City Council Recap: Showboat Funding Shortfall Discussed

Lowell City Council spent just more than an hour discussing five agenda items during their second regular meeting of July. All councilmembers were present as was attorney Dick Wendt.

The Showboat garnered the most discussion during the evening, which also saw split votes on a proposed change to the city’s vacation day policy and on a proposal for hazard pay for city police officers. A handful of people were also present to show their support for former Police Chief Steve Bukala who was present along with his attorney Katherine Henry.

Bukala Attorney Threatens Lawsuit

A Middleville resident addresses Lowell City Council during citizen comments.

Bukala, who was asked to resign or be terminated from his position because of social media posts, did not address the council.

However, Henry spoke for five minutes to reiterate demands sent in a letter to city councilmembers and City Manager Mike Burns. She shared her belief that Bukala, who posted on Facebook in support of four people openly carrying firearms in the city, would have been in violation of the U.S. and Michigan Constitutions if he had not supported these people’s action.

She asked the city to buy service time for Bukala from the Michigan Employees’ Retirement System (MERS) at a cost of approximately $8,000. This service time would allow Bukala to begin receiving full retirement benefits at age 55 instead of age 65. She also asked that the City of Lowell issue a statement in support of the U.S. and Michigan Constitutions.

If these demands were not met, Henry said Bukala would be forced to file a lawsuit seeking damages in excess of a half million dollars. According to Henry’s letter, damages sought would include the following:

  • $487,855.11 for lost wages from July 6, 2020 to May 2026
  • $34,149.86 for lost retirement contributions from the city
  • $2,400 for payments in lieu of insurance
  • Undetermined punitive and statutory damages
  • Attorney fees and court costs

Prior to the meeting, Lowell’s First Look called MERS for clarification on the process for purchasing service credits. According to a representative from the organization, a municipality must approve any service credit purchase. However, the municipality does not have to pay for the credits themselves, and the cost can be paid by an employee.

Lowell’s First Look contacted both Burns and Bukala to see if this option had been discussed. Burns declined to comment, saying it was a personnel matter.

Bukala replied that he sent a request to the city after last night’s meeting asking for the opportunity to buy the time himself. He noted he has 60 days after the end of employment to buy the service credits, and the next city council meeting, on August 3, will be day 59. Bukala added that both Burns and former assistant city manager Rich LaBombard were allowed to purchase service credits so there is precedent for this action.

After Henry spoke, a Middleville resident addressed the council to express his displeasure with the departure of Bukala from his position. “I’m ashamed of you people,” he said. “You people will be held accountable. This country is going down into tyranny.”

At the conclusion of the citizen comments portion of the meeting, City Clerk Sue Ullery noted she received six more signatures for petitions submitted to the city earlier in the month. These petitions call for the resignation of Burns and Mayor Mike DeVore over their handling of Bukala’s forced resignation.

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Showboat has $865,000 Shortfall

The first regular agenda item of the night was an update on the Showboat. The pieces for the steel structure have been delivered, and they are currently being assembled near the Riverwalk. Burns said the Showboat Committee now needs to select a general contractor to complete the rest of the work, but there is currently not enough cash on hand to finish the boat as originally planned.

“The fundraising efforts have been slow due to the COVID-19 pandemic,” Burns said. “The design specifications for the Showboat are very complicated, and we have looked at a number of options to reduce costs.”

Currently, there is an approximately $865,000 shortfall in cash-on-hand for what is needed to complete the interior of the boat. Of this, $500,000 is money needed for the heating and cooling system that will allow the boat to be used year round. This cost is well above what was expected when plans for new Showboat were being developed.

Burns reported that the Showboat Committee is continuing its fundraising efforts and will be applying for grant funds as well as seeking sponsorships from area businesses. However, the committee would also like the council to consider financing the remaining costs so work could be completed now, rather than waiting for fundraising to be complete.

“It is still the goal that no city tax dollars be used to subsidize this project,” Burns said. However, he also noted there is a risk to the city if the council finances the project and then fundraising efforts fall short.

After some discussion, councilmembers agreed to schedule a Committee of the Whole for the first Monday of August to meet with members of the Showboat Committee to discuss the project parameters. “I feel like we have a Lamborghini of a Showboat here,” said councilmember Greg Canfield. “It has a lot of bells and whistles.”

Councilmembers also asked for a representative from Moran Iron Works to be present. They would like to hear from the iron company regarding whether it would hurt the lifespan of the boat to forego heating it for a few years.

Township Water Report and Lowell Light & Power Bonding

Lowell Light & Power General Manager Steve Donkersloot explains the utility’s bonding proposal.

The next two items on the agenda dealt with a water report from Lowell Charter Township and a bonding proposal from Lowell Light & Power.

Since last year, a developer has been looking for a way to run water to the I-96 interchange in Lowell Charter Township for a development there. Burns has been adamant that the city would only extend its water lines that far if a 425 agreement was in place to allow the city to capture tax revenue from the development. The developer and Lowell Township officials are not agreeable to that proposal.

Instead, the township had an engineering report drafted to determine the feasibility of creating their own water and wastewater systems. The price for these systems is expected to be $30.6 million, according to the report. If the township does construct their own system, they would presumably move all their residents off the city infrastructure. Currently, Lowell Charter Township owns 18% of the capacity in the city’s wastewater facility and is a significant wholesale customer of the water system.

Canfield asked if an analysis could be done to determine how much the city would stand to lose if township residents were no longer customers of the city’s water and wastewater systems. The matter was scheduled for further discussion at a Committee of the Whole on the second Monday in August.

Next, Lowell City Council voted unanimously to approve $995,000 in bonds for Lowell Light & Power. They will fund a number of projects at the utility’s Chatham Street facility. “We have a parking lot that’s falling apart,” LLP general manager Steve Donkersloot said as an example.

The bonds will have a 7-year term and a 2.2% interest rate. Donkersloot said that with interest rates so low right now, it makes sense to bond for projects this year. The utility could spread the projects out over several years and pay cash, but if inflation pushes project costs up more than 2.2%, the utility could end up spending more that way.

Donkersloot stressed that while the bonds must be approved by city council, the debt will be LLP’s alone. Utility ratepayers, not city taxpayers, will absorb the cost.

Vacation Days and Hazard Pay

The final two agenda items pertained to city workers.

First, Burns proposed increasing the number of vacation days that non-union and department director staff can bank. Currently, these workers are limited to accruing 20 days of vacation time.

During contract negotiations for unionized workers, the city agreed to an increase in the number of vacation days that workers with 20 to 24 years of service could accrue. Workers with 20 years of service will be able to accrue 21 days of vacation time, and that number will increase annually until it is maxed out at 25 days of accrued vacation time for those who have served 24 years or longer. Burns suggested making the same change for non-unionized workers, adding that people would still be limited to cashing out no more than 20 days of vacation time when leaving city employment.

Canfield said that, given the current economic uncertainty, he would prefer to wait a year before adding to the benefit package. Others appeared to agree and the proposal failed on a 2-3 vote.

Councilmembers Canfield, Jim Salzwedel and Marty Chambers voted no while Mayor Mike DeVore and Councilmember Cliff Yankovich voted yes.

The final piece of business for the evening was regarding a provision of the CARES Act which provides reimbursement to municipalities that award hazard pay to eligible workers. Under the act’s provision, Lowell could provide a $1,000 hazard pay bonus to each full-time and part-time officer in the Lowell Police Department and request reimbursement.

The total cost for the bonuses is $11,000, and the money must be distributed prior to requesting reimbursement. Money is reimbursed on a first-come first-serve basis, and there is no guarantee that the city will be reimbursed.

Councilmembers approved the distribution of hazard pay with the understanding the city would request reimbursement under the CARES Act. The proposal passed on a vote of 4-1 with Canfield being the lone no vote.

The next regular meeting of Lowell City Council will be on Monday, August 3, at 7pm.

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