Traverse City commissioners voted Monday to approve zoning changes that will allow for more density in R-2 neighborhoods, adopted the city’s 2025-26 budget and strategic action plan, and authorized issuing up to $42 million in bonds for wastewater treatment plant repairs. Commissioners also approved a $340,000 settlement agreement with former City Assessor Polly Cairns, which will be covered by insurance and will resolve a wrongful discharge lawsuit Cairns filed against the city.

R-2 Zoning Changes
Property owners in R-2 (mixed density residential) neighborhoods will have the potential to have up to four dwelling units instead of two under zoning changes approved by commissioners Monday. Commissioners voted 5-2 to support the amendments, with Commissioners Heather Shaw and Jackie Anderson opposed. The changes still limit the number of residential structures allowed to two, but offer flexibility for configurations that could create up to four internal units – such as two duplex buildings, a triplex with an accessory dwelling unit (ADU), or a quadplex. Setbacks, height limits, impervious surface limits, and lot width and area will remain the same in the ordinance, so the changes “would not permit something to be built in terms of scale and placement other than what is allowed today,” City Planning Director Shawn Winter previously said.

Commissioners debated the zoning changes in April but declined to vote on them at the time. A memo from City Clerk Benjamin Marentette said Michigan law requires city commissioners to take some kind of action on the changes, which were supported and advanced by the planning commission. This is the second go-round for the amendments, which were originally part of a package of housing density recommendations made by the planning commission to city commissioners in 2023. While most of those 2023 recommendations were approved, city commissioners never voted on the proposed R-2 changes.

Shaw and Anderson both expressed concerns about potential impacts on neighborhood character, with Shaw saying the amendments needed more “nuance.” However, representatives from Housing North, several city residents, and multiple planning commissioners advocated for the changes as an incremental but meaningful way to address the region’s housing crisis and create more living spaces within neighborhoods. “We owe it to these young people to give them housing,” said Planning Commission Chair Debbie Hershey. “Here’s our chance to work cooperatively together to make a small change that will help people.”

Budget & Strategic Plan
Two key documents expected to heavily guide city decision-making were approved by commissioners Monday. The first was the city’s 2025-26 budget – as well as budgets for Traverse City Light & Power and the TC Downtown Development Authority – which were approved by all commissioners except Tim Werner, who opposed both the city’s and the DDA’s budget (Anderson also opposed the DDA budget, but it still obtained the five votes required to pass). Among his critiques, Werner said he felt lack the city budget lacked a “narrative” of where the city had been and where it’s going.

The budget – which comes in at $88.4 million across all funds, including $25.4 million in the general fund – dedicates one percent of general fund operating revenues to complete streets initiatives, boosts public arts funding, adds 11 new staffing positions and increases two others to full-time, and tackles several capital projects including repairing the North Union Street Bridge and upgrading city water and sewer infrastructure.

Commissioners also voted unanimously Monday to formally adopt the city’s new strategic plan, which was created over the last year with extensive public input and lists six strategic “pillars” or focus areas as well as related action steps. Though this year’s budget had to be put together before the strategic action plan was completed, officials agreed they want to align spending with community priorities identified in the plan. Accordingly, commissioners are expected to hold a study session on July 14 at which they review how the 2025-26 budget aligns with the strategic action plan – and could make budget amendments if necessary. Since the strategic action plan looks ahead to the coming decade, it’s likely to shape the budget planning process in future years as well.

Sewer Bonds
Commissioners voted unanimously Monday to authorize issuing up to $42 million in bonds for improvements to the wastewater treatment plant near Boardman Lake. A low-interest state loan will also help fund the project, with the debt to be repaid over two decades through sewer user fees. The project is intended to address aging infrastructure, increase reliability, improve hydraulics, and fix a deficient UV disinfection system at the city plant. Plant repairs are expected to start this fall and be complete by fall 2028. “This is a major project that’s been years in the works, and we’re hitting the finish line,” City Manager Liz Vogel said.

Cairns Settlement
Finally, commissioners went into closed session Monday for discussion before returning to vote unanimously to approve a $340,000 settlement agreement with former City Assessor Polly Cairns. Cairns filed a lawsuit last year against the city in Thirteenth Circuit Court alleging she was fired for refusing to sign off on a tax abatement she believed was illegal. Cairns’ two-count complaint alleged she was wrongfully discharged and that her firing violated the Whistleblowers’ Protection Act. The case has been winding its way through the court system since late fall. The settlement agreement with Cairns will be covered by the city’s insurance, according to Mayor Amy Shamroe.