After two rough financial years in which the city of Whitefish saw layoffs, pay freezes and persistent cash reserve concerns, City Manager Chuck Stearns has released a budget proposal for fiscal year 2012 that is decidedly less dreary.
In a memorandum to the mayor and city council dated May 2, Stearns said that a slowly recovering economy and increased resort tax revenues have helped ensure that the 2012 fiscal year, which begins July 1, will not be “as difficult” as 2011.
The budget contains 28 active self-balancing funds, according to the proposal compiled by Stearns and Finance Director Rich Knapp. The city’s total budget authority is $38.07 million, a 4.7 percent increase from last year.
The increase is due to a number of factors, including the incorporation of an independent library into the budget, payroll and pay increases, higher tax-increment fund and resort tax expenditures, and increases in capital expenditures.
The property tax mill levy is the same as last year, “except for transferring the 5.4 library mills from the county portion of the tax bill to the city portion,” the proposal states. This transfer does not affect residents’ total amount of property taxes.
“There is no net effect of library property taxes being paid by city property owners,” Stearns said.
After discussions with the mayor, council and unions, Stearns is requesting that the city move forward with cost-of-living-adjustment (COLA) pay increases of 1.3 percent for city employees and another 2 percent increase over the next two years.
“Given that employees had a pay freeze last year and that the 1.3 percent COLA is more
or less offset by higher employee medical insurance premiums this year,” Stearns wrote, “I believe that the 2 percent increase over two years, which roughly equates to 1 percent per year, is a fair balance.”
“Especially,” he continued, “as we can achieve that increase without increasing property taxes.”
Projected year-end cash balances for property tax-supported funds, excluding the library, are expected to be equal to 4.89 percent of expenditures, up slightly from the 2011 budget. Low cash balances have been a problem for the city. In a recent third quarter financial report for this fiscal year, Knapp anticipated a cash shortage by June.
The proposal notes that there are currently two vacancies in the police department. Stearns recommends replacing one of the vacancies and reducing the number of sworn officers by one to 15, still keeping within the parameters of the 2006 emergency services plan.
Stearns also recommends not filling a vacant position in the public works department, “but rather promoting internally to fill the supervisor vacancy,” while transferring an equipment operator to crew work on streets, water lines and sewer lines.
Stearns lowered estimates for revenues from court fines, planning fees and building, but noted “hopefully they may exceed estimates.” Last year, Stearns confessed to being overly optimistic in his planning and building revenue estimates.
A budget work session with the city council was scheduled for May 9.