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Building a budget for 2018-19

Alex Doty • Apr 17, 2018 at 12:00 PM

While 2018 may only be a quarter of the way through, Grand Haven City Council is beginning the process of discussing the city’s 2018-19 fiscal year budget, which begins July 1.

Part of that process took place Monday night at St. Patrick’s Catholic Church, where City Council hosted a work session to discuss the $78 million budget, which includes General Fund revenues of $13.7 million and expenses of $13.59 million.

City Manager Pat McGinnis noted that one of the highlights of the proposed budget is the change in millage rates for taxpayers. The total levy is set to decrease by 0.036 mill in 2018-19, from 15.0066 to 14.9706 mills.

“Services are going up, but the taxes are going down,” McGinnis said.

Contributing to the change is an increase in the Community Center millage and a reduction to the levy for the 2008 infrastructure bond debt fund.

City officials also note that the total taxable value in Grand Haven is slated to increase from last year by about 4.42 percent, from $546,984,677 to an estimated $571,158,354.

Mayor Geri McCaleb also noted several “good news items” at Monday night’s work session, including positive news about the downtown and Grand Landing tax increment financing (TIF) payments.

“Our downtown TIF payments are on a downward trend,” she said.

A downtown TIF debt fund was created about 12 years ago to manage debt from the $3,345,000 2006 capital improvement bonds sold in January 2006. The debt service for these bonds — which continues through October 2026 — is anticipated from TIF revenue from Main Street DDA properties.

In 2015, the city issued refunding bonds to save $275,000 in future interest costs. The city’s General Fund supports the downtown TIF debt service, as property values are only now reaching anticipated levels when the bond was initially issued. According to the 2018-19 budget, the payments are decreasing from $110,000 in 2018 to a projected $84,000 in 2019.

General Fund support for the DDA TIF is proposed to be reimbursed in later years when TIF dollars are no longer needed for debt service payments.

“On the revenue side, taxes paid by Grand Landing is on an upswing,” McCaleb noted.

The Grand Landing debt fund was created in 2006 to manage debt from the construction of public infrastructure at the Grand Landing property. Revenue for debt service comes from tax increment revenue upon these Brownfield properties where improvements were made.

This bond will continue debt service payments until November 2021. A 0.75-mill levy for a Grand Landing debt support fund to meet future debt service needs for TIF properties was approved initially in FY 2011-12, and is slated to continue through FY 2021-22.

In 2018, taxes paid by Grand Landing totaled $460,000, and 2019 taxes are projected to be $621,000 due to increased development, McCaleb noted.

A 0.75-mill levy established in 2012 to grow a Grand Landing debt support fund will continue through FY 2021-22, and will diminish the need for large levies in future years. Elevated development on the site may relieve the need for this continued tax levy and, should excess funds be collected, they would be dedicated to infrastructure replacement, per City Council.

Should there not be a need for these resources for debt service payments, these revenues may be used only for infrastructure projects at City Council’s direction. In 2016, the Brownfield Redevelopment Authority issued 2016 Brownfield refunding bonds, which reduced the overall interest cost by $510,000.

“It’s a combination of refinancing our bonds, the construction that’s going on out there and increases in property value,” McCaleb said of the “good news” items. “We’re headed in the right direction.”

City Council goals

Expectations for the coming fiscal year, as spelled out in the goal statement adopted by the City Council on Jan. 15, include:

• Build and adopt a sustainable infrastructure funding plan.

• Discussion of local energy production.

• Look at a strategic plan for the airport.

• Develop a snowmelt energy source and plan.

• Work on unfunded liabilities.

• Housing affordability.

• Washington Square improvements.

• Address Department of Public Works space needs.

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