COLDWATER, MI (WTVB) – The City of Coldwater presented its proposed fiscal year 2027 operational budgets to City Council for approval during a public hearing last night. The budgets cover the general operating funds, special revenue funds, tax increment financing authorities, and the Coldwater Board of Public Utilities.
In a letter to council City Manager Keith Baker highlighted that the current 2026 fiscal year, which began with a planned $197,000 deficit, is now projected to end with an $82,000 surplus. Stronger-than-expected revenues from permits, interest earnings, grants, and a $571,000 distribution from the State’s Local Community Stabilization Authority (LCSA) contributed to the improved position. The city expects to close the year with a healthy fund balance of approximately $7.6 million, exceeding 50% of expenditures.
For 2027, the initial budget shows a modest $165,000 deficit, which incorporates $560,000 in capital spending and $125,000 for sidewalk work.
Property taxes for the average residential homeowner are projected to rise by 2.7%, with overall property tax revenues expected to increase 4.4% due to new development, reaching about $5.6 million including LCSA reimbursements. Revenue from the Board of Public Utilities’ payment in lieu of taxes (PILOT) will grow 4.8% to $3.95 million, while state shared revenue is expected to decline 2.5% to $1.53 million.
On the spending side, wages and benefits — which make up over 60% of General Fund expenditures, are budgeted with a roughly 5% increase to account for added positions, though one-time 2026 costs will not repeat. Capital plans include phase two of the Rotary Park project, downtown streetscape improvements on US 12, recreation center upgrades, new public safety and municipal services vehicles, and cemetery infrastructure work.
Major infrastructure projects remain a priority amid aging roads and underground utilities. The 2027 road program features full reconstructions on East and West Pearl Street and portions of Morse and Hudson streets, funded partly by 2025 road bonds, alongside mill-and-repave work and water/wastewater upgrades.
An expansion of the wastewater treatment facility is underway, with a significant debt issuance planned later in 2027 to be repaid through system revenues. Officials noted ongoing challenges, including a second consecutive Headlee rollback reducing the operating millage and uncertainty around future LCSA surplus distributions and state funding. Despite these pressures, the city maintains a strong short-term financial position and plans to manage costs conservatively while supporting growth from industrial expansion.
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