Kalispell studying $99,000 in budget cuts

Next week, Kalispell's City Council might trim about $99,000 (after all the pluses and minuses are hashed out) from its general fund.

But no one expects the city's budget troubles to go away.

"This is a Band-Aid more than a cure," Interim City Manager Myrt Webb told the council at a Monday workshop session.

The actual vote on whether to trim $99,000 will be next Monday.

"I don't think we're out of the woods yet. I think in two to three months, we're going to be in the same position," council member Tim Kluesner said.

The $99,000 in administrative costs does not include laying off any people.

But potential layoffs - with firefighters and police likely targeted - haunted the workshop.

About 80 percent of the $10.654 million general fund covers personnel costs - with firefighters and police employees accounting for the biggest share.

At the past three council meetings, dispatchers, police officers and firefighters turned out in significant numbers to plead against trimming their forces, arguing that public safety will be greatly hurt. Almost 30 showed up at Monday's session.

So far, council members have been skittish about trimming any people, mainly because of public safety concerns.

However, that stance is wobbling.

"Eighty percent of the [general fund] budget is people. We spent three full [council] sessions on 20 percent of the budget. … instead of the 80 percent we're going to have to work on," council member Hank Olson said.

Council member Duane Larson countered: "We also have an obligation to provide the taxpayers the [public safety and other city] services that we provide."

Olson replied: "The taxpayers didn't ask us to gamble" that revenue will grow soon without the city having to cut expenses.

Larson said: "Did they ask us to gamble with people's lives?"

Five people - including Dr. Wayne Miller of the Flathead City-County Board of Health and two developers - spoke against cutting people from the police and fire departments.

Miller, who spoke for himself and not for the Board of Health, argued that Kalispell's fire department with its 24/7 staffing, extra training and vehicles provides a cornerstone for emergency medical services across Flathead County.

Kalispell resident Bill Miles said: "Leave our cops, firefighters and dispatchers the hell out of it" in considering budget cuts.

However, Webb said cutting people is almost inevitable to save the city from going broke in either 2009 or 2010 unless significant new revenue appears.

He has a so-far-rejected draft plan to trim two current police officers, one police dispatcher, one animal warden and three firefighters - along with the equivalent of 1 1/2 administrative workers elsewhere.

Kalispell's general fund is in a major crisis because expected revenues have not materialized.

A few weeks ago, the decreased revenues meant that the only way to stick to the $10.654 million general-fund budget would be to allow the city's cash reserves to drop to practically zero.

Webb said the current general-fund situation looks like this:

• By cutting many administrative costs, the general-fund's expenses could be reduced to $10.555 million.

• The $474,000 in cash reserves would drop to about $258,000.

• The city is spending general-fund money faster than it is receiving income for the fund.

A possible one-time cash injection could come from eliminating the city's west-side tax-increment-financing district.

In that district, property taxes above a specific amount are set aside in a separate fund to pay for infrastructure improvements.

Kalispell's west-side tax-increment-financing district fund has about $1.5 million in it. But if it is eliminated, most of the money would have to be split among the county government and schools - with about $300,000 going to Kalispell, City Finance Director Amy Robertson said.

Eliminating the tax-increment-financing district would add roughly $50,000 a year in annual property tax revenue to the city, she said.

Webb cautioned that the $300,000 would be a one-time injection that would solve a fraction of the potential shortfall problem. He recommended that the differences between 2008-09 revenues and expenses be zeroed out before the council considers eliminating the tax district to get its set-aside money.

Pay cannot be trimmed for the majority of city employees because of union contracts.

Some council members suggested trimming non-union employees' salaries by 5 percent, along with cutting the council's salaries by 5 percent.