Members of the Kent County Finance Committee were presented last week with a list of recommended capital improvement projects for next year. And, as promised, that list was much shorter than the first one they saw a few weeks earlier.
But how much the county will spend on those projects next year hasn’t been settled and won’t be for a few more weeks, as the committee wasn’t required to take action on the recommended improvements last week. The target date to do that is July 20.
“This does not require formal action. We will bring it back to the Finance Committee at the next meeting,” said County Administrator and Controller Daryl Delabbio last week.
The initial CIP list contained 29 projects that would cost $6.4 million, with $6.1 million of that total to come from the county’s general fund. The number of projects had to be cut to lower spending because the general fund in 2011 has a projected deficit of $9.5 million without the CIP appropriation. And $6.1 million is twice the amount the county has recently taken from the operating budget for capital projects.
The CIP list Finance Committee members saw last week was smaller by 13 projects, with 16 for just under $3 million. In reality, the list was actually two lists, with eight projects on each of two possible spending levels. One list has eight projects for $1.95 million. The other has eight more projects above the first spending level. The second eight would add another $1.03 million to the budget and would bring the CIP total to 16 projects at $2.98 million.
There are two amounts because the county has to decide how much of its operating millage to devote to CIP spending next year.
As Commissioner Roger Morgan pointed out last week, until last year the county dedicated 0.2 mills to improvements, giving the board about $4 million from the general fund for CIP projects. Morgan reminded committee members that commissioners picked that number seven years ago to make sure the county could maintain its infrastructure.
Since then, tax revenue to the fund has dropped, and for eight of the last nine years the county has had to dip into the reserve to pay for operations, so the commission cut that transfer last year from 0.2 mills to 0.15 mills.
At 0.15 mills the county would have about $3 million for the CIP budget and could fund the 16 projects. Earlier this year, though, commissioners suggested possibly dedicating only 0.10 mills from the general fund to the CIP budget, which would give operations more money but only give the county about $2 million for eight improvement projects.
Which spending level the committee will choose seems to be up for grabs. There was vocal support for two of the three options they appear to have: returning to 0.20 mills and $4 million, or staying at 0.15 mills and $3 million. No one voiced support for the smaller 0.10 mills.
“I think we ought to go back to 2. If we lose our infrastructure, we are going to be pretty poor,” said Commissioner Art Tanis.
“I wouldn’t go back to 2. I’d go to .15 and almost $3 million,” said Commissioner Richard Vander Molen.
“My recommendation is we go with .15 and the projects selected,” said Delabbio, who reviewed the projects recommended by a CIP committee made up of seven department managers and directors.
One allocation will certainly be made regardless of which spending amount the committee chooses, and it’s the most costly of the recommended items: a $1.1 million bond payment for the Fuller Avenue Campus construction project. One project on the bubble is a new Kent County Health Department clinic. The health department wants to consolidate operations at its Kentwood and Wyoming clinics into a single clinic located between the existing clinics. The project would cost $430,000, but only $230,000 of that would come from the CIP budget; the remaining amount would come from the state.
The reason that making a decision on next year’s CIP spending level is getting so much consideration is the general fund’s $9.5 million projected deficit will be attacked by cutting operating expenses by $7.5 million and by reaching into the reserve account for $2 million. It’s likely the cut to operations will result in more employees being laid off; some commissioners are trying to minimize the job loss by keeping as much money as possible in the general fund. One way to do that is to lower the fund’s contribution to the CIP budget from 0.15 mills to 0.10 mills, leaving the general fund with another $1 million.
“My concern at the last meeting was that we not get locked in at .15,” said Commissioner Jim Talen. “If we’re spending money here, we’re not spending it somewhere else.”