FISCAL YEAR 2010 / 2011
BUDGET NARRATIVE
Like most local governments in the
State of Michigan, the City of Grandville is facing a significant
shrinkage in General Fund revenue for the coming fiscal year
resulting from a 4% decrease in property tax values and the most
recent in a long series of reductions in funding from the State of
Michigan dating back to 2002.
The
following financial plan for the fiscal year beginning July 1, 2010
and ending on June 30, 2011 reduces General Fund expenditures,
increases the millage rate by 0.7 mills to 9.154 and covers a
projected General Fund deficit of $96,495 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 $27,759,632. 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 $8,536,565 which is .8% less than
budgeted General Fund Revenues for the current fiscal year even
after the millage increase producing an additional $460,000 in
revenue. The majority of general fund revenue comes from property
taxes (61.8%). The percentage of general fund revenues provided by
the Federal and State governments (12.1%) 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 $8,633,060, not including
the budgeted capital expenditures of $201,000 using designated
reserves. This is a decrease of slightly under 1%
from budgeted expenditures in the current fiscal year. Cuts in the
budget include leaving vacant one part time Assessing position, pay
freezes along with requiring health care contributions from
non-union employees, cutting a requested library furniture purchase,
reducing fire training, elimination of the printed City Calendar,
reducing the number of printed City newsletters and other
miscellaneous cuts such as sprinkling and fertilizer application
reductions. The projected deficit of $96,495 (assuming full
expenditure of all General Fund line items) will be covered by
utilization of available fund balance, if necessary.
Police Department
Police Department budgeted
expenditures total $3,075,429, minus the budgeted expenditure of
reserve funds, or approximately 35.5% of total city General Fund
expenditures. There is an additional budgeted expenditure of
$201,000, for the purchase of a records management system and other
small capital items that will be funded by Drug Forfeiture
Reserves. The Police Department provides a full range of law
enforcement services including a Detective Bureau, narcotics
enforcement and a full-time Police School Liaison Officer jointly
funded by the City and the Grandville Public School District.
Authorized departmental strength this year is 24 full-time officers
and two full-time and one part-time civilian.
Fire Department
Fire
and 24 hour emergency medical response budgeted expenditures total
$898,450 or approximately 10.4% of total city General Fund
expenditures. The Fire Department will maintain its current
staffing level in this fiscal year, however, regularly-scheduled
Fire Department training will be reduced from 24 to 16 events this
year.
Parks and Recreation
Budgeted Park and Recreation capital projects are limited this year
to small expenditures for picnic tables, tree planting and benches
for City parks. An update of the required Park & Recreation Master
Plan is due but will be either deferred or conducted at a minimal
scope using in-house resources.
Special Projects
The
2010-2011 budget contains funding to continue city involvement in
such programs as the Senior Neighbor Recreation Program, Grand
Valley Metropolitan Council, REGIS, Michigan Municipal League, Right
Place Program, Community Access television, the Historical
Commission 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.
Three Major Streets projects are
budgeted for this year including White Street from Wilson to
Division; Ottawa from 30th to Prairie and Chicago Drive
from Wilson to Canal.
Two local streets will be
reconstructed or resurfaced next fiscal year: Cheyenne and Navaho.
Two other local streets, Yellowstone and Wilfred, will be resurfaced
along with Water main replacement projects scheduled for those
locations.
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
$10,713,479 which includes the construction costs of $5,000,000 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 offsetting revenue. The Clean Water Plant budgeted for
additional bond interest expense in 2010-2011 and the Wyoming
Treatment cost is budgeted to increase due to rate increases and
additional flow during construction.
A
comprehensive utility rate study is completed annually and this
year’s study showed a need to increase the Sanitary Sewer
ready-to-serve charges from $3.05 to $7.80 per quarter in order to
meet our bond covenant and pay for the additional interest and
charges from Wyoming.
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 $2,660,679 and includes
a budgeted expenditure of $720,000 for water main repair on
Yellowstone & Wilfred.
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 2010-2011 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. I am appreciative to all involved in this process but would
especially recognize Finance Director Tammy Hopman for her
professionalism and extensive effort in analyzing City finances and
developing this budget.
Respectfully Submitted,
Kenneth D. Krombeen
City Manager
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