Kalamazoo exploring innovative, transformative funding solution: Foundation of Excellence

Along with an update on revenue options currently in progress, City Manager Jim Ritsema introduced a new alternative at a work session held Thursday night which would take a philanthropic approach to solving the City’s budget shortfalls.

The newly introduced option calls for the creation of the Foundation for Excellence, a new private-public partnership funded by area philanthropists, institutions, and anyone in our community who may wish to contribute. Once fully endowed, the foundation would provide resources to the City of Kalamazoo in perpetuity that will be used to stabilize the City budget, improve regional collaboration, provide tax relief for city residents, and most importantly fund key investments to create a vibrant, forward-looking community that benefits everyone. These investments would be driven by Imagine Kalamazoo 2025, the City’s master plan update process in which planning staff have been working closely with residents, community groups, and area organizations to create a unified vision for Kalamazoo’s future.

“This is a major opportunity for Kalamazoo,” said Mayor Bobby J. Hopewell. “This option not only offers a solution to our structural revenue problems, but also provides tax relief for city residents and still creates the opportunity for significantly more investment in our city and its people.”

Enough commitments have been secured to begin the process as early as 2017. $70.3 million has already been committed by donors to provide, over a three year period, support for the creation of the Foundation, with a goal of having it fully endowed within that three year timeframe. During this period, these commitments will stabilize the City’s budget, allow for an immediate reduction in city property tax rates by more than a third, and allow for substantially more investment in programs for youth, ending generational poverty, neighborhoods, place-making projects, streets & infrastructure, targeted economic development, and other initiatives.

The Foundation for Excellence would allow for the city property tax rate in Kalamazoo to be reduced by more than a third from 19.2705 mills to 12 mills, making investment in the city more regionally competitive. The long-term goal is to achieve a reduction to 10 mills.

“City staff have been working diligently to implement all feasible recommendations from the Blue Ribbon Revenue Panel,” said City Manager Jim Ritsema. “During our work, this exciting, innovative solution began to take shape. The initial commitments from many local philanthropists made this a real option.”

Funding for the foundation would be sought from a broad base of donors under a clear legal framework to ensure that Kalamazoo’s elected leaders will independently direct the use of funds, as they do with all City funding.

In addition to this exciting new solution, the city is continuing to explore additional revenue options to further shore up its budget, including the creation of a countywide emergency dispatch center that is expected to save the city $2 million annually if successful.

The City Commission gave City Manager Ritsema direction to move ahead and to craft the necessary legal documents to create the Foundation of Excellence. The City Commission will take formal action to officially create the Foundation for Excellence after the documents are prepared, which should occur before the end of the year.

“The Kalamazoo Promise has shown us what is possible when we, as a community, ask ourselves, ‘What can we do for our community? What can we do to address a challenge?’” said Mayor Hopewell. “This will provide an opportunity for this community to unite around a common vision to truly make Kalamazoo a city of promise.”

For additional information or to share your thoughts on this innovative new solution, please visit the City of Kalamazoo’s Facebook page at www.facebook.com/kalamazoocity or the city’s website at www.kalamazoocity.org/foundation.

City of Kalamazoo

Home to the Kalamazoo Promise, three institutions of higher education, two nationally recognized healthcare systems, cutting-edge medical research, world-class brewing and dining, outstanding parks, and an extensive variety of music, art, theatre, and cultural attractions.


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