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E1. 05-06-25 Budget Work Session Minutes Page 1 of 9 CITY COUNCIL BUDGET WORK SESSION DRAFT MINUTES TUESDAY, MAY 6, 2025, at 6:00 p.m. City Hall Council Chambers, 201 First Avenue East Video of this meeting with time stamped minutes can be found at: https://www.kalispell.com/MeetingVideos. A. CALL TO ORDER TUESDAY, MAY 6, MEETING AT 6:00 PM B. ROLL CALL Mayor - Mark Johnson: Present Council Member - Kari Gabriel: Present via video conference Council Member - Sandy Carlson: Present Council Member - Sam Nunnally: Present Council Chair - Chad Graham: Present Council Member - Jed Fisher: Present Council Member - Sid Daoud: Present Council Member - Jessica Dahlman: Present via video conference Council Member - Ryan Hunter: Present Staff present included City Manager Doug Russell, Deputy City Clerk Judi Funk, Finance Director Aimee Cooke, Public Works Director Susie Turner, Public Works Budget Resource Manager Terri Loudermilk, and Assistant Finance Director Julie Hawes. C. DISCUSSION 1. Fiscal Year 2025-2026 Budget Review (Preliminary Budget Linked) a. General Fund Administrative Departments b. Development Services Department c. Public Works City Manager Doug Russell began the staff report explaining the process for the meeting and the approach taken on the budget transmittal letter explaining it is an executive summary. He emphasized this is a preliminary budget submittal that is subject to change. 00:03:02 10 Year Forecast Manager Russell went over the 10-year forecast graph between revenues and expenditures. 00:04:52 Emergency Responder Levy Graph Manager Russell went over the dedicated levy fund forecast and related information in the transmittal letter. 00:06:20 Manager Russell continued reviewing the budget transmittal letter speaking about revenue sources. Kalispell City Council Minutes, May 6, 2025 Page 2 of 9 00:07:25 Manager Russell talked about general fund expenditure tables and graphs in the transmittal letter, and then in the other funds. He then provided a high-level overview of personnel compensation. 00:08:43 General Fund Revenue Review and Summary Manager Russell reviewed these numbers. 00:10:45 General Government Expenditures Manager Russell reviewed these numbers. 00:12:10 Council Member Daoud asked about the sidewalk and curb transfer. 00:13:22 Council Member Hunter asked about the sidewalk 50/50 program. 00:14:22 City Manager Expenditure Detail Manager Russell explained changes in this fund. 00:15:23 Human Resources Expenditure Detail Manager Russell explained changes in this fund. 00:17:59 Mayor/Council Expenditure Detail Manager Russell explained changes in this fund. 00:20:16 Council Member Daoud asked about the cost of Council Ipads and laptops. 00:21:40 Mayor Johnson asked about the meetings line item within the Mayor/Council budget. 00:22:04 Council Member Daoud asked questions about payroll costs. 00:23:11 Council Member Graham provided discussion about the entirety of Council being included within the payroll line item. 00:23:38 Council Member Gabriel provided discussion that Council pay has not changed since 2003. 00:23:57 Council Member Fisher provided discussion about the Council/Mayor wage and the importance of the wage being high enough to cover the expenses entailed in public service so more people are able to serve. Council continued discussion about the Council/Mayor wage. 00:33:32 City Manager Russell explained the options Council can take to make a decision regarding wages for the Mayor and Council. 00:35:26 Council continued discussion about the Council/Mayor wage. 00:43:24 City Manager Russell explained how he will handle future consideration of the Council/Mayor wage. Kalispell City Council Minutes, May 6, 2025 Page 3 of 9 Council continued discussion about the Council/Mayor wage. 00:52:22 Manager Russell provided discussion about options based on Council discussion. Council continued discussion about the Council/Mayor wage. 00:56:14 Manager Russell explained how staff will move forward for Council to continue this discussion and decision. 00:57:00 City Clerk Expenditure Detail Manager Russell explained changes in this fund. 00:57:33 Finance Expenditure Detail Manager Russell explained changes in this fund. 01:00:09 City Attorney Expenditure Detail Manager Russell explained changes in this fund. 01:00:38 Municipal Court Expenditure Detail Manager Russell explained changes in this fund. 01:01:40 Council Member Fisher asked questions about wages. City Manager Russell talked about the possibility of a market study for the Judge’s wage. Council Member Hunter asked questions about how the wage for the Judge’s salary is currently determined. Manager Russell confirmed that Council is open to further review of how the Judge’s salary is determined. 01:04:36 Development Services Planning and Zoning Expenditure Detail Manager Russell explained changes in this fund. 01:05:19 Council Member Hunter asked questions about the Pro Housing Grant funds. 01:05:58 Council Member Hunter provided discussion about his vision for the addition of a dedicated housing and homeless person within the Planning Department, and what he would envision the position and other resources to entail. 01:08:25 City Manager Russell and Council Member Hunter discussed past discussions on this topic and what it would entail. 01:13:18 Council and staff discussed the idea of a dedicated staff person related to Council Member Hunter’s ideas. Kalispell City Council Minutes, May 6, 2025 Page 4 of 9 01:25:32 Community Development Manager Russell explained changes in this fund. 01:26:00 Director of Development Services Jarod Nygren spoke regarding the work being done by the new Planner and continual work that will need to occur on the Land Use Plan. 01:27:06 Building Department Manager Russell explained changes in this fund. 01:27:47 Director Nygren spoke regarding Building Department revenues and expenditures. 01:28:19 Council Member Nunnally asked about the tone heard from developers recently. 01:28:59 Council Member Fisher asked questions about the furniture line item, and about administrative transfers. 01:30:47 Development Services Special Revenue Funds Manager Russell explained these funds. 01:31:31 Director Nygren spoke regarding why a housing study has been placed in the budget. He explained study and staff requirements and needs to comply with Senate Bill 382. 01:33:18 Council Member Hunter asked questions about the housing study. 01:33:45 Council Member Hunter clarified that he would like to see a housing study include what strategies the City can employ to address needs. Manager Russell and Council Member Hunter discussed further what a housing study would entail and how it would be discussed. 01:36:38 Director Nygren spoke further regarding what he would expect a housing study to include. 01:38:03 Council Member Hunter provided discussion about next steps after, or to be included in, a housing study. 01:40:01 Mayor Johnson provided discussion about housing development and market strategy. 01:40:59 Director Nygren talked about the current housing and development market. 01:41:33 Council Member Hunter provided discussion about the housing market and strategy. 01:42:39 Manager Russell continued discussing the special revenue funds. 01:43:36 TIF Funds Manager Russell provided information about the Tax Increment Finance funds and anticipated projects and possible redevelopment. 01:44:48 Westside TIF Fund Kalispell City Council Minutes, May 6, 2025 Page 5 of 9 Manager Russell spoke regarding this fund and anticipated projects. 01:45:37 Old School Station TIF Funds Manager Russell explained 2026 is the final year for these tax increment finance districts. 01:46:05 Glacier Rail Park Targeted Economic Development District Manager Russell talked about possibilities with these funds. 01:46:44 Director Nygren explained acquisition of the Wye Tract property is still moving forward. The sampling plan is back to BNSF for review, subject to their approval of the environmental study, the closing on that property will occur. 01:47:08 Public Works General Fund Administration 01:47:38 Public Works Director Turner explained the aerial imagery line item. 01:48:15 Special Revenue Funds Manager Russell briefly reviewed these funds. 01:49:01 Lighting District Director Turner explained the increase seen is for new growth to the lighting district and explained that a Central Garage transfer was added to this fund. 01:49:59 Council Member Hunter asked about lighting technology that dims. 01:50:55 Gas Tax 01:51:21 Public Works Director Turner spoke regarding the creation of a line item to move BARSAA funds into the gas tax. 01:52:16 Public Works Director Turner talked about this fund further. 01:52:50 Council Member Daoud asked about the cost of asphalt and concrete materials. Director Turner answered Daoud’s questions and provided further related information. 01:56:10 Special Street Maintenance Director Turner spoke to the health of this fund and spoke regarding support from the TIF District. She explained increases to supplies for inflationary costs and then spoke regarding the Central Garage transfer. 01:58:06 Council Member Hunter asked about previous sidewalks funding discussions. 01:58:47 Mayor Johnson provided discussion about sidewalk budget considerations within the overall budget. Kalispell City Council Minutes, May 6, 2025 Page 6 of 9 02:00:12 City Manager Russell spoke to having budget revenue numbers in August, and considerations of a sinking fund for the Central Garage needs. 02:00:32 Mayor Johnson provided further discussion about budget considerations. 02:00:58 Council Member Hunter, Mayor Johnson, and Manager Russell provided further discussion about the budget process. 02:03:40 Council Member Daoud asked for details about the Central Garage transfer increase. 02:04:09 Director Turner spoke regarding the addition of a capital line item to purchase potential property in northern or western Kalispell for a satellite facility to store equipment. 02:04:46 Manager Russell spoke further to this capital line item and further processes. 02:05:38 Director Turner spoke regarding the need for a dump truck purchase, and a vac truck trailer purchase, and about front loader forks within the proposed budget. 02:07:30 MT. Air & Congestion Grant Director Turner explained we do not anticipate receiving further funds from this grant. 02:07:47 Projects Manager Russell spoke to the Two-Mile Drive project from congressional HUD Grant appropriation. He then spoke to the Four Mile Drive budget and adjustments that will need to be made for that project. 02:08:34 Enterprise Funds 02:08:56 Water Operations Director Turner explained the addition of a full-time water operator to help service the new water facilities, and new development. Electricity is anticipated to go up by 4.9%, and bringing on 3 more wells will increase electricity needs. 02:10:13 Director Turner explained a facility plan is being completed with grant funding, and then we’ll move into an impact fee and rate study for water. 02:10:37 Director Turner explained an increase in costs for hydrants and pump replacement costs for pump failures that occurred. 02:12:02 Council Member Nunnally asked about the status of meter replacements. Director Turner spoke to the status of the meter replacement program and success with the new meters. 02:14:08 Council Member Nunnally spoke to the success of the new meter program for the fairgrounds and asked what would be needed to make the change over faster. 02:15:14 Director Turner asked for questions related to capital bonded projects that have already been reviewed within council sessions. Kalispell City Council Minutes, May 6, 2025 Page 7 of 9 02:15:47 Director Turner spoke to carry over projects, a 6th Street West project, as well as the lead line replacement funds needed for meter pits. 02:17:00 Director Turner spoke to a new line item for contract main upsizing as not enough impact fees are available for all the new development. She then talked about related project planning. 02:19:39 Council Member Daoud asked about the location of PFAS emerging contaminant response expenditures. He then asked questions about future disposal of the PFA’s unit pellets, and associated costs and funding. 02:24:27 Water System Impact Fees Director Turner talked about the projects in this fund, and the upsize line item. She explained that when the facility plans are complete, impact fees for water will be reviewed. Council Member Daoud asked about the current number of volunteers for the Impact Fee Advisory Committee. 02:25:47 Sewer Fund Summary Director Turner spoke regarding sewer collection patterns, and the increase in electricity. 02:26:30 Council Member Fisher asked about line item 425 which pays for lift station failure repairs. 02:27:08 Council Member Graham asked about the cost of the facility plans being completed. Manager Russell spoke to the value of plans, and staff explained a pro-housing grant will help pay much of the cost. 02:28:44 Council Member Daoud asked about line 512. Staff explained the line item is for possible claim pay-outs, and some goodwill expenditures. 02:29:55 Machinery and Equipment Director Turner spoke to capital projects and the increase in construction costs. She then talked about lift station costs. 02:31:50 Council Member Daoud asked about the fermenter learning it is in another budget. 02:32:50 Wastewater Treatment Plant Director Turner talked about electrical increases, and higher tipping fees for Glacier Gold. 02:33:49 Capital Projects Director Turner talked about reasoning and solutions related to capital projects within this fund. 02:35:18 Capital Bonding – Fermenter Director Turner talked about this project. 02:35:51 Director Turner spoke to needing to re-bid the equalization basin. Kalispell City Council Minutes, May 6, 2025 Page 8 of 9 02:36:33 Director Turner talked about the status of the Biosolids Dewatering Project. 02:37:53 Sewer Impact Fees Director Turner explained that most of these projects are carry-overs and spoke further about these projects. 02:39:18 Storm Sewer Director Turner said this fund is very similar to last year’s. The storm water facility plan is almost complete, and then the impact fee study will be next. A hydraulic storm water model will be completed as a part of the plan. 02:41:05 Mayor Johnson asked about projects as part of the regulations related to the MS4 permit. 02:41:53 Director Turner provided an update related to water quality TMDL Stormwater projects. 02:42:29 Director Turner spoke regarding a stormwater decant facility project. 02:43:23 Director Turner talked about contingency funds for the Two-Mile Drive drainage improvement project. 02:44:09 Storm Sewer System Impact Fees Director Turner explained there are no changes to this fund. 02:44:30 Solid Waste Director Turner talked about front load commercial services starting this summer, and related preparation including the need to construct a facility to house the new equipment. Director Turner talked about how the new fall clean-up went. 02:47:31 Council Member Gabriel asked about public communications regarding the roll out service. 02:48:29 ARPAA Director Turner explained that the fermenter project is the last ARPAA project to be completed. 02:49:02 Central Garage Director Turner referred to the recent work session on this fund, and the increases discussed. She then explained how the transfer amount from other funds is calculated. 02:50:59 City Manager Russell explained the staff perspective related to budget preparation. He spoke to what will be covered tomorrow night and his appreciation for prior review of work plans. 02:52:52 Mayor Johnson provided discussion related to the budget process, and budget considerations. Kalispell City Council Minutes, May 6, 2025 Page 9 of 9 D. PUBLIC COMMENT No public was present. E. CITY MANAGER, COUNCIL, AND MAYOR REPORTS – None. F. ADJOURNMENT Mayor Johnson adjourned the meeting at 8:57 p.m. Budget discussions will continue Wednesday, May 7, 2025, at 6:00 PM ______________________________ Aimee Brunckhorst, City Clerk Minutes approved on UPCOMING SCHEDULE Next Work Session – May 12, 2025, at 7:00 p.m. – Council Chambers Next Regular Meeting – May 19, 2025, at 7:00 p.m. – Council Chambers PARTICIPATION When addressing council please give your name and address, see the last page of the agenda for the proper manner of addressing the council, and limit comments to three minutes. Comments can also be emailed to publiccomment@kalispell.com. Watch council sessions live with the agenda and supporting documents or later with documents and time stamped minutes at: https://www.kalispell.com/MeetingVideos or live or later on YouTube at: www.kalispell.com/YouTube. The City does not discriminate on the basis of disability in its programs, services, activities, and employment practices. Auxiliary aids are available. For questions about disability accommodation please contact the City Clerk at 406-758-7756.