Issue of the Month: Kent County Prevention Initiative and Evaluation

Ever since 2002 the County Commission has allocated funds for a “Prevention Initiative” for our county. The Commission in that year directed the Administrator to “develop a plan to fund” three priority service needs: (1) primary prevention family support services (2) services to families who have had reported child abuse or neglect interventions, (3) substance abuse prevention activities. Since 2003 the Commission has allocated up to $1.7 million annually from the county General Fund to help local non-profit agencies address these three areas. The County has used the Kent County Family and Children’s Coordinating Council (KCFCCC) to oversee the distribution of these Prevention Initiative funds. The KCFCCC has provided reports of how the monies have been used, and the Commission has felt assured the funds are proving effective in addressing needs in the priority areas. The KCFCCC recently adopted a process of evaluating effectiveness of human service dollars in our county—including the Prevention Initiative—called the “Collective Impact Strategy”. The County Commission embraced this strategy, and is encouraging participation by all organizations involved with addressing social issues in our community. This includes businesses, governments, non-profit agencies, and philanthropic agencies. The Commission will be getting periodic reports of the KCFCCC’s implementation, and I will pass these reports on to my readers. I will work hard to assure our county’s commitment to the Prevention Initiative continues and we play a continuing role in addressing social needs in our community.

Kent County Budgeting in Times of Fiscal Stress

The Commission passed our county operating budget for 2012 in mid-November. This budget is for $160.6 million in General Fund expenditures against expected tax revenue of $160.5 million. Only $158,000 is being taken from the General Fund surplus from previous years. We are pleased to be able to adopt a “structurally” balanced budget which means we are spending no more than the revenue we are taking in. Since our revenue has dropped approximately $5 million over last year, this meant a decrease of that same amount in expenditures. This necessitated eliminating 21 FTE positions—most of which are currently vacant—and cutting services in many areas. The county has done a good job of limiting increases in health care and pension costs and is complying with the recently passed state legislation in regards to employees paying 20% of the cost of health care premiums. Like all local governments, the county is experiencing less revenue sharing dollars from the state and less local property tax revenue flowing into its coffers. Our county is similar to more than half of the nation’s counties in the nation who report they are experiencing declining revenues from their state and the federal government to perform mandated services, as well as lessening local tax revenues. Most counties—like Kent—are adopting a “new normal” of less revenues, less staffing, and lowered service levels than in previous years. I will continue to work hard on balancing the needs of my constituents against the need to maintain a conservative approach to using our tax payer’s funds in the most efficient manner possible.

Issue of the Month—Airport Board and Future Airport Operation

The County Commission recently approved three recommendations from the Aeronautics Board Governance Subcommittee. This subcommittee had been appointed by Chair Parrish in January 2011 to review the governance structure of the airport and make recommendations regarding the composition of the airport Board and it’s future operations. The committee reviewed national and other state airport data as well as reviewing current state statutes dealing with governance structure for airport boards.

After spending nine months looking at the data and conducting interviews and visits to other airports, the committee made recommendations as follows: (1) Change the name of the Board from Kent County Aeronautics Board to Gerald R. Ford International Airport Board. This will make it consistent with the name of the airport. (2) In order to reflect the regional nature of passengers and freight using the Gerald Ford airport increase the size of the airport Board from its current six members to seven members. This seventh member will be someone from other counties within the West Michigan Statistical Area—Allegan, Barry, Ionia, Montcalm, Muskegon, Newaygo, and Ottawa. (3) In order to strengthen the regional nature of its services, the Board is directed to work with the WMSA counties to develop a plan to grow the regional nature of the Airport, and to coordinate the development of complementary services with airports in the surrounding WMSA cities.

Issue of the Month—State Health Insurance Act (Senate Bill 7)

There has been a lot of interest and discussion about the effects of the recently passed Senate Bill 7 that establishes requirements for public sector employee cost sharing of health insurance premiums. The new law either caps the amount to be paid by an employee, or limits the employer contributions at no more than 80% of the health care premium cost. The new law takes effect on January 1, 2012.

It is good to know our county management has been doing an excellent job of aggressively bargaining with employee unions during the past several years regarding costs of health insurance premiums. Our current level of employer contributions averages about 85% of the cost—and employees are paying about 15%. This would seem to indicate we would have to re-negotiate a small amount within some of the contracts to get within the prescribed employer/employee contribution ratio. However, even better news is that the union contracts of the past several years actually have enabled us to fall within the “capped” amount of employee contributions for the 2012 budget year. Our management is currently in negotiation with five bargaining units and will have to discuss how the costs of health care premiums get paid for subsequent years. But for now it appears the new law won’t seriously affect our county budget figures for health insurance costs. Unfortunately some other public employers—schools, other counties, cities—may have a more difficult time.

Issue of the Month—County Cash Reserves and AAA Credit Rating

County Fiscal Services Director, Steve Duarte, recently reported the county has 53 days of cash reserves on hand with which to pay bills without having to buy “tax anticipation” notes to pay bills until such time as tax receipts come in to pay the bills. While the County has always had a cash reserve, it is alarming to note the number of days our county can operate has declined by 14% the past five years. This means we need to be careful how we budget for the next several years, and strive to maintain a healthy ‘unassigned’ cash balance. An additional reason to carry a healthy balance is it’s impact on the cost of money needed by the county to implement capital improvement projects. Since 1999 the County has been able to carry a triple-A financial rating—a distinction that only one other Michigan county carries. Standard & Poor—which recently downgraded the US credit rating—has said one of the main reasons they give us this rating is because of our healthy cash balance of nearly $68 million. This triple A rating enables the county—and many other local municipalities who use the county’s triple A rating to aid in their borrowing—over $1 million per year for capital projects over what it would be if we were only double A rated. The debate of how much we should continue to dip into the ‘’unassigned’ fund balance versus reducing level of services to live within current tax revenue becomes more relevant and difficult each year. I would be interested in hearing feedback from readers about how I should approach this issue.

Issue of the Month—Zoo Re-Organization Implementation Group

County Commission Board Chari Parrish recently appointed a John Ball Zoo re-organizational implementation committee. The purpose of this committee is to develop a proposed “public-private governance structure for managing and operating the John Ball Zoo that combines the collective resources and staffs of the County and the John Ball Zoological Society into a 501 © (3) not-for-profit organization.” This is in response to a special study concluded in early 2011 that we needed a different and more efficient of sustaining the Zoo into the future. With this new structure it is envisioned the County will remain the “public” partner and the Non-profit would be the “private” partner as the sole operating entity for the John Ball Zoo. The group will perform the initial budgeting for the future operation, review and assessment of the current assets and resources held by the present two organizations (County Zoo department and John Ball Zoological Society), and determination of how those individually held assets can be combined into the best operation possible. The plan will also include how the future of the Zoo will be funded. The committee is comprised of nine individuals including two county commissioners. It is hoped the work will be complete by early 2012, but that date may be delayed pending some of the initial findings regarding future funding difficulties and current issues. The Commission will receive periodic reports of progress. In the meantime, I would welcome your thoughts about this project.

Issue of this Month—Kent County Parks Collaborative Services Study

In 2010, a subcommittee of the Board of Commissioners Legislative Committee spent time identifying potential collaborative efforts of Kent County’s and other local governments’ “parks, trail systems, recreation, and open space preservation efforts…” The conclusion of this sub-committee was that we should conduct a more thorough study—with all local park/recreation departments invited to participate—of what services and amenities currently exist in our county, where there are some duplications and redundancies, where there are unique one-of-a-kind services, resources being used to provide these services, and a final presentation of a model system or structured relationships that could be formed to maximize benefits and minimize public funding of the parks, trail systems, open space, and recreation activities within the entire county. All local jurisdictions have been invited to participate in this endeavor. So far Kentwood and Wyoming—among many other locals governments—have agreed to participate. The $100,000 cost to complete this is being covered by grants and each participant’s small contribution. The County Board Chair will appoint the citizens committee once all local jurisdictions have indicated a commitment to participate, and have provided names of suggested local citizens to be on the study. The timeline is for the study to be conducted this fall and winter, with a final report due next March or April. I would welcome any of your thoughts about this process.