Total Budget

The City of Kalamazoo 2022 Budget includes expenditures of $245.4 million, representing an increase of 14.72% from the 2021 Adopted Budget total expenditures ($213.9 million). The citywide budget is made up of various funding groups. The highlights of the recommended spending plan are discussed below in greater detail. The increase in expenditures is primarily due to additional capital improvements in the City's various Capital Improvement Programs. See the Capital Improvement Program section of the budget for a listing of the City's 2022 planned projects.

Revenue

General Fund revenue is estimated at $71.3 million in the 2022 Budget, which represents an increase of 4.99% from the Adopted 2021 amount ($67.9 million). The three largest revenue sources for the City come from Property taxes, Intergovernmental Contributions (primarily State revenues), and Foundation for Excellence funding. These three sources represent 78.35% of all estimated General Fund resources.

Major & Local Streets

The Major & Local Streets operations are primarily funded by Statewide Gas & Weight Taxes, which are apportioned to the State and Local road and transportation systems through State of Michigan Public Act 51 formulas. Act 51 revenue (as it is known) is expected to see a 3.02% increase from 2021 budgeted amounts, primarily due to increased gas tax revenues. Major Street revenues are sufficient to fund operations. The Local Street Fund will require an operating subsidy of $1.25 million from the Major Street Fund for 2022 and $1.25 million for 2023. Major Streets and Local Streets are budgeted to receive $419 thousand and $174 thousand, respectively, of American Rescue Plan Act (ARPA) funds due to lost revenues in 2020. These funds will be utilized to continue to fulfill the City's streets plans.

Cemetery

Cemetery operational revenue is projected to remain steady in 2022. Operational revenues are not designed to cover operations and capital improvements, therefore a recurring subsidy of $312 thousand from the Perpetual Care Fund supports the cemetery activity. In addition, the Perpetual Care Fund supports cemetery capital expenditures budgeted for $200 thousand in 2022.

Solid Waste

Solid Waste operations are funded by a dedicated millage of 1.8 mills. Property Tax revenues of $3.2 million are estimated in 2022. This represents an increase of 4.61% due to anticipated increases in tax values.

Wastewater Fund

The 2022 Budget anticipates an increase of approximately 12% in Wastewater revenues as compared to 2021 rates. Rates are dependent on final ratemaking calculations and will be presented in January 2022 for City Commission action.

Water Fund

The 2022 Budget anticipates an increase of approximately 15% in Water revenues as compared to 2021 rates. Rates are dependent on final ratemaking calculations and will be presented in January 2022 for City Commission action.

Expenditures

The 2022 Budgeted expenditures for the General Fund is $73.0 million, representing an overall increase of 6.93% when compared to the Adopted 2021 Budget.

The City’s programs are divided into Governance Programs and Community Programs. Governance Programs are primarily served by the City Commission Appointees, including the City Manager, City Attorney, City Clerk and Internal Auditor. The City Manager oversees the Community Programs of the City and the remaining Governance Programs. The General Fund has four departments that facilitate the majority of community programs of the City: Public Safety, Public Services, Community Planning and Economic Development, and Parks and Recreation. The remaining departments that primarily serve governance programs include: Management Services, Human Resources, Information Technology, and 311 Customer Service. Certain expenses included in the General Fund are general in nature and are therefore not assigned to a specific department or governance program.

Projected General Fund

Position Allocations

The 2022 Budget includes 669 full-time positions and 5 part time positions, for a total of 674 allocated positions. The city-wide increase in staffing is to better meet the needs of the community. The Position Comparison schedule included within this budget document provides further detail of the positions and changes by department.

Capital Improvements

General capital projects, which are funded in the Capital Improvements Program (CIP) Fund, total $9.4 million. Capital projects in the CIP Fund include $3.2 million in heavy equipment and vehicular equipment, $1.2 million for farmers market and park improvements, and $5.0 million for facilities and improvements.

The General Fund transfers funds annually to cover the debt service payments required by the City’s General Capital Improvement program that is not otherwise funded by other sources. In 2022, the total transfer is $5.7 million as compared to $3.8 million in 2021 adopted transfers.

The Five-Year Fiscal Plan for the Capital Improvement Fund is included in the Budget Summary section of this budget document.

Local Streets

Improvements to various local streets total $1.5 million which is 90.5% bond funded in 2021.

Major Streets

Improvements to various major streets total $13.7 million in 2022. The capital improvements are to be funded with $4.8 million in federal funds, $.375 million in state funds, $5.1 million in new capital improvement bonds, and $3.4 million in funds from the State of Michigan for the transfer of streets to the City of Kalamazoo.

Water & Wastewater

Capital improvements of $17.7 million and $39.0 million are planned in the Wastewater and Water Funds, respectively. Capital investment in the Wastewater and Water systems is necessary to ensure the supply and quality of drinking water and the flow and treatment of sanitary sewer. This includes new & replacement mains, service connections, hydrants, meters, pumping station upgrades, capital maintenance, and improvement of existing infrastructure.