City Works on Fund Balance, Zoning Approvals, Fall Maintenance

Traverse City commissioners are working to update the city’s fund balance policy, which will outline how excess funds can best be used. In other city news, city commissioners relaxed zoning rules to make it easier for child care centers to operate, planning commissioners supported plans for a new Nicolet National Bank on Front Street, and staff are gearing up for annual fall leaf and tree maintenance.

Fund Balance
An unassigned fund balance of nearly $9 million earlier this year prompted commissioners to form an ad hoc committee to review the city’s fund balance policy and create a strategy for spending it down when it climbs too high.

The fund balance is essentially the city’s financial reserves or “savings account,” according to City Treasurer/Finance Director Heidi Scheppe. Municipalities typically have a policy on how much they keep in their fund balance; Traverse City’s policy is to maintain a balance that’s no less than 15 percent and no more than 20 percent of annual expenditures.

At the beginning of this year, after planned set-asides, the city’s unassigned fund balance was $8.79 million, or 33.5 percent of expenditures. Commissioners allocated some fund balance in the 2026-27 budget approved in June, including $1.2 million toward the city’s pension debt and $500,000 toward budget stabilization. But they additionally agreed to temporarily suspend the fund balance policy so it could be revisited.

The ad hoc committee – including Mayor Pro Tem Laura Ness and Commissioners Jackie Anderson and Lance Boehmer – determined at their first meeting that their recommendations should include a “consistent framework” for how commissioners spend down excess funds. Several principles have already emerged. The committee agreed the city should avoid structural deficits by not using fund balance for “ongoing expenses or recurring commitments,” according to City Manager Benjamin Marentette, but rather one-time strategic investments or the reduction of long-term liabilities like pension or other debt.

The city will also need to “balance future fiscal pressures with stewardship of taxpayer dollars,” Marentette wrote in a memo. “The city faces significant facilities and infrastructure needs, pension and personnel costs, and uncertainty regarding continued use of tax increment financing. Given these pressures, returning excess fund balance to taxpayers may be unlikely; however, as stewards of taxpayer dollars, the city commission should include that option when evaluating the appropriate use of excess funds.”

The ad hoc committee is expected to present its recommendations to city commissioners at a January 11 study session.

Zoning Updates
Traverse City commissioners last week approved zoning amendments that will “reduce zoning barriers for child care services, providing greater flexibility for facilities to locate throughout the community and expand to meet the needs of local families,” according to the city’s Bay Brief.

The updates, which were recommended by the planning commission, make all types of child care centers a use by right in all zoning districts, “without requiring a land use permit or additional special standards. The changes also remove the previous requirement in certain districts that child care centers be associated with a school or place of worship,” the Bay Brief states.

Acting Planning Director Leslie Sickterman previously pointed out that child care facilities must still go through “rigorous licensing requirements imposed by the state,” so additional city burdens – like parking, operating hours, and playground restrictions – create unnecessary barriers for providers. Addressing child care is a key issue in the city’s strategic action plan.

New zoning rules also came up at the planning commission’s meeting Tuesday. The city recently changed auto-centric uses – like car washes, gas stations, and drive-thru businesses – from a use by right to a special land use permit (SLUP), which is a more intensive approval process. Planning commissioners saw their first SLUP application under the new rules from Nicolet National Bank, which is planning a single-story, 1,800-square-foot headquarters on three parcels at 1026, 1028, and 1040 East Front Street.

Project architect Ian Wilson said Nicolet will be consolidating its Traverse City locations into one “uniform hub." Commissioners talked through several issues with Wilson, including minimizing lighting and sound impacts, upgrading the alley, and traffic. The company is conducting a required traffic study to determine if any turn restrictions are needed along Front Street. Planning commissioners recommended the project to city commissioners, who will have final approval.

Fall Maintenance
Finally, staff are gearing up for the city’s annual fall maintenance. Leaf pick-up will begin next Monday (October 19) starting on the west side and moving eastward. Crews will then return to the west side and repeat the process. The city is divided into six service zones; residents can find their zone on the city’s map to plan for pick-up. Exact dates for each zone are not provided because of unpredictable weather and leaf fall. Residents are asked not to place any leaves in the street before Friday.

Staff are also preparing for the city’s annual fall tree planting, with 150 new trees to be planted. Pruning and tree removal also occur under direction of a certified arborist on staff. Crews last week worked on addressing hazardous trees at Oakwood Cemetery. The city noted that work was “unrelated to recent discussions regarding trees and operations at Cherry Capital Airport.” The city maintains an interactive tree map that provides public information on thousands of trees in the city’s inventory.