Grand Rapids
Michigan

GR Agenda Item

Fiscal Year 2019 Budget Adoption

Information

Department:Economic Development StaffSponsors:
Category:Agenda Action Request

Attachments

  1. Item Description
  2. SmartZone LDFA FY2019 Budget

Content A

Attached is the SmartZoneSM Local Development Finance Authority (LDFA) FY2019 budget to be considered for adoption.  On May 18, 2018, the SmartZoneSM LDFA approved the FY2019 budget and recommended the same to the City Commission for considerationOn June 5, 2018, the City Commission approved the SmartZoneSM LDFA FY2019 budget without modifications.

 

For FY2018 year-end, revenues are estimated to end slightly above budget ($1,238,699) at $1,323,008.  This is due to a larger amount of tax increment revenues than expected for the parcels added to the SmartZoneSM Certified Technology Park in 2016 and a larger than anticipated Michigan Small Taxpayer Exemption Loss Reimbursement.  Staff estimate that expenditures will end significantly below budget ($5,538,899) at approximately $1,722,401.  In the FY2018 budget, $2,585,110 were appropriated for future strategic priority initiatives.  Through a Request for Proposals (RFP) process, $2,480,423 were committed to various projects and services and $104,687 remain.  Only $155,852 of that is anticipated to be spent in FY2018.  In addition, $1,375,000 were allocated for a various infrastructure projects, which did not come to fruition in FY2018.

 

For FY2019, tax increment revenue from the Michigan Street Development dropped due to recently approved charitable exemptions for commercial personal property, resulting in a decrease to the total budgeted FY2019 revenue ($1,219,173) of 8% from the FY2018 year-end estimate.  The appropriation request for FY2019 contains $4,127,398 in expenditures.  The ongoing expenditures in Table 2 are anticipated to decrease, primarily due to the completion of the developer reimbursements for Icon on Bond.  Anticipated expenditures for strategic priority initiatives include $1,246,202 for the projects and services approved during the RFP process and $605,206 for future strategic priority initiatives.  The only other committed expenditures are for the Michigan Street Bridge debt service and Michigan Street Improvements.  Appropriation authority is also being requested for SmartZoneSM Operations, Tradeshows and Marketing, and Maker Space; however, new contracts for these services and projects are subject to approval by the Board.

 

The FY2019 budget complies with the Amended and Restated Grand Rapids SmartZoneSM Agreement between the City, the SmartZoneSM LDFA and the Michigan Economic Development Corporation.  Staff recommends adoption of the SmartZoneSM LDFA FY2019 budget.

 

KLW/em

 

Attachment