After a year in which its staff and services were cut deeply to alleviate Kalispell’s budget crunch, the city council indicated Monday night it would vote to set up a separate fund for the Parks and Recreation Department’s budget in order to more adequately fund the department.
The discussion ensued at a work session, at which no formal votes are allowed, but all the council members present appeared amenable to the suggestion by City Finance Director Amy Robertson and Parks and Recreation Director Mike Baker that a special revenue fund be set up, which would allocate a number of property tax mills directly into the department’s budget.
The Parks and Recreation Department suffered the worst cuts in 2008, under the logic that it makes more sense to cut parks maintenance or after-school programs than it does to lay off police officers or firefighters. Creating this special revenue fund would take Parks and Rec out of competition with the Fire and Police Department for general fund money. It could also encourage Recreation programs to grow efficiently and would provide additional revenue, in the form of mills, as the city’s tax base grows. In theory, the department will operate in a more entrepreneurial way, since increased revenue would directly benefit Parks and Recreation, not get funneled back into the general fund.
“It actually will promote creativity and efficiency within our department,” Baker said. “I really feel confident that it would work.”
But if the council approves of this plan, it would need to approve the fund creation before the next fiscal year begins in July, since much of the Parks and Recreation Department’s budget begins flowing in when summer programs commence in June. Robertson will likely bring a resolution before the council sometime in March.
City staff also broadly outlined the budget for the next fiscal year. Robertson projects Kalispell’s general fund will finish the fiscal year, on June 30, with $179,538 in cash reserves, up slightly from last month’s projection. In a memo to the city council, Interim City Manager Myrt Webb told council the budget is balanced between revenue and expenditures, adding, “While the general fund situation may not be getting any better it is not getting any worse.”
Kalispell’s ambulance fund is projected to have an operating deficit of $50,000, up from the previous year’s deficit of $20,000, which will have to come out of the general fund cash reserves if it doesn’t correct itself. The deficit derives mainly from higher salaries and a lower collection rate.
Mayor Pam Kennedy questioned whether Kalispell’s ambulance rates are lower than other Montana cities, and if so, whether raising the rates couldn’t make up for the operating deficit.
Looking ahead to fiscal year 2010, which begins July 1, Kalispell is projected to have $10,475,145 in general fund revenues, with $10,403,880 in expenditures and a reserve of about $259,758. These numbers are rough and assume no salary increases for city employees except for longevity and contractual obligations, no hiring unless a replacement is approved, limited layoffs and finding a solution to the ambulance fund deficit. Webb would not say specifically what number of employees “limited layoffs” might mean.
City department heads must now draw up their own individual budgets within these guidelines, so numbers are likely to change between now and the summer.
Kalispell’s entire budget is about $52 million, though most of those funds are self-sustaining or operate on their own, with the general fund making up about one fifth of that budget, but accounting for payroll for city employees, including public safety. All of the city’s funds, other than the general fund, have reserves of at least 10 percent or more, from the Wastewater Treatment Plant’s reserve of 11 percent, to the Community Development Department’s reserve of 44 percent.
While the general fund is stabilized, it is by no means safe. A city of Kalispell’s size, according to most experts, should have a cash reserve of between $1 million and $1.5 million. Whitefish, a city with a small population has a cash reserve of more than $8 million. One public safety emergency or unforeseen expense could easily wipe out the Kalispell’s entire cash reserve.