Traverse City budget proposal tied to strategic plan, faces facility shortfalls

Traverse City’s proposed fiscal year 2026-2027 budget put the city’s hardest tradeoffs on display: about $30.5 million in personnel costs and tens of millions more in unmet facility needs that could shape staffing, repairs and delayed projects across town.

City Manager Benjamin Marentette presented the spending plan to the Traverse City City Commission as the city tried to balance daily operations with a large backlog of buildings and infrastructure. The draft capital improvement plan posted with the budget covered fiscal years 2026/27 through 2031/32 and outlined a six-year, $119 million investment strategy for infrastructure improvements, public facilities and community development projects.

The proposal also showed how closely city budgeting had become tied to the Strategic Action Plan adopted unanimously on June 2, 2025. That planning effort lasted nine months, drew more than 1,500 community members, included nine engagement sessions in January and February 2025, and used a survey with nearly 1,200 verified participants. The city said the plan was meant to guide programs and investments through 2030, while the new Objectives and Key Results framework was designed to turn those priorities into measurable outcomes that shape policymaking, budget decisions and cross-department work plans.

That link between public priorities and spending matters because the city was already under pressure. In February, commissioners were told Traverse City faced rising wages, health insurance costs, pension debt and more than $7 million in upcoming capital projects. The city’s unassigned fund balance stood at $8.79 million, or 33.5 percent of expenditures, above the city’s 15 percent to 20 percent policy range. At the same time, the pension system was reported to be 55.2 percent funded, below the state minimum requirement of 60 percent, and commissioners were weighing whether to suspend the fund balance policy to create more flexibility.

For residents, the practical stakes are straightforward. The budget will help decide which services stay staffed, which facilities get repaired and which projects are pushed back. The city’s 2025-26 budget, adopted June 2, 2025, already authorized up to $42 million in bonds for wastewater treatment plant repairs, a sign that Traverse City was trying to fund major infrastructure while keeping operating costs aligned with its strategic priorities. With Marentette now steering the next budget, the debate will test whether the city’s most important promises can be matched by the dollars available.