Fiscal Committee Meeting Summary - December 2, 2025

All right, good morning, everybody.

Happy December.

It's 8 30, so we'll go ahead and call our fiscal committee meeting to order.

Um, we've got a few items here, and then um pending time, which we should have plenty given this uh scheduled for an hour today.

We have um a follow-up briefing that we didn't have time to get to um back from our November 13th City Commission workshop.

So um jumping in here with item number one.

We've got a resolution approving new three-year contract award for employee assistance program services through U Lions Incorporated uh with an administration cost not to exceed 132,480 dollars.

Is there a motion?

So move support.

All right, moved and supported.

Good morning, welcome.

Good morning.

Uh my name is Mike Hosperman, I'm the employee benefits manager.

I hope you all had a wonderful Thanksgiving.

Um the human resources department recently conducted a request for proposal along with our first responder groups to see if we could find a employee assistance provider.

And uh after the results of the RFP, we concluded that Ulliance Incorporated was the correct provider for that.

They've also been our EAP for the last three years, and they do uh uh just a really wonderful job.

So we'd like to continue that relationship.

Awesome.

Thanks so much.

Any questions, colleagues?

I just one quick question.

Do what's sort of the the utilization rate?

I know EAPs are an awesome resource for employees.

I'm just curious, like what how much can we do that?

Yeah, so um uh looking at the 2024 data, we don't have quite all the 2025 one yet.

Um so we had eight hundred and twenty-seven total services utilized during that time and three hundred and twenty-seven people used.

So if you do the math on that for employees, it's about twenty two percent.

And we're kind of on track for that right now.

Yeah, that's great.

All right.

Well, hearing seeing no other questions, um, all those in favor say aye.

Aye.

Any oppose, the motion carries.

Thank you.

Thanks.

Next, we've got a resolution approving uh one year contract extension with Arthur J.

Gallagher Risk Management Services, um, our agent of record for property and casualty insurance totaling $58,850.

So move support.

All right, moved and supported.

Good morning, Miss Eddie.

Good morning, everyone.

My name is Michelle Eddie, deputy HR director.

I'm requesting approval of a one-year extension of the agent of record agreement with AJ Gallagher Risk Management Services for property and casualty insurance.

Our current agreement expires December 31st, and this extension will be a not to exceed amount of $58,850 for the calendar year 2026.

This will also allow the HR department the necessary runway to manage current workload demands while we preparing a full competitive RFP process in the coming year.

This short-term extension maintains the continuation of services while we complete a thorough um competitive process in 2026.

I am respectfully requesting your approval of this one year extension.

Okay, got it.

Thank you.

Colleagues, any discussion on this one.

All right.

All those in favor say aye.

Aye.

Those opposed, the motion carries.

Uh brings us to item number three.

We've got a resolution approving payment to the Kent County Drain Commission, KCDC for the saddlebag drain assessment payment uh in the amount of twenty-eight thousand one hundred thirty-six dollars and fifty-seven cents.

So support.

All right, moved and supported.

Good morning.

Morning, commissioners and colleagues.

Uh Dan Tabor, Stormwater Manager, City of Grand Rapids here.

Uh this is uh requesting a uh payment in the amount of twenty eight thousand one hundred and thirty-six dollars and fifty-seven cents for uh a drain assessment from the Kent County Drain Commissioner for the saddleback drain.

Uh the this project is completing a pump station and various uh dredging and stormwater maintenance up on the northeast side of the city.

Uh this drainage area encompasses parts of Grand Rapids, Grand Rivers Township in Kentwood, and the drain commissioners looking to uh complete this work this year.

So uh standard stuff, not related in app at all.

Um, but just work uh train commissioners under undergoing with got it.

Okay, that was gonna be my question is if there was any relation or connection to uh different watersheds.

Um connected.

Any questions, colleagues?

All right, hearing none.

All those in favor say aye.

Aye.

Any opposed, the motion carries.

Thank you.

Thanks.

Um, next is a resolution authorizing uh budget substitution in the amount of five hundred thousand dollars for the replacement of uh LMFP switch gear.

So move support.

All right, moved and supported.

Good morning.

Morning, commissioners.

Uh the item that you have in front of you is associated with the lightning strike that we had out at the filtration plant uh near our generator building back in August.

Um this amount of money uh will cover the gap that we have.

We have some money budgeted capitally for electrical improvements.

We do that on an annual basis for our filtration plant.

We plan on using uh about a million dollars of that budgeted money uh towards making these improvements to the generators, and this amount will cover that gap, and it's gonna come out of the IIP.

Okay.

Uh any discussion, colleagues?

Questions on this one?

All right, hearing none, all those in favor say aye.

Aye.

Those opposed, the motion carries.

We've got a resolution authorizing a budget substitution in the amount of three million two hundred sixty-five thousand five hundred and six dollars for the Stevens Steel to Randall project.

So move.

Support.

All right, move to and supported.

Okay.

Um this project has been bid by city engineering already.

Um the portion for water was originally we had million dollars budgeted, I believe it was an FY25.

Um there was the the total amount for water share of this is over four million because some groundwater contamination in the area that adds to the cost.

Um we were planning to budget money for it in FY27's capital budget, but because of available IIP dollars um from uh unspent uh uh previously capital budget money, we're gonna use IIP to pay for the the gap on this one.

Okay.

Any questions on this one, colleagues?

All right, hearing seeing none, I'll call the question then.

All those in favor say aye.

Aye.

Any oppose?

The motion carries.

Bringing us then to item number six, we've got a salary ordinance for non-represented management employees of the 61st district court.

So move.

Support.

All right, move to and supporter.

We'll turn this one back over to Miss Eddie here.

Hello again.

Okay.

Um presenting a salary ordinance for the non-represented management employees of the 6 61st district court.

These adjustments have already been reviewed and approved by the 61st district court judges who hold authority to negotiate and approve compensation for these positions.

However, since these roles are part of the city's ordinance, the city commission action is required to approve these changes.

The impacted classifications are the court administrator, the deputy court administrator, the eviction prevention holistic facilitator, the problem-solving court case manager, the domestic violence case manager, the magistrate, and the law trained magistrate.

These adjustments will help ensure the court can maintain competitive compensation for these key management roles.

This order ordinance formalizes the updated salary schedules and ensure that they take effect.

Intended July 1st, 2025.

Okay, thanks.

Any questions, colleagues?

So you said July of 20 of this current day.

That is correct.

Okay, so we'll that I'm assuming there'll be some sort of retro backpack.

Okay.

All right.

Um hearing no other questions, all those in favor say aye.

Aye.

Any opposed?

Motion carries.

Bring us to item number seven.

Now we've got a salary ordinance amending section 4.2 of ordinance 2025-31.

Range and title change for the parking services shift supervisor and parking operations superintendent uh in the creation of a new classification for parks planning and project manager.

So move.

Support.

All right, move and supported.

Yes, so I'm presenting an amendment um to the section 4.2 salary ordinance, two classifications within mobile GR, and then one new classification within parks and recreation.

At the request of the mobile GR department, we conducted a review of the parking services shift supervisor and the parking operations superintendent roles to ensure the responsibilities, expertise, and pay aligned with current industry standards.

And then based on that analysis, the parking services shift supervisor would become the parking and mobility shift supervisor, moving from a range 10 to a range 12.

The parking operations superintendent would become parking and mobility operations manager, moving from a range 16 to an 18.

Additionally, the parks and recreation department is requesting their creation of a new classification title parks planning and project manager, which will be placed in range 19.

This role will oversee park design, construction work, manage the department's five-year plan, capital plan, and manage the capital millage funding for improvements across more than 90 plus parks and a growing trail system.

These changes were reviewed and approved by the Civil Service Board on November 18th, 2025.

I am respectfully requesting your approval of this ordinance.

Great, thanks.

Any questions on these ones, colleagues?

All right.

All those in favor say aye.

Aye.

Any oppose?

The motion carries.

That brings us then item number eight.

We've got our bid list resolution for today, December 2nd, 2025.

So move.

Support.

Alright, moved and supported.

I'll hand this one over to Miss Claren.

Uh good morning, Commissioners.

Uh on the bed list this morning, fairly routine.

We have fun stuff like sewer lining and um, of course, snow removal.

So uh, you know, just in time for Christmas.

So yeah.

If you uh you have any questions myself or the department directors are here to answer them.

Perfect, thank you.

Any questions, colleagues, comments?

All right, I did not write down the page number, but the full list is in the packet too, in case people are curious and want to read through those.

Um all right.

All those in favor say aye.

Aye.

Any oppose?

The motion carries.

And I will forward it over to our deputy comp troller who's joining us for the first time here.

So good morning, good morning, commissioners.

And you just said my whole line, so the report is submitted as as you just stated.

Okay.

Any questions on the anything, you know, specific to call out or nope.

If you want me to, I can let you know that the payroll was for that period included $5,870, 899.67 cents.

Income tax warrants were 282 dollars and 282,415 and 81 cents, which included 700 income tax returns and 1214 in accounts payable checks.

Awesome.

Thanks so much.

We'll go ahead and receive and file that.

Um number 10 brings us then to our treasurer's report for the same period, or sorry, similar period, November 5th, 2025 through November 18th, 2025.

So we'll hand it over to you.

Great.

Good morning, commissioners.

Um with a report today.

Um following up on what we talked about last um treasure's report versus this one.

We had a probability of a rate hike of 80 percent, which then dropped down to about 40 percent.

Now it's back up to 80 over 80 percent.

Um there just continues to be wild swings right now.

Um we expect to see a uh 25 basis point rate cut.

Um but if we're looking at it, uh jobs are an issue, they're under very, very large challenges in the jobs market right now.

We're seeing it more and more.

We're seeing layoffs happen, we're seeing people struggling to find work.

Um that is a huge issue right now.

Um another issue that we're finding out in the positive side is our gross domestic product is averaging about four percent, which is higher than expected.

So we've got all these large shifts right now going on.

Um we expect that 25 basis point uh drop, but other than that, you know, it's it's kind of like hang on tight, you know, grip the arms of your chair and let's wait for all the news to keep populating through.

We still haven't had a good set of economic data come back out again since uh the federal government reopened.

So we're still waiting kind of on pins and needles to see if that's gonna show us any more of a clearer picture.

Um but with that, our our portfolio is at 720 million and we're at 3.44% uh return on that investments.

Great, thanks.

Any questions, colleagues?

Just one quick one from me.

Do you know by chance when if and when they release that?

Is it gonna be like in aggregate for that whole period, or is it still gonna be broken out at one time?

They're probably not gonna catch up from what they've already passed.

Okay, it's probably gonna be that here's your next set of economic numbers for the following months period or quarters period, wherever that might be.

Okay, sure.

Just curious.

Appreciate the information as always.

So we'll go ahead and receive and file that, uh, bringing us to our last item here as mentioned is a follow-up uh financial update that we didn't get to on our November 13th City Commission workshop.

So we um are bringing it here before fiscal committee this morning.

So Miss Claren, I'll hand it over to you.

Okay, good morning.

Um, this is I guess fourth time's fourth time's a charm, because I know we have the workshop, then we had fiscal committee, committee of the coal, and now I'm back here at fiscal committee again.

Um so this this uh report was created for the workshop on November 13th.

So the data is a little old, but and we are much farther along in the audit.

So before this was this is an abbreviated presentation of what I usually give because of where we were at at that point in time, um, in about a month and a half or so, the the city comp troller does his report out for the citizens guy that'll contain much more information like the city's net position, um, the state of our you know, pension, things like that.

So um rather than altering my report, I'll let him cover that because he covers it anyway with his um citizens report.

And um, but the the key takeaways and um it's beautiful that I'm following John Globinsky because he did a lot of the work for me this morning as far as where we're at economically.

Uh yeah, unemployment is a concern in Michigan is a little bit higher than the nation.

So um as we look forward towards uh creation of the budget, one thing that city manager is going to be talking to departments about is affordability, um, knowing that knowing that yeah, we do have higher on higher um unemployment and also um you know you know what what's going on.

We seem to have stable consumer demand, but um know it knowing that there are other challenges out there, we want to be mindful of that.

Um the other thing I'll just note um John already addressed the um inflation, but yeah, are we gonna get um a rate decrease or not?

Um it's not a foregone conclusion.

So waiting to see what happens with that, and um you know, any weakness in the economy seems to be um centered around technology and demographic changes.

So it is an interesting time.

Um I have this bullet uncertainty around tariff policy changes and federal shutdown, past federal shutdown.

But you know, every other week it seems like we're talking about okay, what if this tariff happens or um things seems to be moving quicker at the federal level?

So uh what's going on with the um city?

We we adopted these labor contracts, but we know we're gonna have to layer in these costs across all the funds of the city.

We did bank or or reserve some space in the general fund.

So the uh what we're layering on to the general fund in the out years compared to what we adopted last May is about six million dollars across the three years of the contracts.

Uh, we also have the class and comp study and the implementation timing.

Uh, we're still waiting.

I'm still waiting to get data on that so I know what the impact is going to be.

We're hoping to be able to have some forward direction as we shape the budget on that as well to see, okay, can we can we time it into when we adopt the budget, or are we gonna have to again like we did with the labor agreements, leave space for that.

Um, you know, and then and then the next bullet points were all around the the federal shutdowns as far as impacts to um our grant programs were we're waiting where we were covering with our own city operating funds because we weren't getting reimbursement from the federal government on certain things.

I think of the the FEMA grant we we fund some of our firefighters through Safer.

So that's that's one example, and also um we had we we did shut up shut off suspensions for our water customers, so having to subsidize that um is something that the water fund won't recover.

So um given it it wasn't too costly for them, probably under 50 grand because it didn't last, I don't think a total month, but again, that that's one thing the city did to help with that affordability issue as we were going through that time.

Uh as far as our our cash flow, this is what we adopted back in May.

So this is this doesn't include the impact of labor agreements.

Um I also don't have threaded in yet the the finalized uh 2025 numbers, but you can see we adopted a budget that I was already uh operating at a deficit in the out years.

So as we fine-tune our revenue expectations.

I'll come back and talk to you about that uh second meeting of February with the new financial update.

And usually I try to get updated um revenue numbers, particularly like state sharing numbers.

We'll have the revenue conference um at the end of January, so we'll be able to update things like that, and also get a good look at about how income tax is re performing over the first six months of our fiscal year.

But zeroing in on those uh revenues, this is our income tax performance for fiscal year 25, and you can see we perform quite well.

A lot of that was driven.

You'll see the I you know, I have overall income tax and then um broken out by those different income tax um categories, and we were pretty cletty on the money when it comes to you know, base interest and uh compliance, but uh with refunds, you'll see well, what happened?

8.8 million dollars, and that's largely driven by an accrual adjustment we make at year end.

Last few years we realized we were being way too conservative with um you know what we expected to have to pay back out in in refunds.

I think we're a lot of that had to do with the work from home, you know, trying to get our arms around what that is, and and uh you know, we realized we were being way too conservative and outperforming that, so um that adjustment was modified drastically, and that's why you see that we're actually gonna retain a lot more of that income tax money in the house.

Uh property tax, uh again, that's kind of our sleepy um revenue category because it's it's um limited by how much it can grow grow due due to state law.

So um again, that's that's fairly conservative, but we do like to see a little bit of positive growth there, and then uh state sharing as well as gas and weight tax outperformed our expectations.

So again, that's that's again positive news knowing knowing um what we're up against as far as absorbing some some cost.

Um, as far as our debt issuances, uh we have been um issuing a lot of debt over the last uh couple years.

I listed out what we've been doing since fiscal year 24, and you'll recall the large issuances of like the soccer stadium ample theater, of course.

We did that on behalf of the county.

Um while we had a secure revenue source, that is um debt that goes against our full faith and credit.

So, should that revenue stream fall short, we do have a waterfall protection where where we do have a reserve to help pay that, but um just something to keep in mind out there.

Um, you know, and then and then other other initiatives like uh Lion Square and Um Street lighting, parks projects, those are other things we've issued for on the horizon.

We'll probably do some more.

Well, we just got done with the water and sewer refunding.

Uh we'll be giving you a report of bond sale on that in um January, but again, very positive, achieve some savings for those funds.

Um we have the fire training center on the horizon, and um right now we have um 12 million dollars reserved um to issue debt for related culture plaza.

So again, um, you know, that's what we know about now.

This will be refined when we go through budget.

Um impact of the state budget changes.

I know we've had a few conversations on that.

Um they created a new category this year for state shared revenue with the public safety allowance.

You can see, you know, we come out a little bit ahead overall on state sharing, but um they reduced our constitutional amount a little bit, um, you know, to help pay for that.

So uh so while we did pick up some some pennies, 1.7 million for a public safety amount.

Um that is you know, not a huge gain necessarily overall for the for the city.

Uh gas and weight tax, you'll see within this fiscal year, we're picking up about five million there.

So and with that, um, if there are any questions, I'm happy to answer them.

Otherwise, yeah.

Yeah, thank you.

Um, I'll turn on my colleagues and see if they have any.

I had one quick question, but I'll see if they have anything first.

All good.

All righty.

Um just curious, I know, and this was like you know, comment even back with Mayor Bliss about you know, being conservative about our revenues, and then I I know I'd much rather us, you know, assume we're gonna have less than the opposite because that could put us in a bad spot.

But just curious once we have some of those updated revenue numbers, like do we have any any idea estimate of like how that's gonna impact the bottom line deficit, just looking at it.

Absolutely, and that that's something we should definitely talk about in February.

Um, one thing I uh I can share with you is um we used to use withholding and income tax as we'd always be right on the money with our estimation um pre-COVID years.

Sure.

So that was a good indicator of how we were gonna perform.

The COVID kind of threw that out the door because now this work from home and alternative work schedules, things like that has really impacted um you know how we estimate uh income tax.

And you know, used to be John O'Connor and I used to go back and forth like Molly, what's going on?

And always to the good.

We always make more than what what we were estimating.

So yeah, we we we came out of COVID being still being fairly conservative with how we estimate, but seeing how we're in this new reality and we're trying to get our arms around okay, what is a better way to um to estimate we've partnered with GVSU to create a forecasting model.

So rather than trying, well, using what we do in-house, but comparing that to what they think we should, you know, what they think are good market indicators, things like that.

Um we're supposed I'm supposed to get a my first, you know, get to kick the tires of of this model um this month.

So I'm kind of excited to see it.

Cool, yeah.

Um, so I'm hoping that's going to they're they're gonna go back a few years to see, okay.

Here's what we would have estimated compared to what we did, and we'll see we'll see how that compares.

So we are honing in on that category because yeah, I agree with you.

We have been conservative and yeah, yeah.

Yep.

No, that's so essentially you'll be taking that model, applying past year's data to see how accurate it would have been.

Yeah, yeah, and then applying it to okay, let's let's use it for the you know, well, for mid year when I recast revenue based on what we hear from the state and and other, you know, other revenue sources and and also yeah, so so you could we'll be updating all of our our revenues when I report back to you in February.

Yeah, I think I think that'd be helpful.

I'm just trying to wrap my mind around I'm looking at like FY26 is just a million dollars, you know, surplus, and then 27, like we're already you know, multi-million dollar deficit, so just trying to think through and and hopefully the model proves, you know, yeah, it's gonna be back into the surplus.

But um, just something to keep an eye on, I think.

Yeah, and then these numbers are from this is what we adopted the budget with.

Yep.

So we know more now.

Uh we've started the fiscal year 27 budget, but what departments also do is scrub down what they're actually going to spend in this fiscal year.

So you will see you know that that tighten down a little bit, and in you know, we'll you know, again, looking at affordability, looking at the cost of what we do and what we can get done within the fiscal year.

Um, all those conversations are being had right now.

So got it awesome.

Well if there's no other questions we can go ahead and and wrap up this presentation then appreciate it.

Um and we'll go ahead and adjourn our meeting at 855