County budget 'looking pretty good'

After holding the line on spending and imposing a hiring freeze, the county's preliminary budget for fiscal 2010 is "looking pretty good," County Administrative Officer Mike Pence said.

The county commissioners hope to approve the preliminary budget by the end of June, before the new fiscal year begins July 1. Typically budget approval has been done in September when taxable valuation figures become available, but Pence said it makes better sense to him to approve a budget before it takes effect, not after the fact.

The commissioners are considering a 1.9 percent cost-of-living salary adjustment recommended by the county Salary Compensation Board. The state-mandated board makes salary recommendations for elected officials and sheriff's deputies, but traditionally the cost-of-living increase is applied to all county employees "out of fairness," Pence said.

Also under consideration is a budget scenario that freezes employee compensation at current levels.

Approving the 1.9 percent adjustment would increase county salary compensation by more than $477,000.

"We're reducing expenditures in both scenarios, though," Pence said, praising department heads for cutting expenses across the board.

Expenditures with the 1.9 percent adjustment would total $46.7 million in the coming year, a decrease of about $774,000 from the current fiscal year. The savings is greater with the salary freeze, roughly $1.2 million, with projected expenditures of $46.3 million.

Either way, the county intends to freeze the amount of property tax revenue collected at $27.6 million, which means taxes shouldn't be going up for property owners this year.

Pence cautioned that the preliminary budget "is still a work in progress' and much work still needs to be completed this month.

"One of the reasons the commissioners are considering the COLA [cost-of-living adjustment] is because we've reduced personnel," he said.

Nearly all of the work-force reductions have been through attrition. The road department has taken the greatest hit, down by eight employees. The planning department decreased its staff by two and expects at least one more position to be eliminated in a couple of months, Pence said. One of the planning positions was an outright layoff because of the recession-induced drop in the workload.

The treasurer's office has an upcoming reduction of one employee through attrition. The clerk and recorder's office is down three workers, and solid waste is down one.

"Wherever possible, in areas where we can get by with less staff, we'll continue to do that," Pence said.

PROPERTY taxes are the largest source of revenue for the county. Last year the economic downturn cut the percentage of property valuation growth by more than half, to just 2.7 percent. During high-growth years earlier this decade, the increase in valuation was averaging about 7 percent, Pence said.

"We think it will be less than 2.7 percent this year," he said.

Even so, the county hopes to keep its cash reserves healthy, around $10.2 million.

The county is expecting a modest decrease in non-tax revenue - money that comes from the state, recording fees, court system fees and so on.

Allocations from the federal Secure Rural Schools Act - which got a four-year extension from Congress last year - and from the Payment in Lieu of Taxes program are giving Flathead County a way to stretch money for road improvements.

The county got an $800,000 windfall this year from the Payment in Lieu program, in addition to Secure Rural Schools funding. All of it will be put toward roads, Pence said.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com