Traverse City budget study session weighs rates, downtown spending, staffing

Traverse City residents could see their monthly bills, downtown projects and city staffing all shift at once as commissioners reviewed a package that includes an electric rate request, $11.7 million in downtown spending and the city’s 2026-2027 budget.

The study session moved the budget into the final stretch before a public hearing scheduled for Monday, May 19. City manager Benjamin Marentette presented the spending plan as the first built around the city’s strategic action plan, tying together six pillars that include strengthening placemaking, supporting environmental sustainability and building a thriving year-round economy. Commissioners could approve the budget as soon as the May 18 regular meeting, but the city has until June 2 to make it official.

The proposal reaches far beyond one department. The city budget, the Traverse City Light & Power budget and the Traverse City Downtown Development Authority budget are all part of the same 2026-2027 cycle, even though they remain separate documents. That matters because electric rates affect households and businesses directly, while downtown spending helps determine what gets built, repaired or redesigned in the city center. The DDA is a component unit of the city, governed by an appointed 12-member board, and both its budget and large public infrastructure projects must be approved by the DDA board and the Traverse City City Commission.

Staffing and reserves are under just as much pressure as bricks and wires. The proposed budget puts personnel costs at about $30.5 million across all funds, with no new positions recommended. Some jobs were reallocated to better match operational needs, a sign that city leaders are trying to protect service levels without expanding payroll.

The budget also leans on fund balance in targeted ways, including a $1.2 million pension contribution required for state compliance and a $500,000 transfer to the city’s budget stabilization fund. An ad hoc committee is expected to meet in September to examine fund balance policy, long-term financial trends and pension obligations, a move that underscores how closely this year’s decisions are tied to the next several years of city finances.