City adopts $457M budget


After addressing a handful of concerns, the Grand Rapids City Commission passed a $457.6 million budget for fiscal year 2016 that was first presented in April by City Manager Greg Sundstrom.

The concerns stemmed from conversations commissioners had when discussing the budget, and concerns brought up by the Grand Rapids Chamber of Commerce at the June 9 public hearing on the budget.

In a letter to commissioners, the Chamber expressed issues with the number of staff additions in the budget.

“The 2016 budget proposal includes the addition of 43 new full-time equivalent positions,” the letter reads. “We have great concerns over the addition of these positions and the long-term risks that go along with them, especially when there are essential services and liabilities that need attention.”

The Chamber recommended the city take “a very close look at each proposed position to ensure the need for the position is long-term, critical to core city services and cannot be addressed through efficiencies or alternative solutions.”

It noted the 43 new positions could total up to $3.5 million annually. Instead of spending surplus funds on added staff, the Chamber called for an increase in road funding.

Mayor George Heartwell noted the majority of the new positions will reside within housing inspections and planning departments as well as the police department and fire department.

“We strongly recommend the commission use surplus funds to invest earlier in the maintenance of our streets,” the letter reads. “As part of the income tax extension, the city commission pledged to spend at least an additional $13 million from the general operating fund, with a minimum of $500,000 and a goal of $1 million annually to fix our roads.

“The FY16 budget request includes an additional $200,000 for city streets, roughly 6 to 10 percent of this year’s projected surplus. Considering that the 15-year plan to return city streets to serviceable condition also included state action on transportation funding — something that is not a certainty and could very likely include a lengthy phase-in — we recommend a more appropriate goal of $1.5 million, adding $550,000 to the current request.”

Josh Lunger, director of government affairs for GRACC, said overall the organization is thankful for the work the commission and staff has done to re-establish a healthy economic climate within the city government, but it believes the city should be using more of its surplus funds on roads and savings, particularly since state funding is still undetermined.

“Mainly, we think a higher priority needs to be put on the roads,” Lunger said. “It’s pretty clear when two-thirds of the city votes to extend the income tax that people want the roads fixed.”

Lunger said by hiring an additional 43 positions, the city is dramatically increasing its staff after, just five years ago, having reduced staff by approximately 500 positions.

“We have concerns over the number,” he said. “This is almost 10 percent of (the positions cut) back in one year. We are worried about what happens if the economy slows again.

“The letter and the commentary was more about we have a surplus and we’d rather it be spent on the long-neglected infrastructure items or be put in savings than on ongoing new hires.”

In addressing the criticism, Heartwell said, “We know we need to have more money in streets, but what we’ve done with this budget exceeds the commitment we made to the Chamber when we got support for the income tax extension and addresses what is a top priority — fiscal stability in creating the general fund and budget stabilization funds that permit us the luxury of being able to weather another recession when it comes.”

Heartwell said the current budget supports the city’s efforts to maintain its bond rating and possibly even improve it, and the additional staff will be added in areas that contribute to economic development in Grand Rapids.

“The staff we are investing in are staff that help spur economic growth and investment,” he said.

“We take the Chamber’s encouragement seriously, but I think it’s fair to say maintaining those balances and investing in staff that can help spur the economic development of the city are key,” Heartwell said.

Before approving the budget, the city commission also discussed plans for how to address six topics identified in its previous budget discussions that commissioners believe deserve greater attention in future budgets.

Those topics are: investing in police outcomes, citywide succession planning, citywide diversity efforts, city cemeteries, Safe Alliances for Everyone and Strong Neighborhoods/neighborhood economic development, and fees.

The commission asked Sundstrom to put together a timeline for revisiting each of the topics to ensure they receive the attention they deserve.

“I want to make sure they don’t fall off the radar,” said Commissioner Rosalynn Bliss. “I would like a timeline with dates for the next four months of when we are going to tackle these topics. These six topics are critical.”

Sundstrom assured commissioners he would make sure the topics do not fall off the radar and would be back in front of them for further discussion.

Part of the budget adoption process included passing a resolution establishing a 2015 property tax millage rate of 9.1515 mills, which is three ten-thousands of a mill less than in 2014.

The average residential property in Grand Rapids has a taxable value of $46,141. Based on the 2015 property tax millage rate, the property taxes for the average residential property for the city of Grand Rapids would be $422.26.

This compares to the prior year’s average residential taxable value of $45,138 and average tax bill of $413.09.

Commissioners unanimously approved the decreased millage rate and approved the ordinance to adopt the 2016 budget.

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