GRAND RAPIDS — The first quarter of Kent County’s fiscal year ended with general operating fund revenues and expenses higher than for the same period last year.
Total revenue for the quarter was up by roughly $14.5 million over last year, but nearly $10.5 million of that increase came from the new revenue sharing reserve fund that went into effect this year and was moved into the general fund.
“It’s a rather significant increase,” said County Fiscal Services Director Robert White. “We transferred that money out of the reserve fund into the general fund.”
But interest income was up for the quarter by 67 percent from last year and tax revenue was also up by 3.6 percent. The county also had double-digit increases in reimbursements, charges for services and fines for the first three months of the fiscal year.
Expenses for the first quarter were up by $13.4 million from last year, but the increase was due to transfer payments made to funds that operate on a different fiscal year than the county does. White told members of the Finance Committee last week that without the transfers, spending was down by more than 2 percent from the first quarter of 2004.
In all, the general fund had $22.1 million in revenue for the quarter and $36.2 million in expenditures, leaving the fund with a $14.1 million shortfall after three months. The county, however, is expected to cut that gap in the coming months.
White said the general fund should finish the fiscal year, which ends on Dec. 31, with a deficit of $5.6 million based on revenue of $142.5 million and expenses of $148.1 million.
“We believe we will run close to budget,” said White.
The deficit will be covered by the fund balance, which was at $77.4 million when the year began. Of that amount, $24.5 million was undesignated and will be used to close the gap.
White told committee members that revenue to the general fund should rise from 3.8 percent to 4.6 percent for fiscal years 2006 to 2009, while expenses are expected go up from 2.7 percent to 3.9 percent over that period. He said services would have to be reduced by $15.25 million over those four years if the county hopes to balance its general fund budget in FY09.
A general fund forecast calls for the county to eliminate $2 million worth of spending in 2006, $3.25 million in 2007, $4.5 million in 2008, and $5.5 million in 2009.
