City budget approved; work on aquatics center continuing
City Commissioners unanimously adopted their budget during their July 20 meeting for the current fiscal year.
The budget does not include any tax increases and has been discussed in several commission work sessions.
City Manager Greg Doyon has called this a continuation of the city’s economic recovery budgeting.
There are also no increases for assessments or utility rates and departments were asked to only request additional budget for items critically essential to their operations.
This is the second year of budgets without the inflationary factor or permissive medical levy that would have increased property taxes and generated about $229,124 in new revenue for the city. The city is capped by state law on how much it can raise taxes by one-half of the average rate of inflation for the prior three years, which this year was 0.93 percent.
Going into covid, Doyon said, “we were in a strong financial position which has allowed us to utilize fund balance to offset the lost revenues, but for a third year, we’re not going to be able to sustain that.”
In this budget, the city is using $736,648 of fund balance, which will lower the projected fund balance for the fiscal year that runs July 1 through June 30, 2022 to 20.8 percent. The city’s policy is a recommended minimum of 22 percent, which equates to about two months of operating expenses for cash flow needs, maintaining the city’s quality, low-risk credit rating and to address unexpected expenses.
This budget year, which began July 1 and runs through June 30, 2022, the city will receive about $21.5 million in taxes. For comparison, the city’s budget for public safety this year is $27.7 million. The city has other revenue sources and this year’s total revenue is about $34.6 million. The city receives about 27 percent of the property taxes collected locally. About 32 percent goes to public schools and state schools get about 20 percent. The county gets about 17 percent and the transit district gets just under 3 percent.
For more details on the budget and information on property tax relief, go to the city finance department’s website.
Doyon said that they aren’t raising taxes but the commission will be asked in the coming months to adjust some fees for services since many rely on utilization for their revenue and they took a hit from COVID.
Other factors driving potential fee increases include rising fuel costs that are affecting the city’s cost for sanitation and that’s an enterprise fund, meaning operations are funded entirely by fees for service and doesn’t receive tax support.
Doyon said that since there’s no other mechanism to cover the cost of providing those services, the commission may be asked to increase those fees this year.
One of the first fee adjustments to be discussed will be for the Mansfield Theater during the Aug. 3 work session.
The budget doesn’t include COVID relief fund expenditures as those will be addressed in separate budget discussions and mid-year budget amendments will be made for those one time funds. Doyon said discussions regarding the use of COVID relief funds will start during the August work sessions. The city is slated to receive a total of about $29 million in federal funds from the CARES and American Rescue Plan acts.
Under state law, the budget must be adopted by the later of the first Thursday after the first Tuesday in September or within 30 calendar days of receiving certified taxable values from the Montana Department of Revenue. But the budget is not finalized until the commission sets tax levies, an action that will be scheduled when the city receives its certified taxable values from the state, which is usually in August.
The city is estimating about $400,000 in newly taxable property but that also won’t be finalized until the city receives its certified values from the state.
During the regular commission meeting, Doyon also updated the commission on the planned Aim High Big Sky aquatics and recreation center.
Doyon said he still hasn’t received official word from the Defense Department office overseeing the grant program regarding the complaint lodged with that office by Phil Faccenda regarding the selection process for the design team.
Doyon said the DoD officials know the city is continuing work on the project and that design is almost complete. He said the city plans to let out bids soon to relocate the water line for the project in Lions Park.
“I expect they’d advise us to stop work if they were going to take a different action,” Doyon said.
DoD awarded the city a $10 million grant for the project that requires a $10 million match by the city.
Doyon said that they’re potentially setting a groundbreaking ceremony for late September unless the DoD tells them to stop work or makes any changes regarding the grant.