GRAND RAPIDS — Stagnant revenues and growing operating costs have driven the Grand Valley Metro Council to a crossroad that could very well determine the direction the regional planning agency will take in the future. And making a U-turn to better days isn’t an option for council members.
“We don’t have good times here. When I see deficits of 22 to 24 percent, that is serious trouble,” said Michael DeVries, supervisor of
GVMC Executive Director Don Stypula recently presented the board with a projected deficit of $258,556 for the next fiscal year. He said that shortfall would grow to $312,075 in fiscal year 2009 if the status quo remained under Plan A, which would result in eliminating services and programs and making adjustments to the 18-member staff.
But Stypula also gave board members a Plan B and a Plan C, both of which would cut the deficit and leave the council with a surplus in FY09. Both rely on staffing changes and, more importantly, raising the annual dues that member communities pay.
At the core of both plans is a 21-cent per-capita increase for each of the 33 members. Eight cents of that would go to the transportation department and the other 13 cents would go to general operations, which funds the planning department and administration. The dues increase would be phased in over four years starting with FY06, which begins on Oct. 1.
Both options shift some salaries from the general fund to REGIS, the geographic information system that is a separately funded division of the council. But Plan C goes a bit further by also transferring GVMC Planning Director Andy Bowman to REGIS and making him the director of that division.
Under Plan B the surplus for general fund would reach $21,388 in FY09. Under C, it gets to $55,439.
“There is a lot of pain here. I understand that,” Stypula said to members, many of whom have had to trim and even slash their jurisdiction’s budget.
Stypula said grants, the council’s second source of revenue, have all but dried up — especially the ongoing variety. He also said daily operational costs have risen, with the biggest being what the council plays for its office in the
When GVMC signed its lease in 1997, Stypula said the council paid $24,000 a year for rent and parking. But today, he said that payment has risen to $72,000 and the council doesn’t have an escape clause in its lease agreement, which expires at the end of 2008.
Stypula noted that across-the-board membership fees haven’t been increased since 1995 and that inflation has added 50 percent to the council’s expenditures since that increase.
“So we have a crunch, a significant crunch,” he said.
But Kent County Chairman David Morren said if more revenue couldn’t be found, then cutbacks would have to be made to one or all three of the council’s departments. Ottawa County Administrator Al Vanderberg told Stypula that maybe it was time to determine what areas the council should be involved in, and that maybe it should consider backing off from doing land-use planning for the region.
DeVries called Plan B a “shell game” — a reference to moving some salaries to REGIS — and said each department had to stand on its own. He added that land-use planning was the only readily apparent budget to cut, and that his board would likely approve a dues increase but only if the council’s budget was outcome based.
Grand Rapids Mayor George Heartwell and Tallmadge Township Supervisor William Wiersma both asked Stypula to come up with more options.
“I can’t sell this to my board,” said Heartwell of a fee increase he calculated to be 55 percent over four years.
The council’s executive committee will review the financial situation, the options and any other plan that comes along. Stypula asked the committee to file a report by August so the full board can vote on the FY06 budget in September.
- Dues would rise by a dime for each person in a member community for the next fiscal year should Grand Valley Metro Council members agree to raise the fees by 21 cents per capita over the next four years.
Fees would then rise by 4 cents per capita in FY07, 5 cents in FY08, and 2 cents in FY09. Membership dues would rise by 55 percent from the current 38 cents per capita to 59 cents per capita in FY09.
FY05 FY05 FY09 FY09 FY05-FY09
Jurisdiction Fee Dues Fee Dues Increase
Membership dues provide the Metro Council with roughly $1.5 million in revenue annually.