City approves budget, intent to raise property taxes

City Commissioners voted 4-0 during their July 16 meeting to approve the budget for fiscal year 2019, which began July 1, and to pass a resolution of intent to raise property taxes.

Under state law, the city can raise property taxes by one-half the average rate of inflation for the prior three years.

For fiscal year 2020, which started July 1, the allowable inflationary adjustment is 1.02 percent, according to the Montana Department of Administration.

Commission agenda includes setting public hearings on taxes and budget for July 16

For the City of Great Falls, that equates to $168,142 of additional revenue for the general fund.

State law also allows municipalities to increase property taxes for premium contributions for employee health insurance benefits.

The city is proposing a 2.79 percent property tax increase that would provide $460,000 in additional revenue to help offset the cost to the general fund. Health insurance premiums increased 10.6 percent for the new fiscal year.

The total proposed allowable property tax levy increase is 3.81 percent.

City takes first look at proposed budget, mayor floats idea of public safety levy

The July 16 public hearing will be on the intent to raise property tax, but the commission will have to take additional action to set the mill levy, which happens after the city receives its certified taxable value from the Montana Department of Revenue in August.

For a residential home in Great Falls with a taxable market value of $100,000, the proposed inflationary increase equates to about $2.33 and the permissive medical levy to $6.38 for an annual tax increase of $8.71 for the new fiscal year, according to the city finance office.

City budget being developed, no new public safety officers included

The increases would generate about $682,142 in revenue for the general fund, according to the finance office.

According to the city, if the taxes aren’t increased, the city would need to determine alternative revenues from non-property tax sources or cut the budget by $628,142.

Few people spoke on the budget or intent to increase taxes. Commissioners and city staff had more in depth discussion on the budget over the last month in special and regular work sessions.

Shyla Patera, a regular meeting goer and advocate for ADA accessibility, said she supported the city’s effort to catch up on deferred maintenance to move the city forward.

Tom Crane, who came to the meeting to share his frustration with being notified by the city that he needed to repair a sidewalk in front of his house that was damaged when the city removed diseased boulevard trees, also shared his opposition to increased taxes.

He said he and his wife live on pensions that haven’t increased more than 1.9 percent per year and they own two rental properties in town that they’ve improved, increased their taxes further.

“This is another imposition on us that I’m not sure we can afford,” he said.

Jeni Dodd said that her middle class household is struggling and worries about those with lower incomes.

She told commissioners to focus on the heirarchy of needs, highest of which is public safety and the need for additional police officers.

The now adopted budget does not include funding for the additional police officers or firefighters requested by those departments.

The budget does include a new part time judge position for Municipal Court as requested by Judge Steve Bolstad to help handle their heavy case load and move trials more quickly.

City Manager Greg Doyon said the budget is a tough process and this year’s was complicated by significant increases to health insurance costs coupled with the continued tax protest from Calumet Montana Refining, which is tying up millions of dollars that would otherwise come to the city, county and school district.

Commissioner Mary Moe asked if staff had looked at other health insurance options since this year’s cost went up roughly 10 percent to the city.

The city is part of the Montana Municipal Interlocal Authority insurance pool, which is funded by cities and towns across the state.

The city switched to that program several years ago when it became apparent their self-funded program through Blue Cross wasn’t sustainable, Doyon said.

It’s a robust plan, he said, and often a major factor in recruitment and retention for employees since the city often can’t match wages with other municipalities or industry due to limited resources.

Currently, the city has a 90/10 split with the city covering 90 percent of insurance premium increases and employees covering 10 percent.

Doyon said health insurance is always looked at during labor negotiations and the commission could direct staff to look at increasing the employee contribution or other options.

Gaye McInerney, the city’s human resources director, said her department continually looks at other options, but the city just committed to another year with MMIA and labor agreements are currently being finalized, two of which were approved during the July 16 meeting, and most of those have two year terms. So, the city would likely have to wait and address any health insurance changes in the next labor negotiation cycle.

Commissioner Owen Robinson said that maybe it was time to consider having employees contribute more for health insurance benefits.

As for approving the budget and tax increases, Robinson said it was “excruciating. It just has not been that fun.”

Commissioner Bill Bronson said that the alternative to increasing taxes would have been to cut the budget by $682,142, which “would most likely have meant letting people go.”

He said they’ve tried to make dents in the city’s needs, such as with the new part-time judge in this budget but “we deal with the cards that we’re dealt.”

The system of taxation for municipalities is governed by the Legislature and Bronson said he hopes lawmakers will have a serious discussion about the taxation system and find solutions that help municipalities generate revenues to cover increasing costs while still providing services.

An interim committee at the Legislature is currently reviewing the state’s tax policies.

Moe said the budget would have been even more difficult to manage if the city hadn’t increased parking meter rates, effective July 1; contracted for private management of the gold courses; or closed the Natatorium.

Management agreement with CourseCo approved for city golf courses

The decision to close the Nat came after bricks fell off the exterior of the building last year, exposing additional problems with the facade and roof with repairs at an estimated $539,834 to $613,088.

Proposed pool fee increases small; aquatics program facing larger budgetary challenges

The current Nat was built in 1966, after its predecessor on the same site was closed in 1963 due to significant settling throughout the building causing walls to shift, the pool to leak and the foundation to crack, according to a city memo.

A 2011 study found masonry staining, groundwater concerns, water leakage in the basement and other nonstructural issues. The high water table at the site was also a concern in the report and it recommended projects totaling $997,114 that should be done over 1 to 50 years, according to city records.

City looking at costs, options to repair Natatorium, Civic Center, wave rider

Since then, the city has partially removed the top of nonbearing load walls to allow for foundational movement, mud jacking and door replacement.

Since 2004, the city has also done more than $357,939 in repairs including roof repairs, ventilation tunnels around the pool were filled with concrete since they were in danger of collapsing, a new pool liner, drain pipe liner, boiler replacement, pool desk resurfacing, asbestos testing, southwest corner to women’s locker room lifted due to cracks and settling in foundation, doors and door jams replaced.

Natatorium reopens, facade repairs still in the works

According to city records, the total annual users for the Natatorium in 2015 was 22,507 users, which includes repeat users. In 2016 the total was 29,665; in 2017 the total was 26,068 and as of mid-July this year, it was 16,004.

For comparison, at Electric City Water Park, the total users in 2016 from June-September was 27,324; in 2015 it was 24,894.

Since the closure of the Natatorium, the city Park and Recreation Department has partnered with the Montana School for the Deaf and Blind to offer swim lessons at their Mustang Pool.

The year had a rocky start with equipment breaking and limiting pool availability.

According to city data, from January to June, the total city revenue at the Mustang Pool was $10,043, while the cost was $26,156 to serve 274 people for a total of 1,138.

Steve Herrig, park and rec director, said summer will likely pick up with swim lessons, but the smaller pool size limits their capacity.

Doyon said in budget meetings this summer that they’re going to have to take a look at aquatics again because the intention of closing the Natatorium was to save money and eventually focus on the possibility of a new facility, not incur more expenses after closing the Nat.

Last year, city staff proposed a 50 cent increase for open swim at some pools to generate some revenue for operational costs, but commissioners rejected the increase and the additional revenue would have been far from enough to cover needed repairs at the Natatorium.