City budget being developed, no new public safety officers included
The city budget process is underway and the city is not looking at much increased tax revenue for the upcoming fiscal year, coupled with significant tax protests tied up at the state level, the budget is largely status quo.
Police and fire departments both requested additional staff, but so far, those staffing increases aren’t included in the preliminary budget.
Cities are limited in their ability to generate revenue under state law, which allows local governments to levy to generate the amount of property taxes assessed in the previous year, plus one-half the average rate of inflation for the prior three years.
Based on the preliminary budget discussed at meetings in June, the inflationary factory for fiscal year 2020, which starts July 1, would raise taxes on a property with a taxable value of $100,000 by $2.33 annually. The permissive medical levy, which can only be used to cover employee medical insurance costs, is estimated to increase taxes by $6.31 annually.
That’s an estimated $8.71 annual increase on a property with a taxable value of $100,000.
For comparison, under the proposed budget in Bozeman, residents would see a $121 annual increase, according to the Bozeman Chronicle.
The tax increase from the inflationary factor will raise an estimated $168,142 in revenue for the city.
For comparison, an entry level police officer costs the city $87,585.
The increase in revenue from newly taxable property is roughly $425,000. The permissive medical levy will be an estimated $460,000 increase; and the entitlement share will increase by an estimated $292,005.
The Great Falls Police Department asked for additional officers under two scenarios, either four new officers at $87,585 each for a total of $350,349; or six new officers for a total of $525,510.
The Great Falls Fire Department requested six new entry level firefighters at $78,500 each for a total of $471,000, plus another $275,820 worth of needs.
Other significant constraints on the budget this year include $466,688 worth of health insurance increases; salary increases under collective bargaining agreements; new workers compensation coverage for firefighters under the new presumptive law for $123,904; a new clothing allowance for firefighters for $41,600; central insurance for $168,569; the city commission election for $45,000; among other costs.
The tax protest from Calumet Montana Refining has tied up several millions worth of taxes for the city budget. The budget office told commissioners earlier this month it was an estimated $1.1 million impact so far this year and $2.1 million in the last fiscal year.
Melissa Kinzler, city finance director, said during the June 18 meeting that those protested taxes are accounted for in the proposed city budget in the fund balance. She said the city is currently on track to have a 17 percent fund balance, but depending on the outcome of the tax appeal hearing in February 2020, the fund balance could be significantly reduced.
City policy is to maintain an undesignated fund balance of 17-20 percent, or about two months of operating expenses for cash flow needs, maintaining the city’s quality, low-risk credit rating and to address unexpected expenses.
The general fund supports fire, police, administration, legal, park and recreation and the Municipal Court functions of the city. Other departments are largely funded by charges for service or other revenue funds.
For the current fiscal year, the city generated $109.3 million in revenue. Of that, 44 percent came from charges for service. Most of those charges are for utility services including water, sewer, storm drain and sanitation. Those fees go back into running those departments for the city.
Tax revenue makes up 19 percent of the city’s revenues; intergovernmental revenue is 12 percent; special assessments are 8 percent; licenses and permits are 2 percent and fines and forfeitures is 1 percent.
Earlier this year, the city launched interactive budget tools to help residents learn more about city funding and expenses. The tools are using data for the current fiscal year until the next budget is approved.
During the June 18 meeting, Municipal Court Judge Steve Bolstad asked for a part-time judge, part-time bailiff and a full-time clerk, for a total of about $153,000 annually.
City Manager Greg Doyon said during the meeting that if the commission supports funding those positions, staff will have to make adjustments to the proposed budget.
The Park and Recreation Department also asked for an increased subsidy toward aquatics, but Doyon is not recommending that funding.
Since the Natatorium closed in January and the city has been partnering with the Mustang Center at the Montana School for the Deaf and Blind, there will be some operational considerations. Using the Mustang Center pool has allowed the city to continue offering swimming lessons, but has come with unexpected costs and since it’s smaller, doesn’t drive the same revenue levels.
“It was never my intent to exceed prior year appropriations to accommodate the use of the pool,” Doyon said.
Park and Recreation director Steve Herrig said that about 300 people had used the pool January through April, but he expected those numbers to increase in the summer months, particularly with swimming lessons.
The next budget meeting is 10 a.m. June 27 at the Civic Center.