Spending plan reflects stronger local economy

A proposed budget that asks for a 3.7 percent pay raise for city workers plus staff additions in the planning and parks departments indicates an improving economy for the city of Whitefish.

The city recently rolled out a preliminary $36.5 million budget for the  fiscal year that begins July 1. It’s slimmer than last year’s budget by about $358,330.

Once again, Whitefish will hold the line on property taxes, proposing no increase in the  mill levy rate set annually by the city. Because of its 2 percent resort tax that offers a tax rebate to city property owners, Whitefish historically has kept tax rates lower than most other larger Montana cities.

With a marked increase in building activity in Whitefish over the past year, the city is proposing to hire an additional planner.

“After considering the pros and cons of hiring an additional planner versus contracting for additional planning services, I felt that the hiring of an additional planner is more efficient and effective than contracting for planning services,” City Manager Chuck Stearns said in his budget transmittal message.

The cost of a new planner is $76,744 annually in wages and benefits. Contracting the upcoming work for the U.S. 93 South corridor plan and lakeshore permits would cost the city about $95,000.

Whitefish expects an increase of about $55,000 in planning and zoning fee revenue for the coming year.

The budget also calls for the equivalent of one full-time employee in the Parks and Recreation Department for more seasonal help. Part of the $63,720 penciled in provides additional seasonal employees for work on the Whitefish Trail, but that cost is offset by the contribution of more than $59,000 for maintenance from Whitefish Legacy Partners’ maintenance endowment.

A proposed 3.7 percent pay increase includes a 1.7 percent cost-of-living adjustment and the resumption of a 2 percent step increase for city employees.

Negotiations on a fiscal 2013 labor contract with the firefighters union are ongoing and the city currently is in mediation, Stearns said. The city will negotiate with the public works union as the collective bargaining agreement ends June 30. The police union is in the first of a three-year contract.

Another good economic sign is a plan to grow the city’s cash reserve fund from 10 to 10.5 percent in the coming fiscal year, to a total of $983,669. Three years ago, when Whitefish was still challenged by a sluggish economy, the city’s cash reserve was a mere $169,789, or 2.4 percent.

Stearns said the city expects the property tax base to grow by 4 percent from last year.

“The 2013 Legislature’s changes to the tax base should all be reimbursed by the state, so if our tax base does not grow by this amount it should be offset by higher entitlement payments from the state,” Stearns said.

A few one-time uses of the cash balance for property tax-supported funds include $30,000 for an irrigation system for the city cemetery, $30,000 for fire radios and $40,000 for a snowplow truck.

Stearns is advising the City Council to discuss continued subsidies for the Stumptown Ice Den. The city subsidized the indoor ice rink to the tune of $71,000 two years ago and has budgeted a $41,769 subsidy for the coming year.

“I believe that we need to increase user rates or shorten the season to close this subsidy,” Stearns said. “I also worry that we continue to fall behind on capital improvements at the Ice Den.”

Stearns also suggested an increase for ambulance rates.

Total general fund revenues are projected at $3.3 million, a 6 percent increase over last year.

Summing it all up, Stearns said the city was “able to keep the property tax mill levy at the same level as last year, provide strategic additional staffing, increase the year-end cash balance on a percentage of expenditures basis, and provide a 3.7 percent pay increase.

“Sometimes it seems like magic to me, but we will know more as we get our June 30 year-end cash balances and the mill levy valuation in early August,” Stearns said, giving credit to city Finance Director Rich Knapp for doing most of the “number crunching” and budget preparation.

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