County Gets Upgrades List

June 12, 2006
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GRAND RAPIDSKentCounty could spend $21.7 million on capital improvements next year if commissioners approve the list of projects that was recommended by a review committee last week.

Four projects worth $12.7 million of that amount would take place at the county's Fuller Avenue Campus, which is home to Community Mental Health, KentCommunityHospital, the county Health Department, a state police crime lab, the county correctional facility, the sheriff's department, the animal shelter and the county's fleet services facility.

Road improvements through the campus, a new animal shelter, a new building for fleet services, and replacement of the existing boiler plant are the four projects the panel recommended for the campus. The $4.6 million animal shelter and the $4.5 million boiler plant make up the majority of the suggested investment.

A new fleet services building and road improvements are worth $1.8 million and $1.7 million, respectively, and bring the campus expenditure to its $12.7 million total.

"We are putting our plan together to sequence our projects. The road will probably be the first one," said Robert Mihos, KentCounty facility management director, to members of the Finance Committee last week.

Besides increasing access throughout the property, Mihos said the road work would allow entry and exit from

Fuller Avenue
. Right now, vehicles can only leave the campus there.

Other notable project recommendations include spending $6 million to consolidate the 63rd District Court to a new site near the East Beltline on property the county purchased last year, and investing about $500,000 for security and upgrades to the office building at

82 Ionia Ave. NW
. The biggest expense would be $200,000 to make security improvements to 82 Ionia, which houses the county prosecutors and other circuit court services.

"A substantial increase in security is something that we're planning," said Mihos.

That $6.5 million for the court-related projects would be in addition to the $400,000 the county will spend next year to add another judge to the circuit court bench.

The difference between the improvement budgets for this year and next year is striking. Commissioners only appropriated $3.8 million for improvements this fiscal year. So next year's requested spending is nearly six times more than what the county allocated for FY06.

Kent County Fiscal Services Director Robert White told the committee that in order to meet that much higher expenditure, they will likely have to issue a $12 million bond package to cover the cost of the

Fuller Avenue
campus work. The other $9.7 million would come from property tax revenues and the fund reserve.

"One of the things to consider, due to the size of the projects, is debt service," said White.

White said bond payments would only cost the county $300,000 next year, as only interest would be paid to the bondholders. He added that the county's debt service next year would only be 4 percent of its general fund budget.

"That is considered to be a low debt-service financing," he said.

According to the most recent report issued by the state treasury, KentCounty had the highest fund balance as a percentage of expenses in Michigan. The county fund balance was at 59 percent of total expenses, two points higher than runner-up OttawaCounty and 27 percent higher than eighth-ranked OaklandCounty

White told the committee that appropriations for the projects would be done after the first of the year once the county's fiscal year begins, and that work would get started next spring. He also said there was $7.3 million in the fund balance now and up to $6 million could be used for the upgrades next year.

White also suggested that commissioners issue the bonds through the building authority rather than use a capital improvements security.

The Finance Committee may decide to take another look at the recommended projects later this summer. The full board will receive the Finance Committee's report in September.

Parks Director Roger Sabine, IT Director Craig Paull, Lloyd Pitsch of the sheriff's department, Purchasing Director Jon Denhoff, Marvin VanNortwick of Fiscal Services, Mihos and White reviewed the projects and made the recommendations..

"It's a very aggressive capital spending program; you've got over $21 million in projects," said White to the Finance Committee. "If you want to go above this, you're going to have to go into reserve funding."           

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