About this Page
The City of Kalamazoo is partnering with OpenGov to bring our financial information to our community in a format that is easy to use and understand.
This page highlights financial information included in our 2020 Proposed Budget.
The 2020 Budget is subject to change until the budget is formally adopted by the City Commission. The City Commission is scheduled to adopt the 2020 budget on January 20, 2020 at its regularly scheduled Business Meeting.
The City's Budget will be adopted at a fund level. A fund is a self-balancing set of accounts that have a common purpose. Fund accounting emphasizes accountability rather than profitability.
Further information about the City's funds can be found in the Budget Policies in the 2020 Proposed Budget.
Total City Budget
The City's Funds are divided into two primary categories:
- Governmental Funds
- Enterprise Funds
Further information about these funds are found in the section below.
Governmental Funds are separated into:
- General Fund: This is the City's primary operating fund and is discussed in greater detail below
- Special Revenue: These funds are supported by resources restricted for their purpose from Michigan laws or special millages. The Major Street, Local Street, and Solid Waste funds are included in this category.
- Grants & Donations: The City separates Grants and Donations from Special Revenue funds for budget because they are funded by grants or donations that are not on-going. If the grant or donation becomes fully expended, these programs would cease.
- Capital Improvement: Used for tracking the significant capital improvement projects for the City. Projects are planned and may expand multiple years. Resources for this can include bond funding, grants or donations, or intergovernmental revenues.
Enterprise Funds are not separated into categories similar to the Governmental Funds. The Enterprise Funds consist of:
- Wastewater Fund: All activities of the Wastewater Treatment system including the operation and maintenance of the system and improvements to the system are tracked in this fund. Wastewater is financed by user charges, state grants, and contributions from other municipalities and customers.
- Water Fund: All activities of the Water Supply system including the operation and maintenance of the system and improvements to the system are tracked in this fund. Water is financed by user charges, state grants, and contributions from other municipalities and customers.
The General Fund
The General Fund is the primary operating fund for the City of Kalamazoo. In this fund, the City budgets for the City Commission Appointees, which includes the City Manager, City Clerk, City Attorney and City Internal Auditor. Other Governance departments include Management Services, Human Resources, Information Technology, and 311 Customer Service. Community departments include Public Safety, Public Services, Community Planning and Economic Development, and Parks and Recreation.
The General Fund expenses are supported by revenues from property taxes, state funding, charges for interdepartmental services and the Foundation for Excellence.
Where does the General Fund get its resources?
The 2020 Budget includes $67.6 million of revenues in the General Fund. The General Fund collects property taxes as the primary source of revenues. The City was able to reduce property tax rates in 2017, thanks to generous contributions from the Foundation for Excellence, which is the second largest source of General Fund resources. Intergovernmental Contributions from the State provide the third largest resource.
Property Tax History
Property Taxes are estimated to increase by 2.60% in 2020. Of this increase property tax values are anticipated to increase approximately 2.58% from 2019 estimated taxable values. The remaining tax increase is due primarily to the change of timing in the disbursements from the State of Michigan Public Act 86 of 2013 for the City's personal property taxes. The large decrease in 2017 was due to the Property Tax Rate cut from 19.2705 mills to 12.0000, which was funded by the Foundation for Excellence.
Intergovernmental Revenue - State Revenue Sharing
The estimated Revenue Sharing payments of $9.6 million in 2020 is an increase of 1.38% compared to 2019 projected receipts of $9.4 million. Over the past few years Revenue Sharing has had incremental growth, but remains significantly reduced from the 2001 level of $12.5M
How does the General Fund use its resources?
The total 2020 proposed expenditures for the General Fund is $67.6 million, of which $58.0 million is used in operations.
Community Programs are the largest share of General Fund expenses, using $43.3 million of the General Fund resources.
What departments use the General Fund resources?
The largest department in the City's General Fund is Public Safety (Combined Police and Fire), with a proposed budget of approximately $32.5 million. Public Services is the second largest department with total proposed expenses of $5.2 million.
How are resources divided between personnel, operations and other?
Personnel costs is the General Fund's largest expense. Operating costs include the supplies and services that are needed to carry out operations.
Other expenses include transfers to the capital improvement funds for payment of bonds used to pay the City's large capital projects.
The capital expenses in the General Fund are those for vehicles, equipment, and small building improvements that are funded through existing resources.
The 2020 Budget includes 655 total positions (646 full-time and 9 part-time). This reflects an increase of three positions versus the 2019 Budget to better meet the needs of the community.
GENERAL FUND 5 YEAR FISCAL PLAN
The General Fund 5 Year Fiscal plan anticipates expenses keeping pace with available resources. It is the City's goal to maintain a Fund Balance equal to 15% of Operating Revenues. The City meets that target through 2025.
General Fund 5 Year Fund Balance
The City's budget policies target to maintain 15% of its operating revenues as a fund balance in the General Fund. The 5 Year Fiscal Plan for the General Fund meets the target fund balance.
The 2020 Proposed Budget includes a list of the major capital improvements planned for the next 5 Years, starting with page 101. The City's Capital Improvement fund tracks signficant capital improvements and debt service for these improvements are funded by transfers from the General Fund.
The Major Streets, Local Streets, Water, and Wastewater Fund supports their capital improvement as programs within the funds.
The Major Streets and Local Streets capital improvements are funded by federal programs, state grants, or bonds that are paid through the use of State of Michigan Act 51 Road Funding.
Water and Wastewater capital improvements are funded through revenues earned through charges for services, the use of existing reserves, or revenue bonds. Water and Wastewater revenue bonds are ultimately paid using revenues from charges for services.