Citizen Budget Input Very Helpful

April 8, 2006
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GRAND RAPIDS — City Manager Kurt Kimball said the results from the citizen budget advisory sessions exceeded his expectations. First, he was impressed with the diverse make-up of the 19-member panel chaired by Brian Harris, president and CEO of H&H Metal Source Inc. Second, Kimball was equally impressed with the depth of understanding the group had of municipal finances.

Kimball said he initially wondered how philosophical they were going to be and how much of a long-term view they were going to take with their suggestions for the general operating fund.

“But I think they did the city a great service by pointing to some of the structural things that need to change. I’m not just saying the structure of the organization, but the structure in terms of our wage and fringe benefit components of our expenses, which were very helpful,” he added.

The citizen budget report, which was filed in late March, called for the city to benchmark employee wages and benefits at a level that matches other private and public entities that are facing similar stressful budget conditions.

The report also called for increasing the share employees pay for health insurance, up to 30 percent of the premium cost, and for controlling that cost by offering employees incentives for living a healthy lifestyle and by making health savings accounts available to workers and retirees.

City decision-makers didn’t escape the group’s cost-cutting sights either, as the report suggested eliminating retirement benefits for city commissioners.

“I wondered how that one was going to be received,” said Kimball with a laugh.

“I don’t think that any of the particular points are things that the group unanimously agreed on as insisting that the city must do. But rather I see it as a way to approach accomplishing the strategy that they did unanimously suggest the city pursue,” he said.

The citizen group made a couple of recommendations that the development community might find interesting. One was to either privatize the city’s economic development team or consolidate that unit with the community development department, which would result in a shrunken single department.

But it would be hard to make the economic development department much smaller, as it only consists of three individuals: Susan Shannon, Daniel Oegema and Eric Soucey. And Kimball pointed out that Shannon, who directs the department, has spread the expense of that unit across multiple budgets so her team isn’t a strain on the general operating fund.

“Susan has been successful in getting other organizational units, albeit the SmartZone and the Brownfield authorities, to pay for portions of her time and the time of her meager staff; commensurate with the time that they put in, of course. So it really isn’t costing the general fund very much at all for her services or that of her staff,” said Kimball.

Privatizing the department could remove some of the transparency that the vast majority of projects involving the city has had in the past. But Kimball didn’t feel that such a move would lead to a conflict of interest for the city.

“I don’t know that I would go that far. But I do think we still operate in a public-private mode at the current time. Although we don’t have a separate contract with The Right Place Program any longer for urban redevelopment services, we still work hand-in-glove with The Right Place Program on many different fronts,” said Kimball, also a Right Place board member.

“The big book of business that we have currently and are going to continue to have, with regard to complex economic development, necessitates all kinds of meetings with a bevy of staff internal to the organization to pull them off, and I don’t think we can easily farm that business out.”

Another recommendation was to consider reducing the local property tax capture of the Downtown Development Authority and direct the city’s portion of those dollars to the general operating fund. KentCounty agrees with that position and has suggested that the DDA capture be capped at $3.5 million. The board had captured $3.02 million by the end of February, eight months into the fiscal year.

“I think because of that recommendation we are likely to have a healthy policy discussion on that with the city commission in the course of budget reviews. I don’t know how it will turn out,” said Kimball.

“My own bias is generally to be defensive in support of the DDA’s resources, because I’ve seen how much they’ve accomplished and how they’ve leveraged other monies to make us and our downtown the envy of the entire state and beyond.”

Kimball reiterated that he respected and appreciated the recommendations the citizen group made, and said the reason he didn’t see eye-to-eye with them on all their suggestions was because the group’s members didn’t have as much information as he does.

“In their defense, time didn’t permit them to be subject to an exhaustive presentation by each of our organizational units,” he said. “So there was a lot they couldn’t be expected to comprehend or understand about organizational particulars.”    

Citizen Budget Advisory Group

Here are the citizens who served on the budget advisory group.

Nancy Ayres   David Bulkowski        K.C. Caliendo
Jim Dunlap Kysha Frazier Harold Hamilton
Ed Kettle Birgit Klohs Mary Milanowski
Dave Mossburger Jared Rodriguez Margaret Sellers Walker
Rebecca Smith-Hoffman Don Souter Jennifer VanderPloeg
Gordon VanHarn Don Williams Mary Alice Williams

Brian Harris, chairperson

Source: City of Grand Rapids, March 2006.

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