City budget talks focus on pay raises

Whitefish City Council is working its way through some of the personnel pieces of the fiscal year 2016 budget.

The proposed budget calls for a 2.3 percent pay increase for city employees. Normally employees receive a 3.3 percent increase, but in order to balance the budget the city has proposed a lesser increase.

Council July 20 tentatively favored increasing salaries by the 2.3 percent during a budget work session. Council will hold another work session Aug. 10 on the budget and is set for a final vote on Aug. 17.

This year’s budget is complicated by the Montana Department of Revenue’s six-year reappraisal of property-tax valuations, which takes effect in the coming fiscal year, according to City Manager Chuck Stearns.

Numbers released Monday by the state Department of Revenue show a 6.7 percent decrease in the city’s mill value. The city had been projecting a 10 percent decrease in its tax base.

“We will work on the budget this week to get it nearly final and that is when we will have more information on what our property tax mill levy is for fiscal year 2016,” Stearns said Tuesday.

He said the differential effect on every property owner remains the same with some likely paying higher tax dollars to the city and some paying less because of the reappraisal.

During the July 20 meeting, Stearns shared tax valuation information about his own home, which he said saw a 14.27 percent decrease in taxable value this year compared with last year.

“That’s a bad harbinger of our tax base,” he said.

While council seemed to favor the increase in wages, it was cautious about making a final decision until all of the city’s tax valuation information arrives from the state.

“I have a hard time making a decision without all the pieces of the puzzle,” councilor Jen Frandsen said. “If our tax base is going down by 10 percent and we’re going to have to raise everybody’s taxes as a result. I don’t think we can provide the kinds of raises we would in a normal year.”

Councilor Frank Sweeney said he would like to see the city increase its cash reserves and the solution to that could be a 1.3 percent increase in pay.

“I would like to move our reserves to 15 percent,” he said.

Whitefish’s ending cash balance for fiscal year 2015 was 13.5 percent of the budget. The estimated cash reserve for fiscal year 2016 is estimated to be 13.5 percent.

Mayor John Muhlfeld agreed that he would like to see the cash reserve increase and one way to get the reserves to 14 percent would be to give a pay increase of 2.3 percent only to the police union.

He suggested increasing police department salaries by 2.3 percent, while increasing wages in other departments by only 1.3 percent. He noted that the police department salaries, are on average lower than other city departments — public works is 10 percent higher, non-union salaries are 20 percent higher, and firefighter salaries are 30 percent higher.

“I see a disparity when I look at the average salaries — police being the lowest,” Muhlfeld said. “I don’t think if we increase police by 2.3 percent we have to increase everyone by that.”

Stearns cautioned that increasing police salaries more than other departments could be seen as going against policy for equal pay for equal work.

“There is a fair amount of turnover in the police department that results in hiring of young officers,” he said. “As there is a lot of young officers at the low end of the pay scale keeping the average salary for the department down. In public works, non-union and fire the tenure is much longer and have higher pay.”

Stearns suggested that if council wants to give extra compensation to some of its employees who make less per hour, it could give a one-time bonus to those employees without impacting the city’s standard pay matrix.

Council did voice support of settling police labor negotiations with a 2.3 percent pay increase.

The proposed fiscal year 2016 budget is $65.9 million and is up $25.4 million over last year. There is a 63 percent increase in appropriations in this year’s budget.

Included in the budget is the cost of constructing the new City Hall and parking structure at a cost of $14.95 million and the $8 million conservation easement for Haskill Basin.

Removing those two large ticket items, which combined are about $22 million of the $25 million increase, the city budget is only increasing by about 3 percent for appropriations. The city budget often grows by 3 to 5 percent every year, according to Stearns.

Council agreed to open labor negotiations with the public works union, which asked to meet with the city about its contract including about pay for fiscal year 2016.

Council also made decisions about whether to add positions to the city staff.

Most were against adding a new public works assistant position. The job was planned to be dedicated to plowing in winter and street maintenance in the summer.

However, council felt that adding a position wouldn’t increase the response time of the city to get streets cleared on the weekends. Some said they would consider adding the position, if the public works union agreed to allow for workers to be scheduled to work weekends and not just called out as need on those days.

“If the city expects private sidewalks to be cleared in 24 hours, we should do the same as the city,” Frandsen said.