City Manager: $70M donation ‘game-changer’ for Kzoo

Downtown Kalamazoo. (File)


KALAMAZOO, Mich. (WOOD) — City leaders in Kalamazoo are calling it a “game-changer” in government financing.

Various donors have pledged $70.3 million over three years toward kick-starting a new foundation aimed at stabilizing the city’s budget and lowering property taxes.

It’s called the Foundation for Excellence. It was unveiled at a city commission meeting Thursday night.

“Last night was not about a budget. It was about taking care of a community,” Kalamazoo Mayor Bobby Hopewell told 24 Hour News 8 Friday.

“This is new thinking on how government can be financed,” city manager Jim Ritsema added.

If approved, the Foundation for Excellence would provide for the city in three primary ways:

  • Eliminate the budget deficit
  • Fund key investments and improvements, like roads, parks and youth programs
  • Cut property taxes for citizens

The foundation would lead to a property tax cut from 19.2705 mills to 12 mills — a decrease of more than 37 percent — by next year. A resident owning a $100,000 dollar home would pay about $363 less in property taxes per year. Eventually, the city says the property tax rate could drop to 10 mills.

“That’s real money back in people’s pockets to spend in the community, invest… whatever they’re gonna do with it,” Ritsema said.

The associate dean at Western Michigan University’s business school told 24 Hour News 8 she’s never heard of a private-public partnership quite like this.

“It is unique, and the Kalamazoo Promise was unique as well and it made the national news. And I expect this to come into the national spotlight as well,” Devrim Yaman said. “I think this is very exciting news for our city.”

The Kalamazoo Promise is a program funded by private donors that covers college tuition costs for public school students. It’s been in place for about 10 years now. Ritsema said both that program and the new donation reflect the generosity of the community.

“Having the (Kalamazoo) Promise out there as a model really allowed for these discussions to occur. Because there are donors that are committed to this community,” Ritsema said.

Mayor Hopewell said he has heard concerns over who decides where the money goes. He made clear that the donors won’t dictate how the funding is distributed. He said that’s the job of elected officials.

“There are no strings attached here,” Hopewell said. “If we have a history of meeting our ethical standards, I believe we will have a history of being able to do that with this.”

The foundation is not a done deal.

Ritsema will now craft legal documents outlining the agreement between the city and the foundation, and then the city commission will make a formal decision on the budget option.

The $70.3 million investment — which would take effect in 2017 — is just Phase 1 of the  foundation.

Phase 2 includes creating a fully-funded endowment by 2020 with an annual revenue source for the long-term.

Hopewell said community members would eventually be able to contribute to the foundation. The city is encouraging feedback through their Facebook page.

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Online:

Foundation for Excellence

Kalamazoo city manager’s future revenue options presentation

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