Kalispell’s city council received an update on the city budget Tuesday night and the numbers were, unsurprisingly, grim. In November, City Finance Director Amy Robertson anticipated a cash reserve at the end of the current fiscal year, June 30, of $258,788. In a Jan. 20 memo to city council, Robertson revised that estimate downward to $171,700, but emphasized that these numbers were her “worst case scenario.” By most estimates, a city of Kalispell’s size should have a cash reserve of somewhere between $1 million and $1.5 million.
The reasons for the decrease are twofold, but familiar to anyone who has drawn up a budget: unexpected expenses have come up, and some revenue streams came in lower than anticipated. A roof leak at the old city hall building, which currently houses Kalispell’s fire and police departments, could cost as much as $35,000 to repair. And a required retrofit of a drain at the city pool could cost an additional $8,500, for a total chunk of $43,500 coming out of the general fund.
Revenue from a number of city departments appear, at this point in the fiscal year, to be on track to bring in less revenue than was projected. Parks program revenues have been adjusted down $32,000, and city court revenues down $25,000. The fire engine response fee was over estimated and its revenue projection is down $17,500, while revenue from certain investments is likely to drop about $10,000 from original forecasts.
Additionally, 20 percent of firemen salaries are charged to the ambulance fund and that fund’s current balance of $63,000 is “proving to be inadequate,” Robertson wrote. At the end of the fiscal year, salaries will have to be moved back into the general fund to bring the ambulance fund back into the black, which could subtract an additional amount from the cash reserve.
While the city’s building fund is currently in the black with several projects, including a Super Wal-Mart planned to begin construction this spring, “long range projections are bleak,” Robertson wrote, adding, “Excess Building Fund reserves were spent on the new city hall building – the Building Fund may need a bail out in the future.”
The budget update comes about one month after the city council voted on a stripped down budget that took weeks of deliberation and managed to pare down city services without making cuts to the police and fire departments, whose salaries comprise the largest portion of general fund spending. Through the construction boom of the last several years, much of Kalispell’s revenues have derived from fees attached to growth. But with the economic slowdown, those revenues have fallen short of the city’s expenditures.
Robertson’s budget report indicates the city’s fiscal pinch is far from over, and Councilman Jim Atkinson hinted the council may have to once again consider staff cuts in the future to bring the city’s spending in line with its revenue.
“The community can understand that we’re hurting and we’re in trouble and it’s looking like we’re in more trouble now than we were a month ago,” Atkinson said. “If we need to take more drastic measures than what we have already taken it will be because our revenue projections are incredibly bad.”