As the current fiscal year nears its conclusion at the end of the month, the Whitefish City Council voted unanimously on June 20 to approve city manager Dana Smith’s preliminary budget for fiscal year 2023.
The budget anticipates $34 million from revenues and other financing sources, which is a 6.85% decrease from the current fiscal year, attributed primarily to the reduction of grant proceeds from the Spokane Avenue Cast Iron Watermain Replacement Project in the city’s water fund. Those proceeds totaled $2.5 million.
The budget calls for $41.2 million in expenditures and $9.7 million in interfund transfers to bring the total appropriated budget to $50.9 million. The expenditures represent a 2.91% decrease, or $1.2 million, from the previous fiscal year, while the interfund transfers represent a 31.21% increase, or $2,318,336 million. The decrease in expenditures is mostly due to changes in capital expenditures with the completion of the Water Treatment Plant Expansion Project and substantial completion of the Wastewater Treatment Plant Upgrade Project
A final hearing for the budget is scheduled for Aug 15.
Smith, the city manager, presented to the council at a recent meeting some of what she called the highlights of the budget. As Smith noted, fiscal year 2023 is not a reappraisal year for the Montana Department of Revenue, which reappraises taxable property on a two-year cycle. That means in the upcoming fiscal year the city’s taxable value will be limited to growth from newly taxable property like new construction or additions on current properties. Given the continued strong building activity over the past year,Smith’s proposed budget “assumes taxable value will grow by 4% compared to Fiscal Year 2022.”
Smith also pointed out that the proposed budget includes an overall reduction of property tax mills levied by 8.413 mills. The reduction in mills is in part the result of the resort tax bringing in collections greater than had been budgeted for fiscal year 2022. In fiscal year 2022 resort tax collections are expected to be the highest on record, with an estimated 30% increase over the previous fiscal year when the city collected $4.7 million in revenue. The proposed budget estimates that property tax relief for fiscal year 2023 is estimated to increase 70.1%, or $1.1 million compared to the previous year, for an estimated total property tax relief amount of $2.8 million.
For the first time in two years the city will raise its maintenance assessments. The city is increasing its assessments for both street maintenance and parks and greenways maintenance programs by 4%, but residential lighting and stormwater maintenance assessments under the new budget will remain flat for the third straight year.
All told, Smith said that on a home with a Zillow market value of $916,000, the estimated taxpayer savings from the new budget will come out to $41.87.
“Obviously we will see some of that savings offset by future propose increases in water and sewer rates based on our study, as well as the increase in the garbage service rates,” Smith said.
Capital spending is expected to go down under the proposed budget, which also adds to the budget for police, fire, parks and recreation, human resources and building inspection enforcement. The budget provides funding for the hiring of a new police officer at a cost of $84,443 annually.
For the fire department, the budget takes into account that the two existing 40-hour per week firefighter/paramedic positions have been proposed to move into 53-hour per week schedules for a cost of $35,500. The move will allow for staffing to increase to six for each of the three shifts the fire department staffs. The city has applied for grant funding to help cover the costs of the new position for the first three years.
The budget also includes funding for the hiring of a second assistant fire chief for an annual cost of $123,346. The budget cites the needs of EMS supply management and training coordination “as well as the growing demands of the assistant fire chief with annual inspections of short-term rentals and building plan reviews, which in turn limits support for daily operations.”
The addition of a second assistant fire chief would shift the current assistant fire chief into an “Assistant Fire Chief of Prevention” position, responsible for building inspections, plan reviews, and wildfire preparedness and education.”
In the general fund, the budget calls for the hiring of an additional code enforcement officer to improve enforcement of illegal short-term rentals, at a cost of $85,390 per year.
“Those are all new positions we’re looking to add or increase to more hours and that will help with our growing demands on city staff,” Smith said. “We also are looking at retention and obviously wage adjustments. We’re facing the same pressures as every other business out there.”
The budget proposes a 5% cost of living adjustment for employees and a 2% STEP increase on the city’s wage matrix. That 7% wage adjustment is more than what city employees might see in a normal year, and according to the budget proposal the increase is being driven by the current market conditions, increasing turnover, and difficulty filling positions.