A newly proposed budget for the fiscal year 2027 may potentially violate the Grand Rapids City Charter, the city’s founding document, Comptroller Max Frantz told The Grand Rapids Herald.
City Manager Mark Washington in April presented a $785.4 million preliminary budget for fiscal year 2027. That proposal included a $50 million, or 6.4%, increase over the current year’s $735 million plan.
Frantz explained in an email to The Herald that part of the proposal appropriates funds to a department within the city manager’s office, which “will perform the payment issuance and accounting responsibilities” typically assigned to the comptroller’s office. This new department could lead to a concentration of financial power within Washington’s office, he claimed.
“Aligning the city’s budget with the charter is essential to maintaining public trust,” Frantz wrote. “Creating and funding such a department undermines the charter’s safeguards, diminishes the role of an elected official and was not approved by Grand Rapids voters.”
The City Charter delegates specific powers to elected positions so voters know who to hold accountable. This new change would only obscure the movement of funds within the city, Frantz said.
“Reassigning the comptroller’s office duties to a ‘Fiscal Services Accounting Services department’ run by an unelected CFO and City Manager run counter to that principle and deviate from the city’s established governance structure defined in the charter,” he added.
According to a prior proposal, the department has a budget of approximately $5.5 million and as many as 28 staffers. This change removed about $2.1 million from the Comptroller’s Office budget.
Frantz also highlighted the fact that in the debt overview section of the budget proposal, the city acknowledged credit rating agencies Standard & Poor’s and Moody’s had expressed concern over the city’s growing debt burden. This, he said, could threaten the fiscal sustainability of the city.
“Five years ago, the City of Grand Rapids held less than $500 million in debt and managed an annual budget of $546 million,” Frantz wrote. “Today, the debt has increased to nearly $700 million, and the proposed 2027 budget stands at $785 million – representing a 44% increase in the budget and more than a 40% increase in outstanding debt since FY 2022.”
“Understanding how prior year budgetary decisions are shaping current financial realities is essential to ensuring that new budgetary decisions are sustainable for Grand Rapids residents over the long term,” he added. “This underscores the importance of the role our City Commissioners play in evaluating and approving proposed budgets.”
City Media Relations Manager Steve Guitar told The Herald the City Charter says “the budget is the responsibility of the chief administrative officer who also has responsibility to present the budget and recommended general appropriations act for adoption to the governing body.”
“As the City Manager is the Grand Rapids Chief Administrative Officer, this is consistent with the City Charter and the State Law,” he wrote. “The proposed budget for the Fiscal Services Department is consistent with last year’s budget relating to duties and personnel.”
Frantz, however, pushed back against that assessment.
“The Uniform Budgeting and Accounting Act 2 of 1968 cited by the city prohibits delegating any charter responsibilities of an elected official to the chief administrative officer,” Frantz wrote in response. “Accounting and payment issuance are charter-mandated functions of the elected City Comptroller’s office in Grand Rapids – not an unelected city manager or CFO.”
In response to questions about the debt, Guitar said Grand Rapids is “a strong AA rated organization which is appropriate for our size and economic profile.” He did not acknowledge the 40% swell in debt from fiscal year 2022 to fiscal year 2027.
Frantz’s comments come amid his lawsuit against the city in which he claims Grand Rapids stripped him of his authority after he questioned spending and filed complaints against several employees, including Washington and Chief Financial Officer Molly Clarin. He alleges these actions also constitute a violation of the City Charter.
Write to jackson@grherald.com.