Whitefish Passes Preliminary Budget

By Beacon Staff

The Whitefish City Council approved a 2011 preliminary budget on June 30, a day before the official fiscal year began.

Council adopted the budget proposal with the understanding that it is a working document and is not a finalized budget. More budget session meetings are expected this summer to hammer out a final budget in August.

No meeting dates have been set, but council expects to discuss the budget some time in July.

City Manager Chuck Stearns released a proposed budget to city officials on June 6 calling for layoffs in the police, fire and parks and recreation departments. The budget proposal, prepared by Stearns and Finance Director Rich Knapp, also recommended pay freezes for non-union employees and an increase in property taxes, among other measures.

Council addressed the budget proposal in meetings on June 15, June 16 and June 30, when it approved the preliminary document. At the first two meetings, department heads explained their financial situations and stated their cases against cuts in their respective departments.

The proposed budget would increase year-end cash reserves in property tax-supported funds to 4.1 percent of appropriations, or $287,759. The bump in cash reserves, along with a more balanced budget, would be achieved through expenditure cuts, revenue increases and transfers.

Following a Dec. 31 mid-year financial report, Stearns released a memo calling Whitefish’s financial situation “dire.” The general fund’s cash balance at the time was $295,746. At the same time the year before, it was $966,660, and in 2007 the balance was $1,030,247. A March 31 third-quarter report showed that cash reserves had depleted to $44,579, compared to $783,850 the year before.

Stearns has blamed the low cash balance on three primary reasons: the payment of nearly $400,000 in losses stemming from a Montana Supreme Court decision against the city; a higher number of property tax protests and delinquencies; and the continued decline in revenue from planning and building permits and fees.