HART - Hart City Council approved two deficit elimination plans, another five-year internet service agreement and two “street add” certifications at their regular meeting March 10.
City Manager Nichole Kleiner brought two resolutions to the council asking for approval regarding deficit elimination plans for both John Gurney Park (JGP) and the city’s Sewer Fund. Local units of government are required to file a Deficit Elimination Plan with the state when a deficit exists, Kleiner explained.
“You can continue to have a deficit as long as your five-year plan shows how you’ll get out of it,” Kleiner began.
With regards to the JGP fund, Kleiner admitted she inherited the FY25-26 budget and wasn’t anticipating the $175,842 deficit carried over from FY24-25. “I’ve scoured over this the best I could, and the solution I find best is to take $175,000 from the separate savings account we had established for JGP back when we used a management company.”
Currently this savings account has approximately $454,000 invested.
Kleiner went on to explain that the deficit seems to be a combination of low site occupancy and overages in several expense accounts within the JGP fund, namely operating supplies, professional services and contractual services.
“I’m going to set the goal high (occupancy) for our superintendent so that by FY27-28 we will be at 38 percent occupancy and bringing in $300,000, that should help keep us in the clear,” added Kleiner. “I don’t know if our occupancy or accounting tracking was off or what, but I can assure you starting this year, this season, we’ll be having different measures in place, ways to track what’s going on.”
Kleiner said she believes with these amendments, the fund should be back in the black, with a balance of $23,708 for FY25-26 (July 1, 2025-June 30, 2026).
As far as the city’s Sewer Fund, beginning in FY25-26 the balance stood at -$7,551. The city is currently in year two of its 11 percent increase. In FY26-27 through FY29-30, metered sales revenue will increase six percent year-over-year.
Other anticipated income includes lab testing revenue, which is projected to double. “Not only are more tests being required, but the price increase of testing will help us better balance our expenses,” Kleiner said.
On the expense side, sludge removal will be reduced by over 70 percent. “That’s a fun story I’ll let Paul Cutter tell,” Kleiner added.
Depreciation needed to be increased with the added upgrades, but electricity will be reduced by 25 percent due to those same infrastructure upgrades. The city’s loan repayment to the State Revolving Fund was $100,000 this fiscal year and will increase to $220,000 for the next 30 years.
“I’m so happy we did this projection. I was feeling a little nervous about how it would impact the budget. Even though we will have to absorb the $7,500 deficit this year and end up with a deficit next year and the year after, then you start to see us climb out of it, which is really awesome. That facility is set to run fantastically for 99 years. We’re in a wonderful position at this facility,” Kleiner concluded.
Next, the city approved a five-year service agreement with Merit Network, Inc. at an annual cost of $7,950, which is reduced from the city’s current annual cost of $15,390. This agreement not only reduces overall costs, but increases their available bandwidth. Previously, the city received internet service through a shared agreement with the Oceana County building. With this renewal, the City of Hart will have its own account, which will provide greater control over what internet services they need and use.
Two street add certification approvals officially place US-31 BR/State Street, from US-31/Polk Road to Johnson Street, and Comfort Drive, from US-31 BR/Polk Road to the end of the cul-de-sac, within the city’s street system for the purpose of obtaining funds under Act 51. Both sections are classified as public streets and for public street uses.
Under discussion items, Kleiner presented more information related to the increased cost projected for BS&A’s moving to all cloud-based access. BS&A is a software used by municipalities across the state to streamline financial management, human resources and community development. Currently the city pays $7,700 for a “.Net” system. With the required switch to BS&A Cloud, the city’s anticipated cost would be $25,580. Undoubtedly, this conversion has municipalities across the state “up in arms." Kleiner reported she is currently working with the Michigan Department of Treasury to determine if funding assistance may be available to cover at least part of that increase.
Kleiner also announced the Hart TIFA (Tax Increment Finance Authority) was scheduled to meet the following day, March 11 (but was canceled due to weather, with a reschedule date to be announced), to narrow down four Ceres Solutions property proposals to just two candidates. Kleiner hopes to have finalized TIFA’s recommendation and be ready to award the contract by the council’s March 24 meeting.
“In looking at the proposals that came through, it’s very exciting to see proposals that really meet our original goals - and I think will definitely hit all of our various public forums and public meetings and work with the engineering group… All that effort is finally beginning to pay off… I’m very excited to see what comes out of this,” council member An0drew Mullen shared.
“I’m very happy with the response that we got and the fact that we waited… this is going to change the landscape of that part of the city,” Mayor Amanda Klotz said.
