Land bank revises budget due to larger workload
Organization will increase staff and compensation for employees.
With a year’s worth of transactions under its belt and even more deals on the horizon, it’s become obvious the Kent County Land Bank Authority is growing. Because of that growth, some changes will have to be made to better accommodate its progress.
Even though, like Kent County, KCLBA’s fiscal year is the calendar year, its development year pretty much runs from July 1 to June 30 in order to be in sync with the timing of the tax-foreclosure process.
Last year, the land bank bought 44 tax-foreclosed properties in July. A few weeks ago, the agency purchased at least 197, and more transactions are likely to come.
“In the last 12 months, we’ve done $1.65 million in sales. From a cash-flow perspective, we’ve done extremely well,” said Dave Allen, executive director of the land bank.
“We have $176,000 in profits and we paid off our lines of credit,” he added.
With having roughly five times the number of properties to handle this year compared to a year ago, Allen told the board the land bank’s current annual budget has to be amended to reflect the additional workload. He also said the three-person staff needs to grow by one, and that new hire should be an in-house accountant.
“We need to have somebody watching our cash on a daily basis with all the properties we’re handling,” he said.
“I think right now, based on the number of properties and the budget, we should take on somebody,” said Rosalynn Bliss, Grand Rapids city commissioner and KCLBA board member.
Kent County Treasurer and land bank Chairman Ken Parrish said having four full-time employees wasn’t out of the question because the agency is going to become a $4 million entity soon. “I believe it is appropriate at this time for two reasons,” he said.
Parrish said one reason is the much higher volume of properties the staff will be dealing with this year. Another is the staff will have to complete those transactions in a matter of months.
“That could be a real nightmare without (an accountant),” he said.
Allen also told board members that LouAnn Bryant, the agency’s administrative assistant, and David de Velder, its director of real estate development, are deserving of salary increases.
“We’re not keeping up with the market. I increased my own salary because that’s what the board instructed me to do,” he said.
In de Velder’s salary situation, Allen said a nonprofit development firm has an opening for a real estate director and was offering $90,000 in annual compensation for the position. Allen said an increase of $19,000 would bring de Velder’s salary more in line with what the market pays.
“I knew when we brought David on, his salary was low,” said Bliss.
Allen also told the board the agency needed to double its 401(k) match from 2 to 4 percent.
By a 4-1 vote, the board adopted a revised fiscal-year budget to reflect the compensation increases.
The land bank had operating revenue of slightly more than $1 million last year and operational expenses of $908,000, according to an audited report of the organization’s annual budget. The land bank ended FY12 with a surplus of $276,134.
Allen said he expects to sell about 100 of the tax-foreclosed properties by the end of this year. He also thinks the land bank will get $120,000 in property-tax revenue next year from the sales the agency already has made. But he mentioned the revenue figure could be higher next year because it doesn’t include any property-tax income from sales the land bank will make this year.
State law allows a land bank to collect half of the property tax for five years from every property it sells.