Whitefish budget issues, planning clarified

An "In My View" article published on July 5 expressed concern about the Whitefish city budget.

The writer compares the city's capital improvement plan (CIP), which forecasts potential projects that might take place over the next five years, with the FY2007-2008 budget. Specifically, the writer expresses concern that the total of potential capital improvement projects listed in the CIP of $71 million is an "eye opener" when compared to the city's FY2007-2008 fiscal year budget, which totals about $23 million.

First, let me assure everyone that there is no plan or intent to fund the current CIP through the FY2007-2008 budget. In fact, the overall FY2007-2008 budget projects a modest 4.2 percent increase over the previous year. If it were not for a $500,000 affordable housing grant the city will receive and pass on to the Whitefish Housing Authority, the overall budget increase would be only 2 percent.

Unlike many cities, the city's property tax rate for FY2007-2008 will see no increase for the fifth straight year. Even though the city is not seeking an increase in the mill rate, the community should be aware that if it was seeking an increase, state law caps the city's ability to increase the mill rate to an amount roughly equal to inflation — somewhere in the 3 percent range. Any further increase would require a vote of the people.

So, how does the city's spending compare with other peer cities?

According to the Local Government Center at Montana State University, the amount of money the city spent from its tax supported budget funds in FY2006 equals $434 per city resident. Cities with populations similar to Whitefish include Miles City at $602/resident, Livingston at $579/resident, Laurel at $496/resident, Havre at $401/resident and Lewistown at $384/resident. How about our neighboring cities in the Flathead? Columbia Falls spent $509/resident while Kalispell spent $564/resident. How about other growing communities in Montana? Missoula spent $562/resident and Bozeman spent $605/resident in FY2006.

I believe it would also be helpful to understand what the CIP is and what it is not. First, it is not an adopted budget that will be implemented. Rather, the CIP is a forward-looking plan that tries to anticipate all possible capital equipment needs and infrastructure projects the city might need to fund over the next five years. Projects are included in the CIP based on the possible needs for the community. These needs are projected using potential growth patterns and assessments of the remaining useful life of the various parts of the city's infrastructure, including the streets, water system, sewer system, stormwater system, parks system, courts, police, fire and administrative facilities.

The CIP is a forward-thinking document that is intended to help the community plan for future needs in a timely fashion rather than react to failing equipment and infrastructure that often results when planning is neglected. Typically, the latter situation results in service disruptions and unnecessary and expanded costs. We often hear the statement that government should be run more like a business. Well, here is an example where the city of Whitefish is trying to anticipate and plan for future costs like any well-run business would also do.

Because the CIP is a working document, the projects contained in it are under constant review. If it appears that existing infrastructure is performing at acceptable levels longer than anticipated, some projects are dropped from the CIP or delayed. If actual growth is more or less than originally anticipated, other projects may be either accelerated or delayed. Sometimes projects are delayed or dropped because more cost-effective solutions are found.

So how will infrastructure projects be funded in the future? A number of options are available, and many funding sources are already in place. The city will use utility rates and developer-paid impact fees, also known as plant-investment fees, in the water and wastewater funds to accomplish a significant share of these needs. Grants and low-interest loans from state and federal agencies will also continue to play a significant and crucial role in meeting our infrastructure needs, just as they have in the past. The resort tax will continue to help the city improve its streets and associated infrastructure. It will also continue to support many park-related projects, while providing property tax relief to Whitefish property taxpayers. Additionally, the Tax Increment Fund will continue to provide much-needed financial support for several upcoming facility projects. Finally, the City Council is currently considering implementation of new impact fees to assure that development pays for new or expanded infrastructure necessary to serve new growth. When and if additional funds are needed beyond these listed, the voters of Whitefish will decide whether the projects warrant the needed funds.

According to the Montana Department of Commerce, the population of the city of Whitefish has increased by more than 53 percent since 2000, from 5,032 to 7,723 as of July, 2006 (the most recent data available). This degree of growth requires the city to continually evaluate current infrastructure and make improvements where necessary to assure that essential services continue to be adequately provided to support the community. The CIP helps the city's managers, planners and engineers to anticipate these needs. As has been the case in past budget years, the city will continue to evaluate crucial infrastructure projects, assess funding needs with a critical eye to the bottom-line expense, and bring projects forward in a timely fashion that are needed to assure the community has the infrastructure it needs to protect its quality of life.

As city manager, I adhere to the budget philosophy I believe in and continually impart to my staff and to the City Council. "Management will strive to develop a proposed budget that supports critical community services and infrastructure in the context of on-going growth while maintaining a conservative approach to property tax rates and the efficient use of public funds."

Gary Marks is the Whitefish City Manager.