Bay City presents final 2026–27 budget with street projects and ARPA largely spent down

Bay City staff presented the final segment of the proposed 2026–27 budget at the June 1 commission meeting, laying out capital projects, intergovernmental revenues and program-level changes the commission will consider for adoption on June 15.

Mr. Martini, who delivered the presentation, said the major streets fund includes transfers of about $400,000 from CDBG, roughly $50,000 from a health care distribution and $47,000 from the Marquette TIF. He said the city plans $1,478,000 in fund-balance use in the major streets fund and listed key capital items: Earth Street reconstruction ($90,000), the state-reimbursed North Union project ($400,000), Henry Street ($1.5 million) and Smith Street ($1,219,000). "This presentation will cover all other funds besides the utility funds, as well as the general fund," Martini told commissioners.

Commissioners pressed staff to make reimbursements and transfers more visible in department-level pages after questions about bridge reimbursements. Martini said much of the Independence Bridge budget is reimbursed by Bay City Bridge Partners, but that fringe benefits and some maintenance costs are not eligible for reimbursement; commissioners were told approximately 80–85% of the bridge budget is reimbursed by partners.

The presenter reported that American Rescue Plan Act (ARPA) allocations previously used for roads, lead-line replacement and sewer projects are nearly exhausted, leaving roughly a little over $3 million in remaining ARPA funds. Several line items that were ARPA-dependent have declined accordingly.

On community-development financing, the city is collecting about $3 million annually from the Uptown Brownfield tax capture; Martini said this produces more revenue than required debt service and that the Uptown bonds are scheduled to be paid off in 2043. A local site remediation revolving fund is also generating revenue — including an EPA grant and developer payments — to support small remediation loans.

Sanitation fund adjustments were a prominent point in the presentation. Rather than a single $3 monthly increase, staff proposed smoothing the increase over three years to avoid a steep first-year jump: $2.00 per month in FY27, $2.28 in FY28 and $1.53 in FY29. Martini characterized the approach as preserving service levels while moderating rate shock.

The presentation also reviewed smaller funds and programs — cemetery endowment transfers, Community Development Block Grant (CDBG) cuts (about a 25% reduction), airport capital work and ongoing middle-grounds remediation required by a state consent decree. The presenter said remediation costs are shared among the city, the sanitation fund and Honeywell under existing arrangements.

The commission did not adopt the budget on June 1; Mr. Martini said figures reflected requested changes and will appear in the formal adoption documents on June 15. The budget amendments asked on this agenda were approved later in the meeting.