MONTAGUE — The Montague City Council met Monday for a budget work session in advance of a potential approval of the 2026-27 fiscal year budget, which will be part of the June 15 meeting agenda.
Five of the seven council members were on hand; Paul Schultz and Lisa Kiel were absent. However, as the budget was the only matter being discussed, no formal votes were taken on any topic.
The proposed budget, which City Manager Jeff Auch presented to the council, would keep the city's millage rate at 15.75 mills, the same as in 2025-26. Auch said the millage rate has steadily decreased over the past several years - last year, it went down from 16 the year before - and the city is around where it needs to be in order to pay for its annual projects. Auch said these decreases have moved Montague from the second-highest millage rate among the seven cities in Muskegon County down to fourth-highest. Council member Susan Newhof expressed appreciation to Auch for not only helping facilitate those decreases but for clearly outlining what the city's tax money funds.
The originally approved city millage rate of 20 mills has steadily been rolled back due to the Headlee amendment anyway, and even if the city wanted to levy all 20, Headlee rollbacks would limit what it would collect to 16.189 mills, Auch added. The Headlee amendment prevents property tax rates from outpacing inflation.
Part of the reason the city has been able to lower the millage rate over time is that there is only one long-term debt obligation the city is holding, though Auch wryly noted that "it's a big one" - the water fund. The original debt of $2.8 million, established in 2017 to pay for major projects, has actually increased the past several years due to interest, but continues to have a maturity date of 2057, as it did when it was first enacted.
The city has aimed to maintain a fund reserve of about $1 million, Auch said, which is higher than the city requires but offers an easy round number to pursue. The city has a $1.3 million fund reserve as of the end of this fiscal year, with a little more than half of that being readily available cash while the remainder is in various investments to gain interest.
Montague is projecting an increase in state revenue for this year due to an increase in grant money, to about $637,000. Grants are coming in from the state Department of Natural Resources - this includes $400,000 for the first phase of the city's planned improvements to Cullen Fields - and Department of Transportation.
The budget as presented by Auch calls for Montague to replace 40 more water service lines, which would push the city even further ahead of schedule in its state-mandated replacement plan of lines that due to their age may potentially include lead; the city was recommended to replace 23 such lines.
Other planned projects for this year include road replacements on Dicey and Knudsen streets, a crush-and-reshape for portions of the city's bike trail that have been repeatedly opening up, renovations at the police department (budgeted for $120,000, but Auch said they will likely come in under that), and potentially a full repair of the ductile flex pipe outside Shelby State Bank if it continues to give the city trouble. Engineers will also be keeping an eye on the culvert on Old Channel Trail after it overflowed in April due to heavy rainfall. The culvert remains in good shape, Auch said, but engineers want to take a look at it to ensure it will hold up in the event of another heavy rainfall.
Among the requests made by city agencies are from the Department of Public Works to increase staffing. The DPW cited that three of its employees are on course to retire within the next five years and it would like to train a new employee to prepare for that, as well as to help with upcoming projects. The boat launch made a request for funding for brick painting, though Auch said due to recent expenditures there that will be pushed out another year.
