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City leaders in Kalamazoo commit to a new way of funding city government

Oct 25, 2016

Kalamazoo City Commissioners voted Monday night in support of a public-private partnership they hope will stabilize the budget, lower property taxes and fund “aspirational projects” as early as next year.

The donation comes from two local businessmen and philanthropists. Both have ties to the Kalamazoo-based medical device manufacturing giant Stryker Corporation. One is heir to the Upjohn Company.

They’re offering the major donation to help stabilize Kalamazoo’s budget. The city was considering an income tax to help close a deficit.

As part of the agreement, commissioners will support lowering the millage rate on homes and businesses in the city by a third beginning in 2017.

Bill Lindsey was one of at least a dozen residents who lined up Monday night to urge the commission to support this new funding model. Lindsey, who owns a small renovation business, called the $70 million a “tremendous gift.”

“When you hear about money it generates excitement, right?” Lindsey said, smiling at the crowd.

“Sometimes people get overexcited and do not think clearly about what the future could bring. But I think if we can stay together, plan well, and still make contact with the community, I think we can do well,” he said.

After years of cuts and hundreds of early retirement offers, Kalamazoo is running out of options to balance its budget. Commissioners blamed the great recession and lower revenue sharing from the state government; factors that have plagued many Michigan cities.

“In other cities, they’re just going down. But we got a chance to do something here,” longtime Kalamazoo City Commissioner Don Cooney said.

“For me, there’s a sense of urgency here. We got some tough work to do and now we have a chance to get some resources to do the things that we need to do,” he said.

But some commissioners worry about the set up; about potential conflicts between the city and big donors or about Kalamazoo becoming too dependent on the stock market. After hearing mostly support from residents, only one commissioner voted against the plan.

Commissioner Shannon Sykes said she came into the meeting prepared to vote against the Memorandum of Understanding to set up the Foundation For Excellence.

“I’m still concerned about a privatization of a portion of the budget and I have to be honest about that. But I was elected to serve all of you,” Sykes told the crowd.

“There are people in this community who are skeptical and don’t want this plan so I wanted to give them a voice at the table tonight,” commissioner Matt Milcarek said of his lone ‘no’ vote.

Next, Kalamazoo plans to lower property taxes and create a non-profit to raise money. The goal is to create a permanent endowment by the end of 2019.