Revenues were up and expenditures were down in the first quarter for Kent County’s general fund.
At the fiscal year’s three-month mark, total revenues were up by 2.8 percent from the first quarter of last year to $17.8 million, a gain of nearly $500,000. Tax income rose by nearly a percent to $530,000. The county receives the vast majority of its tax revenue in September after property taxes are paid.
However, charges for services increased by more than 14 percent to almost $3.2 million, a hike of roughly $400,000 from a year ago. County Fiscal Services Director Stephen Duarte said the increase was due to higher-than-expected revenues from the property transfer tax and recording fees, which indicate more real estate transactions.
The “other” revenue category, which contains a variety of income sources, rose by 12 percent to $900,000.
“It’s a timing issue and not an increase in revenue,” said Duarte.
Expenditures from the general fund were down by 3.7 percent during the first quarter to $25.9 million, roughly $1 million less than last year. Employee wages were down slightly. The cost for the county’s group health insurance plan fell by 18 percent to $1.9 million. That is a drop of $400,000 at a time when most 2013 premiums rose.
”I’d say that’s significant — it’s significant for the county and for the employees. But I’ll tell you, that monster will rise again,” said Duarte.
Duarte told the county’s Finance Committee last week he wasn’t sure how the Patient Protection and Affordable Care Act, which is set to become fully operational in January, will affect the county’s health insurance plan. “It will have some impact and we need to keep a close eye on it,” he said.
Duarte also said he expects the general fund budget will end the fiscal year with a slight surplus and he doesn’t anticipate any surprises.
“There will be ups and downs. Some of the revenue levels will decrease and some of the expenditures will rise. It’s not level through every month of the year,” he said.
Tax revenue to the lodging excise account also rose by 4.2 percent during the fiscal year’s first quarter to $880,000. Last year income from the 5 percent hotel and motel tax that is attached to every guest’s bill totaled almost $6.6 million, and Duarte thought it could reach $6.9 million this year.
“I now think we’ll see a 4.5 percent increase in tax revenue. (Experience Grand Rapids) is planning on a 4 to 5 percent increase in hotel sales. They get a percentage of the revenue,” said Duarte.
The county’s new contract with Experience GR went into effect this year; the destination marketer is entitled to collect 16.75 percent of the tax total for the next three years. The county transferred almost $1.3 million from the general fund into the lodging excise account at the beginning of the year.
The hike in the excise-tax revenue has been good news for the county because it uses that income to pay the bonds that covered a good portion of the construction of DeVos Place. Not too long ago the tax receipts were down and the county had to dig into the general fund to pay bondholders. This year, the debt is $6 million.
“I think we’ll be able to cover the debt service this year for the third year in a row,” said Duarte.
In a related financial matter, the county decided to keep its property-tax millage rate at 4.2803 mills for this year. State law allows the county to set that rate at 4.2807 mills, which would bring in an additional $750,000 to $800,000 annually in tax revenue.
Last month, the county had its triple-A bond rating renewed by Standard and Poor’s and Moody’s Investors Service. The industry’s top rating was applied to both short-term notes and long-term securities. It’s the 15thconsecutive year the county has achieved the rating’s gold standard.
“Some people say we have a lot of money stuffed into a shoebox,” said Commissioner Dick Vander Molen. “But it’s the way we manage our money and our (fiscal) policy.”