Council Recap: A Rental Rule the City Says It Can’t Enforce, and the Bigger Question of Who Decides

For those who missed the City Council meeting, here is an overview of the discussion. If you see a need for any corrections, let us know….

Brief

• The city’s short-term rental ordinance came up again in public comment as hard to enforce.

• A moratorium is in effect on 3 story buildings from the new code, the Planning Commission takes it up this week, and Council put it on the July 20 agenda.

• Council also reopened how the city awards contracts to planners, engineers, and its attorney. The purchasing policy dates to 2019, and there is no current written process for issuing a request for proposals (RFP). Members split on whether to write the policy first or start now.

• Chris Kukulski was sworn in as the new City Manager. Several real decisions, including the Kiwanis building and the rental ordinance, now land on his desk and on the July 20 City Council agenda.

Key Numbers (from the meeting record)

• $250 million. The new City Manager’s estimate of the city’s assets: streets, water, sewer, electric, parks. So what: every deferred-maintenance call is a decision about a quarter-billion-dollar portfolio, not a single line item.

• $500,000, a donation to the City, spend by year-end. Allocated for the Kiwanis building. An engineer reportedly found the walls cannot carry a code-compliant roof, and repair could approach $700,000. So what: the choice is prop-and-repair versus rebuild, and the calendar is forcing it.

• $90 per home, about $28,000 total. Estimated cost to inspect roughly 300 below-the-bluff properties for illegal sewer hookups. So what: the Sewer Authority’s own case is that cutting clean-water infiltration filling the sewer, which runs about 10 percent above peer communities, could push a plant expansion out 10 to 20 years.

• 2019. Last update to the city’s purchasing and procurement policy. So what: the city contracts routinely with planners, engineers, and an attorney without a current written rule for how those contracts get awarded or who decides.

• About 80 days remaining. The building heigh moratorium clock as described at the meeting. So what: there is a real, time-boxed window to fix an ordinance the city says it cannot currently enforce.

1. What Happened

Public comment opened with two process complaints. A resident asked Council to add the short-term rental (STR) ordinance to an upcoming agenda, arguing that it is unenforceable in low-density neighborhoods. The resident pointed to the city’s Master Plan (p. 15), which records that residents strongly prefer that homes in these neighborhoods not be used as short-term rentals, and laid out specific gaps: no required record-keeping by owners, no neighbor notice when a license is issued, no clear definition of “relative” for owners who claim family use, and penalties too small to change behavior. The resident asked Council to decide the hard threshold questions first, such as whether commercial rentals belong in residential districts and whether existing ones get grandfathered, before handing the work to the Planning Commission.

A second resident raised a contracting question about the Historical Society’s operation of the city-owned Blackbird Museum: whether a contractually specified full-time position was ever publicly posted, and whether the funds tied to it were used as the contract requires. The resident asked Council to review the contract. No decision was recorded.

Chris Kukulski was sworn in as City Manager. He thanked the outgoing interim manager, framed the job as stewardship of roughly $250 million in public assets, and said his goal is to leave the city’s streets, water, sewer, electric, and parks in better condition than he found them. Kyle Knight, who served as interim City Manager on top of his role as Police Chief, handed off the job after about six months.

Council spent significant time on small event applications. Approvals and conditions were debated for an informational booth, a children’s supervision pop-up, and a donation-based fitness class in the parks. A recurring point surfaced more than once: current policy already lets staff handle low-impact events without Council action. How long would council meetings last if City Council delegated all of these event requests to city staff?

The City Manager’s report flagged several open items. An engineer’s review found the Kiwanis building’s walls cannot support a new code-compliant roof, putting the city’s $500,000 allocation in play between repair and rebuild. The city applied for an additional FEMA ice-storm grant of roughly $37,000 to $38,000. A stop-work order was issued for a floodplain violation, only the second in the zoning administrator’s 12 years.

Board updates carried real fiscal substance. The Sewer Authority is hiring a firm to inspect for illegal hookups in neighboring townships and is weighing whether Harbor Springs should fund its own screening below the bluff. The Harbor Commission is scoping a 10-year plan for Ford Park and flagged that the marina rules (2014) and commercial harbor licenses need review.

The meeting closed on the contracting question. Council reopened whether the city should issue RFPs for its regular contractors, including its city planner, engineer, and attorney. The purchasing and procurement policy was last updated in 2019, and there is no current written RFP process. Members divided on sequence, and one member noted the line that Council sets policy while the manager handles administrative selection. The matter was deferred to the new City Manager to prioritize and was added to the July 20 agenda.

2. Wouldn’t It Be Easier If

What if an ordinance enforced itself by design. The friction is real: the city says the current STR rule is hard to enforce. The opportunity is to write the next version so the proof is built in rather than chased after the fact. The open question is one of sequence and tools.

On sequence, Council has two honest paths:

Option A. Decide the threshold questions first, then send clear direction to the Planning Commission. Slower to start, but the Commission is not guessing at intent.

Option B. Hand the full question to the Planning Commission to work up options, and decide later. Faster handoff, but risks a redraft if Council’s eventual answers differ from the Commission’s assumptions.

On tools, the approaches used in comparable communities cluster around a few mechanisms:

Owner record-keeping (occupancy logs, contact info, proof of payment). A license number required on any listing, so a nightly listing without one is prima facie evidence of a violation. A defined meaning of “relative” so the family-use exception has limits. Neighbor notice when a license is applied for. Penalties that escalate and are enforceable in court without being cost-prohibitive.

Honest costs: records and notice add administrative load and need staff time, and penalties have to be collectible without dragging the city into expensive litigation. None of that is free. But “we have a rule we cannot enforce” is also not free.

What if the city knew, in writing, how it buys things, and tested whether it was getting value. The friction is that Harbor Springs contracts with a city planner, an engineer, and an attorney, but the procurement policy is six years old and there is no current RFP process. The opportunity is a short, clear policy that does two things: sets how the city awards a contract, and sets when it checks whether the current arrangement still serves residents. Several questions are open, and comparable communities answer them in known ways.

One is the term. A standing professional contract that renews on its own, with no end date, removes the city’s ability to test the market. A common alternative is a defined term, often three years, with a scheduled recompete at the end and no automatic renewal. The certainty of an end date is what keeps an arrangement competitive. The trade-off is that recompeting too often is costly for the city and for bidders and can deter good firms from applying, so the usual balance is a defined multi-year term rather than an annual contest.

A second is the threshold loophole. If the rule says contracts above a dollar figure go out for proposals, a steady stream of hourly work can quietly exceed that figure without ever triggering it. A backstop is to total a contractor’s spend over a rolling twelve months and apply the same review once it crosses the threshold.

A third is the standard. For a planner, engineer, or attorney, the goal is not the lowest hourly rate. It is best value: qualifications, approach, and track record first, with fee negotiated after. Choosing professional services on rate alone can cost more later.

A fourth is scope. With about 29 employees, the city cannot run a heavy process on every contract. A workable design tends to tier it: a full review cycle for the handful of relationships where the dollars and the public contact concentrate, and a light check, a rate benchmark and a manager sign-off, for the rest.

The sequencing question remains. Adopt the policy first, so every future contract runs the same transparent process? Or start issuing proposals now and write the policy in parallel? Policy-first is slower but durable and avoids redoing work. Begin-now is faster but risks awards that are inconsistent or open to challenge. One low-cost step both paths share is an inventory: a public list of every standing contract, its annual and trailing-twelve-month spend, its term, and how it renews. The city cannot test what it has not counted.

Credit where due: deferring the priority call to the incoming City Manager, and keeping the line between Council policy and administrative selection, is a defensible way to keep the lanes clean.

The repair-versus-rebuild math was on the table before the clock ran out. The friction is a $500,000 allocation that must be spent by year-end, and a building whose walls reportedly cannot carry a new roof. The opportunity is a side-by-side comparison with real numbers, in public, before the deadline forces a default. Repair could approach $700,000 and keep the original structure. A rebuild in a similar D-log style could cost less and reset the building’s life, at the cost of the original. Either way, residents are better served seeing the two numbers next to each other than learning the answer after the money is committed.

3. Open Loops

A running ledger of items raised in public meetings and not yet resolved. This is a handoff list, not a scorecard.

• Utility Rates. We have to borrow money to rebuild the substation, and still have not addressed the need to take our below market rates to market rate, so we dont need to borrow in the future.

• Height Moritorium. Raised in public comment and by Council. Status: moratorium in effect, roughly 80 days remaining. Next: Planning Commission discussion [Thursday June 18]; Council on July 20.

• Purchasing and RFP policy (last updated 2019). Raised In January 2026. Status: deferred to the new City Manager to prioritize. Next: a contract inventory, then a written policy; on the July 20 Council agenda.

• Historical Society / Blackbird Museum contract. A resident asked Council to review whether a contracted position was publicly posted and whether funds were used as specified, June 15. Status: no decision recorded. Next: none set.

• Kiwanis building. Engineer review found the walls cannot support a code roof; $500,000 must be spent by year-end. Status: City Manager to bring a plan with the Parks Board. Next: a future Council meeting.

• Events-on-public-property policy. Recurring question of whether low-impact events need Council action. Status: current policy allows staff handling. Next: possible policy update, no date set.

• Sewer inflow and illegal hookups. Status: Authority screening focused on other townships; Harbor Springs is weighing its own ~$28,000 screening. Next: to be worked through with the City Manager.

• EV charging. Flagged as a priority by management. Status: in progress.

• Marina rules (2014) and commercial harbor licenses. Flagged by the Harbor Commission for review. Status: open.

• Ford Park and the Harbor 10-year plan. Harbor Commission scoping; possible consultant and a joint meeting with the Parks Board. Status: open.

How to Participate

• Next regular City Council meeting: Monday, July 20, 2026, 7:00 p.m., City Hall. Note there is no first-Monday meeting in July. Short-term rentals and the RFP/procurement policy are both on this agenda.

• City Manager open house: a community welcome for Chris Kokoski is planned for the week of June 26, date and time to be announced.

• Agendas and comments: agendas are posted on the City of Harbor Springs website. Public comment is taken in person at meetings.

Close

Prior generations protected what makes this town what it is, often through quiet, unglamorous work: the Conservancy, land purchases, decisions whose payoff arrived decades later. The items on this agenda are in that same key. A rental rule that holds, a clear way to award public contracts, an honest number on an aging building. None of it is dramatic. All of it compounds.

Thanks are due to the staff doing the physical work, the roughly 29 employees who stand in the trench when a water main breaks in February, and to the volunteers on the boards and commissions who turn out for long meetings on parks, sewers, and harbor rules. Welcome to Chris Kukulski, and thanks to Kyle Knight for carrying two jobs through the transition. The next milestone is July 20. We will be watching the rental ordinance and the contracting policy, and we will report what gets decided.