Local meeting primer: Sturgis City Commission

The Sturgis City Commission will meet Wednesday, August 12, at city hall for a regular business meeting at 6 p.m. 

Commissioners are expected to consider paying down $3 million in outstanding debt connected to past Sturgis Hospital improvements, approve annual utility rates, and hold a public hearing on the city’s proposed 2026-27 budget. Commissioners will also consider issuing up to $800K in bonds for the Doyle Community Center roof project. 

This will be the first meeting where interim City Manager Doug Terry will serve as the lone city manager after former City Manager Andrew Kuk’s final meeting on Wednesday, July 22.

$3 million hospital bond payment

Commissioners will consider using $3 million to pay down outstanding bonds originally issued to finance improvements at Sturgis Hospital. 

Despite the agenda item being titled “Sturgis Hospital $3M Usage Resolution,” the money would not be paid to the hospital. Instead, it would be used to retire early a portion of bonds for which the city remains responsible. 

The debt dates back more than two decades. In 2004 and 2005, the Sturgis Building Authority issued bonds to finance improvements related to Sturgis Hospital. The 2004 bond issue totaled $10 million. The meeting packet does not state the original principal amount of the 2005 bonds. 

In 2014, the Building Authority refinanced portions of those bonds by issuing $9.445 million in new refunding bonds. Under the agreement between the city and Building Authority, the city is responsible for making payments to the authority sufficient to cover the debt service on those bonds. 

About $5.445 million in principal remains outstanding. City staff is recommending using $3 million currently held by the city to redeem, or pay off early, a portion of that debt on October 1. The bonds can now be redeemed before their scheduled maturity at their face value plus accrued interest. 

If commissioners approve the resolution, the outstanding principal would fall from $5.445 million to $2.455 million, according to the agenda packet. The remaining bonds would still mature in 2034. 

The change would significantly reduce the city’s annual debt payments. Under the proposed schedule, debt service would be $295,175 in fiscal year 2027 and average about $295K annually for the remainder of the obligation. State marijuana tax revenue would continue to be dedicated toward those payments. 

The $3 million itself came from Asker Corporation, roughly three years ago as part of an agreement that released liens the city held on the hospital property related to the bonds, according to Commissioner Aaron Miller. 

Before that agreement, Miller said, the hospital payments ultimately went toward the bond debt. Those hospital payments stopped following the agreement with Asker. 

If approved, $3 million of bonds scheduled to mature between 2027 and 2034 would be called early. The city would then have $2.455 million in principal remaining, plus about $596K in interest under the proposed debt-service schedule.

Is this related to the Sturgis Hospital closing?

Although the bonds are connected to past Sturgis Hospital projects, the hospital is not directly involved in the proposed $3 million payment. The bonds were originally issued to finance improvements at the hospital and were later refinanced. 

There would be no payment to or from Sturgis Hospital as part of Wednesday’s agenda item. Instead, the city is considering using $3 million to pay down outstanding debt owed to bondholders.

When and why did the hospital close?

Sturgis Hospital officially closed June 19, 2026, citing “many years of ongoing financial challenges.”

The closure was announced less than a week in advance and has since prompted a lawsuit from the Michigan Nurses Associated (MNA). The union alleges the hospital violated the federal Worker Adjustment and Retraining Notification Act, commonly known as the WARN act, by failing to provide sufficient advance notice before laying off employees. 

The law generally requires covered employers to provide 60 days’ advance of certain plant closings and mass layoffs to affected workers or their representatives. The MNA said nurses received only 72 hours’ notice. 

The lawsuit remains pending.

Maxwell Knauer is a staff writer for Watershed Voice.