Parks tax to go before voters

A proposed parks operations-and-maintenance tax will go to Kalispell voters in November.

The Kalispell City Council delayed other action Monday on the town's 2008-09 budget expenses until Sept. 2 - leaving everyone still puzzled about how to deal with a predicted shortfall of roughly $500,000.

If anything, the budget picture became a bit more convoluted.

Here is what happened:

. The council voted 7-2 to take the proposed parks-and-maintenance tax - predicted to raise $540,000 annually - to a public vote in November. Council members Duane Larson and Bob Hafferman dissented. That means a roughly $500,000 shortfall will exist in Kalispell's 2008-09 general fund because such a tax, if approved, wouldn't go into effect until fiscal 2009-10.

. The council voted 7-2 not to take any action on the parks-and-maintenance tax proposal issue until Nov. 17. Hafferman and Jim Atkinson dissented.

This opens new possible scenarios. One is the council would follow the voters' decision to the letter. A second is that even if voters reject a parks tax, the council could still revive it. A third is if the voters approve the parks tax, the council could change the formulas on how it is levied.

. The council delayed any action on the general fund - with $10.606 million in predicted income, $10.823 million in predicted expenses and $495,206 in cash reserves, which everyone in city government believes is too low - until Sept. 2.

These figures assumed the parks operations-and-maintenance work would be totally removed from the general fund. That scenario was nullified for at least one year by Monday's votes. The council probably will discuss this problem in a workshop session next Monday.

A likely scenario would be the council seeking cuts in jobs. If so, the council will face the fact that the majority of the roughly 125 general fund employees are unionized - leading to legal questions on how their contracts address layoffs.

. The council delayed action on the remaining $41.822 million in the city budget until Sept. 2 because Hafferman wanted to study those figures more. This money covers numerous programs - such as utilities - that are locked in, with specific revenue sources paying for specific expenses.

The draft overall city budget for 2008-09, which began July 1, stands at $52.645 million.

The wiggle room is in the general fund, which pays for much of the city's salaries, planning and administration. City property taxes, as well as other revenues, go to the general fund.

If the City Council decides to go with layoffs, the general fund pays for firefighters, police officers, parks employees, plus some planning department, municipal court and city attorney workers, as well as City Council salaries. A significant number of these employees belong to unions.

Including managers, the fire department has 34 employees, the police department has 50, the planning and building department has 12, the parks and recreation department has 15 (not counting seasonal workers), the court has four and the city attorney's office has five.

The layoff talks of the past few weeks have spooked many city employees.

"A lot of employees are really wondering, really scared about this budget issue," Mike Nicholson, president of the American Federation of State, County and Municipal Employees Local No. 256, told the council. "They're wondering if they're going to have a job tomorrow morning or not."

Local No. 256 represents 77 of Kalispell's roughly 200 employees. Nicholson did not know Monday how many AFSCME members are in jobs that face potential cuts.

Nicholson said AFSCME's contract with the city forbids layoffs.

The police and firefighters also are unionized.

Council member Tim Kluesner suggested that the general fund borrow money from tax-increment-financing districts, since those are set-aside accounts filled with property tax money. The tax-increment money is surplus property tax revenue in defined geographic areas.

City Attorney Charles Harball and City Finance Director Amy Robertson said such as move would be possible, but difficult.

Hurdles include working around projects that already have tax-increment money earmarked for them, including making bond payments. The city government also would have to work out plans to repay the borrowed money to the individual tax-increment funds, they said.

Another potential hurdle is that the city's tax-increment funds have stashed away some money that could have gone to the county government and schools - so any borrowing plan might have to include some allocations to Flathead County and the schools, Robertson said.

The city government has been looking at the creation of a parks maintenance district - essentially a parks operations-and maintenance tax - to remove the parks' expenses totally from the general fund.

The Kalispell Parks and Recreation Department has a $1.647 million proposed budget for 2008-09. The department takes care of parks, the swimming pool, athletic complexes, sports programs and youth camps.

The actual care of parks is estimated to cost $567,570 for fiscal 2008-09, with most of that coming from the general fund. The remaining $1.08 million is paid by revenues generated by individual programs, plus sources other than the general fund.

All this does not mean the general fund's shortfall is due to the parks department.

Instead, the creation of a parks maintenance district is a proposed solution to the city's general fund woes by setting up a separate revenue stream for parks operations and maintenance.

The proposed tax is a dollar amount reached by multiplying the square footage of a lot by 0.0055.

That translates to $38.50 a year for a 7,000-square-foot lot, or $22 a year for a 4,000-square-foot lot.

No home would be required to pay more than $150 a year, and no commercial lot would be required to pay more than $500 a year, according to the proposal. The proposed parks tax was expected to raise roughly $540,000 in fiscal 2008-09.

On Monday, some council members speculated about installing another formula to assess the potential parks tax that would not be based on square footage.

The council approved several tax levies Monday, including three increases. Kluesner opposed all three increases, Hafferman opposed two and Hank Olson opposed one because of philosophies of opposing tax increases during a time of a struggling economy.

The increases are:

. The storm-sewer assessment would increase 11.5 percent from 2007-08. This tax is linked to the square footage of the taxed lot.

. Pavement-replacement assessments would increase 10 percent from 2007-08. This tax also is linked to the square footage of each lot.

. Garbage pickup fees would increase $6 annually to cover fuel costs and recycling.

Reporter John Stang may be reached at 758-4429 or by e-mail at jstang@dailyinterlake.com