The URL can be used to link to this page

01. Index & Budget MessageCl 0 • CITY OF KALISPELL BUDGET INDEX-FY2003 BUDGETMESSAGE............................................................... 1-9 EXHIBITS.................................................................... . 10 - 20 GENERAL FUND REVENUE DETAIL ............................................. 21 - 22 GENERAL FUND EXPENDITURE SUMMARY ...................................... 23 - 25 RECAP OF FUND POSITION...................................................... 26 - 27 GENERAL GOVERNMENT: 28 400 GENERAL GOVERNMENT.................................................... 29 - 30 401 CITY MANAGER............................................................ 31 .33 401 PERSONNEL................................................................34-37 402 CITY COUNCIL.............................................................38-41 402 CITY CLERK ................................ ................................ 42-44 403 FINANCE...................................................................45-48 404 CITY ATTORNEY............................................................ 49 - 52 406 CITY COURT ....................... ......................................... 53-55 412 CITY HALL MAINTENANCE .................................................. 56 - 58 420 ZONING DEPARTMENT...................................................... 59 - 61 2360 COMPREHENSIVE INSURANCE ............................................ ...62 - 64 2370 RETIREMENT.......................................................... ....65-67 2380 HEALTH FUND............................................................. 68-70 6030 DATA PROCESSING........................................................ . 71 - 74 PUBLIC SAFETY: 75-76 413 POLICE ............................... ............ ......................... ..77-82 2914 POLICE RESOURCE GRANT ................................................. 83 - 86 2915 POLICE RESOURCE GRANT (2).............................................. 87 - 90 2916 POLICE DRUG ENFORCEMENT .............................................. 91 - 94 2919 LAW ENFORCEMENT BLOCK GRANT ........................................ 95 - 97 416 FIRE DEPARTMENT....................................................... 98 - 104 2957 FEMA GRANT............................................................ 105-106 5410 AMBULANCE ............................. ..............................107-112 2394 BUILDING CODE ENFORCEMENT ........... .............................. 113 - 118 PUBLIC SERVICES: 119 - 121 410 PUBLIC WORKS ADMINISTRATION .......... .............................. 122 - 124 410 CENTRAL GARAGE.........................................................125 - 127 421 STREET DEPARTMENT .................................................... 128 - 130 2420 GAS TAX................................. ..............................131-135 2500 SPECIAL STREET MAINTENANCE ......................................... 136 - 140 410 TRAFFIC SIGNALS & SIGNS ................................................ 141 - 144 2400 LIGHT MAINTENANCE................................................... 145 - 147 2401 DECORATIVE LIGHTS .................................................... 148 - 150 4290 SIDEWALK AND CURB CONSTRUCTION ................................... 151 - 153 2825 MT. AIR & CONGESTION GRANT .......................................... 154 - 156 • 4393 HWY 93 SO. UTILITY EXTENSION PROJECT ................................. 157 - 158 5210 WATER.................................................................159-170 5210 WATER BILLING ............................... .......................... 171-173 5310 SEWER OPERATING...................................................... 174 - 180 5310 WASTEWATER TREATMENT PLANT ....................................... 181 - 186 5310 SEWER BILLING........................................................ 187-189 5310 WWTP/SEWER DEBT SCHEDULE .............................................. 190 5349 STORM SEWER..........................................................191-197 5510 SOLID WASTE...........................................................198-203 PARKS & RECREATION: 204 436 PARKS MAINTENANCE.................................................... 205 - 210 436 RECREATION PROGRAMS ................................................. 211 - 213 436 OUTDOOR PROGRAMS .................................................... 214 - 217 436 BASKETBALL............................................................. 218 - 220 • 437 POOL....................................................................221-223 n L_J • • 2215 AQUATIC FACILITY.......................................................224-227 2210 PARK IN LIEU............................................................228-230 2600 URBAN FORESTRY DISTRICT ............................................. 231 - 234 2927 MONTANA CULTURAL ARTS GRANT ...................................... 235 - 237 29751STEA...................................................................238-240 4102 POOL CONSTRUCTION.................................................. 241 - 242 COMMUNITY DEVELOPMENT: 243 - 244 2180 TAX INCREMENT -DOWNTOWN ........................................... 245 -248 2185 TAX INCREMENT -AIRPORT ............................................... 249 - 251 2188 TAX INCREMENT-WESTSIDE.............................................. 252 - 254 2880 COMMUNITY DEVELOPMENT/LOAN REVOLVING .......................... 255 - 257 2882 COURTYARD MAINTENANCE FUND ....................................... 258 - 260 2885 GRANTS ADMINISTRATION FUND ......................................... 261 - 263 2886 UDAG-PLANNING AND DEVELOPMENT .................................... 264 - 269 2940 2ND AVENUE WEST GRANTS................................................270 - 272 2945 CDBG-STREAM TRAINING FUND .......................................... 273 - 274 OTHER BUDGETS: 275 2170 AIRPORT................................................................ 276-279 2250 TRI-CITY PLANNING ..................................................... 280 - 283 3000 DEBT SERVICE (Sidewalk & Curbs, SID's).................................... 284 - 286 3010 G. O. BOND- NEW POOL DEBT SERVICE ................................... 287 - 288 3188 STREAM DEBT SERVICE FUND ........................................... 289 - 291 6050 SELF INSURED HEALTH FUND ............................................ 292 - 296 List of Exhibits: A Chart - Fund Balance Comparison since 1987 B History of Full time Equivalent Employees -FTE C Administrative Transfer Formula D Chart- Total City Budget E Chart - General Fund Expenditures & General Fund Revenues F Mill Levy - 5 Year History and FY2001 G Mill Levy calculation - estimate H Taxable Valuation Change compared to CPI and Mill Levy I Equipment, Construction & Capital Improvements list City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 April23, 2002 Budget Message Honorable Mayor Kennedy, City Council members Jim Atkinson, Don Counsell, Bob Hafferman, Randy Kenyon, Duane Larson, Fred Leistiko, Hank Olson, Jason Peters and the citizens of Kalispell: Enclosed is the proposed 2002/03 budget as developed by the administrative team. While I am responsible for signing this proposal, the budget could not be presented without the hard work of the administrative teams within each department. In particular, the finance department lead by Amy Robertson dedicates a tremendous amount of time and resources to ensure the accuracy and legibility of this document. In many respects the budget is a summation of the City's priorities and goals. It is not uncommon to • hear that "we vote everyday with our pocket book." In budgeting, you should be able to look at an organizations budget and conclude where their priorities lie. When you review this budget ask yourself if it represents our vision of "Building a Community that Expects Excellence." Also think of our mission which is "To Provide the Services, Resources, and Competitive Environment that Enhance the Quality of Life for All Citizens." Is this vision and mission of the organization being supported financially? This is where, in some respects, the rubber meets the road. Will we be financially backing these statements or simply providing "lip service" to them? This is much easier said than done. Finding ways to improve our communities public services while improving the competitive environment within the City is a formidable challenge in the proposed budget. Factors that challenged the staff in developing the 2003 budget: • Upon the sun setting of the Downtown Urban Renewal District the General Fund experienced a net loss of approximately $150,000 (admin. transfer, 50% Tri City, downtown beautification etc.). In addition, the Downtown TIF has funded hundreds of thousands of dollars of capital improvements in utilities, streets, alleys and sidewalks since its inception. • For the second consecutive year the city has experienced a high number of retirements (6). Approx. $120,000 in severance per State law. This unfunded liability currently totals $1,026,995. • Kalispell's self insured health fund has experienced drastically increasing claims, dropping the cash reserve to an unacceptable level. • Though electrical cost have appeared to stabilize and the City utilized every opportunity to improve our efficient use of electricity, the increases in electrical costs are approx. 40% higher than just two years ago. • Demands for Fire and Ambulance services have driven call-backs and overtime to an unacceptable level for both personnel and management. We are currently in negotiations with the Firefighters union. • An estimated $3,978,500 in equipment (vehicles) has exceeded its life expectancy within the general fund alone. Continuing to utilize this equipment can be described as "penny wise and pound foolish". Factors that assisted the staff in developing the 2003 budget: • Revenues from annexations including Glacier Village Greens and bricks and mortar construction within the city are estimated at $150,000. • The refinancing of Sewer Bonds saved approximately $25,000 annually. • Federal grants are anticipated to assist in operating the police department, fire department, airport, waste water treatment plant and community development departments. • Continued use of UDAG program income funds finance the operations within our Community Development office. BUDGET SUMMARIES • The following table depicts projected beginning balances, estimated revenues, recommended appropriations levels and projected ending balances for fiscal year 2003. -led Beginning Balance/Retained Earnings Revenues Appropriations r'►nanciai sun Government Special General Revenue $1,117,538 $6,506,323 Lary rrscar i Cal �vvo Fund Types Debt Capital Service Project $268,866 $3,600,000 Proprietary Fund Types Total Internal All Enterprise Service Funds $7,525,140 $332,240 $19,350,107 $5,429,339 $5,783,445 $1,052,516 $2,516,690 $5,931,360 $1,297,536 $22,010,886 $5,553,006 $8,680,522 $982,032 $6,116,690 $7,917,899 $1,345,620 $30,595,769 -led Change in Balance/Retained Earnings ($123,667)($2,897,077) $70,484 ($3,600,000) ($1,986,539) ($48,084) ($8,584,883) Projected Ending Fund Balance/Retained Earnings* *adjusted for non -cash expenses $993,971 $3.609,246 $339,350 $0 $5,638,601 $319,156 $10,900,224 2 The proposed budget estimates the operating cash carryover/working capital for General Fund operations • at 15.16% at the end of FY 2003. The actual cash carryover for FY 2002 is estimated to be 16.40.% of expenditures. Cl A good guideline and policy for cash carryover for the general fund is two months operating expenditures or 16.66%. Exhibit A reflects the City's cash balances for the general fund since 1987. It is important for the City to manage these balances. The percentages of cash carryover are shown on the fund revenue pages. Cash carryover in the tax funds should be the second half tax receipted on the 15`h of June (and July) which is our working capital to operate until the December tax receipts. The overall expenditures are down by $1,549,614 (most is associated with the Sunnyview Drive reconstruction). The proposed FY/2003 budget for the City is $30,606,868 compared to $32,145,383 last year, or a 4.9% decrease. A more detailed summary reflects: Total Budget Expenditure Comparison Summary FY 2002 FY 2003 PERCENT CHANGE GENERAL FUND $ 5,427,453 $ 5,553,006 2.31 % SPECIAL REVENUE $ 9,776,712 $ 8,680,522 -11.21% DEBT SERVICE $ 570,262 $ 982,032 72.21% CAPITAL PROJECT $ 7,620,261 $ 6,116,690 -19.73 ENTERPRISE FUNDS WATER $ 2,141,705 $ 1,981,505 -7.48% SEWER $ 3,086,377 $ 3,448,451 13.03% STORM $ 728,009 $ 802,993 10.30% SOLID WASTE $ 593,473 $ 747,470 25.95% AMBULANCE $ 1,041,781 $ 897,480 -13.85% INTERNAL SERVICE FUNDS $ 1,159,350 $ 1,345,620 -4.82% TOTAL BUDGET $ 32,145,383 $ 30,606,868 -4.90% • Changes in Special Revenue Funds reflect $1.8 million reduction in Downtown TIF. • Changes in Debt Service Funds reflect the new pool, skate park and Sunnyview Drive SID. • Capital Projects Fund budgets have decreased as a result of the completion of the Sunnyview • Drive project. • There are no major changes in either personnel ormaintenance and operations with the enterprise funds. The major increases or decreases are related to capital purchases or improvements. 3 Total Budget by Function Summary FY 2002 Budget Expenditures $32,145,383 (after amendments) FY 2003 Budget Expenditures by Function - $30,595,769 General Parks & Other Gov't. Public Rec. 8% _ 9% Safety 16% 15% .,jtli:c!#tfl! �• SF.!Uf71�;E!i�i: ire::.::.. Corn. rev 13% Public Services 39% General Fund Summary The general fund budget totals $5,553,006 compared to $5,534,087 for last year or a 0.34% increase • 00 a o 1 u� A hrPnMnwn nmmnarison of the f_eneral fund is shown below: FY 2002 FY 2003 PERCENT CHANGE PERSONNEL SERVICES $3,998,592 $4,045,519 1.17% M & O $1,167,126 $1,211,717 3.82% CAPITAL OUTLAY $257,600 $214,156 -16.86% DEBT SERVICE $36,855 $39,730 7.80% OPERATING TRANSFERS $73,914 $41,884 -43.33% TOTAL $5,534,087 $5,553,006 0.34% The reoccurring expenditures such as personal services and M & O represent a collective increase of 1.8% while capital, a one time expenditure, represents a decrease of 16.86%. The debt service increase relates to short term borrowing for operational equipment and the decrease in operating transfers is a result of eliminating the transfer to urban forestry and shifting the ISTEA match to the Parks and Lieu budget. The staff worked hard reducing cost in every area possible to deal with revenue losses as a result of the sun setting downtown urban renewal district. With the exception of Capital Outlay I think the • numbers are positive for the city. If alternative revenue sources can be found, capital expenditures should be the focus of any new money. 4 Enhancements Included in the 2003 Budget • Aquatic Center Construction in Woodland Park. • Kalispell's first skate park will be constructed in Woodland Park. • Streetscape downtown beautification project. • $822,000 in sidewalk improvements ($607,000 in East North, $190,000 KYAC #3 Trail/Meridian Connector, $25,000 throughout) • Highway 93 South utility project subject to MDT decision to proceed. • Meridian road storm drain project. • Replacement of two vehicles within the Police Department. • Replacement of the sewer cleaning truck. • Replacement of one garbage truck. • Replacement of two 3/4 ton pick-ups in public services • Replacement of one single axle dump truck in public services. • Replacement of Lift Station #3 • Replacement of of the Fire Departments SCBA air bottles. • Purchase of a Deep Tyne Aerator for the athletic fields and parks. • Replace building code enforcement vehicle • Completion of the facility plans Phase R rate analysis for the storm, sanitary sewer • collection system, and the water system. • Continued street overlay program.(see gas tax budget) • Construction of a storage building for equipment at the WWTP • Replacement of the public services lean-to that is used to store vehicals * See exhibit I for complete detailed capital improvements list. • City Debt DESCRIPTION DEBT AS OF JULY 1, 2002 SCHEDULED PAY-OFF DATE Sewer/Waste Water Treatment Plant $4,705,000 July 1, 2011 Water Bonds $735,000 July 1, 2011 Sidewalks & Curbs $21,381 Ongoing - 8 year assessments S.L.D.'s $1,645,000 Ongoing - July 1, 2021 Board of Investments- Intercap $428,084 2005 and 2009 Board of Investments- Courtyard $241,270 June 1, 2025 Board of Investments- Stream $2,114,293 July 1, 2010 Water SRF $860,652 July 1, 2022 General Obligation Bond - Pool and Skate Park 3,675,000 July 1, Z022 GRAND TOTAL $14,425,680 5 PERSONNEL The number of Full Time Employees (FTE) in the proposed budget has increased to 150.5. This is an increase of one full time and two half time positions. An eleven year tabulation of FTE's is shown on Exhibit B: 1 Firefighter/Paramedic - This position is necessary to reduce call-backs, overtime, continue working towards the reduction in the City's ISO rating and prepare for the staffing necessary to man the City's first fire sub -station. 1/2 - Police Secretary - In meeting the needs identified in the WRICOPS analysis the Police and Ambulance Department will share a clerk IUsecretary position. The Ambulance Department currently includes their 1/2 of this FTE, this is why we only show an additional 1/2 FTE over the 2002 budget. 1/2 - CD Housing Manager/Grantsmen - This new permanent 1/2 time position will be funded through UDAG program income and program income that is received from other grants received by this individual. The department has always been recognized for their grant writing skills and success. This new position may prove to be a real asset to all departments in the City. No general tax revenue will be utilized to fund this position. This brings the total FTE's within the Community Development Department to 4.5. The department has been traditionally run with five full time positions. COMDensated Absences Liability June 30, 2000 June 30, 2001 POLICE $374,984 $403,289 FIRE $232,271 $233,138 OTHER GENERAL $177,551 $185,564 BLDG. DEPT. $21,734 $21,016 COMM. DEV. $12,042 $14,172 ENTERPRISE FUNDS $146,182 $169,815 TOTAL PAYABLE $964,764 $1,026,995 The sick leave and vacation liabilities will increase slowly due to increased seniority and salaries. Like some other cities, we are attempting to fund a portion of this liability with a designated reserve. If this could be accomplished, the interest on the reserve could help fund new liabilities. Unfortunately we have had to utilize nearly all ($70.000) of the money set aside for this purpose to fund retirements in the proposed budget. Retirements are estimated to cost S 120,000 in this upcoming budget year. Last year's budget included $100,000 in retirement cost. With all of the retirements included in the budget, we were unable to add to the earmarked account and in fact have drained the account to a $10,000 balance. The i 2001 Audit report showed this liability to be $1.026.995 as of June 30, 2001. This is a net increase of $62,231 over FY 2000. 0 Population and Mill Levy Comparisons of Montana Cities CITY 2000 CENSUS POPULATION FY 1999 TOTAL MILLS FY 2002 TOTAL MILLS 1. Billings 89,847 89.00 105.34 2. Missoula 57,053 139.84 165.19 3. Great Falls 56,690 88.79 111.32 4. Bozeman 27,509 138.79 147.29 5. Helena 25,780 86.19 98.75 6. Kalispell 44,223 IIIA6 129.42 7. Havre 9,621 115.49 154.60 8. Miles City 8,487 119.69 163.30 9. Livingston 6,851 127.15 150.77 10. Lewistown 5,813 126.74 170.81 11. Whitefish 5,032 88.25 97.90 12. Columbia Falls 3,645 97.97 134.26 • Seven of the twelve largest cities in Montana had a higher city levy than Kalispell in 2002. We have to be careful with these comparisons because not all cities use property tax for the same functions. Some cities utilize property taxes to provide libraries and forestry districts. Missoula, Bozeman, Billings, Helena, Great Falls, Whitefish and Columbia Falls have a cable TV franchise fees that generates the equivalent of two to four mills. Whitefish has a 2% resort tax which creates more revenue than their entire property tax levy. It is interesting to note that with the exception of Whitefish, the smaller the city, the larger the negative impact of Senate Bill-184 of 1999. While the levy comparisons are of interest, we need to be careful not to draw hard conclusions from the comparisons. • Residential City Property Taxes in Kalispell 1999, 2001 and 2002 Markel Value 1998/99 Taxable Value M V x 0.03816 1998/99 Mill Levy 0.11116 2000/01 Taxable Value M V x 0.03627 2000/01 Mill Levy 0.122 2001/02 Taxable Value M V x 0.035435 2001/02 Mill Levy 0.12942 $50,000 $1,908 $212 $1,813 $221 $1,772 $229 $100,000 $3,816 $424 $3,627 S442 $3,544 $458 $150,000 $5,724 $636 S5,440 $663 $5,315 $687 $200,000 $7,632 $848 $7,254 $884 $7,087 $916 This chart reflects what city property owners paid in city taxes on houses valued from $50,000 - $200,000 in 1999, 2001 and 2002 - Class 4 residential property. The chart shows that even though the City's mill levy has increased by 16% since 1999 the actual property tax paid to the City has increased by 8%. Legislative action (SB-184) designed to lower taxable values, cap revenues and reduce property taxes for commercial developments have proved to result in a tax shift from commercial to residential. It is estimated that one mill will generate $23,728 in property taxes during the 2003 budget year. The cost of each mill per household for 2002 was as follows: Market Value 2002 Taxable Value One Mill Annual Cost Per Mill Monthly Cost Per Mill $50,000 $1,772 0.001 $1.77 15 cents $100,000 $3,544 0.001 $3.44 29 cents $150,000 $5,315 0.001 $5.32 44 cents $200,000 $7,087 0.001 $7.09 59 cents The proposed budget includes fifteen additional mills. Twelve mills pay for the $3.65 million debt retirement for the new aquatic center and skate park as approved by the voters. Three mills are being requested to offset the increasing cost of health insurance benefits. The increasing cost of health • insurance is better described in the Self Insured Health Fund which can be found under the "other, function in the last section of the budget. In addition to the three mills the employees are paying for 12.5% of their health insurance premium. LEGISLATIVE ACTIONS The 1999 and 2001 Legislatures made dramatic changes to the State's tax system. Many of these changes affect local governments. Cities, towns, counties and school districts are all trying to cope with the effects of the legislative changes on the financial picture of their respective organizations. The legislative changes affect each governmental entity's finances in a different manner. Consequently, our ability to accurately assess the impacts of the legislative changes on our anticipated revenues as a result of the 2001 legislature is limited. Nevertheless, we have made the best estimates possible with the information available. HB -124 of 2001 - Passed on the final days of the legislative session, HB-124 replaces many of our revenues with an Entitlement from the State. We will no longer receive the following: motor vehicle; beer, wine and liquor apportionment; gaming; corporation tax; and SB-184's personal property reimbursement. This is the second budget created under HB - 124. Per HB - 124, the budget is based • on last year's revenue plus a growth factor of 3% in the Entitlement and a 1.28% increase in our tax revenue. We will receive final information on the entitlement as well as the tax levy information before adopting the final budget. 8 CONCLUSION • In my third budget cycle it has become increasing obvious that the City must find alternative revenue sources and/or eliminate services provided. We have made serious attempts to fund capital equipment replacements and cover the City's unfunded liabilities and both were nearly wiped out in order to finance this budget. We continue to sit idle knowing that transportation (traffic) problems are growing daily. The City has an excellent street maintenance program and as a result our street system is in very good condition. However, major street reconstruction projects need to be completed in order to efficiently move traffic. In addition to funding equipment replacement, comp/sick/vacation liabilities we have added a new designated fund balance line item for the fire sub -station. On the positive side we have budgeted $50,000 for the fire sub -station, however we had to utilize almost all funds in the unfunded liabilities line item to help pay for retirements and utilize over $50,000 in the capital equipment fund in order to replace two police vehicles. Not including the street improvements listed above the City has $140,000 set aside to fund over $5.5 million in future expenditures between personnel liabilities, fire/space needs and equipment replacement. In addition to State laws that need to be changed allowing for local option taxes; annexations and large • scale commercial and industrial developments are some of our only options to increasing revenues. On the reverse side of the ledger, costs to service a fast growing community can only be substantially reduced by eliminating services. I would like to thank Amy Robertson, Carol Kostman and Rick Wills of the Finance Department, and each of the department directors, for all of their hard work in this process. As you review the enclosed budget document, please do not hesitate to call myself or any of the department directors for assistance in understanding the proposed budget. Respectfully submitted, Chris A. Kukulski City Manager 0