Kent property values to fall heavily in '10

November 23, 2009
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At last week’s meeting where county commissioners recognized 38 employees with at least 25 years of service, they heard from five people who asked them to save the jobs of 11 kitchen workers at the jail who are likely to be let go at the end of the year.

“We’re looking for more time,” said the workers’ UAW representative, who added that there wasn’t enough time to form a new labor agreement with county Sheriff Larry Stelma before the new budget is adopted Dec. 10.

As it now stands, the 2010 general fund budget has $167.8 in expenditures and $165.4 million in revenue. The gap leaves a deficit of $2.4 million that will be covered through the fund’s $6 million reserve. The spending plan calls for the equivalent of 79 full-time jobs to be eliminated.

Property-tax revenue to the fund is projected to be down by $3.5 million next year from this year and be worth $86.5 million to the county — tax dollars that are expected to account for 51.7 percent of the fund’s total revenue. In comparison, property-tax revenue was 53.2 percent of the fund’s entire revenue this year.

One reason that revenue will be less next year is that the taxable value of all properties in the county is expected to fall by nearly $800 million, dropping from $21.83 billion this year to $21.06 billion in 2010.

County Equalization Director Matt Woolford said the decrease was significant, as values will fall across the commercial, residential and industrial sectors. He said values have fallen throughout the state. Woolford said property values fell statewide last year by roughly $23 billion, or nearly the county’s total equalized value, and could fall by that much next year.

County Administrator and Controller Daryl Delabbio said property assessments and home prices have fallen by 2.2 percent and 25 percent, respectively, since December 2007.

Another reason property-tax revenue to the county will be lower in 2010 is inflation was a negative three-tenths of 1 percent in October, the measurement assessors regularly apply to a taxable value. Last year, the inflation figure was 4.4 percent.

County Fiscal Services Director Robert White estimated that the county loses $80,000 in property-tax revenue for every one-tenth of a percent drop in inflation.

Also last week, commissioners ratified a new three-year labor agreement for 16 full-time, unionized workers in the Parks Department. Those workers will get a retroactive pay hike of 2 percent for this year, no increase next year, and a 2.25 percent raise in 2011. The increase in salary and benefits will cost the county almost $70,000 over the life of the contract.

At the sale time, commissioners rejected a 1 percent pay raise for the lowest-paid, non-unionized frontline supervisors — some of whom will be terminated at year’s end. The increase would have cost the county $205,836 next year and the funds were included in the proposed 2010 budget.

Some commissioners took exception to one group getting an increase while another didn’t. “Someone has got to look out for them, and that’s our job,” said Commissioner Art Tanis, who argued that the supervisors were without representation and voted for the raise.

“If you want another bargaining unit, then vote ‘no,’” said Commissioner Richard Vander Molen. “I see a huge inconsistency here after we’ve approved contracts for bargaining unit after bargaining unit.”

“I don’t think any pay increases at this time are warranted,” said Commissioner Tom Antor, who voted against both raises because other employees are about to lose their jobs.

“We’re going to be cutting far, far more jobs next year,” said Commissioner Dean Agee.

Board members did approve a land bank agreement between County Treasurer Kenneth Parrish and the state land bank authority, which was also expected to ratify the contract late last week. Parrish said his next step was to create the local authority’s board of directors and would bring that issue to the commission soon.

Commissioners also agreed to lease 80 acres of county land on Ten Mile Road to the West Michigan Sports Commission for a baseball and softball complex that will offer a dozen diamonds for tournament play. The county will charge the sports commission $100 for each of the lease’s first two years and $5,000 in the third year. The three-year deal also gives the sports commission an option to buy the land outright for $400,000, even though the property has an appraised value of $2 million.

Vander Molen, who chairs the sports commission, said the group had looked at various properties in the county for two years, but most were too expensive. He said the land, a former county landfill, is a half mile from a U.S. 131 interchange and is serviced by gas, water and sewers.

The sports commission has estimated the complex would generate 19,000 hotel room nights from the tournaments in the first year and $49 million in revenue for hotels over 10 years. The indirect spending from the complex to restaurants, golf courses and attractions over that decade was estimated at $138.7 million. The sports commission has pegged the cost to build the complex at $5.6 million.

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