Annual Budget Fiscal Year 2017-2018 - Hudsonville
Annual Budget Fiscal Year 2017-2018
CITY OF HUDSONVILLE, MICHIGAN ANNUAL BUDGET For The Fiscal Year
JULY 1, 2017 – JUNE 30, 2018 Adopted on June 13, 2017 in accordance with Sections 7.5 and 7.6 of the Charter of the City of Hudsonville and State of Michigan Public Act 2 of 1968, as amended through Public Act 493 of 2000 For Hudsonville City Commission Mark Northrup Jim Holtrop Gary Raterink Greg Steigenga Dan Bolhuis Larry Brandsen Philip Leerar (Mayor Pro-Tem)
Mayor Commissioner, Commissioner, Commissioner, Commissioner, Commissioner, Commissioner,
Ward Ward Ward Ward Ward Ward
1 1 2 2 3 3
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Executive Summary …………………………………………………………………………………………………………………………………………………………………. i - xiv Exhibit 1 – FY 2016-2017 Summary of Revenues and Expenditures …………………………………………………………………………………….
Ex. 1
Exhibit 2 – Schedule of Budget Preparation …………………………………………………………………………………………………………………………… Ex. 2 General Operating Fund (101) ………………………………………………………………..…………………………………………….………………………………… 1-27 Revenues...…………………………………………………………………………………………………………………………………………………..………………….. City Commission…………………………………………………………………………………………………………………………………..…………………………… City Manager…………………………………………………………………………………………………………………………………………………………………… . Clerk………………………………………………………………………………………………………………………………………………………………………………… Information Services………………………………………………………………………….………………………………………………………………………………. Board of Review………………………………………………………………………………………………………………………………………………………………… Administrative Services……………………………………………………………………………………………………………………………………………………… . Finance & Accounting………………………………………………………………………………………………………………………………………………………… Assessor…………………………………………………………………………………………………………………………………………………………………………… Elections………………………………………………………………………………………….……………………………………………………………………………….. City Hall Buildings & Grounds…………………………………………………………….……………………………………………………………………………….. Attorney/Legal Council……………………………………………………………………….………………………………………………………………………………. Police……………………………………………………………………………………………………..………………………………………………………………………… Fire………………………………………………………………………………………………………………………………………………………………………………….. Emergency Services…………………………………………………………………………………………………………………………………………………………… Department of Public Works……………………………………………………………………………………………………………………………………………….. Planning & Zoning……………………………………………………………………………………………………………………………………………………………… City Promotion…………………………………………………………………………………………………………………………………………………………………… Employee Fringe Benefits…………………………………………………………………………………………………………………………………………………… . Other Expenses………………………………………………………………………………………………………………………………………………………………….. Debt Service...…………….…………………………………………………………………………………………………………………………………………………….. Transfers-Out……………………………………………………………………………………………………………………………………………………………………..
1-2 3 4 5 6 7 8 9 10 11 12-13 14 15 16 17 18-19 20 21-22 24 25 26 27
Investment Income Fund (125) ………………………………….………………………………………………………………….………………………………….…….. 28-30 Major Street Fund (202) …………………………………………….………………………………………………………………….………………………………….……… 31-37
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Revenues…………………………………………………………………………………………………………………………………………………………………………. Street Construction……………………………………………………………………………………………………………………………………………………………. Street Routine Maintenance……………………………………………………………………………………………………………………………………………….. Mowing……………………………………………………………………………………………………………………………………………………………………………. Traffic Services…………………………………………………………………………………………………………………………………………………………………. Winter Maintenance……………………………………………………………………………………………………………………………………………….………….. Administration……………………………………………………………………………………………………………………………………………………………………
31 32 33 34 35 36 37
Local Street Fund (203) …………………………………………………………………………..…………………………………….………………………………………… 38-44 Revenues…………………………………………………………………………………………………………………………………………………………………………. Street Construction……………………………………………………………………………………………………………………………………………………………. Street Routine Maintenance……………………………………………………………………………………………………………………………………………….. Mowing…………………………………………………………………………………………………………………………………………………………… .……………… Traffic Services…………………………………………………………………………………………………………………………………………………………………. Winter Maintenance…………………………………………………………………………………………………………………………………………………………… Administration……………………………………………………………………………………………………………………………………………………………………
38 39 40 41 42 43 44
Park & Recreation Fund (208) …………………………………………..………………………………………………….………………………………….………….……. 45-47 Revenues ………………………………………………………………………………………………………………………………………………………………………….. 45 Expenditures …….………………………………………………………………………………………………………………………………………………………………. 46-47 Tax Increment Finance Fund (247) …………………………………………..………………………………………………….………………………………….……… 48-51 Revenues………………………………………………………………………………………………………………………………………………………………………….. 48 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 49-50 Transfers-Out…………………………………………………………………………………………………………………………………………………………………….. 51 DDA Operating Fund (248) …………………………………………………………………………………….…………………………………………………………..…..… 52-53 Revenues ……………………………………………………………………………………………………………………………………………………………………….… 52 Expenditures …….………………………………………………………………………………………………………………………………………………………………. 53 Terra Square Fund (254) …………………………………………………………………………………….…………………………………………………………………… 54-58
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Revenues…………………………………………………………………………………………………………………………………….…......…......…......….....…....... Expenditures……………………………………………………………………………………………………………………………….….....…......…......…......…........ Operations Revenues…………………………………………………………………………………………………………………………………………………...….... Operations Expenditures……………………………………………………………………………………………………………………………………………....…....
54 55 56 57
Library Fund (271) ……………………………………………………………………………………………………….………………….………………………..……………… 59-62 Revenues………………………………………………………………………………………………………………………………………………………………………….. 59 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 60-61 Library Endowment Fund (272) …………………………………………………………………………………….……………………………………………….………… 63 Library Universal Service Fund (275) …………………………………………………………………………………… .…………………………………..……………. 64-65 Revenues………………………………………………………………………………………………………………………………………………………………………….. 64 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 65 Bond Money Market Fund (295) …………………………………………..………………………………………………….………………………………….…………… 66 2016 Quality of Life Projects Debt Fund (355) ……………………………..………………………………………………….………………………………….…
67-65
Revenues………………………………………………………………………………………………………………………………………………………………………… . 67 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 68 Building Authority Debt Fund (384) ………………………………………………………………………………….………………………………………………….…. 69-70 Revenues……………………………………………………………………………………………………………………………………………………………………….... 69 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 70 Library Debt Fund (385) ………………………..………………………………………………………………………….……………………………………….……………
71-72
Revenues………………………………………………………………………………………………………………………………………………………………………… . 71 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 72
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Quality of Life Enhancement Projects (430) ………………………………………………………………………………………………………………………….. 73-75 Revenues………………………………………………………………………………………………………………………………………………………………………… . 73 Expenditures…………………………………………………………………………………………………………………………………………………………………….. 54 Library Expansion Fund (471) …………………………………………………………………………………….………………………………………..…………………… 76-77 Revenues………………………………………………………………………………………………………………………………………………………………………….. 76 Expenditures…………………………………………………………………………………………………………………………………………………………………..… 77 Transfers-Out……………………………………………………………………………………………………………………………………………………………….…... 78 Sewer Fund (590) …………………………………………………………….…………………………………………………………….………………………………………… 79-82 Revenues………………………………………………………………………………………………………………………………………………………………… ...…….. 79 Line Maintenance………………………………………………………………………………………………………………………………………………………..…….. 80-81 Administration…………………………………………………………………………………………………………………………………………………………… ..……. 82 Water Fund (591) ………………………………………………………………………………………………………….………………………………………………………..… 83-87 Revenues………………………………………………………………………………………………………………………………………………………………………….. Line Maintenance…………………………………………………………………………………………………………………………………………………....…………. Administration………………………………………………………………………………………………………………………………………………………… ..……….. Debt Service……………………………………………………………………………………………………………………………………………………………………..
83 84-85 86 87
Equipment Fund (661) ………………………………………………………………………………………………………….…………………………………………..……. 88-89 Revenues ………………………………………………………………………………………………………………………………………………………………………….. 88 Expenditures…………………………………………………………………………………………………………………………………………………………………..… 89 Transfers-Out……………………………………………………………………………………………………………………………………………………………….…... 90 Exhibit 3 – 2017-2018 Capital Improvements Plan………..………….………………………………………….……………………………………….……. Ex. 3 Exhibit 4 – 2018-2019 Capital Improvements Plan………………….…………………………….……………………………………………………………. Ex. 4 Exhibit 5 – Ordinance of Adoption (Ord. No. 17-XXXX) ……………….………………………………………………….…………………………………… Ex. 5
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ June, 2017 Dear Mayor Northrup and City Commissioners: On behalf of city staff, I am pleased to present the City Commission with the recommended budget for the fiscal year ending June 30, 2018. This budget document is organized by Fund number, but also includes supplemental materials including charts, exhibits, and this Executive Summary. The Ordinance of Adoption necessary for the approval of the budget is included at the end. The Charter of the City of Hudsonville specifies the requirements for the proposed budget document. Per the Charter, the following information must be included in the budget document:
Detailed estimates of all proposed expenditures for each department and office of the city showing the expenditures for corresponding items for the current and last preceding fiscal year. With reasons for increases and decreases recommended, as compared with appropriations for the current year.
Statements of the bonded and indebtedness of the city showing the debt redemptions and interest requirements, the debt authorized and unissued, and the condition of the sinking fund, if any.
Detailed estimates of all anticipated income from sources other than taxes and borrowing, with a comparative statement of the amounts received from each of the same or similar sources for the last preceding and current fiscal year.
A statement of the estimated balance or deficit, as the case may be, for the end of the current fiscal year.
An estimate of the amount of money to be raised from current and delinquent taxes and the amount from bond issues which, with income from other sources, will be necessary to meet the proposed expenses.
Such other supporting scheduled as the City Manager or Treasurer may deem necessary or the Commission may require.
This submitted budget meets all of the above criteria.
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ CITY COMMISSION GOALS At the time of this budget adoption, the City Commission was in the process of updating its Strategic Plan for years 2017 through 2022. Because the new plan was not yet complete, the city’s current 2011-2016 Strategic Plan was used as the basis for many of the planned expenditures. To an extent, every single goal and most every objective in the Strategic Plan have been incorporated into either the operating or the Capital Improvement budget items. These include:
Goal 1 – Public Services – Deliver the exceptional level and quality of public services and amenities that our residents have come to expect o Objective 1 – Prioritize street maintenance and repair at the top of the list for public services. Met through the allocation of funds for street resurfacing and repair.
o
Objective 2 – Continually improve the services provided by the city, especially those that relate to public safety and quality of life. Met through the allocation of funds for new Fire and DPW equipment.
o
Objective 3 – Continue to operate and improve our city parks and open spaces. Met through the allocation of funds for park improvements and non-motorized pathways.
o
Objective 4 – Focus on improving “walkability” throughout the city. Met through the allocation of funds for sidewalks, non-motorized pathways, and the Harvey St. improvements.
o
Objective 5 – Develop and maintain a versatile professional workforce that is cross trained to ensure exceptional public service. Met through the allocation of funds for employee, appreciation, training, wellness, and job reassignment.
Goal 2 – Finance - Maintain and improve the strong financial position of the city. o
Objective 1 – Maintain a fund balance of at least 20% of annual revenues. For the first time in recent history a projected shortfall may cause the General Fund balance to dip below the 20% average expenditure level of $548,000. However as described later, the financial circumstances of the FY 17-18 budget are unique to this year. It is therefore anticipated that the fund balance will rebound above 20% in subsequent years.
o
Objective 2 – Strive to minimize the necessity of incurring debt, and to pay off existing debts as soon as possible. 2018 will mark the final installments on the city hall and library bonds, meaning these building will be paid off by the end of this
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ fiscal year. At the same time, the city will began making its annual (smaller) debt service payments on the new 2016 quality of life enhancement bonds. o
Objective 3 – Adopt policies that support “living within our means”. Met through the proposed budget estimating methodology, planned allocation of funds for new or slightly used capital items, and the continued investment of city capital. Also met through the replacement of the 0.5 Library debt millage with the 0.5 operating millage.
Goal 3 – Economic Development – Support and promote economic development in our community that seeks to revitalize our downtown and enhance our quality of life. o
Objective 1 – Establish public/private partnerships in our community that further the downtown development Vision of the Master Plan. Met through the allocation of funds for Lakeshore Advantage and full time staff who are actively working in concert to promote economic development in the community in accordance with the 2030 Plan.
o
Objective 2 - Initiate and support the redevelopment of the downtown area. Met through the allocations towards the various remaining Quality of Life Enhancement Projects (i.e. M-121 landscaping, Service Rd. streetscape enhancements, Harvey Street Phase II, and the Buttermilk Creek Underpass.
o
Objective 3 – Determine a course of action for the “triangle property” owned by the DDA. Met by the assumption of the 2017 sale and public/private redevelopment of the triangle property.
Goal 4 – Partnerships - Establish strong partnerships with our community, with our neighbors, and with other governmental agencies to promote shared essential services. o
Objective 1 – Regularly communicate with the community about current developments and issues facing the city. Met through the allocation of funds for the quarterly newsletter, storm water education, regular public meetings and a more robust website alert system.
o
Objective 2 – Proactively seek out and collaborate with other governmental agencies and organizations to provide essential services in the most efficient manner. Met through participation in the Fire mutual and automatic aid programs, contractual police services, continued membership and participation in the Chamber of Commerce, and other various contractual arrangements for services.
iii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ BEST PRACTICES IN BUDGETING As noted above, the city’s Strategic Plan contains the financial goal of “Maintaining and improving the strong financial position of the city”. To meet this goal, the city follows three primary objectives - 1) to maintain a minimum fund balance of at least 20% of its normal annual expenditures in reserve (which averages around $548,000 over the past 6 years); 2) to strive to minimize the necessity of incurring unnecessary debt and to pay existing debts off early (if possible); and 3) to adopt policies that support “living within our means”, which includes creating a budget that assumes lower than expected revenues and higher than expected expenditures. As evidenced in the graph below, the city has an established pattern of adhering to these objectives. First, revenues consistently outpace expenditures, even in years where shortfalls were projected in the budget. Second, the city’s debt obligations have been paid down or paid off early, and large down payments were made towards new incurred debt, such as the case in 2012-2013 when $1 million of fund balance was paid towards the new DPW building debt. And third, the city has historically maintained a fund balance at or above 20% of normal annual revenues. These “best practices in budgeting” have allowed the city to maintain its strong financial position.
City of Hudsonville General Fund 2011-2018 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $2010-2011 Revenues
2011-2012 Expenditures
2012-2013
2013-2014
2014-2015
End of Year Fund Balance
2015-2016
2016-2017 (Budgeted)
2017-2018 (Projected)
Average Minimum Fund Balance (20%)
iv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ REVENUE SOURCES Core governmental functions are funded through the city’s General Fund. The primary source of revenue for the General Fund is property taxes which constitutes over 69% of all funds available for general operations. The city’s second largest revenue source for government operations, state revenue sharing which comprises about 19% of all revenues. Despite the Michigan Municipal League’s ongoing efforts to convince the state to restore statutory revenue sharing amounts to pre-2002 levels, the city’s overall state shared revenue is projected to decrease by about $5,000 next year. The city’s property tax revenues are projected to increase by nearly $368,000 next year. The projected increase is largely attributed to a 0.500 increase in the city’s general operating millage, which is intended to replace the 0.500 Library debt millage that fell off last year. The increased revenues generated from this millage will be used primarily to fund the city’s Library, which has been operating at a budget shortfall for several years due to increased demand for services by the community. Because the voter-elected 0.5 mills debt millage fell off in FY 2017, city tax payers will not see an overall increase to their millage rate. In addition to the new millage, tax revenues are also trending up thanks to an increase of over $5 million in the city’s total taxable value. This topic is discussed further on page vii. The pie chart below illustrates the distribution of various revenue types that the General Fund receives.
Property Taxes (69.4%)
Federal/State Funds (19.4%) Licenses & Permits (3.3%) Charges for Services (0.7%) Fines & Forfeits (0.5%) Interest (1.7%) Reimbursements (1.9%) Other Revenues (3.2%)
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ PROPERTY TAX REVENUES As stated above, the city’s property tax revenues are projected to increase by nearly $368,000 next year over the prior fiscal year. This is due primarily to a planned 0.500 mill increase in the general operating millage rate, as well as an increase in the city’s total taxable value. The increase in total taxable value is attributed to an upward tick in residential, commercial and industrial development throughout the city. This is a good sign given that tax revenues decreased significantly in the prior fiscal year due to the loss of the city’s ability to collect personal property taxes.
$2,380,358
$2,012,589
$2,358,831
$2,310,915
$2,273,619
$2,456,115
$2,505,289
$2,471,843
$2,551,565
$2,485,981
$2,376,468
$2,466,803
$2,390,639
$2,285,053
$2,208,011
$2,000,000
$1,860,633
$2,500,000
$1,760,670
$3,000,000
$1,803,334
The graph below illustrates the city’s historical property tax revenues over the past 17 years, along with next year’s projected amount.
$1,500,000 $1,000,000 $500,000 $-
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ TAXABLE VALUES Revenues from property taxes are closely correlated to the city’s total taxable value. Last year (FY 16-17) the city’s total taxable value decreased by over $4.5 million to $216,491,033. This was due to a new law that effectively phases out the ability of local governments to collect personal property taxes from large manufacturers. Fortunately in the upcoming year, the city’s total taxable value will increase by over $5 million to $221,501,138. At the proposed millage rate, this equates to a little over $56,000 in additional tax revenue for the city. Values for individual parcels within each property class vary based on the neighborhood as well as the overall condition of the property.
$250,000,000
$50,000,000
$221,501,138
$216,491,033
$221,012,995
$216,280,151
$213,754,639
$204,328,295
$214,435,294
$226,943,939
$230,207,300
$231,828,160
$220,267,966
$208,129,990
$200,376,032
$193,712,316
$183,210,567
$176,573,077
$100,000,000
$157,570,536
$150,000,000
$237,413,044
$200,000,000
$-
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Total Taxable Value of City Property since FY 2000-2001
vii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ THE AFFECT OF PROPOSAL A ON TAXABLE VALUE The taxable value of each property is capped and limited by Proposal A. Under this Act, the taxable values of individual parcels cannot increase more than 5% or the rate of inflation, whichever is less. For 2017 the inflationary factor as set by the state capped the increase in taxable value at 1.009%. The table below shows a 17 year history of the maximum allowable increases for taxable value under Proposal A, which was enacted in 1995. Since then, taxpayers have directly benefited due to the capping of their taxable property values during times of economic prosperity. However the law has also had the unforeseen negative consequence of limiting the city’s ability to recoup lost property tax revenues after the 08-09 recession, which dramatically reduced the city’s taxable values (see graph on prior page). As a result the city’s current taxable value is still equivalent to the 2007 level, while at the same time the cost of city-provided services has increased at a faster rate than that of Proposal A. This is a primary reason why the city has needed to utilize its fund reserves in recent years, and further justification for the 0.500 millage increase. Maximum Allowable Properly Tax Increases Under Proposal A Year
% Increase
Year
% Increase
Year
% Increase
2000 2001 2002 2003 2004 2005
1.900% 3.200% 3.200% 1.500% 2.300% 2.300%
2006 2007 2008 2009 2010 2011
3.300% 3.700% 2.300% 4.400% 0.997% 1.700%
2012 2013 2014 2015 2016 2017
2.700% 2.400% 1.600% 1.600% 1.003% 1.009%
MILLAGE RATE Since 2006 and throughout the 08-09 economic downturn, the City of Hudsonville has levied a total of 11.2303 mills. In addition, properties located within the Downtown Development Authority (DDA) boundary levy 1.00 mills upon themselves for DDA maintenance and operations such as downtown parking lot maintenance and street light energy bills. Under a state law known as the Headlee Amendment, the city is legally able to increase its operating millage rate to 17.6657 mills. Many communities in Michigan have been forced to levy their maximum millage rates due to various economic hardships, most notably the crippling financial burden of unfunded pension liabilities and other post-employment benefits. Fortunately through foresight and fiscal conservancy, the City of Hudsonville has been able to avoid these pitfalls and therefore maintain a relatively low millage rate throughout the sharp downturn in the economy after 2008.
viii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ The table below indicates both the maximum allowable (as rolled back under the Headlee Amendment) and recommended millage rate for each taxing entity. Function General Operating
Current City Millage Rates Maximum Allowable* 17.6657
Recommended Rate 11.2303
DDA Operating
1.8611
1.000
*As adjusted under Headlee Amendment
MILLAGE RATE REDUCTIONS As noted above, since 2006 the City of Hudsonville has levied a total of 11.2303 mills. However between 2000 and 2006, the city rolled its General Operating millage levy back on three separate occasions for a total reduction of 2.1239 mills, as shown in the table below. The millage rate was rolled back during times of economic prosperity and when the city had large fund balance reserves. Although the millage rollbacks benefited the city’s taxpayers, they also had an unforeseen negative effect on the city due to the 08-09 economic downturn and recession that followed. Like many Michigan communities, Hudsonville saw its tax revenues and state shared revenues began to decline after 2009, causing the city to begin utilizing its fund reserves to cover budget shortfalls for general operations and capital improvement costs, specifically road improvements. This trend continues today as the city’s operating costs continue to increase while revenue streams remain relatively flat. Hudsonville Millage Rate Reductions Year Before 2001 2001-2003 2004-2006 2006 to 2015 Total Millage Reduction
Millage Rate 13.3542 12.2369 12.2322 11.2303
Mills Mills Mills Mills
Change From Previous Rate N/A -1.1173 Mills -0.0047 Mills -1.0019 Mills 2.1239 Mills
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ MILLAGE RATE COMPARISON Our tax payers may be surprised to learn that Hudsonville currently levies the third lowest millage rate among Ottawa County cities and villages (see table below). Determining an appropriate millage rate in a community is dependent upon a number of factors including the population and size of the community, as well as the number and type of public services that are offered. More importantly however, is the total taxable value of the community, which directly influences the amount of revenue that each mill will generate. In Hudsonville for example, one mill generates a little over $217,500 in revenue for the city. However in Zeeland, where the city’s total taxable value is over $290 million higher than Hudsonville’s, that same one mill will generate about $509,400 for the city. This is noteworthy when you consider that Hudsonville serves a larger population and has more land area than Zeeland. It also emphasizes the importance of maintaining property values and continuously growing the tax base in the city.
Municipality City of Holland City of Coopersville City of Grand Haven City of Zeeland City of Hudsonville City of Ferrysburg Village of Spring Lake
Ottawa County City/Village Millage Rate Comparison 2016 City Millage Rates Population Includes City & Library Taxes 15.1085 Mills 33,742 13.7231 Mills 4,312 13.9090 Mills 10,895 11.2354 Mills 5,605 11.2303 Mills 7,263 10.7773 Mills 2,957 10.3600 Mills 2,398
Area (Sq. Miles) 17.35 4.81 7.36 3.01 4.14 3.59 1.74
Taxable Value $709.9 Million $103.8 Million $546.9 Million $509.4 Million $217.5 Million $172.2 Million $125.9 Million
MILLAGE RATE RECOMMENDATION Based on the various economic factors described herein, the Finance Director and I are recommending that as part of this budget adoption, the City Commission increase the city’s general operating millage by 0.500 mills. It is noted that with this increase, the city taxpayers will not see their overall millage rate increase. This is because the 0.500 mills that were previously collected for the Library improvement bond were removed in 2016-2017 once these bonds were paid in full. In addition, the continued collection of the 0.500 mills is deemed necessary to cover the ongoing and increasing operational costs for the city, primarily the Gary Byker Memorial Library. Once again, the recommended millage increase will not result in an overall change to the 11.2303 mills that the city currently levies.
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CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ DEBT OBLIGATION In 2016 the City Commission bonded for approximately $4.7 million in new capital improvements know as Quality of Life Enhancement projects. These include the Terra Square farmers market and community center, the Harvey Street pedestrian corridor (“woonerf”), the Chicago Drive landscape enhancements, and the Service Drive streetscape and parking enhancements. These projects, which were thoroughly vetted in the community through several years of public comment and polling, were identified as priorities in the city’s Imagine Hudsonville 2030 master plan. Furthermore, the decision to borrow for these projects was strategically timed with the conclusion of the 1997 general obligation bond for the City Hall and Library buildings, which will be paid in full by late 2017. Prior to 2016, the city borrowed $300,000 in installment purchase notes for the construction of a new $2.1 million DPW facility in 2012. The rest was paid in cash out of the city’s fund reserves. As noted earlier, Hudsonville’s current total taxable value is $221,501,138. State statute limits the amount of general obligation installment note debt that governmental entities may issue to 1.25% of its total taxable valuation, and the amount of general obligation bond debt to 10% of its total taxable valuation, exclusive of interest. The current debt limitation for the City of Hudsonville is $2,768,764 (1.25% of TTV) for installment note debt, and $22,150,113 (10% of TTV) for bond debt. The city currently owes $200,000 on installment note debt, and $5,060,000 in bond debt. Therefore the city’s current debt obligation is well below the state-imposed limitations. As outlined below, the city paid $488,825 towards outstanding debt (principle and interest) during the prior fiscal year. The city will have four remaining debt obligations in FY 17-18 however one of them, the 1997 City Hall/Library Bond, will be paid in full in late 2017. The current outstanding principal balance on all City debts combined is $5,260,000. During the 2017-2018 fiscal year the city will pay a total of $590,655.42 towards principal and interest on these debts, which is over $100,000 more than in the prior fiscal year. This makes this a particularly costly year since the city will be paying its final principal and interest on the 1997 bond, as all as its first payment (interest only) on the new 2016 bond. Type
Name
Bond
City Hall/Library Building
1997
2018
$325,000
$429,875
$331,093.75 (final)
Bond
Water Supply
1998
2019
$60,000
$32,250
$31,500
Note
DPW Building
2012
2027
$200,000
$26,700
$26,300
Bond
Quality of Life Enhancement
2016
2047
$4,675,000
N/A
$201,761.67
$5,260,000
$488,825.00
$590,655.42
TOTAL
Origination
Maturity
Outstanding Principal Balance
16-17 P&I Payments
17-18 P&I Payments
xi
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ BUDGET SUMMARY On the following page is a breakdown of the proposed budget by various fund types. The General Fund includes operating revenues and expenses for basic core services provided by the City of Hudsonville, including police and fire. The Water and Sewer Funds make up the Enterprise Funds. Finally, the Other Funds column includes a combination of the Equipment, Streets, Library, DDA & TIFA, Debt, and Public Improvement funds. These funds have their own sources of revenue dedicated for a specific purpose. Expenditures are categorized by primary function. Legislative represents the City Commission’s Department. General Government includes most administrative departments, and Public Works expenditures include all operational and capital expenditures for water, sewer and streets.
xii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ 2017-2018 Budget at a Glance
General Fund
Enterprise Funds
Revenues by Source Property Taxes Federal/State Funds Licenses & Permits Charges for Services Fines & Forfeits Interest Reimbursements Interfund Transfers Other Revenues Other Financing Source Total Revenues
$ 2,382,530.00 $ 665,762.00 $ 111,450.00 $ 25,720.00 $ 16,000.00 $ 56,940.00 $ 66,444.00 $ $ 110,500.00 $ $ 3,435,346.00
$ $ $ 91,000.00 $ 2,077,159.00 $ 15,000.00 $ $ $ $ 500.00 $ $ 2,183,659.00
Expenditures by Activity Legislative General Government Public Safety Public Works City Promotions Parks & Recreation Debt Service Capital Outlay Interfund Transfers Total Expenditures
$ 19,500.00 $ 1,278,959.00 $ 865,578.00 $ 251,446.00 $ 92,533.00 $ $ 26,300.00 $ 44,210.00 $ 1,092,810.00 $ 3,671,336.00
$ $ $ $ 1,611,035.00 $ $ $ 31,500.00 $ 820,136.00 $ $ 2,462,671.00
Beginning Fund Balance
$ 714,991.00
Ending Fund Balance
$ 479,001.00
Other Funds $ $
233,369.00 831,651.00
$ $ $
330,572.00 41,194.00 89,938.00
$ $
2,851,938.00 365,462.00
$
4,744,124.00
$
249,038.00
$ $ $ $ $ $ $
554,172.00 106,603.00 1,046,038.00 547,269.00 2,040,542.00 146,102.00 4,689,764.00
$ 9,995,868.00
$
2,923,212.00
$ 9,716,856.00
$
2,977,572.00
Totals $ $ $ $ $ $ $ $ $
2,615,899.00 1,497,413.00 202,450.00 2,433,451.00 72,194.00 146,878.00 66,444.00 2,851,938.00 476,462.00
$ 10,363,129.00 $ $ $ 19,500.00 $ 1,526,303.00 $ 865,578.00 $ 2,416,653.00 $ 199,136.00 $ 1,046,038.00 $ 605,069.00 $ 2,904,888.00 $ 1,238,912.00 $ 10,823,771.00 $ $ 13,634,071.00 $ $ 13,173,429.00
xiii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Below is a more detailed breakdown of the total budgeted expenditures, by each fund, for the current and two prior fiscal years. Totals include interfund transfers. It is noted that three new funds are being introduced in the budget this year; the Parks & Recreation Fund (moved out of the General Fund), the Terra Square Fund (the Operational fund for the new building), and the Quality of Life Enhancement Fund. The latter is a temporary fund that will be used to receive and expend bond monies related to the quality of life enhancement projects being constructed in 20172019. Fund 101 General Fund 202 Major Streets 203 Local Streets 208 Parks & Recreation Fund 247 TIF 248 DDA 254 Terra Square Fund 271 Library Operating 275 Library Universal Service Fund 430 Quality of Life Enhancement Fund 471 Library Expansion Fund 590 Sewer Fund 591 Water Fund 661 Equipment Fund MISC. Debt Service Payments Total (includes all funds)
FY 15-16 $3,022,040 $570,731 $187,579 N/A $103,402 $10,700 N/A $364,020 $1,389 N/A $107,540 $1,108,093 $1,042,409 $306,383 $506,100* $7,270,286
FY 16-17
FY 17-18_____
$3,040,214 $549,614 $175,640 N/A $98,585 $10,618 N/A $364,557 $50 $3,009,213 $107,052 $1,087,303 $1,011,765 $438,984 $488,825* $10,320,568
$3,671,336 $572,883 $194,482 $539,338 $301,742 $11,707 $99,881 $405,619 $200 $1,704,718 $75,256 $1,332,965 $1,129,706 $236,169 $698,681* $10,823,771
*A portion of the debt payments are also accounted for in the total expenditures of various funds.
CAPITAL EXPENSES Capital expenses generally include those projects and equipment purchases which exceed $5,000 and can be depreciated. The City Commission reviews and provides input on the proposed Capital Improvement Plan at a work session prior to budget adoption. Capital Improvement projects for FY-2017-2018 through FY 2018-2019 are detailed on Exhibits 3 and 4 in the budget. Significant capital projects and expenses that are scheduled to occur this year include (but are not limited to):
xiv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Road Projects Balsam Dr. resurfacing (from bridge to north city limits) - $77,407 Harvey Street Phase II reconstruction - $991,000 Chicago Dr. Landscape enhancements - $600,000 West City Hall Parking Lot Resurfacing - $30,000 Preventative Maintenance Improvements (crack sealing, fiber mat and sealcoating on various streets) - $77,000 Park Improvements Miscellaneous Park Development Improvements - $20,000 Elmwood Commerce Pathway Connection - $12,000 Buttermilk Trail Connection (through Summergreen Property) - $323,325 Summergreen (Creekside) Park Development - $30,000 Water System Projects Hillcrest Rd. water main replacement and resurfacing (from 36th west to Marlin) - $231,000 Curtis St. water main replacement and resurfacing (from 36th to Madison, including Pine and Madison) - $195,900 School Ave. water main replacement and resurfacing (from Central to Service) - $194,000 Valve and Hydrant Replacement Program - $20,000 Sewer System Projects Lift Station Pump & Valve Replacement Program - $30,000 Park & Van Buren Lift Station Overhaul - $150,000 Equipment Purchases New Pickup Truck for DPW - $35,000 6 sets of Turnout Gear for Fire Department - $12,000 New Plotter - $8,500 City Facility Security Cameras - $10,858 PERSONNEL The budget includes 20 full-time employees, 1 part time Administrative Assistant to replace the full-time Assistant to the City Manager, 2 part time Facility Maintenance employees, 1 part-time Emergency Services Director, 1 part time Fire Chief, 12 part-time library employees, 14 paid on-call Fire Fighters, and 9 paid on-call Emergency Services personnel. All changes to personnel were reviewed and approved by the city’s Personnel Committee in early 2017.
xv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Employee Wages A 1.5% cost-of-living wage increase is recommended for all full and part time employees. This includes all SEIU union employees who, under their current 3 yr. collective bargaining agreement, are tie-barred to non-union employee wage adjustments (over 1%). Some employees will also receive “step-increase” according to their date of hire with the City. Employee Benefits For FY 2017-2018, employee health care premium amounts are projected to increase by 6.3% in each category (i.e. single, 2-person and family). This increase will require that the current Employer/Employee health insurance contribution amounts (i.e. 85%/15%) are adjusted to 83%/17% in order to remain under the state-imposed hard-cap limit for shared revenue eligibility. It is projected that the city’s contributions to the MERS DB pension plan will increase by $5,999 per month next year, for a total annual increase of $71,990. SUMMARY This proposed FY 2017-2018 Budget is structured to meet the Goals, Objectives and Action steps of the city’s 2011-2016 Strategic Plan. It has been tailored and limited to basic essential operational expenses and those capital projects that have been determined to be most critical to the wellbeing of the city and its residents. It is further recognized that the city must continue its efforts to make all funds more “self-sustaining”, both now and in the future. As always, I would like to acknowledge and thank all of the city’s employees who aided in the preparation of this budget and the many revisions done in the process. Many good ideas for increasing revenues, cutting expenditures, and changing the way we do things to be more efficient came from our staff. It is to their credit that I am able to present this proposed budget to the City Commission. Respectfully submitted,
Patrick B. Waterman, ICMA-CM City Manager
xvi
Exhibit 1 - FY 2017-2018 Summary of Revenues & Expenditures FUNDS
2017 Revenues 2018 Revenues
101 - General Fund 202 - Major Street Fund 203 - Local Street Fund 208 - Park/Recreation Fund 247 - Tax Increment Fund 248 - DDA Operating Fund 254 - Terra Square 271 - Library Fund 430 - QOL Enhancement Fund 590 - Sewer Fund 591 - Water Fund 661 - Equipment Fund All Other Funds
TOTALS
Difference
2017 Expenditures
2018 Expenditires
Difference
Surplus/ (Shortfall)
Projected Year Percent of End Fund Expenditures Balance
$3,043,396 $558,852 $189,540 N/A $125,771 $13,723 N/A $313,603 $5,270,000 $1,415,520 $826,270 $214,871 $588,465
$3,435,346 $573,208 $213,095 $539,400 $335,107 $13,817 $103,279 $406,582 $1,704,718 $1,303,281 $880,378 $237,130 $617,788
12.9% 2.6% 12.4% N/A 166.4% 0.7% N/A 29.6% -67.7% -7.9% 6.5% 10.4% 5.0%
$3,040,214 $549,614 $175,640 N/A $98,585 $10,618 N/A $364,557 $3,009,213 $1,087,303 $1,011,765 $438,984 $534,075
$3,671,336 $572,883 $194,482 $539,338 $301,742 $11,707 $99,881 $405,619 $1,704,718 $1,332,965 $1,129,706 $236,169 $623,225
20.8% 4.2% 10.7% N/A 206.1% 10.3% N/A 11.3% -43.4% 22.6% 11.7% -46.2% 16.7%
($235,990) $325 $18,613 $62 $33,365 $2,110 $3,398 $963 $0 ($29,684) ($249,328) $961 ($5,437)
$479,001 $89,448 $19,813 $62 $1,805,548 $40,880 $3,398 $37,879 $0 $4,548,548 $5,168,308 $980,544
$12,560,011
$10,363,129
171.0%
$10,320,568
$10,823,771
224.7%
($460,642) $13,173,429
13% 16% 10% 0% 598% 349% 3% 9% 0% 341% 457% 415% 0%
Exhibit 2 CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
SCHEDULE OF BUDGET PREPARATION ________________________________________________________________________ DATE
ACTIVITY
February 14, 2017
Department Heads are given budget preparation forms by Assistant to the City Manager.
February 22, 2017
City Manager meets with DPW personnel, Planning Director and City Engineer to discuss capital projects.
February 28 – March 10, 2017
Department Heads submit annual budget proposals to City Manager.
March 28, 2017
General overview of proposed Capital Improvement Plan is given to City Commission at work session meeting.
April 25, 2017
General overview of proposed budget is given to City Commission at work session meeting.
April 26 - May 4, 2017
Final revisions to draft budget are completed.
May 9, 2017
Final draft version of proposed budget is delivered to City Commission at regular meeting for comments.
June 13, 2017
Final budget is formally presented by City Manager during required public hearing and adopted by City Commission.
&,7
CITY OF HUDSONVILLE, MICHIGAN ANNUAL BUDGET For The Fiscal Year
JULY 1, 2017 – JUNE 30, 2018 Adopted on June 13, 2017 in accordance with Sections 7.5 and 7.6 of the Charter of the City of Hudsonville and State of Michigan Public Act 2 of 1968, as amended through Public Act 493 of 2000 For Hudsonville City Commission Mark Northrup Jim Holtrop Gary Raterink Greg Steigenga Dan Bolhuis Larry Brandsen Philip Leerar (Mayor Pro-Tem)
Mayor Commissioner, Commissioner, Commissioner, Commissioner, Commissioner, Commissioner,
Ward Ward Ward Ward Ward Ward
1 1 2 2 3 3
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Executive Summary …………………………………………………………………………………………………………………………………………………………………. i - xiv Exhibit 1 – FY 2016-2017 Summary of Revenues and Expenditures …………………………………………………………………………………….
Ex. 1
Exhibit 2 – Schedule of Budget Preparation …………………………………………………………………………………………………………………………… Ex. 2 General Operating Fund (101) ………………………………………………………………..…………………………………………….………………………………… 1-27 Revenues...…………………………………………………………………………………………………………………………………………………..………………….. City Commission…………………………………………………………………………………………………………………………………..…………………………… City Manager…………………………………………………………………………………………………………………………………………………………………… . Clerk………………………………………………………………………………………………………………………………………………………………………………… Information Services………………………………………………………………………….………………………………………………………………………………. Board of Review………………………………………………………………………………………………………………………………………………………………… Administrative Services……………………………………………………………………………………………………………………………………………………… . Finance & Accounting………………………………………………………………………………………………………………………………………………………… Assessor…………………………………………………………………………………………………………………………………………………………………………… Elections………………………………………………………………………………………….……………………………………………………………………………….. City Hall Buildings & Grounds…………………………………………………………….……………………………………………………………………………….. Attorney/Legal Council……………………………………………………………………….………………………………………………………………………………. Police……………………………………………………………………………………………………..………………………………………………………………………… Fire………………………………………………………………………………………………………………………………………………………………………………….. Emergency Services…………………………………………………………………………………………………………………………………………………………… Department of Public Works……………………………………………………………………………………………………………………………………………….. Planning & Zoning……………………………………………………………………………………………………………………………………………………………… City Promotion…………………………………………………………………………………………………………………………………………………………………… Employee Fringe Benefits…………………………………………………………………………………………………………………………………………………… . Other Expenses………………………………………………………………………………………………………………………………………………………………….. Debt Service...…………….…………………………………………………………………………………………………………………………………………………….. Transfers-Out……………………………………………………………………………………………………………………………………………………………………..
1-2 3 4 5 6 7 8 9 10 11 12-13 14 15 16 17 18-19 20 21-22 24 25 26 27
Investment Income Fund (125) ………………………………….………………………………………………………………….………………………………….…….. 28-30 Major Street Fund (202) …………………………………………….………………………………………………………………….………………………………….……… 31-37
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Revenues…………………………………………………………………………………………………………………………………………………………………………. Street Construction……………………………………………………………………………………………………………………………………………………………. Street Routine Maintenance……………………………………………………………………………………………………………………………………………….. Mowing……………………………………………………………………………………………………………………………………………………………………………. Traffic Services…………………………………………………………………………………………………………………………………………………………………. Winter Maintenance……………………………………………………………………………………………………………………………………………….………….. Administration……………………………………………………………………………………………………………………………………………………………………
31 32 33 34 35 36 37
Local Street Fund (203) …………………………………………………………………………..…………………………………….………………………………………… 38-44 Revenues…………………………………………………………………………………………………………………………………………………………………………. Street Construction……………………………………………………………………………………………………………………………………………………………. Street Routine Maintenance……………………………………………………………………………………………………………………………………………….. Mowing…………………………………………………………………………………………………………………………………………………………… .……………… Traffic Services…………………………………………………………………………………………………………………………………………………………………. Winter Maintenance…………………………………………………………………………………………………………………………………………………………… Administration……………………………………………………………………………………………………………………………………………………………………
38 39 40 41 42 43 44
Park & Recreation Fund (208) …………………………………………..………………………………………………….………………………………….………….……. 45-47 Revenues ………………………………………………………………………………………………………………………………………………………………………….. 45 Expenditures …….………………………………………………………………………………………………………………………………………………………………. 46-47 Tax Increment Finance Fund (247) …………………………………………..………………………………………………….………………………………….……… 48-51 Revenues………………………………………………………………………………………………………………………………………………………………………….. 48 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 49-50 Transfers-Out…………………………………………………………………………………………………………………………………………………………………….. 51 DDA Operating Fund (248) …………………………………………………………………………………….…………………………………………………………..…..… 52-53 Revenues ……………………………………………………………………………………………………………………………………………………………………….… 52 Expenditures …….………………………………………………………………………………………………………………………………………………………………. 53 Terra Square Fund (254) …………………………………………………………………………………….…………………………………………………………………… 54-58
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Revenues…………………………………………………………………………………………………………………………………….…......…......…......….....…....... Expenditures……………………………………………………………………………………………………………………………….….....…......…......…......…........ Operations Revenues…………………………………………………………………………………………………………………………………………………...….... Operations Expenditures……………………………………………………………………………………………………………………………………………....…....
54 55 56 57
Library Fund (271) ……………………………………………………………………………………………………….………………….………………………..……………… 59-62 Revenues………………………………………………………………………………………………………………………………………………………………………….. 59 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 60-61 Library Endowment Fund (272) …………………………………………………………………………………….……………………………………………….………… 63 Library Universal Service Fund (275) …………………………………………………………………………………… .…………………………………..……………. 64-65 Revenues………………………………………………………………………………………………………………………………………………………………………….. 64 Expenditures…….………………………………………………………………………………………………………………………………………………………………. 65 Bond Money Market Fund (295) …………………………………………..………………………………………………….………………………………….…………… 66 2016 Quality of Life Projects Debt Fund (355) ……………………………..………………………………………………….………………………………….…
67-65
Revenues………………………………………………………………………………………………………………………………………………………………………… . 67 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 68 Building Authority Debt Fund (384) ………………………………………………………………………………….………………………………………………….…. 69-70 Revenues……………………………………………………………………………………………………………………………………………………………………….... 69 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 70 Library Debt Fund (385) ………………………..………………………………………………………………………….……………………………………….……………
71-72
Revenues………………………………………………………………………………………………………………………………………………………………………… . 71 Debt Service…………………………………………………………………………………………………………………………………………………………………….. 72
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
TABLE OF CONTENTS ________________________________________________________________________ Quality of Life Enhancement Projects (430) ………………………………………………………………………………………………………………………….. 73-75 Revenues………………………………………………………………………………………………………………………………………………………………………… . 73 Expenditures…………………………………………………………………………………………………………………………………………………………………….. 54 Library Expansion Fund (471) …………………………………………………………………………………….………………………………………..…………………… 76-77 Revenues………………………………………………………………………………………………………………………………………………………………………….. 76 Expenditures…………………………………………………………………………………………………………………………………………………………………..… 77 Transfers-Out……………………………………………………………………………………………………………………………………………………………….…... 78 Sewer Fund (590) …………………………………………………………….…………………………………………………………….………………………………………… 79-82 Revenues………………………………………………………………………………………………………………………………………………………………… ...…….. 79 Line Maintenance………………………………………………………………………………………………………………………………………………………..…….. 80-81 Administration…………………………………………………………………………………………………………………………………………………………… ..……. 82 Water Fund (591) ………………………………………………………………………………………………………….………………………………………………………..… 83-87 Revenues………………………………………………………………………………………………………………………………………………………………………….. Line Maintenance…………………………………………………………………………………………………………………………………………………....…………. Administration………………………………………………………………………………………………………………………………………………………… ..……….. Debt Service……………………………………………………………………………………………………………………………………………………………………..
83 84-85 86 87
Equipment Fund (661) ………………………………………………………………………………………………………….…………………………………………..……. 88-89 Revenues ………………………………………………………………………………………………………………………………………………………………………….. 88 Expenditures…………………………………………………………………………………………………………………………………………………………………..… 89 Transfers-Out……………………………………………………………………………………………………………………………………………………………….…... 90 Exhibit 3 – 2017-2018 Capital Improvements Plan………..………….………………………………………….……………………………………….……. Ex. 3 Exhibit 4 – 2018-2019 Capital Improvements Plan………………….…………………………….……………………………………………………………. Ex. 4 Exhibit 5 – Ordinance of Adoption (Ord. No. 17-XXXX) ……………….………………………………………………….…………………………………… Ex. 5
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ June, 2017 Dear Mayor Northrup and City Commissioners: On behalf of city staff, I am pleased to present the City Commission with the recommended budget for the fiscal year ending June 30, 2018. This budget document is organized by Fund number, but also includes supplemental materials including charts, exhibits, and this Executive Summary. The Ordinance of Adoption necessary for the approval of the budget is included at the end. The Charter of the City of Hudsonville specifies the requirements for the proposed budget document. Per the Charter, the following information must be included in the budget document:
Detailed estimates of all proposed expenditures for each department and office of the city showing the expenditures for corresponding items for the current and last preceding fiscal year. With reasons for increases and decreases recommended, as compared with appropriations for the current year.
Statements of the bonded and indebtedness of the city showing the debt redemptions and interest requirements, the debt authorized and unissued, and the condition of the sinking fund, if any.
Detailed estimates of all anticipated income from sources other than taxes and borrowing, with a comparative statement of the amounts received from each of the same or similar sources for the last preceding and current fiscal year.
A statement of the estimated balance or deficit, as the case may be, for the end of the current fiscal year.
An estimate of the amount of money to be raised from current and delinquent taxes and the amount from bond issues which, with income from other sources, will be necessary to meet the proposed expenses.
Such other supporting scheduled as the City Manager or Treasurer may deem necessary or the Commission may require.
This submitted budget meets all of the above criteria.
i
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ CITY COMMISSION GOALS At the time of this budget adoption, the City Commission was in the process of updating its Strategic Plan for years 2017 through 2022. Because the new plan was not yet complete, the city’s current 2011-2016 Strategic Plan was used as the basis for many of the planned expenditures. To an extent, every single goal and most every objective in the Strategic Plan have been incorporated into either the operating or the Capital Improvement budget items. These include:
Goal 1 – Public Services – Deliver the exceptional level and quality of public services and amenities that our residents have come to expect o Objective 1 – Prioritize street maintenance and repair at the top of the list for public services. Met through the allocation of funds for street resurfacing and repair.
o
Objective 2 – Continually improve the services provided by the city, especially those that relate to public safety and quality of life. Met through the allocation of funds for new Fire and DPW equipment.
o
Objective 3 – Continue to operate and improve our city parks and open spaces. Met through the allocation of funds for park improvements and non-motorized pathways.
o
Objective 4 – Focus on improving “walkability” throughout the city. Met through the allocation of funds for sidewalks, non-motorized pathways, and the Harvey St. improvements.
o
Objective 5 – Develop and maintain a versatile professional workforce that is cross trained to ensure exceptional public service. Met through the allocation of funds for employee, appreciation, training, wellness, and job reassignment.
Goal 2 – Finance - Maintain and improve the strong financial position of the city. o
Objective 1 – Maintain a fund balance of at least 20% of annual revenues. For the first time in recent history a projected shortfall may cause the General Fund balance to dip below the 20% average expenditure level of $548,000. However as described later, the financial circumstances of the FY 17-18 budget are unique to this year. It is therefore anticipated that the fund balance will rebound above 20% in subsequent years.
o
Objective 2 – Strive to minimize the necessity of incurring debt, and to pay off existing debts as soon as possible. 2018 will mark the final installments on the city hall and library bonds, meaning these building will be paid off by the end of this
ii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ fiscal year. At the same time, the city will began making its annual (smaller) debt service payments on the new 2016 quality of life enhancement bonds. o
Objective 3 – Adopt policies that support “living within our means”. Met through the proposed budget estimating methodology, planned allocation of funds for new or slightly used capital items, and the continued investment of city capital. Also met through the replacement of the 0.5 Library debt millage with the 0.5 operating millage.
Goal 3 – Economic Development – Support and promote economic development in our community that seeks to revitalize our downtown and enhance our quality of life. o
Objective 1 – Establish public/private partnerships in our community that further the downtown development Vision of the Master Plan. Met through the allocation of funds for Lakeshore Advantage and full time staff who are actively working in concert to promote economic development in the community in accordance with the 2030 Plan.
o
Objective 2 - Initiate and support the redevelopment of the downtown area. Met through the allocations towards the various remaining Quality of Life Enhancement Projects (i.e. M-121 landscaping, Service Rd. streetscape enhancements, Harvey Street Phase II, and the Buttermilk Creek Underpass.
o
Objective 3 – Determine a course of action for the “triangle property” owned by the DDA. Met by the assumption of the 2017 sale and public/private redevelopment of the triangle property.
Goal 4 – Partnerships - Establish strong partnerships with our community, with our neighbors, and with other governmental agencies to promote shared essential services. o
Objective 1 – Regularly communicate with the community about current developments and issues facing the city. Met through the allocation of funds for the quarterly newsletter, storm water education, regular public meetings and a more robust website alert system.
o
Objective 2 – Proactively seek out and collaborate with other governmental agencies and organizations to provide essential services in the most efficient manner. Met through participation in the Fire mutual and automatic aid programs, contractual police services, continued membership and participation in the Chamber of Commerce, and other various contractual arrangements for services.
iii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ BEST PRACTICES IN BUDGETING As noted above, the city’s Strategic Plan contains the financial goal of “Maintaining and improving the strong financial position of the city”. To meet this goal, the city follows three primary objectives - 1) to maintain a minimum fund balance of at least 20% of its normal annual expenditures in reserve (which averages around $548,000 over the past 6 years); 2) to strive to minimize the necessity of incurring unnecessary debt and to pay existing debts off early (if possible); and 3) to adopt policies that support “living within our means”, which includes creating a budget that assumes lower than expected revenues and higher than expected expenditures. As evidenced in the graph below, the city has an established pattern of adhering to these objectives. First, revenues consistently outpace expenditures, even in years where shortfalls were projected in the budget. Second, the city’s debt obligations have been paid down or paid off early, and large down payments were made towards new incurred debt, such as the case in 2012-2013 when $1 million of fund balance was paid towards the new DPW building debt. And third, the city has historically maintained a fund balance at or above 20% of normal annual revenues. These “best practices in budgeting” have allowed the city to maintain its strong financial position.
City of Hudsonville General Fund 2011-2018 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $2010-2011 Revenues
2011-2012 Expenditures
2012-2013
2013-2014
2014-2015
End of Year Fund Balance
2015-2016
2016-2017 (Budgeted)
2017-2018 (Projected)
Average Minimum Fund Balance (20%)
iv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ REVENUE SOURCES Core governmental functions are funded through the city’s General Fund. The primary source of revenue for the General Fund is property taxes which constitutes over 69% of all funds available for general operations. The city’s second largest revenue source for government operations, state revenue sharing which comprises about 19% of all revenues. Despite the Michigan Municipal League’s ongoing efforts to convince the state to restore statutory revenue sharing amounts to pre-2002 levels, the city’s overall state shared revenue is projected to decrease by about $5,000 next year. The city’s property tax revenues are projected to increase by nearly $368,000 next year. The projected increase is largely attributed to a 0.500 increase in the city’s general operating millage, which is intended to replace the 0.500 Library debt millage that fell off last year. The increased revenues generated from this millage will be used primarily to fund the city’s Library, which has been operating at a budget shortfall for several years due to increased demand for services by the community. Because the voter-elected 0.5 mills debt millage fell off in FY 2017, city tax payers will not see an overall increase to their millage rate. In addition to the new millage, tax revenues are also trending up thanks to an increase of over $5 million in the city’s total taxable value. This topic is discussed further on page vii. The pie chart below illustrates the distribution of various revenue types that the General Fund receives.
Property Taxes (69.4%)
Federal/State Funds (19.4%) Licenses & Permits (3.3%) Charges for Services (0.7%) Fines & Forfeits (0.5%) Interest (1.7%) Reimbursements (1.9%) Other Revenues (3.2%)
v
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ PROPERTY TAX REVENUES As stated above, the city’s property tax revenues are projected to increase by nearly $368,000 next year over the prior fiscal year. This is due primarily to a planned 0.500 mill increase in the general operating millage rate, as well as an increase in the city’s total taxable value. The increase in total taxable value is attributed to an upward tick in residential, commercial and industrial development throughout the city. This is a good sign given that tax revenues decreased significantly in the prior fiscal year due to the loss of the city’s ability to collect personal property taxes.
$2,380,358
$2,012,589
$2,358,831
$2,310,915
$2,273,619
$2,456,115
$2,505,289
$2,471,843
$2,551,565
$2,485,981
$2,376,468
$2,466,803
$2,390,639
$2,285,053
$2,208,011
$2,000,000
$1,860,633
$2,500,000
$1,760,670
$3,000,000
$1,803,334
The graph below illustrates the city’s historical property tax revenues over the past 17 years, along with next year’s projected amount.
$1,500,000 $1,000,000 $500,000 $-
vi
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ TAXABLE VALUES Revenues from property taxes are closely correlated to the city’s total taxable value. Last year (FY 16-17) the city’s total taxable value decreased by over $4.5 million to $216,491,033. This was due to a new law that effectively phases out the ability of local governments to collect personal property taxes from large manufacturers. Fortunately in the upcoming year, the city’s total taxable value will increase by over $5 million to $221,501,138. At the proposed millage rate, this equates to a little over $56,000 in additional tax revenue for the city. Values for individual parcels within each property class vary based on the neighborhood as well as the overall condition of the property.
$250,000,000
$50,000,000
$221,501,138
$216,491,033
$221,012,995
$216,280,151
$213,754,639
$204,328,295
$214,435,294
$226,943,939
$230,207,300
$231,828,160
$220,267,966
$208,129,990
$200,376,032
$193,712,316
$183,210,567
$176,573,077
$100,000,000
$157,570,536
$150,000,000
$237,413,044
$200,000,000
$-
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Total Taxable Value of City Property since FY 2000-2001
vii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ THE AFFECT OF PROPOSAL A ON TAXABLE VALUE The taxable value of each property is capped and limited by Proposal A. Under this Act, the taxable values of individual parcels cannot increase more than 5% or the rate of inflation, whichever is less. For 2017 the inflationary factor as set by the state capped the increase in taxable value at 1.009%. The table below shows a 17 year history of the maximum allowable increases for taxable value under Proposal A, which was enacted in 1995. Since then, taxpayers have directly benefited due to the capping of their taxable property values during times of economic prosperity. However the law has also had the unforeseen negative consequence of limiting the city’s ability to recoup lost property tax revenues after the 08-09 recession, which dramatically reduced the city’s taxable values (see graph on prior page). As a result the city’s current taxable value is still equivalent to the 2007 level, while at the same time the cost of city-provided services has increased at a faster rate than that of Proposal A. This is a primary reason why the city has needed to utilize its fund reserves in recent years, and further justification for the 0.500 millage increase. Maximum Allowable Properly Tax Increases Under Proposal A Year
% Increase
Year
% Increase
Year
% Increase
2000 2001 2002 2003 2004 2005
1.900% 3.200% 3.200% 1.500% 2.300% 2.300%
2006 2007 2008 2009 2010 2011
3.300% 3.700% 2.300% 4.400% 0.997% 1.700%
2012 2013 2014 2015 2016 2017
2.700% 2.400% 1.600% 1.600% 1.003% 1.009%
MILLAGE RATE Since 2006 and throughout the 08-09 economic downturn, the City of Hudsonville has levied a total of 11.2303 mills. In addition, properties located within the Downtown Development Authority (DDA) boundary levy 1.00 mills upon themselves for DDA maintenance and operations such as downtown parking lot maintenance and street light energy bills. Under a state law known as the Headlee Amendment, the city is legally able to increase its operating millage rate to 17.6657 mills. Many communities in Michigan have been forced to levy their maximum millage rates due to various economic hardships, most notably the crippling financial burden of unfunded pension liabilities and other post-employment benefits. Fortunately through foresight and fiscal conservancy, the City of Hudsonville has been able to avoid these pitfalls and therefore maintain a relatively low millage rate throughout the sharp downturn in the economy after 2008.
viii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ The table below indicates both the maximum allowable (as rolled back under the Headlee Amendment) and recommended millage rate for each taxing entity. Function General Operating
Current City Millage Rates Maximum Allowable* 17.6657
Recommended Rate 11.2303
DDA Operating
1.8611
1.000
*As adjusted under Headlee Amendment
MILLAGE RATE REDUCTIONS As noted above, since 2006 the City of Hudsonville has levied a total of 11.2303 mills. However between 2000 and 2006, the city rolled its General Operating millage levy back on three separate occasions for a total reduction of 2.1239 mills, as shown in the table below. The millage rate was rolled back during times of economic prosperity and when the city had large fund balance reserves. Although the millage rollbacks benefited the city’s taxpayers, they also had an unforeseen negative effect on the city due to the 08-09 economic downturn and recession that followed. Like many Michigan communities, Hudsonville saw its tax revenues and state shared revenues began to decline after 2009, causing the city to begin utilizing its fund reserves to cover budget shortfalls for general operations and capital improvement costs, specifically road improvements. This trend continues today as the city’s operating costs continue to increase while revenue streams remain relatively flat. Hudsonville Millage Rate Reductions Year Before 2001 2001-2003 2004-2006 2006 to 2015 Total Millage Reduction
Millage Rate 13.3542 12.2369 12.2322 11.2303
Mills Mills Mills Mills
Change From Previous Rate N/A -1.1173 Mills -0.0047 Mills -1.0019 Mills 2.1239 Mills
ix
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ MILLAGE RATE COMPARISON Our tax payers may be surprised to learn that Hudsonville currently levies the third lowest millage rate among Ottawa County cities and villages (see table below). Determining an appropriate millage rate in a community is dependent upon a number of factors including the population and size of the community, as well as the number and type of public services that are offered. More importantly however, is the total taxable value of the community, which directly influences the amount of revenue that each mill will generate. In Hudsonville for example, one mill generates a little over $217,500 in revenue for the city. However in Zeeland, where the city’s total taxable value is over $290 million higher than Hudsonville’s, that same one mill will generate about $509,400 for the city. This is noteworthy when you consider that Hudsonville serves a larger population and has more land area than Zeeland. It also emphasizes the importance of maintaining property values and continuously growing the tax base in the city.
Municipality City of Holland City of Coopersville City of Grand Haven City of Zeeland City of Hudsonville City of Ferrysburg Village of Spring Lake
Ottawa County City/Village Millage Rate Comparison 2016 City Millage Rates Population Includes City & Library Taxes 15.1085 Mills 33,742 13.7231 Mills 4,312 13.9090 Mills 10,895 11.2354 Mills 5,605 11.2303 Mills 7,263 10.7773 Mills 2,957 10.3600 Mills 2,398
Area (Sq. Miles) 17.35 4.81 7.36 3.01 4.14 3.59 1.74
Taxable Value $709.9 Million $103.8 Million $546.9 Million $509.4 Million $217.5 Million $172.2 Million $125.9 Million
MILLAGE RATE RECOMMENDATION Based on the various economic factors described herein, the Finance Director and I are recommending that as part of this budget adoption, the City Commission increase the city’s general operating millage by 0.500 mills. It is noted that with this increase, the city taxpayers will not see their overall millage rate increase. This is because the 0.500 mills that were previously collected for the Library improvement bond were removed in 2016-2017 once these bonds were paid in full. In addition, the continued collection of the 0.500 mills is deemed necessary to cover the ongoing and increasing operational costs for the city, primarily the Gary Byker Memorial Library. Once again, the recommended millage increase will not result in an overall change to the 11.2303 mills that the city currently levies.
x
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ DEBT OBLIGATION In 2016 the City Commission bonded for approximately $4.7 million in new capital improvements know as Quality of Life Enhancement projects. These include the Terra Square farmers market and community center, the Harvey Street pedestrian corridor (“woonerf”), the Chicago Drive landscape enhancements, and the Service Drive streetscape and parking enhancements. These projects, which were thoroughly vetted in the community through several years of public comment and polling, were identified as priorities in the city’s Imagine Hudsonville 2030 master plan. Furthermore, the decision to borrow for these projects was strategically timed with the conclusion of the 1997 general obligation bond for the City Hall and Library buildings, which will be paid in full by late 2017. Prior to 2016, the city borrowed $300,000 in installment purchase notes for the construction of a new $2.1 million DPW facility in 2012. The rest was paid in cash out of the city’s fund reserves. As noted earlier, Hudsonville’s current total taxable value is $221,501,138. State statute limits the amount of general obligation installment note debt that governmental entities may issue to 1.25% of its total taxable valuation, and the amount of general obligation bond debt to 10% of its total taxable valuation, exclusive of interest. The current debt limitation for the City of Hudsonville is $2,768,764 (1.25% of TTV) for installment note debt, and $22,150,113 (10% of TTV) for bond debt. The city currently owes $200,000 on installment note debt, and $5,060,000 in bond debt. Therefore the city’s current debt obligation is well below the state-imposed limitations. As outlined below, the city paid $488,825 towards outstanding debt (principle and interest) during the prior fiscal year. The city will have four remaining debt obligations in FY 17-18 however one of them, the 1997 City Hall/Library Bond, will be paid in full in late 2017. The current outstanding principal balance on all City debts combined is $5,260,000. During the 2017-2018 fiscal year the city will pay a total of $590,655.42 towards principal and interest on these debts, which is over $100,000 more than in the prior fiscal year. This makes this a particularly costly year since the city will be paying its final principal and interest on the 1997 bond, as all as its first payment (interest only) on the new 2016 bond. Type
Name
Bond
City Hall/Library Building
1997
2018
$325,000
$429,875
$331,093.75 (final)
Bond
Water Supply
1998
2019
$60,000
$32,250
$31,500
Note
DPW Building
2012
2027
$200,000
$26,700
$26,300
Bond
Quality of Life Enhancement
2016
2047
$4,675,000
N/A
$201,761.67
$5,260,000
$488,825.00
$590,655.42
TOTAL
Origination
Maturity
Outstanding Principal Balance
16-17 P&I Payments
17-18 P&I Payments
xi
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ BUDGET SUMMARY On the following page is a breakdown of the proposed budget by various fund types. The General Fund includes operating revenues and expenses for basic core services provided by the City of Hudsonville, including police and fire. The Water and Sewer Funds make up the Enterprise Funds. Finally, the Other Funds column includes a combination of the Equipment, Streets, Library, DDA & TIFA, Debt, and Public Improvement funds. These funds have their own sources of revenue dedicated for a specific purpose. Expenditures are categorized by primary function. Legislative represents the City Commission’s Department. General Government includes most administrative departments, and Public Works expenditures include all operational and capital expenditures for water, sewer and streets.
xii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ 2017-2018 Budget at a Glance
General Fund
Enterprise Funds
Revenues by Source Property Taxes Federal/State Funds Licenses & Permits Charges for Services Fines & Forfeits Interest Reimbursements Interfund Transfers Other Revenues Other Financing Source Total Revenues
$ 2,382,530.00 $ 665,762.00 $ 111,450.00 $ 25,720.00 $ 16,000.00 $ 56,940.00 $ 66,444.00 $ $ 110,500.00 $ $ 3,435,346.00
$ $ $ 91,000.00 $ 2,077,159.00 $ 15,000.00 $ $ $ $ 500.00 $ $ 2,183,659.00
Expenditures by Activity Legislative General Government Public Safety Public Works City Promotions Parks & Recreation Debt Service Capital Outlay Interfund Transfers Total Expenditures
$ 19,500.00 $ 1,278,959.00 $ 865,578.00 $ 251,446.00 $ 92,533.00 $ $ 26,300.00 $ 44,210.00 $ 1,092,810.00 $ 3,671,336.00
$ $ $ $ 1,611,035.00 $ $ $ 31,500.00 $ 820,136.00 $ $ 2,462,671.00
Beginning Fund Balance
$ 714,991.00
Ending Fund Balance
$ 479,001.00
Other Funds $ $
233,369.00 831,651.00
$ $ $
330,572.00 41,194.00 89,938.00
$ $
2,851,938.00 365,462.00
$
4,744,124.00
$
249,038.00
$ $ $ $ $ $ $
554,172.00 106,603.00 1,046,038.00 547,269.00 2,040,542.00 146,102.00 4,689,764.00
$ 9,995,868.00
$
2,923,212.00
$ 9,716,856.00
$
2,977,572.00
Totals $ $ $ $ $ $ $ $ $
2,615,899.00 1,497,413.00 202,450.00 2,433,451.00 72,194.00 146,878.00 66,444.00 2,851,938.00 476,462.00
$ 10,363,129.00 $ $ $ 19,500.00 $ 1,526,303.00 $ 865,578.00 $ 2,416,653.00 $ 199,136.00 $ 1,046,038.00 $ 605,069.00 $ 2,904,888.00 $ 1,238,912.00 $ 10,823,771.00 $ $ 13,634,071.00 $ $ 13,173,429.00
xiii
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Below is a more detailed breakdown of the total budgeted expenditures, by each fund, for the current and two prior fiscal years. Totals include interfund transfers. It is noted that three new funds are being introduced in the budget this year; the Parks & Recreation Fund (moved out of the General Fund), the Terra Square Fund (the Operational fund for the new building), and the Quality of Life Enhancement Fund. The latter is a temporary fund that will be used to receive and expend bond monies related to the quality of life enhancement projects being constructed in 20172019. Fund 101 General Fund 202 Major Streets 203 Local Streets 208 Parks & Recreation Fund 247 TIF 248 DDA 254 Terra Square Fund 271 Library Operating 275 Library Universal Service Fund 430 Quality of Life Enhancement Fund 471 Library Expansion Fund 590 Sewer Fund 591 Water Fund 661 Equipment Fund MISC. Debt Service Payments Total (includes all funds)
FY 15-16 $3,022,040 $570,731 $187,579 N/A $103,402 $10,700 N/A $364,020 $1,389 N/A $107,540 $1,108,093 $1,042,409 $306,383 $506,100* $7,270,286
FY 16-17
FY 17-18_____
$3,040,214 $549,614 $175,640 N/A $98,585 $10,618 N/A $364,557 $50 $3,009,213 $107,052 $1,087,303 $1,011,765 $438,984 $488,825* $10,320,568
$3,671,336 $572,883 $194,482 $539,338 $301,742 $11,707 $99,881 $405,619 $200 $1,704,718 $75,256 $1,332,965 $1,129,706 $236,169 $698,681* $10,823,771
*A portion of the debt payments are also accounted for in the total expenditures of various funds.
CAPITAL EXPENSES Capital expenses generally include those projects and equipment purchases which exceed $5,000 and can be depreciated. The City Commission reviews and provides input on the proposed Capital Improvement Plan at a work session prior to budget adoption. Capital Improvement projects for FY-2017-2018 through FY 2018-2019 are detailed on Exhibits 3 and 4 in the budget. Significant capital projects and expenses that are scheduled to occur this year include (but are not limited to):
xiv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Road Projects Balsam Dr. resurfacing (from bridge to north city limits) - $77,407 Harvey Street Phase II reconstruction - $991,000 Chicago Dr. Landscape enhancements - $600,000 West City Hall Parking Lot Resurfacing - $30,000 Preventative Maintenance Improvements (crack sealing, fiber mat and sealcoating on various streets) - $77,000 Park Improvements Miscellaneous Park Development Improvements - $20,000 Elmwood Commerce Pathway Connection - $12,000 Buttermilk Trail Connection (through Summergreen Property) - $323,325 Summergreen (Creekside) Park Development - $30,000 Water System Projects Hillcrest Rd. water main replacement and resurfacing (from 36th west to Marlin) - $231,000 Curtis St. water main replacement and resurfacing (from 36th to Madison, including Pine and Madison) - $195,900 School Ave. water main replacement and resurfacing (from Central to Service) - $194,000 Valve and Hydrant Replacement Program - $20,000 Sewer System Projects Lift Station Pump & Valve Replacement Program - $30,000 Park & Van Buren Lift Station Overhaul - $150,000 Equipment Purchases New Pickup Truck for DPW - $35,000 6 sets of Turnout Gear for Fire Department - $12,000 New Plotter - $8,500 City Facility Security Cameras - $10,858 PERSONNEL The budget includes 20 full-time employees, 1 part time Administrative Assistant to replace the full-time Assistant to the City Manager, 2 part time Facility Maintenance employees, 1 part-time Emergency Services Director, 1 part time Fire Chief, 12 part-time library employees, 14 paid on-call Fire Fighters, and 9 paid on-call Emergency Services personnel. All changes to personnel were reviewed and approved by the city’s Personnel Committee in early 2017.
xv
CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
EXECUTIVE SUMMARY ________________________________________________________________________ Employee Wages A 1.5% cost-of-living wage increase is recommended for all full and part time employees. This includes all SEIU union employees who, under their current 3 yr. collective bargaining agreement, are tie-barred to non-union employee wage adjustments (over 1%). Some employees will also receive “step-increase” according to their date of hire with the City. Employee Benefits For FY 2017-2018, employee health care premium amounts are projected to increase by 6.3% in each category (i.e. single, 2-person and family). This increase will require that the current Employer/Employee health insurance contribution amounts (i.e. 85%/15%) are adjusted to 83%/17% in order to remain under the state-imposed hard-cap limit for shared revenue eligibility. It is projected that the city’s contributions to the MERS DB pension plan will increase by $5,999 per month next year, for a total annual increase of $71,990. SUMMARY This proposed FY 2017-2018 Budget is structured to meet the Goals, Objectives and Action steps of the city’s 2011-2016 Strategic Plan. It has been tailored and limited to basic essential operational expenses and those capital projects that have been determined to be most critical to the wellbeing of the city and its residents. It is further recognized that the city must continue its efforts to make all funds more “self-sustaining”, both now and in the future. As always, I would like to acknowledge and thank all of the city’s employees who aided in the preparation of this budget and the many revisions done in the process. Many good ideas for increasing revenues, cutting expenditures, and changing the way we do things to be more efficient came from our staff. It is to their credit that I am able to present this proposed budget to the City Commission. Respectfully submitted,
Patrick B. Waterman, ICMA-CM City Manager
xvi
Exhibit 1 - FY 2017-2018 Summary of Revenues & Expenditures FUNDS
2017 Revenues 2018 Revenues
101 - General Fund 202 - Major Street Fund 203 - Local Street Fund 208 - Park/Recreation Fund 247 - Tax Increment Fund 248 - DDA Operating Fund 254 - Terra Square 271 - Library Fund 430 - QOL Enhancement Fund 590 - Sewer Fund 591 - Water Fund 661 - Equipment Fund All Other Funds
TOTALS
Difference
2017 Expenditures
2018 Expenditires
Difference
Surplus/ (Shortfall)
Projected Year Percent of End Fund Expenditures Balance
$3,043,396 $558,852 $189,540 N/A $125,771 $13,723 N/A $313,603 $5,270,000 $1,415,520 $826,270 $214,871 $588,465
$3,435,346 $573,208 $213,095 $539,400 $335,107 $13,817 $103,279 $406,582 $1,704,718 $1,303,281 $880,378 $237,130 $617,788
12.9% 2.6% 12.4% N/A 166.4% 0.7% N/A 29.6% -67.7% -7.9% 6.5% 10.4% 5.0%
$3,040,214 $549,614 $175,640 N/A $98,585 $10,618 N/A $364,557 $3,009,213 $1,087,303 $1,011,765 $438,984 $534,075
$3,671,336 $572,883 $194,482 $539,338 $301,742 $11,707 $99,881 $405,619 $1,704,718 $1,332,965 $1,129,706 $236,169 $623,225
20.8% 4.2% 10.7% N/A 206.1% 10.3% N/A 11.3% -43.4% 22.6% 11.7% -46.2% 16.7%
($235,990) $325 $18,613 $62 $33,365 $2,110 $3,398 $963 $0 ($29,684) ($249,328) $961 ($5,437)
$479,001 $89,448 $19,813 $62 $1,805,548 $40,880 $3,398 $37,879 $0 $4,548,548 $5,168,308 $980,544
$12,560,011
$10,363,129
171.0%
$10,320,568
$10,823,771
224.7%
($460,642) $13,173,429
13% 16% 10% 0% 598% 349% 3% 9% 0% 341% 457% 415% 0%
Exhibit 2 CITY OF HUDSONVILLE ANNUAL BUDGET FY 2017-2018
SCHEDULE OF BUDGET PREPARATION ________________________________________________________________________ DATE
ACTIVITY
February 14, 2017
Department Heads are given budget preparation forms by Assistant to the City Manager.
February 22, 2017
City Manager meets with DPW personnel, Planning Director and City Engineer to discuss capital projects.
February 28 – March 10, 2017
Department Heads submit annual budget proposals to City Manager.
March 28, 2017
General overview of proposed Capital Improvement Plan is given to City Commission at work session meeting.
April 25, 2017
General overview of proposed budget is given to City Commission at work session meeting.
April 26 - May 4, 2017
Final revisions to draft budget are completed.
May 9, 2017
Final draft version of proposed budget is delivered to City Commission at regular meeting for comments.
June 13, 2017
Final budget is formally presented by City Manager during required public hearing and adopted by City Commission.
&,7
