Grosse Pointe Shores maintains high fund balance in new fiscal year

GROSSE POINTE SHORES — Grosse Pointe Shores recently started a new fiscal year in solid financial shape.

Residents are paying a slightly lower millage rate — 18.0201 mills for the 2023 to 2024 fiscal year, compared to 18.7031 mills for 2022 to 2023 — thanks largely to a reduction in the debt millage rate, and Shores Finance Officer Dale Krajniak said the city’s reserves “are in great shape.”

The Shores City Council unanimously approved a budget and millage rate for the 2023 to 2024 fiscal year — which started July 1 — during a meeting May 16.

The general fund balance for the previous fiscal year was $2.6 million, or about 37% of general fund expenditures for the year. This year, the fund balance is expected to be $2.75 million as of the end of the fiscal year June 30, 2024, which equates to a little over 35% of expenditures for the current fiscal year of $7,779,300.

Mayor Ted Kedzierski said the city has a policy of maintaining a fund balance of at least 25%, one of the factors that enabled the Shores to reach AAA bond rating status — the highest rating possible.

“We’ve got a little bit of a cushion,” Kedzierski said of the fund balance, which is sometimes referred to as a rainy day fund.

Not surprisingly for a city that’s almost entirely residential, the vast majority of the Shores’ tax revenue comes from property taxes.

“Eighty-two percent of your (tax) collections come from property taxes,” Krajniak said. “You do receive some state sales tax returns, but the bulk of your (revenue) is from property taxes.”

Property tax revenues are slated to increase by nearly $360,000 in the 2023 to 2024 fiscal year, according to the budget. By comparison, 1 mill in the Shores is equal to approximately $343,600.

“We reviewed the budget and thought it was in great shape,” said City Councilwoman Sandra Cavataio, chair of the Finance Committee.

Finance Committee member Chuck Ruifrok praised the team of Krajniak and City Manager Stephen Poloni for their work on the budget.

“They’ve done an outstanding job of looking at the detail,” Ruifrok said.

Kedzierski said administrators and department heads did “a great job, particularly in this environment” with higher material and labor costs.

“Dale, you hit a home run with this,” Kedzierski said. “It’s all good news.”