Plainwell city council members approved a 2017-18 budget that reflects a housing market continuing to get stronger.
City manager Erik Wilson said, “It’s a testament to the community. We have great neighborhoods and people care about their property.
“We’ve also been spending more time on code enforcement, trying to make sure property values don’t fall.
“Plainwell is a desirable place to live.”
The difference between assessed value and taxable value in the city has been increasing since it bottomed out at a 2.38 percent difference in 2013.
“It’s ticking up which is good,” Wilson said. “We are seeing a strong housing market, which is great.”
The values of real property (defined as non-industrial property, basically) are important to a city’s property tax revenue because if the taxable value catches up to the assessed value, the taxable value will be reduced and property tax revenue will fall.
“The gap between those two allows for more fluctuation without affecting revenue,” Wilson said. “Basically, it’s almost back to the 2005 levels.”
The difference was 20.84 percent in 2005 and was recorded at 17.38 in 2016 and the city estimates it will increase to about 19 percent in 2017.
The city’s general fund revenue overall is up, Wilson said, but the cost of everything else is, too.
“We’re thankful it’s ticking upwards, but that doesn’t mean the city is flush with money,” he said.
Among the biggest ongoing challenges Wilson said is the state’s replacement for the Personal Property Tax, which affected industrial facilities stood out because of uncertainty.
The amount a municipality gets to replace what it would have collected from local industrial property is determined by a formula overseen by a state-appointed board.
“It’s a challenge because determining what those numbers are is very difficult,” Wilson said. “There is a formula, but it is hard to calculate what those are.
“Most municipalities would prefer to have a predictable revenue stream.”
The city pointed to the fact it funds all its capital projects with cash, as opposed to borrowing, as a strength.
Several funds are shown as going into the red in the budget, because the city is using fund balance to pay for capital projects there and saving interest costs.
The budget added another full-time public safety officer.
“We had four or five part-time employees we used for various hours,” Wilson said. “We decided to hire a full-time officer and reduce part-time hours. It cost a little more, but it’s better in training, flexibility and scheduling.
The department now has six officers, plus the director and deputy director.
Wilson said a new item was budgeting about $87,000 to fund the previously unfunded liability of employees who are able to cash in some of their sick time (the city has bargained to reduce the amount) when they retire.
Wilson said, “We’re tracking it, but we hadn’t been funding it until this budget.”
A rate study in the budget showed Plainwell to be toward the middle among comparable communities in water and sewer rates.
Wilson said, “The goal isn’t the lowest water and sewer rates. It’s the lowest water and sewer rates while still funding the depreciation of the system.
“It’s a balance. There’s obviously a horrific example on the east side of the state.”
He thanked the city employees for the job they do with finances.
Wilson said, “Managing the taxpayer’s money is supremely important.”
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