KALAMAZOO, MI (WKZO AM/FM) – Kalamazoo has one thing going for it than no other urban area in the state, or perhaps the nation has, and that’s the Foundation for Excellence
It’s an old funding model for colleges to have an endowment, it was a first for cities when Kalamazoo did it.
City commissioners got a briefing on the long-term prospects for the fund.
Executive director Steve Brown projects interest income will be about 7.5% on average. That income can be used by the city, without touching the principal, meaning it will be there forever.
Brown warned commissioners that any spending that digs into the principal will not only reduce future funding for the city, but any future income from that sum as well.
He says they estimate it will generate about $25.7-million for next year alone.
Mayor Dave Anderson says the FFE, which is now 8 years old, was created because the city could no longer fund basic services and maintenance, without making cuts.
By the end of this year, the FFE will have generated $193 million for city taxpayers, the largest percentage used to reduce property tax bills from 19 to 12-mils. (o r about a $700 savings annually for the average homeowner)
Brown says the FFE charter requires funding tax relief, and city projects, with whatever is leftover going to aspirational projects, and the percentage of the totals will change over time.
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