East Grand Rapids City Manager previews $37.8 million proposed 2025–26 budget; no vote taken

The City Manager presented the proposed 2025–26 budget for East Grand Rapids at a commission work session, saying, "total budget we're proposing this year is 37,800,000.0." The commission did not take formal action at the session.

The budget overview framed why the plan matters: it sets property tax millage, funds streets and capital projects, adjusts utility rates, and accounts for a state pension grant that reduces employer contributions. The City Manager said the operating millage aggregates to about 14.2107 mills compared with 14.884 the previous year and noted recent special millage actions, including a recently approved two-mill street and sidewalk renewal that is subject to statutory rollbacks.

Key numbers and revenue assumptions: the City Manager said total revenues for all funds are about $33,000,008.10 and that the proposed budget uses $559,000 of the general fund balance, leaving a projected general fund balance of roughly $5.7 million against a target of $3.75 million. Property tax revenues were reported to have grown about 4.6 percent. The City Manager listed general fund revenue line items as $11.5 million in property taxes, $1.4 million in revenue sharing, about $1.1 million in recreation revenue and expected investment earnings of roughly $830,000 for the current fiscal year; interest earnings to date were described as “Approximately about 800,000.” General fund expenditures were described as about $15.5 million.

Pension and long-term liabilities: the City Manager said the city recognized a state grant of $1.9 million that reduced the recommended employer pension contribution from about $1.3 million to roughly $1.1 million. He reminded commissioners that the city closed its defined benefit pension system, separated from MERS (the Municipal Employees' Retirement System) in 2021, and is targeting full funding in 2034–2035 using an assumed investment return of 6.75 percent.

Public safety and staffing: the proposed public safety budget is approximately $5.1 million. The City Manager said the department has been hiring to address upcoming retirements, noting, "We just extended offers to 4 reserves. 5," and that, with those hires, the city still expects to be short one position.

Water, sewer and utilities: the large sewer/water fund recommendation includes a 3 percent rate increase for readiness-to-serve and commodity charges, the City Manager said, citing upstream rate changes from Grand Rapids and higher personnel costs. He said the city has not built state reimbursements for lead service line investigations (about $580,000) into the budget because reimbursements are received after work is done. On a separate water reliability project, the City Manager described an interconnection with Grand Rapids involving a 12-inch main near Reeds Lake that would improve fire flows and system flexibility at a fraction of the cost of a full lake-loop option he estimated previously at roughly $20 million.

Capital priorities and street programs: planned capital spending in the general fund includes roughly $1.1 million for various projects (parking-lot resurfacing, HVAC replacements, community-center carpet, and public-safety equipment). City buildings capital was described at about $1.9 million. The City Manager said major-street capital is projected at about $1.7 million, with state gas-and-weight tax receipts and transfers supporting the program. He reminded the commission that staff will rate streets in the fall with construction anticipated in the spring.

Other funds and risks: the motor-equipment replacement fund will be heavy this year because of vehicle acquisitions (a Vactor was specifically mentioned). The health insurance fund is self-insured and faces rising prescription drug claims; the City Manager said the fund carry a reserve of about $700,000. The municipal street millage and transfers were discussed along with local-street funding differences.

Parks, business district and agreements: commissioners asked about the Gaslight business district and a possible change in its structure; staff reported ongoing conversations with the district chair. The City Manager confirmed the city's joint facilities contribution is an agreed-upon $60,000 and said that the elementary-playground capital work has reduced some prior capital pressures.

Questions and next steps: commissioners asked clarifying questions about the GVBA structure, how the joint-facilities figure is set, and how excess fund balance decisions will be scheduled. The City Manager said he would provide updated projections and recommended the commission approve the budget before the external deadline if follow-up is needed, with a future deeper dive scheduled for particular topics.

No formal motion was made at the session. The mayor opened public comment, received no speakers, closed public comment and adjourned the work session.

Ending: The budget remains a proposed plan; staff will provide updated fund-balance figures and follow-up information requested by commissioners before the commission votes at a future meeting.