- change ups
Revenue is off for key county budget
Revenues were down while expenses were up for Kent County’s general operating fund halfway through the fiscal year.
At the six-month mark, total revenue was down by 4.9 percent from the same period last year, to $39.7 million. Receipts from property taxes also were off by 6.3 percent. But the main culprit behind a lower revenue figure was loss of the revenue-sharing reserve fund, which was depleted last year. In the first half of 2011, the reserve fund was worth $4.4 million to the general fund.
“It went from $4.4 million to zero,” said Stephen Duarte, county fiscal services director.
“We expected this,” said Commissioner Gary Rolls.
The county will receive the bulk of its property-tax revenue in the third quarter.
At the same time revenue dipped, expenditures rose by 2 percent to $74.2 million during the first six months. But the county’s pension cost only grew by 1.6 percent, and Duarte told the Finance Committee last week that the plan was 94 percent funded.
Also, the county’s cost for its health insurance plan fell by 4.1 percent compared to last year. “We continue to expect group health insurance to go up, but we’ve been holding the line,” said Duarte.
The county’s fund balance, or reserve account, for general operations was $68.6 million at the beginning of this year and is projected to be $68.5 million at year’s end. And the fund’s cash flow is expected to rise this year to $33.7 million from the 2011-mark of $33.4 million.
Duarte told committee members that the general fund’s cash balance figure of $25.9 million was a bit deceiving, even though the number was down by $7 million from the start of the year. “This isn’t as bad as this looks,” he said. “It’s just a snapshot in time.”
Duarte said the county can expect to receive $4.8 million from two sources soon. That additional revenue would push the fund’s cash balance to more than $30 million. “It would be close to last year’s number,” he added.
The fiscal-year projection for general operations has total revenue at $160.8 million and total expenses at $161 million for a deficit of $139,000. The county’s fiscal year ends Dec. 31.
As for the county’s Lodging Excise Tax, Duarte said receipts were up by 2.1 percent to $2.37 million over the first half of this year from last year. “I’m always grateful to see the lodging excise tax go up,” said Rolls.
The county uses that revenue to pay for the bond package that helped build DeVos Place, the city’s convention center.
For the past three years, though, the county has had to subsidize the account with funds from general operations to meet the account’s obligations. The year the county transferred $841,238 from general operations to the lodging-excise fund, its smallest transfer since 2010. The bond payment this year is $5.8 million, up from $5.6 million last year, and the fund’s total expenditures are nearly $7 million.
Duarte said the bond payment rises by an average of 3.47 percent each year and the security matures in 2031. That final payment, a balloon payment, is expected to top $11 million then.