During their Aug. 5 meeting, City Commissioners will be asked to set a public hearing to adopt the proposed budget and their intent to increase property taxes.
Here’s some key things to know about the city budget:
What is the city budget year?
The city budget year runs July 1 through June 30.
Where can I see the budget documents and information?
All of the budget documents are posted on the city website. The documents for the proposed budget are available here.
There’s also two budget tools to show where your tax dollars go and a budget balancing app to see what would happen if you moved money around in the budget and to send those suggestions to the city staff.
City Commission takes first look at proposed budget
Why doesn’t the city adopt the budget before the budget year starts?
City staff typically presents their proposed budget around June and commissioners are typically asked to adopt the budget in July. The budget isn’t fully finalized until the city receives its certified taxable values from the Montana Department of Revenue. That typically happens in August.
This year, the process has been delayed a bit.
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Can the city raise property taxes as much as it wants?
No. Municipal governments are limited by state law on how much they can raise taxes annually and the rate is half of the three year average rate of inflation. That typically doesn’t generate much in terms of new tax revenue for the city, but as the national inflation levels rise, those figures could also increase.
The city did not take the inflationary factor for two budget years due to COVID but did take the allowable tax increases the last three years to maintain city services.
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City staff are recommending taking the full allowable inflationary factor, which is 2.11 percent, to generate an estimated $448,822, which would have an annual impact to taxpayers of:
- $2.58 on a $100,000 taxable value property
- $7.74 on a $300,000 taxable value property
- $17.80 on a $600,000 taxable value property
For comparison, a new firefighter costs the city about $100,000 and a new police officer costs about $110,000, according to the figures in the proposed public safety levy.
City staff are not recommending increasing the permissive medical levy since they’ve increased how much city employees contribute to their health insurance premiums.
But, the city is taking the same permissive medical levy amount as last budget year, which was $4,279,889.
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How did the city offset the deficit last year, and again this year?
The city is still recovering from COVID and did not take any tax increases during fiscal years 2021 and 2022, using $552,502 and $1,300,466, respectively, of fund balance.
The city used the full tax increases during the fiscal year that ended June 30, 2023, but did not recoup all the lost tax revenue from the previous two years and used $1,205,000 of CARES Act funds to balance the budget.
Staff are proposing to use $647,845 of fund balance in the budget that begins July 1, which brings the general fund’s unreserved fund balance to 23.8 percent when the fiscal year ends June 30, 2026.
City policy is to have a 22 percent fund balance in the general fund, which equates to about a two and a half month’s worth of operating expenses so the city can ensure cash flow in the event of a major unanticipated expense.
Last year, the city used about $444,405 of fund balance to balance the general fund, which as of June 20 had an unreserved fund balance of $10,886,763, or 27.2 percent.
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In June, Melissa Kinzler, city finance director, said that staff want to maintain that fund balance since they believe there will be more tax protests and continued uncertainty from legislative changes.
It’s echoes what she told commissioners in June 2024 when she said staff was recommending a higher fund balance as they anticipated a continued significant tax protest.
In the fiscal year that ended June 30, 2024, the city didn’t collect about $1.1 million in property taxes due to protests and appeals, primarily attributed to Calumet/Montana Renewables. The process to resolve tax protests and appeals can take years.
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In the fiscal year that ended June 30, 2025, the city didn’t collect about $662,000 and that’s expected to continue into the current fiscal year, which began July 1.
City Manager Greg Doyon said in 2024 that the city has had a deficit since fiscal year 2021, when the city didn’t increase any taxes that year or the next, and was anticipating another deficit for fiscal year 2025, which did continue.
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Are there other revenue sources for the city?
Yes.
There’s the permissive medical levy, which the city is allowed to take to help fund employee health insurance premiums.
There’s also special assessments that apply to certain budget items or areas of the city. The assessments are set annually during the budget process and all of them include public hearings.
The boulevard district is a special assessment for the care and maintenance of more than 15,000 street trees, including pruning, removal, planting and streetscape design.
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The city assesses property owners within that district to cover the cost of those services performed by the Natural Resources Division of Great Falls Park and Recreation.
Staff are proposing a 15 percent increase.
The increase was six percent in 2024 and 2023. It was 12 percent in 2022 and there were no increased in 2021 or 2020 due to COVID.
The park maintenance district assessment was approved by voters in 2018 to cover operation costs for city parks and recreation facilities, particularly focused on needs identified in a 2016 park and rec master plan.
The funds can’t be used for programming.
The city has kept that cost at $1.5 million, the same level set in 2018.
The city has 27 special improvement lighting districts with about 9,429 total roadway lights.
Most of the lights are owned by NorthWestern Energy and the city pays a maintenance fee for the lights as well as a fee for electrical transmission and distribution.
The electrical supply for the street lights is from Energy Keepers on a city contract and the other three percent of roadway lights are city-owned, according to staff.
The lighting district assessment funds are used to maintain the light poles and cover electrical supply costs.
The city is proposing a 5.2 percent increase this year. It was 6.7 percent last year.
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The city maintains about 393 miles of streets and alleys and the street maintenance assessment covers those maintenance and traffic operation costs.
Staff are proposing a 10 percent increase, consistent with the last two budget years.
The Portage Meadows special improvement maintenance district assessment was established in 1977 to maintain the green belt of the Portage Meadows addition for materials, snow removal, water, mowing, fertilizer aerification and tree pruning as part of the original planned unit development, according to staff.
The city is proposing a six percent increase.
It was five percent the last two budget years.
There was no increase in 2020 or 2021.
All of those assessments will be reviewed as part of the budget process.
What is in the city budget?
The city has 57 funds. The general fund is the primary operating fund that includes property taxes and pays for public safety, administration, Municipal Court, city legal department, the animal shelter, and supports other areas such as the county health department, Civic Center events and more. The city previously subsidized the Great Falls Public Library through the general fund, but cut that support after voters approved the increase in library mills last year.
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Most of the city’s other funds are enterprise or special revenue funds, meaning they are funded for specific purposes by specific revenue. Enterprise funds are those designed to be self-supporting by fees for services, like the swimming pools fund, utilities, parking, sanitation and others.
What’s a fund balance?
The fund balance is how much the fund should carry throughout the year. City policy sets fund balance requirements that range from 17 to 22 percent. The city’s policy is a 22 percent fund balance for the general fund, which equates to about two to three month’s worth of operating expenses to absorb any cash flow issues since tax revenue comes in December and June, or any unanticipated expenses.
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How does the city create the budget?
At the beginning of the calendar year, the City Commission meets with staff for their priority setting meeting.
The city manager uses those commission priorities to craft the budget each year.
Departments submit their budgets and make requests for additional funds over the existing funding in what’s called “above and beyond requests.” Those are submitted to the city manager’s office, which works with the finance department to develop the overall budget. The city manager makes recommendations on whether to fund those above and beyond requests.
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The city manager and finance staff present the budget proposal to commissioners in June or July annually. Commissioners can direct staff to make changes to the budget and are then asked to vote on whether to adopt the budget.
The budget is the commission’s largest policy decision each year as it funds the city’s priorities, or makes cuts. In the past, the budget discussions have cut fireworks, the Christmas tree and closed the Natatorium or added public safety staff and made major facility improvements.
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Once the budget is adopted, amendments can be made throughout the year as necessary and those changes are typically also discussed in public meetings.
During a July 1 work session, staff also presented three scenarios in which the city didn’t raise property taxes, as requested by Commissioner Rick Tryon.
Those potential scenarios included essentially eliminating the Parks and Rec department, reducing positions in planning, closing neighborhood pools, or not filling four of five vacancies at the Great Falls Police Department.
How are employee wages determined?
Most city employees fall under a labor union and the city has collective bargaining agreements with seven labor unions. Wages and raises are negotiated through those agreements, typically every two years.
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