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.

One Kent Proposal

All of you have heard newspaper accounts of the February proposal from a group of businessman to form a combined Kent County/City of Grand Rapids county government entity. There are numerous mixed reactions to this proposal. The County Commission Chair and the Mayor of Grand Rapids have formed a joint committee— along with members of the “One Kent” Coalition to further research this possibility. One of the tenets of my commission campaign was to be supportive of collaborative efforts on the part of the county, so on one hand I am supportive of this type of effort. What I don’t support, however, is the manner in which this group have made their proposal. It is being done with very little research into the pros and cons of such an effort, how it would affect other local governments in the county, what it would cost in terms of funds and loss of local control, and whether government services would be enhanced. As I’ve indicated before, the county and city—as well as all local cities and townships do collaborate in many things already. We need to be sure these efforts are not lost in the discussion, and that the concerns of all local municipalities are included. Eventually it appears this will come to a vote of the people. In the meantime, I would welcome your thoughts and suggestions. I hope to keep involved, and will let you know any significant items needing further comment.

Revenue Sharing

All of you have heard the complaints from Townships, Cities, and Counties about the declining “revenue sharing” dollars from the state. More than 20 years ago Proposition 2 lowered property taxes and raised sales taxes. Part of this citizen approved tax shift created a formula whereby the state would collect the sales tax and pass on a specified portion to local governments. Unfortunately during the last 20 years—partly because of term limits and partly because of lapsed memories—the legislature and governor have forgotten the part of the ballot language that said a certain specified amount of the increased sales tax was to go back to local governments. The state elected officials figure that money is theirs for use in balancing the state budgets. Gradually the state has “stolen” the amount of funds designated for local governments, and used that money to balance state budgets— while leaving local governments to fend for themselves. As you have undoubtedly heard from local elected officials this results in either decreased local service, or a position of having to go to the local voters for more revenue to cover needed services. The next time you talk with your state legislators tell them to keep their hands off the share of sales tax meant for local governments.

Issue of this Month—Service for Veterans in our County

I was pleased to be nominated to the first Kent County Veteran’s Advisory Committee when this department was established in 2008. I was honored to serve as its first chair. We continue to meet to plan the continued improvement in the service functions. One thing we have realized is that our county is not providing sufficient funds to meet the need. Unfortunately, this pressure to help county veterans comes at the same time the state is cutting funds for veterans services. We have begun to discuss the possibility of finding other sources of funds to help serve the needs of low income and homeless veterans. One possibility is to ask the County Commission to levy a small increase in its Headley Act allowable millage. Essentially it would be possible to levy the difference between what the county currently levies, and the upper limit allowed by Headley—approximately .007 mills. Our committee will be taking that issue up in the next couple of meetings. One factor that will be a major consideration is the amount of revenue sharing we will end up receiving from the state. If we are cut by the estimated $4 million revenue sharing recommended by the Governor, we will be hard pressed to add any additional funding requests to our county budget.

Issue of this Month — Public Transit Millage ballot proposal of May 3

When I was a City Commissioner some years ago I was privileged to serve on the Rapid Transit Board. It was during my service on that Board that a decision was made to create an Authority of the six major cities within the county to fund and operate a public transit system. I am no longer on that Board, but have followed the successes and challenges of the transit system in my service as a County Commissioner. Since its creation, the Authority has successfully had the citizens of the six cities approve millage proposals that operate a fairly comprehensive system of public transit services in the area. Some of the outlying townships, the Grand Rapids Public School system and Grand Valley University purchase services from the Authority for some of their public transit needs. This cooperative arrangement is a plus for all parties. While our area’s public transit is not perfect, I have come to conclude it is one of the most efficient public transit systems in the state, and does a good job of responding to the needs of our population who do not have the means or income to own a car, or need to have an alternative method to get around the community. The Rapid is now asking voters to renew their present millage of 1.14 mills, plus add another .35 mill to expand services and to add a new line that would carry passengers from south Division to the Medical Mile much faster than normal, and allow certain passengers streamline service. It is likely this issue will get more press during the next two months. I would welcome your feedback and thoughts about the upcoming millage question. Should it be voted in or out? Please share your views.

JANUARY 2011 NEWSLETTER

COUNTY COMMISSIONER HAROLD MAST
DISTRICT 12 (WYOMING AND KENTWOOD)

Welcome to this first edition of the Mast County Commission Monthly Newsletter. .

Post Election Activities:

Since the November election I have been involved with several community activities consistent with my campaign platform of jobs, efficiency, and collaboration:

• Participated in the future development forums of 52nd Street sponsored by the Kentwood Planning Department and Lighthouse Communities.

• Accepted appointment to become a member of the Board of the Senior Meals Program, Inc.

• Decided to continue my membership on the Kentwood Board of Review.

• Heard a presentation about the planning efforts to rejuvenate 28th Street Business District at a Wyoming City Council meeting in early December.

• Renewed my membership in the Wyoming/Kentwood Chamber of Commerce and my active role in the Government Affairs Committee of the Chamber.


January activities that I have been involved with:

My first official meeting as a Commissioner was January 4. Several organizational decisions were made:

• Commissioners Sandi Parrish was re-elected Chair and Ted Vonk was elected Vice-Chair of the Commission.

• I was appointed to the Legislative and Human Resources sub-committee of the Board.

• I was appointed to the Network 180 Board and the Veteran’s Affairs Advisory Committee.

• I was also appointed to the Board Standing Rules Committee.


The Board of Commissioners Finance Committee adopted a “buy local” policy that stipulates purchase of goods and services will be based on local ownership vs local dealership presence of providers.

The Veteran’s Affairs Department has filed over 150 claims for benefits since this past June, and has brought over $1 million in added spending to our county businesses.

The Kelloggsville Community Coalition and the Division Avenue Business Association met the week of January 10. The Urban League breakfast on January 17 honored retiring legislators—including Congressman Vern Ehlers.

The County Parks Department is working towards hosting a world class professional water skiing event at Millennium Park this July.