The Ypsilanti City Council approved an ordinance to establish guidelines for its budget stabilization, or “rainy day," fund for the city.
The ordinance, introduced by Council Member Patrick McLean, guides when the rainy day fund can be used. The fund is used to support the general fund during economic downturns, such as a recession or a significant revenue deficit in the city budget. The funding could also be used for unexpected emergencies, McLean said. He referenced the Covid-19 pandemic as an example of a previous unforeseen emergency.
The ordinance was approved Nov. 18, 2025, with a 6-1 majority, with Council Member Amber Fellows voting no. Fellows said they voted no because they wanted more time to adjust and amend the language of the ordinance.
Use of funds can be triggered in certain economic situations, the ordinance stated. Three of these situations require only a simple majority, or four of the seven council members voting yes.
First, funds can be moved to the general fund when the city finance director projects a reduction of 6% or more in total annual property tax receipts compared to the previous fiscal year.
Additionally, the funds can be used when the finance director projects a reduction in total annual revenue to the general fund of 5% or greater compared to the prior year when general fund, not including one-time grants or other one-time funding from the state of Michigan or other funders, and ongoing expenditures are projected by the city manager to be at least as high as in the prior fiscal year, excluding one-time grants or other one-time expenditure.
The funds can also be moved to the general fund when the finance director expresses his belief in writing that the state of Michigan is experiencing a recession based on national, state, or regional economic and labor data.
Additionally, funds could be moved to the general fund under other conditions not explicitly identified in the ordinance. Such cases would require a supermajority of five affirmative votes.
There was some debate between council members about the language used in the ordinance. Fellows expressed a need for clearer, more transparent language in the ordinance. After some discussion, the council made amendments to the proposed ordinance before the vote.
The amendments included an addition of a preamble to the ordinance for clarity.
City Manager Andrew Hellenga noted that the ordinance would still require typical budgetary procedures, and triggering use of the funds would still require a resolution from the council and could not be initiated by only the finance director’s recommendation.
In his proposal of the ordinance, McLean included examples of guidance for other city stabilization budgets. He called the ordinance a prudent fiscal policy.
Council members also discussed the need for a replenishment plan for the fund, opting to determine that plan in the future.
Editor's note: The headline and story were updated to clarify that the ordinance established guidance for the use of budget stabilization funds.
