Kalispell City Council is making the most of a short holiday week by taking up three of the most difficult issues it has dealt with over the last year in one work session tonight at 7 p.m. On the agenda are further recommended budget cuts in city departments to avoid insolvency in the general fund, moving the KGEZ radio towers out of city airport airspace and transportation impact fees.
Interim City Manager Myrt Webb is recommending the city reduce its annual budget, approved in September after months of cost-cutting, by an additional $466,000 due to expenditures that continue to outpace revenue and a cash reserve that has dropped too low.
In a memo to the council, Webb noted that a city of Kalispell’s size, with a general fund of roughly $10 million should have a cash reserve of $1 million to $1.5 million in case of emergencies. Kalispell’s present cash reserve is $474,000. With $10,755 in projected expenditures set to exceed revenues by $466,000, the city would have $8,000 left in the cash reserve at the end of the fiscal year, and the city’s general fund would be insolvent about a month after that.
Since 2002, Webb wrote in the memo, too much of Kalispell’s core general fund expenses, like employee salaries, benefits and insurance, have become dependent primarily on volatile sources of revenue like growth fees – which have dropped off with the economic and construction slowdown.
Roughly $42 million of the city’s budget is locked into specific programs with set revenues and expenses, leaving the general fund as the only real area the city can make budget cuts. But most of the general fund is composed of payroll and other employee-related expenses, which means if the general fund must be cut, job losses could result. But Webb wrote in his memo that job cuts are usually more expensive in the short term, because of personnel expenses due to severance and other costs.
As it did in September, the council must determine how comfortable it is with cash reserves getting quite low, and whether it needs to reprioritize how city departments are funded. No votes are allowed at a work session.
Also on the agenda for tonight, the council will go over Webb’s recommendations regarding the transportation impact fee study. The Public Works Department must insure the approach to transportation impact fees is the best available, that the trip generation data is valid and that the fees are used only to pay for new growth, not existing infrastructure needs. The council has been debating the implementation of transportation impact fees for over a year over the strenuous objections of the business and development community.
Council must also weigh in on plans to move KGEZ radio station’s two towers out of airspace surrounding the city airport, as the Federal Aviation Administration has ordered. Broadcast engineers hired by the city have found 20 acres of land suitable for relocation of the towers, and Kalispell has acquired an option on that land. Three adjacent landowners must give approval for easements to have radials associated with the new towers buried. Two landowners have given tentative approval and a third is reviewing the proposal.
According to Webb’s memo, once the city has the proper options in place, it will contact KGEZ owner John Stokes to construct new towers on the new location in exchange for the removal of the existing towers from protected airspace. If Stokes objects, the city will condemn the towers and substitute the new towers at no cost to Stokes. The cost is estimated at $500,000 and the FAA has indicated it will pay for a portion of the work.