City Council wants higher budget reserve

Whitefish City Council began digging into the city budget last week, which includes a potential tax cut for city residents, but also shows a dip in the year-end reserve.

The preliminary budget shows a 5 percent decrease in property taxes as a result of increased resort tax revenue. The proposed overall budget for fiscal year 2017 totals $48.6 million.

In order to balance the budget and keep a tax decrease, City Manager Chuck Stearns is proposing a drawdown of reserves by $131,000, which would leave a 10 percent end-of-year cash balance. Last year’s budget proposed a year-end balance of 12 percent and the previous two years set it at about 10 percent.

Stearns said this year he was forced to reduce the percentage so as not to make further cuts in some city departments.

A few councilors said they would like to see the cash reserves percentage higher, but didn’t say how they would accomplish that.

Councilor Frank Sweeney said he doesn’t like that the reserve projections have dipped. In the past, council has set a target of increasing the cash reserve to 15 percent.

“I’m concerned we’re not making progress,” he said.

Councilor Katie Williams echoed the concerns.

“I would rather error on the side of caution,” she said.

Stearns said he is hopeful that the year-end balance would actually go up from estimates.

“I’ve told department heads not to spend any money they don’t have and to try to cut back,” he said.

If Council wants to increase year-end cash reserves or reallocate spending to another area, it could increase property taxes or make cuts, he noted.

The projected decrease in property taxes is the result of the increase from 2 to 3 percent for the city’s resort tax, with 25 percent of the increase going to additional property tax reduction, thus leading to the decrease in property tax collections. The budget shows the mill levy with a reduction of 7 mills over last year.

Stearns said that with new development in Whitefish, next year’s property tax relief could increase even more.

“We can only budget for what we collected last year and the rest goes to property tax relief,” he said. “One year from now, with two new hotels going in, the relief could be a lot higher. We may be able to lower the mill levy further or have more flexibility.”

In addition to the tax decrease, the preliminary budget calls for a reduction in spending of 23 percent or $14.7 million less than last year’s budget. The proposed overall budget totals $48.6 million. Last year’s budget at $63.3 million was more than 60 percent higher than normal.

The decrease this year is because of the completion or partial completion of some of the projects that bumped last year’s so high.

The Haskill Basin conservation easement acquisition was finalized last year for about $8 million, removing that from the budget. Seventy percent of the revenue from the extra 1 percent of the resort tax goes toward the cost of the easement.

In addition, the $16 million City Hall and parking structure construction project will be about 50 percent complete by the end of the fiscal year in June. That results in an appropriation of $5 million less this fiscal year.

Council will hold another budget work session on June 13 at 5:30 p.m. at interim City Hall.

Individual pieces of the budget discussed last week included:

Library

The library budget shows only a few changes and an increase in the cash balance. In addition, the library estimates increasing its private donations by $5,000 and the library director salary will increase by about $11,000 per year.

“They are very frugal,” Stearns said. “They don’t spend unless they have to.”

Anne Moran, library board trustee, said the board has been working for the past five years since the library transitioned away from Flathead County to increase the salary of Library Director Joey Kositzky.

“We’re grateful for her patience,” Moran said. “She is very conscientious about the spending that happens.”

In the last five years, Moran noted, the library has doubled the number of library card holders it has and also doubled its collection.

“We feel things are going quite well,” she said.

Planning and Building

The planning department budget anticipates an increase in revenue of about $30,000.

“We’ve gotten a lot busier in the last couple of years,” Planning and Building Director Dave Taylor said. “Subdivisions have really gotten going again.”

The planning budget also includes part of the cost for the Wisconsin Avenue corridor plan. Consultant costs for the plan of up to $50,000 will be paid from the tax increment financing fund.

The building department is expecting an increase in revenue from its contract to handle building permits for the city of Columbia Falls. Whitefish anticipates a $25,000 increase in revenue next fiscal year because of the contract.

Taylor said he expects the number of building permits in Whitefish to remain the same as this year.

“We’re seeing a lot of medium level projects with single-family homes,” he said.

The building budget also includes increasing a part-time clerk position to full time, increasing spending by $22,000 for commercial inspections as part of a contract with the city of Kalispell and purchasing a pickup truck for $30,000.

Fire and Ambulance

The major change in the fire and ambulance fund is spending $175,000 to purchase a new ambulance.

Fire Chief Joe Page said the fire and ambulance equipment has aged to the point of reducing safety and increasing maintenance costs.

“I would really like to see us set up a replacement fund,” Page said. “Three of my vehicles are 20 years old. We need to address this. It feels like I’m replacing those vehicles one part at a time.”

A City Council work session for later this summer is expected to look into options for creating a long-term fire and ambulance equipment replacement plan.

Another change includes the city paying $37,500 to contract out for ambulance billing.

The city is beginning the contracted billing now and expects to try it for one year with the goal that it will result in more revenue for the city, Stearns noted.

Page said he would also like to look into an increase in ambulance fees since the last rate increase was in 2012.

The 2017 budget for fire and ambulance asks to increase the overtime budget to a total of almost $40,000. Council asked about that figure, as well, as noting that the amount spent on overtime through March was near the total budgeted for 2016.

“The overtime has been the result of injuries and [staff having] babies,” Page said, noting that has forced him to use overtime hours to have a full staff on shift.

He said he’s less concerned about this fire department staff getting injuries than in other places he has worked, in part, because staff here are required to exercise while on duty.

“The guys are in good shape,” he said. “We always dispatch the ambulance with the fire department, but when you start lifting larger people that results in injuries. People often fall between the wall and the toilet and you just can’t get four people around them to lift them.”

Councilor Andy Feury said the ambulance fund needs to be generating enough revenue to cover the replacement of equipment.

“What will happen when the population hits 10,000,” he said. “Planning is going to be the key to providing the service the community deserves.”

Parks and Recreation

A big change in the parks and recreation budget is the elimination of the Stumptown Ice Den now that it is under contract with the Whitefish Sports Facility Foundation for management of the facility. This results in a decrease of about $475,000 in revenue from the Ice Den and a decrease in expenditures other than personnel services of about $280,000.

The parks department is looking at increasing its fees for its summer day camp and after school program. The budget anticipates an increase in revenue from the summer day camp of almost $27,000.

The programs haven’t seen any fee increase since they began about five years ago and have always been self sufficient until now, Stearns said. The increase in fees, if approved, wouldn’t take effect until the fall after school program.

Parks and Recreation Director Maria Butts said the parks department is considering an increase for the summer camp of $5 more per day, which would bring the early registration day fee to $45 and the regular registration fee to $50 per day. The after school program would likely increase from $12 per day to $14 per day.

“Some of the youth programs fees also haven’t changed so we’re looking at adjusting those,” she said.

The parks budget also includes a more than $10,000 increase in spending for irrigation.

“As we continue to add greenway and planters like we did on Highway 93 West, it gets more expensive to maintain that,” Butts said.

At City Beach, the lifeguard staff has been reduced. During peak times there will be only three life guards on duty instead of five as has been in the past, according to Butts. Eliminating the lifeguard staff from City Beach could save the city about $45,000.

“We’re decreasing staffing and in the future we want to look at eliminating lifeguards all together,” she said. “There is less insurance risk for the city by not having lifeguards because of the perceived safety of having them.”

Councilor Richard Hildner said he supports doing away with the lifeguards in the future.

“I think you’re moving in the right direction,” he said.