County Wondering About State Funding

September 21, 2007
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GRAND RAPIDS — County commissioners will be asked this week to appropriate nearly $22 million of revenue for six funds, and in most years that action would be considered standard operating procedure.

This year, though, that appropriation may be far from normal because about $12 million of that total revenue is reimbursement money from the state. And for four of the six funds, the appropriation is for Oct. 1 through Dec. 31 — a three-month period that makes up the first quarter of the state’s new fiscal year.

But what does the county do if state lawmakers don’t have a general fund budget in place by Oct. 1?

“One option is, we could do some mass cutting,” said Daryl Delabbio, Kent County administrator and controller.

Funding for child care and the Friend of the Court are the most at risk if there is a state shutdown. County Fiscal Services Director Robert White said commissioners would have to decide what to do about the revenue if Lansing closes up shop and brings all state-funded services to a halt. If there is a shutdown, White said he doesn’t think it would last long, as the pressure on legislators to take action on a budget would be overwhelming.

Still that thought didn’t ease the contempt some commissioners voiced toward lawmakers last week, because the longer Lansing takes to create a budget, the more difficult it becomes for the county to fund its services.

“They’ve had three years to get their act together and they still haven’t gotten it together,” said Commissioner Harold Mast.

“They’ve put us in limbo, and I don’t appreciate that,” added Commissioner Art Tanis.

Mast and Tanis are members of the Finance Committee that appropriated the revenue for the six funds last week. The committee also authorized the property tax levies for the senior services and correction millages for the December tax bill, the only county levies left on the winter tab. Revenue from the corrections millage is expected to be $15.3 million this year, while receipts from the senior services millage should reach $6.3 million in 2007.

The Finance Committee also approved 27 capital improvement projects for 2008 totaling $5.25 million. The CIP account will pay for $4.3 million of the improvements, revenue that comes from the two-tenths of a mill the county sets aside from property taxes. Another $400,000 will come from a close-out fund, and $568,000 will come from bond proceeds.

Committee members learned last week that the county gets its Triple A bond rating from the ratings agencies in an untraditional manner. Usually the municipalities that capture the top rating have high property values, high household income and low unemployment. But a report from Standard & Poors cited the county’s healthy debt reserve, strong fiscal management practices and stable financial outlook as the reasons it renewed Kent’s Triple A rating earlier this year.

“They’re suggesting that you do good planning for the future,” said White.

“I think we need to give credit to staff for their planning,” said Richard Vander Molen, commission vice chairman and chairman of the Finance Committee.

White said the county’s rating saved the aeronautics board about $4 million when it sold $119.5 million worth of airport revenue bonds recently for the new parking ramp and other upgrades. The bonds received a 4.63 percent effective interest rate — roughly two-tenths of a percent less than if the county had a Double A rating — and the airport didn’t have to buy insurance for the 30-year securities because of the county’s bond rating.

White also said the state’s fiscal mess wouldn’t have a negative affect on the county’s bond rating unless it planned to issue a package during a shutdown, and Kent isn’t planning to do that in the immediate future.

“We have nothing scheduled for sale in October or November.”   

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