City OKs $51 million budget

Whitefish City Council Monday passed the final budget of $51.3 million for fiscal year 2017 that includes a reduction in property taxes.

The budget is a decrease of 18.92 percent in spending from last year for all funds. The total decrease is $11.9 million. Under the budget, property taxes will decrease about 11.18 percent.

City Manager Chuck Stearns explained the budget change saying the increase from 2 to 3 percent for the resort tax with 25 percent of the increase going to additional property tax reduction has led to the decrease in property tax collections. The budget shows the mill levy with a reduction of 15 mills over last year.

The decrease in this year’s budget total is the result of three main changes in the spending for the budget.

Last year’s budged contained a $7.75 million appropriation for the Haskill Basin conservation easement that was completed last fiscal year.

In addition the City Hall and parking structure construction project is about 33 percent complete, according to the city, with $4 million already being spent in the last budget as part of the total $16.2 million project.

Also no longer a part of the city budget is the operation of the Stumptown Ice Den, which is now being privately managed. That removes about $466,000 from the budget.

Councilor Andy Feury pointed out that Whitefish’s property tax mills were the second lowest in the state in 2015 when compared with other Montana cities with a population over 4,500.

“We get beat up for being spenders,” he said. “We actually do as good a job as anybody in the state.”

Last year’s budget, because of the uneven effects of reappraisal, forced the city to draw down cash reserves by $310,000. In order to balance the fiscal year 2017 budget and keep a tax decrease, this year’s budget calls for a drawdown of reserves by $110,000, which would leave only a 11.57 percent end-of-year cash balance.

“Unless the use of the cash balance is for one-time type of expenditures like a non-recurring capital project, that drawdown can’t be repeated each year,” Stearns said.

City Council has repeatedly said it wants to keep the end-of-year cash balance at a minimum of 12 percent and has set a goal of increasing that percentage to 15.

“It’s not quite at the 12 percent we were hoping for, but there’s still plenty to operate on,” Stearns said.

Councilor Richard Hildner praised Stearns and city Finance Director Dana Smith for their work on the budget.

“They kept us as close to that 12 percent mark as they could and we still have a reduction in the mill levy and taxes,” he said.

Stearns said the budget is the first in probably 20 years that there was no phase-in of property value increases form a reappraisal leaving the only mill value increase coming from new construction going on the tax rolls. The mill value increased by 3 percent to $21,984 per mill this year.

“With the state Legislature adopting a two-year reappraisal cycle, there is no general valuation increase this year,” he said. “We are very pleased with that growth, even though I had hoped in the preliminary budget that it would grow by 3.1 percent.”

Budget highlights:

• Since the city is no longer budgeting to operate the Stumptown Ice Den, that eliminated the part-time and seasonal positions that were in the budget for the Ice Den. However, the Ice Den supported about $70,000 of full-time employee salaries and benefits for the parks and recreation staff time spent on the ice rink. So those expenses, without any layoffs of full-time staff, had to be shifted to property tax supported functions in the parks and recreation department.

• City employees will generally receive a pay increase of 3.8 percent. Last year’s pay increases for employees was 2.3 percent. Last year’s pay increases for Whitefish city employees were the lowest among Flathead County cities and the county, Stearns noted, saying the 3.8 percent increases were justified.

• The budget does increase staffing in a few areas. A 3/4-time receptions in the planning and building department will move to full-time to help with the workload. A seasonal worker in the parks and recreation department who worked 50 out of 52 weeks per year will be full-time. A new full-time maintenance facility technician for the new City Hall and parking structure. The city will also add a new information technology position.

• Council decided to increase both commercial and residential street lighting assessments by 10 percent. The impact on the median commercial property assessment of $33.50 annually would be $3.35 for the increase. The impact for residential property is an average increase of $1.60 per year. The year-end cash balance for the commercial street lighting district would have been less than zero at year-end, so city staff proposed increasing the rates for the district.