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Metro Council Adopts New Budget
GRAND RAPIDS — Members of the Grand Valley Metro Council adopted their fiscal year budget last week and created a new policy that designates how they will use unreserved funds and cash.
The FY04 Metro Council budget is $2.36 million. The planning agency will receive most of its revenue from transportation grants, nearly $1.29 million, and reimbursements that total $523,500. Fees from member communities will account for $351,756, while $125,000 will come from Michigan Department of Environmental Quality grants.
“It’s a very conservative budget,” said GVMC Executive Director Don Stypula. “We will continue to watch our expenditures, just as you do on the local level.”
Because the council depends heavily on federal and state money for its revenue, Stypula said GVMC would work closely with decision makers in both capitals to ensure that these funds get through. Deficits at both levels could have a negative impact on cash flow to the council.
Stypula reported that payments from the state are “historically late” and he didn’t feel the situation would change for the better anytime soon. He said money due from Lansing has accounted for 93 percent of the council’s receivables, on average, for the past three years. As for the agency’s fund balance, receivables normally make up 79 percent of that account.
Under the new policy, the council will try to keep the total fund balance at 30 percent of receivables and the unreserved cash balance at three months’ worth of operational expenses or 25 percent of the total budget.
At the start of each calendar year, the Executive Committee will review the unreserved cash balance. The committee has three options to take if either that account or the overall fund balance exceeds the recommended amounts. They can hold the funds, partially refund dues to members, or bring a proposed expenditure to the board.
The latter option was suggested by Grand Rapids Mayor John Logie and was added as an amendment to the policy.
“I’m pleased and grateful to see something evolve here,” said Logie.
Kent County Commission Chairman David Morren supported the amendment.
“It seems the biggest problems happen when you have too much or too little money,” said Morren.
Stypula said the policy’s percentages were arrived at after many internal discussions and thought the council was off to a good start for a first-time policy.
“I think this is a very big year for us with Don joining us and all the challenges we face,” said GVMC Chairman Jim Buck, mayor of Grandville.
The council’s Blueprint project will have a budget of $165,000 for the fiscal year. The Michigan Department of Transportation will fund $100,000 of that amount, while the Urban Cooperation Board will contribute the remaining $65,000.
The council’s fiscal year starts on Oct. 1.