County leans on reserves
Flathead County's proposed 2008-'09 budget reflects an attempt by county officials to avoid a "financial crisis situation."
County Administrator Mike Pence addressed the commissioners and the public during Wednesday's hearing on the budget and said that "it will be very challenging to maintain healthy balances as growth has slowed significantly."
Property taxes are the largest source of revenue for the county, and the recent economic downturn has cut the percentage of property valuation growth in half. The growth rate for 2008 was 2.7 percent and Pence said he expects much lower numbers for next year.
Because of the growth explosion from 2003 to 2007, the county was able to build up significant cash reserves, so county coffers have a beginning balance of $27.4 million.
The total revenue projection for next year is $67.6 million, but total spending is projected at $69.4 million, which means the county will have to dip into reserves to help some department budgets such as the Sheriff's Office and the Road Department.
"We have worked hard to build adequate fund balances so we will be OK this budget year," Pence said. "In anticipation of even more dramatic reduction in growth numbers, we are taking proactive measures to try to avoid painful budgetary actions next year."
The budget represents an increase of 11.19 percent in tax dollars to be collected.
The proposed tax levy is 145.96 mills, 3.57 mills higher than last year.
The impact to a property taxpayer with a home valued at $150,000 would be an additional $34.31.
An increase in tax revenue will help fund some capital improvement budget items and a raise for county employees, plus allow the county to maintain its cash reserves.
On Sept. 8, Pence sent a letter to all the county's department heads, asking them to make as many cuts as they could. To prevent layoffs in the future, Pence asked department heads to put a freeze on new hires wherever possible.
The Road Department is one of the biggest examples of savings by attrition: The department is down 8 1/2 full-time employees.
Freezing hiring may prevent layoffs next year, but it also comes with a reduction in county services. The Planning and Zoning Office, for example, is down two full-time employees, which translates to longer waiting times on neighborhood plans and other projects that don't have statutory timelines.
Payroll consumes the bulk of the county's budget. On June 26 the commissioners approved a 2.8 percent cost-of-living adjustment for all employees plus an additional 1.2 percent raise. They also approved a significant boost in employees' dental program benefits, which are funded by a separate property-tax levy.
Because of the expensive wildfire season of 2007, the county is levying the full two mills allowed for emergencies and disasters. This money will pay back loans that funded firefighting efforts.
Tax levies also were increased to the maximum amounts for mosquito control (one mill), emergency medical services (one mill), special emergency medical services (two mills) and search and rescue (one mill).
The budget includes $4,554,447 for the county's capital improvement program.
Commissioners voted to continue Wednesday's budget meeting to Sept. 30, when they likely will take a final vote.
Reporter Michael Richeson may be reached at 758-4459 or by e-mail at mricheson@dailyinterlake.com