Sturgis commission pays down hospital bonds, moves forward with Doyle roof project

The Sturgis City Commission met Wednesday, August 12, approving the use of $3 million to pay down hospital-related bonds, increases to annual utility rates, the city’s 2026-27 budget, and up to $800,000 in bonds for the Doyle Community Center roof project.

The city has had an eventful few months, from a tornado and a change in city manager to an ongoing internal investigation involving commissioners. Wednesday’s meeting, by comparison, was largely focused on routine city business.

Hospital bonds

Commissioners approved using $3 million to pay down a portion of outstanding bonds related to the Sturgis hospital expansion of 2005. 

The payment will reduce the outstanding principal from $5.445 million to $2.455 million while maintaining the bonds’ 2034 maturity date. City staff recommended the payment because it would decrease the annual debt service obligation to about $295,000 in fiscal year 2027 and average $295,000 for the remainder of the bond obligation. The city will continue dedicating state marijuana tax revenue toward the remaining bond obligation.

City Controller Sadie Griffin said the city’s current annual debt obligation is about $700,000.

Griffin said staff recommended making the payment now because lower interest rates have reduced the amount the city earns on the funds, making it more advantageous to use the money to pay down the bonds. 

“The $3 million was given to the city in consideration for relieving the hospital and Asker Corporation from any obligation on the bonds. So we took full responsibility of the bond,” City Clerk Ken Rhodes said. “By releasing all of our liens against that, they gave us $3 million.” 

If the hospital were to end up being purchased by a for-profit entity, it would be considered a “triggering event,” meaning the city would have to reissue a different bond. 

Commissioners unanimously approved the agenda item.

Utility rates

Commissioners then considered the city’s annual utility rate schedules. One motion covered electric rates for billings beginning October 1, 2026, and October 1, 2027, while the other covered water and wastewater rates beginning October 1, 2026.

Both motions passed 7-1 with Commissioner Marvin Smith voting no on both. Commissioners Cathi Abbs, Dan Boring, Justin Wickey, Richard Bir, Aaron Miller, Vice Mayor Jeff Mullins,  and Mayor Frank Perez voted yes. 

Water rates will increase 6.9% while wastewater rates will increase 2%. Electric rates vary by customer class including changes to service, demand and per-kilowatt-hour charges. For an inside-city water customer with a 5/8 inch meter, the monthly customer charge will increase from $19 to $20.25, while the water usage rate will increase from $3.45 to $3.70 per 1,000 gallons for usage up to 50,000 gallons.

2026-27 budget

Commissioners unanimously approved the city’s 2026-27 budget following a required public hearing. The budget projects $68 million in revenue and $68.7 million in expenditures. 

During discussion, Commissioner Aaron Miller asked about costs associated with recent storm cleanup. Griffin said the city has incurred about $1 million in expenses so far, not including internal labor, and that the total is not yet complete. 

Miller also asked about the financial effects of the Sturgis Hospital closure. Griffin said the closure is expected to reduce ambulance fund revenue from hospital transfers by roughly $100,000 and increase fuel costs because of longer transfers. The city also eliminated its fire marshal position, converting it to a full-time fire and ambulance position, and adding staffing in an effort to reduce overtime and maintain staffing levels during longer transfers. 

Doyle roof

Commissioners then approved a resolution authorizing up to $800,000 in capital improvement bonds for the Doyle Community Center roof project. The bonds will have a 15-year term and an interest rate of no more than 6%.

On May 13, commissioners approved the low bidder, Newbury Square Construction of Shipshewana, Indiana, for $729,702, with a $20,000 contingency to complete the project.

Griffin also noted that the city submitted a grant application to the Sturgis Area Community Foundation related to the roof improvement which, if approved, could pay for up to $200K of the project. 

While commissioners approved the motion with minimal discussion, there remains an outstanding question of embezzlement allegations from a former Doyle Center employee. The topic was last discussed during the June 10 meeting, when Vice Mayor Jeff Mullins asked about an update on the matter. At that time, City Attorney T.J. Reed said the investigation was ongoing and being handled by local law enforcement.

Commissioners did not discuss the investigation during Wednesday’s meeting.

Maxwell Knauer is a staff writer for Watershed Voice.