02. Budget MessageCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
Fiscal Year 2012 Budget Message
While the economic outlook for the 2012 fiscal year is not anticipated to improve dramatically,
the City of Kalispell's elected and appointed officials have been working diligently to move our
local government operations toward a stable and sustainable future. This budget reflects growth
in the general fund's ending fund balance (often called reserves) to approach 15%. When the
council implemented the city's current financial policies, a reserve balance of 15% was also
adopted as the threshold for maintaining healthy municipal financial management. 2011 was the
first time the city incorporated a series of financial policies with the annual budget and we hope
these policies will assist the public in understanding what is being budgeted for and why.
The financial policies for Kalispell can be found in the budget document, along with policies on
revenues, expenditures, the development and management of a five-year capital improvement
policy, a debt policy, and policies on enterprise funds. While public finance remains a very
complex spaghetti bowl of rules and regulations, the policies are one way of helping to build
transparency into Kalispell's operations.
The city council also passed a 5-year utility rate plan in 2011. This plan will provide rate
adjustments to maintain and stabilize our utilities' fiscal condition although the waste water fund
remains on the watch list. This is mainly due to the stagnation in the home building arena. In
2012 we will be working to balance the 5-year rate plan with the 5-year capital plan.
Policy work has been an important element of staff actions in 2011-12. A procurement manual
has been compiled and is now being used to bring together a unified program for all purchasing,
disposal of surplus equipment, etc. A revised personnel classification plan for non -union
employees will be introduced to council in the next few weeks. This plan will revise non -union
positions from 19 grades to 6 and will provide improved consistency in similar job functions.
Challenges to Kalispell's fiscal stability will continue to be faced in 2012. The street fund
methodology for assessment does not provide the ability to adequately finance major capital
improvements such as road infrastructure re -construction or large equipment replacement. The
new waste water treatment plant was built for the growth rate from 2005 and will take some time
to absorb this extra capacity, and the recovery of the local devaluation of real estate will take
some time to recover from.
By exploring all avenues for solutions and by working together, I am confident Kalispell's
financial future will continue to get brighter.
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Vane Howington
City Manager