CADILLAC — City council passed a Fiscal Year 2021 budget Thursday during a special meeting. Council and some city staff attended the meeting at city chambers, while others, including the public, called in due to social distancing precautions due to the COVID-19 pandemic.

Cadillac's fiscal years start on July 1. By charter, council is supposed to pass a budget by the end of May. A simple majority won't do the trick; four out of five city council members have to vote yes. The May 18 attempt failed, gathering only three votes of support.

On Thursday, May 27, city council met again for a presentation by City Manager Marcus Peccia and Finance Director Owen Roberts that gave an overview of Cadillac Lofts spending and the city's COVID-19 financial response plan.

Some confusion and hesitation over the interplay of the FY 2021 budget, the Cadillac Lofts, and the impact of the pandemic caused the budget proposal to fail the first time around.

The original budget proposal for FY 2021 did not show the city using a newly-approved funding mechanism to pay for public infrastructure improvements related to the Cadillac Lofts project; however, the budget approved by city council on Thursday had been updated to reflect the anticipated expenditures.

Council member Steve King, who voted against the budget on May 18, voted for the budget on Thursday.

"Adding the million dollars into the budget, I think, was absolutely the right thing to do," King said.

Under the new budget, the city will use $1 million in bond proceeds to pay for public infrastructure improvements, such as public on-street parking, near the Cadillac Lofts project.

However, due to a tax capture mechanism, state tax dollars will repay the city for that spending over the next 20 years.

In addition to passing the budget, city council also adopted a COVID-19 financial response plan.

"The City will respond to the impacts that the crisis may have on the FY2021 budget in a thoughtful and flexible way," the plan states.

As part of the plan, the city will delay $658,600 in capital projects in the general and water and sewer funds as well as travel and education expenses.

However, Roberts stressed that due to conservative financial management, the city is in good position to handle an expected dip in revenue. Additionally, because tax revenue is not expected to be impacted in FY 2021, though revenue in subsequent years could be impacted if property values fall.

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