Council to vote on $47 million budget

 Tonight is budget approval time for the Kalispell City Council, which votes on a nearly $47 million spending plan proposed for fiscal year 2014.

The budget leads to a total city property tax levy of 185.1 mills. That’s half a mill less than the levy for 2013 and 1.6 mills less than the maximum Montana law allows for this fiscal year.

It would mark the first budget in years where Kalispell did not levy the maximum amount of taxes allowed by law. But it also is nearly 10 mills more than the levy for 2012 and 15 mills higher than the levy for 2011.

The small reduction should mean slightly lower bills as far as the city’s taxes are concerned. But that calculation has lots of moving parts and is complicated because of ongoing reassessments.

“The safe thing to say is we’re levying less mills. That’s kind of where I stay at,” Kalispell Finance Director Rick Wills said when asked about the budget’s impact on taxpayers.

Also on the table tonight are proposed rate increases in the special assessments Kalispell charges for its urban forestry, street light and street maintenance programs. 

The special assessments are charged in addition to the city’s general fund, health insurance and general obligation bond levies. The three programs are running out of money soon without either the proposed rate increases, greater efficiencies or service reductions.

PARKS AND RECREATION Director Mike Baker is asking for a temporary increase in the special assessment rate for an urban forestry program that cares for nearly 7,000 trees growing on public property and right-of-way in Kalispell.

The rate would increase from $.00171 to $.00271 per square foot this year and drop to $.00221 per square foot after five years. The initial increase would generate about $100,000 a year more and boost total program revenues to about $301,000.

That additional money would pay for a new wood chipper and chipper truck and to hire a contractor to cut down the last 150 elms in Kalispell as they succumb to Dutch elm disease. The disease has already killed about 240 elms in Kalispell. Removing the trees as they die and become hazardous has overshadowed other forestry operations and eaten into program finances. 

The fund is expected to end this fiscal year with just $2,841 in cash reserves, down from $58,186 in just a couple of years. “The fact is that we are using our reserves to pay for operations,” Baker said.

The rate increase would help boost those reserves. 

It also would let Kalispell work on a backlog of maintenance pruning and a two-year waiting list for residents with tree planting requests. About $10,000 a year usually available to plant new trees has instead been used to cut down elm trees afflicted with Dutch elm disease.

“I think we planted three trees this year,” Baker said. “Now we can put that money back for the people who have been on a waiting list for two years. It’ll take us a while to catch back up.”

The proposed increase is a good road map forward, Baker said. Like the other proposed special assessment increases for the street light and street maintenance programs, it should keep the urban forestry program solvent for at least 10 years. “The key to this, the uniqueness to this, is after we solve the problem it drops. You usually don’t find taxes being lowered in any amount.”

Kalispell’s urban forestry tax rate was last increased in 2009.

PUBLIC WORKS Director Susie Turner is asking for special assessment rate increases for the street light and street maintenance programs. Both increases would be phased in over the next five years to try to minimize their impact.

The street maintenance assessment would gradually increase from $.01222 to $.01968 per square foot for residential properties and from $.019 to $.0306 per square foot for commercial properties.

The streets program plows snow, picks up leaves, sweeps and resurfaces pavement on more than 100 miles of roads in Kalispell. It also covers the city’s traffic sign and signal needs.

Turner said the proposed increase is needed to pay for rising material, fuel and labor costs and to update an aging fleet of expensive vehicles and equipment that includes pickup trucks, dump trucks, loaders, rollers, leaf machines, sweepers, graders and trailers. The assessment was last increased in 2008.

The proposal sets aside more money for equipment replacement, boosting that from $35,000 a year to $200,000 a year. It also aims to build the program’s reserves back up and to gradually set aside more money for pavement resurfacing, increasing that allocation from $280,000 to $400,000 a year. 

Turner calls it a “get-healthy” plan.

“Really what’s keeping us afloat is our carryover money. Our expenditures exceed our assessment money coming in and they have for the last few years. We are eating away our reserves and that money is gone in 2015-16,” Turner said. “That’s where we identified this fund as being critical. And we thought it was important to bring that to the attention of the city manager and the city council for them to kind of make a decision on where they would like us to go with the fund.”

Street light maintenance rates would gradually increase from $.003 to $.005051 per square foot over the next five years. The assessment was last increased in 2003 and is struggling to cover material, labor, equipment and electricity costs.

The program is projected to spend the bulk of its cash reserves this fiscal year and run out of cash in 2014-15. “The majority of that is for electrical costs. As those increased and the assessments stayed the same, it’s just not collecting enough to keep up with those costs,” Turner said.

Today’s council meeting starts at 7 p.m. in Kalispell City Hall, 201 First Ave. E. It is open to the public.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.