38 million, with a projected fund balance of $3.49 million for June 30, 2026. The estimated fund balance as of June 30 of this year is $3.33 million.

General fund expenditures are expected to be 7.47% higher than current year’s budget, but 1.2% lower than the current year’s estimated actual spending, the budget shows. The city’s taxable value has increased by 9%, rising by $26.73 million to reach $323.65 million.

The overall proposed millage rate remains at 21.1421 mills, or $21.14 per $1,000 of taxable value. This includes a general fund millage of 17.4461 mills, a reduction of 0.0017 mills; a police and fire pension millage of 3.3321 mills, which is unchanged; and 0.3639 mills for a school liaison officer, up by 0.0017 mills.

General property tax revenues are projected at $7.31 million for the upcoming fiscal year, compared with $6.74 million for 2024-25. The city anticipates receiving $1.04 million in state revenue sharing, which is similar to the past several years. The amount three years ago was $1.01 million.

The allocation for street paving is set at $844,000. This includes $161,825 generated from the Dickinson County Road Commission’s county-wide paving millage of 0.4994 mills, or 50 cents per $1,000 of taxable value. Additionally, Stanchina said, there is a transfer of $113,054 from the general fund, which hasn’t been done in the past. With major utility work planned, there will be instances when roads may need paving beyond the funding provided.

In 2024, the city was awarded $4.5 million through the Michigan Department of Environment, Great Lakes, and Energy to replace about 400 water service lines containing lead. That project, which began last year, is 49% funded by a grant and 51% by a low-interest loan.

This year, the city was awarded an additional $13.3 million EGLE project consisting of a $2.66 million grant and a 2% loan for the remaining amount. The work includes 2.52 miles of full street reconstruction, along with the underground utilities and replacement of about 426 lead service lines, Stanchina said.

Once the project is bid, there will be better understanding of the city’s cost and the rate structure needed to finance it, he said.

The total cost of health insurance charged to the general fund, before taking into account employee and retiree contributions, is $1.66 million. That’s a decline of about $50,500, as insurance rates are down 2.59%.

Beginning in 2009, the city took steps to eliminate retiree health insurance as a benefit, but the obligation remains substantial. An actuarial study estimated the city’s total overall liability for retiree health at $35.5 million as of June 30, 2024.

The city is now exploring an opportunity to switch from Medicare supplemental plans to Medicare Advantage plans, which might greatly lower the cost of health insurance for retirees, Stanchina said. Health insurance costs for retirees make up 11.56% of general fund expenditures.

Active employees will contribute an estimated $66,186 to insurance costs through payroll deductions in the next fiscal year, while retirees contribute an estimated $71,056 through pension deductions.