Whitefish holds the line on taxes
The city of Whitefish will have to draw down its cash reserves in the coming year to make ends meet, but doesn't plan to raise taxes.
That's according to a report by City Manager Chuck Stearns that accompanies Whitefish's preliminary budget for 2009-10. The City Council will meet at 5:30 p.m. Monday to review the budget and take public comment.
The proposed budget of $44.5 million is about $15.4 million higher than last year, due largely to new or increased appropriations for the recent switch to 24-hour fire operations, the Emergency Services Center, tax increment bonds, Central Avenue reconstruction, A Trail Runs Through it trail project and Public Works projects.
"Despite this increase, none of the proposed budget increase is funded with a higher property-tax levy," Stearns said. "We are proposing no change to the total property tax mill level."
However, the mill levy may need further review depending on valuation figures issued by the county assessor at the end of August.
Property-tax rebates generated from Whitefish's 2 percent resort tax have helped the city keep taxes down considerably since the tax began in 1996.
But in the coming year, the city expects resort-tax revenue to decrease by about $390,000 or 20.6 percent from last year, reversing a 10-year trend of annual gains, Stearns said.
To get by in the short term, the city will reduce its general fund cash balance from an estimated beginning-year balance of $484,000 to a year-end balance of $279,450. The year-end balance is 7.3 percent of appropriations, "which is getting to be too low an amount," Stearns said.
"Certainly, continued drawdowns of the general fund and other cash balances for personnel and operations is not sustainable and we have to hope the economy rebounds," he said.
Last year in anticipation of recession-induced decreases in revenue, the city imposed both a spending and hiring freeze, although seven new firefighters were added when voters approved a tax levy for round-the-clock fire and ambulance operations.
This year staffing changes are minimal and include bumping up a Parks and Recreation seasonal position to full time to increase downtown snow removal and get a head start on park maintenance in the spring.
A drastic drop in building-permit activity and revenue last year forced staff reductions in the Planning and Building Department, and those will continue until the economy rebounds. The total valuation of new construction in 2008 was $33.2 million, roughly a third of the $92 million recorded in 2005.
"If permit revenues do not rebound, the city will have to consider additional expenditure reductions' in the Building Code Program Fund, Stearns said.
The Police Department budget will be a challenge in the coming year, he said, because the Whitefish School District's budget problems forced it to withdraw funding for the school resource officer. The district had contributed half the cost for that position.
A full-time police officer funded with drug forfeiture money may have to be cut, too, because forfeiture money has run out. There is a possible sizable forfeiture making its way through U.S. District Court, but the city can't count on that money this year, Stearns said.
Overall, personnel costs are proposed to be $370,455, or 4.7 percent more than last year, mostly because of higher costs for the additional firefighters, a 2 percent step increase for all employees and higher seasonal employee costs due to the increase in the mandated minimum wage.
The city has one-time operation and maintenance costs this year - about $227,340 - to pay for uniforms and firefighting gear for the seven new firefighters.
Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com