Kalispell’s new city manager arrived in time to join city councilors as they combed through the preliminary budget for the upcoming fiscal year.
Doug Russell, the city’s latest chief administrative officer replacing Jane Howington who left in January, began work Monday by meeting staff and diving into Kalispell’s finances. Russell joined the city council that evening as it continued preliminary budget talks that carried over from a work session the previous week.
Overall spending for fiscal year 2013 beginning July 1 is forecast at $46.75 million, a proposed $3.95 million increase from last year. The increase is largely tied to capital improvement spending in the water, sanitary sewer and treatment and storm sewer enterprise funds and the West Side Tax Increment Finance District.
The city is budgeting with an estimated cash carryover of 15 percent from 2012.
The preliminary budget does not reflect anticipated savings of roughly $2.5 million over 15 years from refinancing outstanding general obligation bonds and water and sewer bonds. With interest rates currently at historic lows, the city decided to refinance roughly $21 million in debt, including $17 million for water, sewer and wastewater treatment plant projects. The financial services company Standard and Poor’s, one of the “Big Three” credit rating agencies, recently gave Kalispell a favorable A+ rating, according to Charles Harball, the city attorney who has also served as interim city manager since January.
Harball anticipates general fund revenues to grow because of new commercial properties joining the tax rolls from last year. Further “good growth” in the commercial sector is expected to continue this year based on requests for building permits, Harball said.
This year’s budget reflected a 2.5 percent increase in overall wages for non-union city employees. In April the council approved a new merit-based pay scale program that rewards workers with higher pay for completing additional job-related training and certification. The city continues to negotiate with union employees over wages and working conditions.
On June 11, the council spent almost three hours reviewing the first half of the 146-page proposed budget before Mayor Tammi Fisher asked to take a break and proceed this week with “fresh eyes.”
Concerns over funding for the 911 Center reemerged. Kalispell has agreed to contribute 2 percent, or $467,911, as opposed to the center’s request for 7 percent. The city was adamant that was the ceiling, Harball said. But councilors called into question the center’s financial stability and the consequences of accruing cost overruns.
Funding concerns for fire department staff resurfaced as well. Kalispell’s fire department currently has three positions funded by a federal grant, but the money expires in September. In an effort to maintain staffing levels, the city moved one position from the fire department’s budget to ambulance. The overall salary budget for the fire department would increase $96,901 this year compared to last year, from $1.44 million to $1.53 million. Councilor Jeff Zauner urged Fire Chief Dave Dedman to pursue further grant funding while Councilor Bob Hafferman expressed support of a funding increase for the department.
“This is the place we should be spending, as far as I’m concerned,” Hafferman said, adding, “There’s a lot of other places that can be cut. I think we better look closely at keeping those employees.”
One of the city manager’s primary duties is preparing and overseeing Kalispell’s budget, and one of Russell’s selling points during the interview process was revitalizing a city after tough economic times. Cities that successfully emerge from bad economies build on their strengths and take advantage of opportunities when they arise, he said. Although Kalispell’s financial outlook has slowly improved in recent years, councilors appear to be cautious.
“We are being very deliberate, as we should be,” Fisher noted near the end of the meeting.
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