Grand Rapids adjusts its operating budget again
City commissioners set the date for two key public hearings on taxes last week and also made what they hope is their final adjustment to the general operating budget for this fiscal year, which ends June 30.
Acting on recommendations made by Interim City Manager Eric DeLong and Chief Financial Officer Scott Buhrer, commissioners lowered the amount of income-tax revenue expected to go into the operating budget by $6.2 million and into the capital reserve fund by $348,000. The revenue changes were made because of the ongoing recession and resulting unemployment figure. The city also had a decline in state revenue sharing.
“We’re recognizing the reduction in income-tax revenue,” said DeLong.
At the same time, commissioners transferred roughly $4 million from two other funds, capital improvement and streets capital, to the 2009 operating budget. The transfers allow the city to maintain at least a 5 percent reserve in the operating budget, a goal established by DeLong and Buhrer.
The budget will finish the year at $119.5 million, less than the $125 million the city had in its fiscal-year forecast. Commissioners cut spending from the budget earlier this year.
Buhrer said the 2009 budget should end the year with a fund balance of 7.3 percent and the 2010 budget should end the year with a reserve of 4.8 percent.
The 2010 general operating budget and 2009 property-tax millage rate will get public airings at one hearing June 16. The proposed rate will rise to 8.37 mills from the 2008 rate of 8.24 mills, if approved. That means homeowners in the city would pay $8.37 per $1,000 of taxable value on their July 2010 tax bills.
“There is no Headlee rollback this year,” said Buhrer.
The higher rate reflects an increase in the refuse millage. It would rise to 1.8 mills in 2009 from 1.67 mills in 2008. The levies for the general fund, the capital fund and the library fund remain the same, while the levy for promotional fund dips slightly. The city is authorized to levy an overall millage rate of 9.34 mills.
Another public hearing will be held the same day on a three-year special assessment for certain property owners in the Downtown Improvement District. The DID hopes to raise $2.3 million starting this July and through the following two Julys from an assessment of properties adjacent to Monroe Center and the Louis Campau Promenade.
The tax has been assessed since 2001, but only on a yearly basis in the past. This year marks the first for a multi-year assessment. “It gives us some stability in planning and contracting,” said DID Chairman Bob Herr.
“We still think we run pretty lean. We’re staying flat for this year.”
The assessment for the upcoming fiscal year, which starts July 1, is $708,000, with $174,500 of that being levied for the snowmelt system on Monroe Center. Most of the dollars, though, will go to the Downtown Alliance for maintenance, trash removal, and a beautification program that includes nearly 90 floral planters throughout the district.
“Our goal is to continue with beautification and maintenance,” said Ray Kisor, chairman of the Downtown Alliance.
The assessment is forecast to generate $760,000 in FY11 and nearly $838,000 in FY12. A new assessment for the snowmelt system on the revived Louis Campau Promenade worth $46,300 will begin next year.
“The most frequent positive comment I get from conventioneers to our town is the appearance of our downtown,” said Mayor George Heartwell.
Billing for the downtown assessment this year will be done August 28. Bills will be sent to property owners July 1 next year and in 2011.