City approves a $53.4 million annual budget
The Whitefish City Council voted unanimously to approve the 2023 fiscal year budget without further discussion. Over the past few months, the council has had two work sessions and a public hearing while working on the budget prepared by City Manager Dana Smith in the absence of a city finance officer.
The budget for FY23 totals $53.4 million. Whitefish’s budget last fiscal year was $49.8 million.
Resort tax collections for FY22 were the highest since its inception and about 32% higher than the prior year. Because of this, property tax relief for FY23 increased by 73% or $1.2 million compared to the previous year. The city rebated a total of $2.89 million to local property owners.
A house with a market value of around $438,000, according to the city, will see an estimated annual savings of $93 on the city’s portion of their property tax bill based on the proposed budget.
“It's very important to keep in mind that this year is not a sustainable growth or one we’ve seen in the past. We’ve averaged around 5-6% growth in our resort tax,” Smith said. “We’re going to have to be very careful in how we plan the use of cash reserves to slowly increase our mill levy again to adjust for that tax relief going away, at the full amount of $1.2 million. The budget estimates about $400,000 we will actually see in excess property tax relief.”
The FY23 budget reduces total mills levied by around 17 mills which is about a 14% decrease in property tax revenue. The report says the city’s ability to actually reduce taxes this year is because of the significant increase in the property tax relief from resort tax collections as well as higher-than-expected fund balances at the start of the year.
“Fund balance and cash reserves for all of our funds are looking great,” said Smith. “We are at 43.74% of total budgeted expenditures in our property tax supported funds.”
The budgeted balance in property-tax-supported funds at the end of FY23 totals $5.9 million. The increase from about 40% in FY22 to nearly 44% in FY23 is due to a higher than expected fund balance at the beginning of the year. For FY23, the city will rely on savings to spend $1.2 million for capital improvements and equipment.
The fiscal year 2023 started July 1. The final number for Whitefish’s taxable value from the state came on Aug. 1 and the increase was 4.51% over the prior year when the city had estimated 4%.
According to the staff report, total budgeted revenues and other financing sources for all funds total about $35.5 million which is almost $2 million, or 5.3%, lower than the FY22 budget.
The FY23 budget totals about $43.19 million in expenditures and about $10.2 million in inter-fund transfers for a total appropriated budget of $53.4 million. Compared to the prior fiscal year, this year’s expenditures are set to increase by 1.7%, while inter-fund transfers are increasing by about 38%.
With a Consumer Price Index (CPI) of 7.1% for FY23 and many struggling to afford the rising costs, careful consideration was made to determine the minimum increase needed based on the financial status of each fund, says Smith in her report.
The FY23 budget keeps the assessments for the Residential and Commercial Lighting Maintenance Districts and the Stormwater Maintenance District flat for a third consecutive year. The assessments for the Street Maintenance District and Parks & Greenway Maintenance District include a 4% rate increase.
Whitefish’s budget calls for a 7% wage increase for most employees, consisting of a cost-of-living adjustment of 5% plus a 2% longevity increase. The city is covering a health insurance premium increase of about 3% for all employees.
Smith concludes in the report, “The FY23 budget is a balanced budget that will continue to support the City’s endeavor to provide exceptional services to our community, adjust to growth and demand, and improve our facilities all while providing relief to our property taxpayers during this period of rising costs.”