FISCAL YEAR 2009/2010
BUDGET NARRATIVE
The primary challenge in development
of the city budget for Fiscal Year 2009-10 was dealing with
decreased revenues due to the declining property tax values and
continued reductions in funding from the State of Michigan.
The
following financial plan for the fiscal year beginning July 1, 2009
and ending on June 30, 2010 reduces General Fund expenditures,
maintains the existing 8.454 mill city property tax millage rate for
the 7th consecutive year and covers a projected General
Fund deficit through use of available undesignated fund balance.
The total appropriation recommended for all funds, excluding
transfers between funds and the use of designated reserves, is
$20,818,235. The sections that follow contain an overview of select
programs and their proposed budgets:
General Fund
General Fund revenues, minus transfers from designated reserves, are
projected to total $8,566,465 which is 2.3% less than
budgeted General Fund Revenues for the current fiscal year. The
majority of general fund revenue comes from property taxes (65%).
The percentage of general fund revenues provided by the Federal and
State governments (15.1%) continues to slide. Revenue sharing from
the state of Michigan is expected to decrease by 5% over the current
year, due to the State budget deficit and shrinking sales tax
collection.
The General Fund provides a wide
array of city services including police, fire, district court, parks
and recreation, cemetery, general administration and others.
General Fund expenditures are budgeted at $8,884,635, not including
the budgeted capital expenditures of $212,000 using designated
reserves. This is a decrease of 1.8% from budgeted
expenditures in the current fiscal year. Cuts in the budget include
leaving vacant one full time Police Officer position and one
position in the Department of Public Works plus additional
reductions of capital expenditures. The projected deficit of
approximately $518,170 (assuming full expenditure of all General
Fund line items) will be covered by reallocation of $200,000 in
local street funds plus utilization of available fund balance.
Police Department
Police Department budgeted
expenditures total $3,027,241, minus the budgeted expenditure of
reserve funds, or approximately 34.9% of total city General Fund
expenditures. There is an additional budgeted expenditure of
$172,000, for the purchase of a records management system and other
small capital items that are being purchased with Drug Forfeiture
Reserves. The Police Department provides a full range of law
enforcement services including a Detective Bureau and Community
Policing Unit that includes a full-time Police School Liaison
Officer jointly funded by the city and the Grandville Public School
District. Authorized departmental strength this year is 25
full-time officers and two full-time and one part-time civilian.
Fire Department
Fire
and 24 hour emergency medical response budgeted expenditures total
$935,123 or approximately 10.6% of total city General Fund
expenditures. The Fire Department will maintain its current
staffing level in this fiscal year.
Parks and Recreation
Budgeted Park and Recreation capital projects are limited this year
and include $5,000 for additional new fencing for the baseball
fields at the Aaron Street Little League complex and picnic tables
and benches for area parks.
Special Projects
The
2009-2010 budget contains funding to continue city involvement in
such programs as the Grand Valley Metropolitan Council, REGIS,
Michigan Municipal League, Right Place Program, Community Access
television and the Grandville/Jenison Chamber of Commerce.
Major and Local Streets
Primary activity in the Major and
Local Street Funds continues to emphasize the improvements necessary
to maintain the integrity of Grandville’s street system.
There are several Major Streets
projects budgeted. Federal Stimulus Money is providing the City an
opportunity to complete four small projects including: Kenowa Avenue
south of Wal-Mart, Potomac Avenue, 44th Street from
Kenowa to the expressway ramp, and 44th from Potomac to
Rivertown. The City’s only cost for those projects are the
engineering costs.
Two other budgeted projects include:
Ivanrest Avenue south of 44th Street, and the small
public portion of the Mall Ring Road from Potomac to Century Center
Street. The Ivanrest Project is a carryover from the 2008-09
capital budget.
Two local streets will be
reconstructed or resurfaced next fiscal year including Pine Avenue
and Liberty Square.
Clean
Water & Water Systems
The City’s Clean Water System budget
is comprised of three departments:
·
The Clean Water System Collection Department is used
to account for operations directly related to the City of Grandville
and supported solely by City residents.
·
The Clean Water System Operations Department is the
primary operating fund for the Clean Water System and is supported
proportionally by Ottawa County users of the system.
·
Clean Water System Improvement and Extension
Department is used to fund Capital improvements, debt retirement,
interest expense, and depreciation reserves.
The
total expense budgeted for the Clean Water System Fund is $9,682,986
which includes the construction costs of $4,000,000 for the Clean
Water Plant renovation. There will be a bond issue for the amount
of the renovation cost. That is reflected in the budget as an
offsetting revenue.
Annually a comprehensive rate study is completed and this year’s
study showed no need to change the current sewer rate charges.
The
Water system is comprised of two departments:
·
The Water Operations Department is used to account for
regular operations
·
The Water Improvement & Extension Department accounts
for long-term capital improvements, debt retirement, interest
expense and depreciation reserves.
The
total expense budgeted for the Water Fund is $2,177,396 and includes
a budgeted expenditure of $290,000 to paint the ceiling of the
storage tank.
The same annual comprehensive rate study that is
completed for sewer rates is used to determine water rates. The
result of this year’s study showed there is no need to change water
charges in the next fiscal year.
Summary
The
Fiscal Year 2009-2010 Financial Plan for the City of Grandville is a
product of months of considerable effort by many individuals
beginning with the input and analysis of staff members at all levels
of the organization and continuing through the final decisions of a
City Council that values strategic planning and is committed to our
community’s quality of life and efficient stewardship of public
funds. My appreciation goes to all involved in this process and, in
particular, to Finance Director Tammy Aue for her budget leadership.
Respectfully Submitted,
Kenneth D. Krombeen
City Manager
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