City budget tracking normally - with exceptions

With the exception of court fines, building permits, prosecution costs and utility payments owed to the city, most financial numbers are tracking according to the city’s budget.

That was city finance director Rich Knapp’s message to the Whitefish City Council when he delivered his mid-fiscal year financial report on Jan. 18.

Court fines are running about 13 percent below the previous fiscal year, Knapp reported. He noted that revenue from dog fines had decreased because the city no longer has an animal-control officer, and with the court’s backlog situation under control now, the city should not expect a bump in revenue as it saw last year.

Knapp also pointed out that the number of tickets dropped two years in a row — by 18.1 percent in 2009 and by 13.2 percent in 2010. At the same time, prosecution costs are running 62 percent of budget and could end the year about $20,000 over budget.

The net loss in the building department is less than in the previous two fiscal years, Knapp said, which he attributed mostly to layoffs. Despite a slight increase from 2009 to 2010, the number of building permits issued by the city has fallen from a high of 240 in 2005 to 144 in 2010, while the number of new housing units has fallen from 292 in 2005 to 26 in 2010.

Good news is that resort tax collections continue to rebound. The city collected $91,362 in November, a 20 percent increase over November 2009. Several councilors credited Canadian tourists for the increase.

Knapp and city manager Chuck Stearns had no solid explanation for a 47 percent increase in money owed to the city for water, sewer and garbage. One reason for the $121,000 increase over the amount owed in 2009 could be the rate increase, but the number of new accounts hasn’t increased, Knapp said.

Adding to the city’s difficulties, the amount of protested property taxes reached $97,000 in December, with another $45,000 in January — far surpassing the past historical high for December, $40,000 in 2007. The higher numbers could be attributed to the effects of the six-year appraisal cycle and significantly higher tax bills for many Whitefish properties.

Stearns, however, pointed out that property owners procedurally protest 100 percent of their tax, and if the tax is lowered by 10 percent, for example, then the city will get the other 90 percent.

Summing it up, Knapp projected a $122,000 budget shortfall by the end of the fiscal year. That figure, however, depends on the city spending 100 percent of its budget. In past years, city-department expenditures have ranged from 94 to 98 percent of budget, he said.

Stearns noted that if departments spend only 98 percent of their budgets, that would leave about $132,000 unspent, which is more than the projected budget shortfall.

For that reason, both Stearns and mayor Mike Jenson cautioned against making budget policy changes in the middle of the year — especially talk of layoffs.

In his own report on the budget, councilor Phil Mitchell noted that the city used $80,000 in one-time revolving money and $300,000 in less capital to the utility fund to balance this fiscal year’s budget. The city won’t have that $380,000 around when it starts drafting the next fiscal year budget, he pointed out.

While council consensus was not to make budget changes now, they did agree to move the budget process up one month this year. Several councilors have expressed interest in completing the next year’s budget about the time the fiscal year ends in June.

Stearns, however, reminded the council that the Montana Department of Revenue’s “certified taxable value” figures won’t be available until August, so adopting a final budget in July would mean holding additional public hearings in August if changes become necessary.