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Budgets Are Done
GRAND RAPIDS — It was budget sweeps week at City Hall last week, as five plans worth more than $132 million were adopted for the upcoming fiscal year that begins in less than two weeks.
Of course, the largest spending plan approved last week was the FY07 city budget. The general operating fund plan calls for expenses to total $118.9 million and revenues to reach $114.7 million, with the deficit to be filled by a $4.2 million transfer from the fund balance.
The FY07 expenditures are roughly $5.3 million higher than the FY06 plan, with public safety getting $7 million more in the coming year than the $61.8 million that was allocated this year.
Revenue to the general fund is expected to rise in FY07 by $1 million to $114.7 million largely due to a $1.4 million expected increase in income tax payments. Budgeted at $55 million for the coming year, the hike represents a 2.5 percent increase over the income tax collected in FY06. And income-tax revenue in FY06 was nearly 5 percent more than what the city received in FY05.
“Income taxes have out-performed our original estimate,” said City Manager Kurt Kimball.
State-shared revenues remain unchanged at $23 million.
The budgets for the city’s Brownfield Redevelopment Authority and SmartZone Local Development Financing Authority were also adopted by commissioners last week.
Revenues to the Brownfield Authority are expected to reach $397,000 and expenditures should top $403,000, with $6,000 projected to be drawn from the fund balance to cover the shortfall.
The authority receives from 10 percent to 20 percent of the tax-increment financing from projects it has designated as brownfields, while property owners get the rest. Six property owners are set to receive reimbursements in the coming year, and those payments will make up much of the authority’s expenses.
City Economic Development Director Susan Shannon said the brownfield board repaid the $50,000 loan the authority received from the city’s general fund in 1998, money that was used to start the program that year.
“So now we’re on a level playing field,” said Shannon.
Shannon said the Brownfield Authority has approved 52 projects since 1998, which has resulted in $606 million worth of investments in neglected properties. Those projects have created an estimated 4,939 new jobs over the past eight years.
“This program has proven to be an excellent tool for revitalizing vacant, contaminated and obsolete properties in the core city,” she said.
There are two SmartZone budgets: one for the Plymouth District and another for the Downtown District, which includes North Monroe and the Michigan Street Hill area.
Income to the downtown SmartZone is expected to be $329,775, with almost all that revenue coming from tax increments and state grants. Expenditures are only expected to total $193,367, which would leave the downtown district with a surplus of $136,408 that would go into the fund balance for FY08.
“We expect to see a lot of revenue from that in the coming years,” said Shannon. “This is a real small fund compared to others like the DDA. But it does have a healthy balance.”
The Plymouth SmartZone fund is even smaller with $189,084 in expected revenue, and $97,000 of that will come from the Water Department fund. Operating expenses have been projected to meet the revenue mark, so the account is expected to break even for the year.
Shannon said the water fund will pay for the district’s debt service until revenue to the Plymouth District increases and can reimburse the department. She also said the Downtown District can expect $500,000 more in revenue annually when the Christman Co. completes the Michigan Street hill project.
The Brownfield and SmartZone authorities pay 60 percent of Shannon’s salary, which relieves the general fund of that expense. Shannon works closely with both groups and is the executive director of the Brownfield Authority. The two also pay half of an administrative assistant’s position at the city.
The Downtown Development Authority adopted its budget last week, one that is just under $14 million for the upcoming fiscal year. The DDA expects to receive $9 million in tax-increment receipts, with nearly $6 million of that amount going to service the debt for Van Andel Arena and the parking ramp near the public museum.
The board plans to spend nearly $2 million in FY07 on supporting development in the district and $3.7 million on downtown streetscape improvements.