City's low tax valuation won't change budget
Whitefish’s increase in taxable valuation for the 2013 budget came in considerably lower than anticipated, creating a decrease in revenues by about $61,000. Despite the shortfall, city councilors have decided to stand pat on the preliminary budget.
City manager Chuck Stearns reported the findings to city council at Monday’s regular meeting. The city had estimated the valuation increase would be 4.3 percent. Monty Long, the Department of Revenue assessor for Flathead County, reported the actual increase was only 1.6 percent.
Stearns said the low increase could be due to the centrally assessed property values which include gas, electric, transmission lines and telecom buildings. The residential and commercial lots, which Stearns calls the bread and butter of the valuation, actually went up 4.25 percent — close to the 4.3 estimate.
Stearns said the $61,000 shortfall, while a hit to the 2013 budget, was fairly inconsequential when considering total transfers and expenditures equal $36.99 million.
He gave councilors a few options to mull over at Monday’s meeting. One being to slash from any number of budget items to offset the loss or to raises taxes. The other option was to “do nothing,” which would reduce the end of the year cash balance from 10.5 percent to 9.8 percent of expenditures. Last year’s budget estimated the city would end 2012 with a cash balance of 12 percent of expenditures.
Stearns list of items to slash included a one percent reduction in the proposed pay raises for union and non-union employees. Cutting raises from the proposed 3.7 percent increase to 2.7 percent would equal a $54,000 reduction.
Stearns originally said one of the reasons he was comfortable proposing pay raises this fiscal year was because the budget anticipated a 4.3 percent growth in the tax base.
Other areas considered for cuts were $22,000 for a police vehicle, $15,000 for a fire extrication tool, $10,000 for cemetery platting, $9,400 for tablet computers for councilors or $10,000 for new flooring in the Ice Den, among other areas.
Councilors rejected the notion that anything had to be cut, including the pay raises, voting unanimously to “do nothing” and stick with the 9.8 percent year end reserve. They agreed that city department heads have been frugal and will continue to keep a close eye on expenditures to make sure the city ends with a sizable cash reserve.
“I don’t think you have to do anything,” Mayor John Muhlfeld said. “To start making 11th hour cuts could be fairly significant to some departments. We will continue to be frugal and our department heads take that seriously.”
Bill Kahle agreed, saying, “We don’t need to go through this with a fine tooth comb.”
Phil Mitchell said he was OK with a reduction in the year end cash balance, but that he’ll continue to watch the expenditures.
“I’ll fight tooth and nail if we get below 10 percent,” Mitchell said. “The city can’t run without that comfort zone.”