City Commission adopts FY2023 Fiscal Plan

City Commission adopts FY2023 Fiscal Plan

Published on May 24, 2022

Budget continues essential services and enhances public safety oversight

GRAND RAPIDS, Mich. - The Grand Rapids City Commission has formally adopted the fiscal year 2023 Fiscal Plan, which will go into effect on July 1. The $598 million spending plan continues essential services and enhances service delivery in key areas. The City continues to use its Strategic Plan as a roadmap for financial planning.

The Fiscal Plan anticipates a 4 percent increase in income tax revenues in FY2023 and then a 3 percent increase each year for FY2024-FY2027. It also includes a 2 percent property tax millage rate reduction - from 8.9950 to 8.8331. The Fiscal Plan outlines capital investments of $163.34 million in FY2023 and $504.58 million across all five years (FY2023-2027). These investments are made possible through a variety of funding sources including the General Operating Fund (GOF) and enterprise funds, bonds, federal and state allocations, leveraged funds, millages and grants. This budget includes 1,665 authorized positions for FY2023, which is approximately 300 fewer positions than 2002 staffing levels at a time when the city continues to see steady population growth and demand for services.

"The FY2023 Fiscal Plan represents a continuation of fiscally sustainable essential services with an acknowledgement that recent events require leaders to address urgent questions," Washington said. "Those include improving public safety, accelerating police reform, increasing investment in oversight, ensuring equitable community engagement and supporting the community's equitable recovery and growth."

More specifically, Washington said that development of the FY2023 budget was guided by the following strategies:

• Maintaining a continuation budget that recognizes and supports basic services (road/streets, water/wastewater, streetlights, parks, library, public safety, courts, refuse, economic development, community development, code compliance, permitting, tax assessment/collection, customer service and other support services).
• Recommending strategic investments that will enable the community to continue to move itself forward.
• Anticipating judicious use of $32.9 million of the City's $92.2 million American Rescue Plan funds to ensure continuity of services and pilot strategic initiatives in FY2023.
• Continuing progress on the City's equity journey with over $36 million in equity investments.
• Accommodating 15 staffing additions made during the current fiscal year and recommending eight staffing additions in FY2023 to achieve strategic plan outcomes.
• Supporting asset management investments in the City's capital plan and meeting the actuarily required contributions for pension and retiree health care obligations for a funded ratio of almost 80 percent in both the General and Police & Fire Pension systems. Ensuring fiscal sustainability.

The City will use its strategic plan and equity value as guides for public safety reform, including accelerating some of that work with investments included in the budget. It will continue to collaboratively seek innovative public safety reforms that intentionally remove and prevent barriers created by systemic and institutional injustice.

As an example, for FY2023, annual City appropriated resources for the Office of Oversight and Public Accountability (OPA) increase from $405,781 to $1.7 million. That will allow the office to:

• Hire an additional dedicated full-time staff person
• Lead the coordination of additional police training for officers that is community-informed and community engaged
• Address topics such as cultural competency and de-escalation that officers co-experience with community members
• Provide funding for OPA to more effectively engage the immigrant and refugee community, and
• Transfer the oversight of the body-worn camera contract procurement and enforcement from Police to OPA.

Additionally, OPA will leverage $600,000 in federal earmarks for violence reduction and a recently announced $250,000 grant for staff capacity for FY2023, bringing OPA's total FY2023 budget to $2.55 million, which is a 537 percent increase over this year.

The intentional investment of resources in areas outside of the Police Department - along with budget reallocations to OPA - has resulted in the FY2023 Police Budget accounting for 33.97 percent of the General Operating Fund, which is less than the FY2021 adopted budget rate of 38.6 percent.

The City is also investing $700,000 for an enhanced mental health police co-response mobile crisis intervention team, offered by Network180, the City's Kent County public health mental health authority partner. This will allow mental health and behavioral health clinicians to either co-respond or lead the response for certain calls for service for which civilians are more trained to respond than law enforcement.

"Our new police chief, Eric Winstrom, will continue to evaluate ways to improve police policy, services, relationships, and safety," Washington said. "The vacant civilian chief of staff position that the City Commission authorized for the Police Department provides an additional opportunity for the chief to hire a new non-sworn person that will provide additional community-informed leadership to the department."

"Chief Winstrom will engage the community over the next couple of months and shortly thereafter provide a report on his initial observations and plans for the department on ways to improve community-police relations and more effectively implement the police strategic plan."

The City's FY2023 Fiscal Plan also supports other high priorities such as community-led participatory budgeting, Third Ward Equity funding, affordable housing, investments with Micro Local Business Enterprises (MLBEs), climate action and equity focused transit solutions.

Specifically, it maintains the $2 million allocation in the budget for community-led participatory budgeting including allocations of $1 million for the Third Ward, $600,000 for the Second Ward and $400,000 for the First Ward to fund investments that are recommended by the community. In addition, the City also has allocated an additional $1 million in the budget for the Third Ward Equity Fund to make sure it intentionally invests in historically underinvested areas of the community.

Washington conveyed that this is the third fiscal plan the City has developed while facing multiple crises: health pandemic, economic disruption, climate change and social/racial tension. Throughout the crises, the City consistently focused on making decisions guided by its strategy and values. He recapped that the FY2021 fiscal plan helped the City navigate the uncertainty of an emerging pandemic, leverage Coronavirus Aid, Relief & Economic Security (CARES) Act and American Rescue Plan Act (ARPA) relief money and made space for the Police Department to begin implementing its new strategic plan. Washington explained that the FY2022 fiscal plan was crafted by what the City learned and how it adapted. It also established an initial framework for $92.2 million in ARPA investments. He said that $63 million is now projected to qualify as revenue replacement from FY2021 to FY2025 and aligned to priorities established by the City Commission. Furthermore, the City's FY2023 budget includes more than $36 million in investments that will advance equity and $208.5 million in health and environment investments, including equitable climate action and adaptation planning, lead service line replacements, parks/green space, and sustainable equipment and infrastructure.

"This budget shows our commitment to ensure that economic recovery following the pandemic is equitable for all communities," Washington said. "Equitable economic growth remains essential. Growing housing supply, especially affordable housing, remains a critical regional success factor. In FY2023, the City will invest a total of $26.7 million in housing and housing stability. The nearly $6 million identified for the Affordable Housing Fund and potential growth of that fund based on the disposition of City-owned land at 201 Market Avenue will assist in creating more housing options. Affordable Housing Fund investments will begin this fiscal year to help drive creation of new housing."

He said that work will be complemented by $6.7 million in CDBG, HOME, HOME-ARP and Emergency Solutions Grants funds planned for housing and homelessness investments that are anticipated to:

• Support 625 households receiving financial assistance and supportive services to obtain or retain permanent housing; and 4,500 people completing intake assessments as a first step to create a housing plan to resolve homelessness.
• Support development of 211 new homes with approximately $2.3 million of HOME-ARP funds reserved for future projects.

"Over the past two years and these last few critical weeks, our employees have remained steadfast in their commitment to delivering on our mission of elevating the quality of life through excellent City services," Washington said. "Our dedicated workforce stands ready to usher in a new era of progress that will drive Grand Rapids toward our vision of being an equitable, welcoming, innovative and collaborative city with a robust economy, safe and healthy community, and the opportunity for a high quality of life for all. We are committed to continuous improvement and innovation across our entire organization."

The PDF document and several FY2023 Preliminary Fiscal Plan PowerPoint presentations and videos outlined during the budget workshop process can be found HERE.

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