01/21/02 Jentz/Tri-City Planning Budget IssuesTri-City Planning Office
17 Second Street East Suite 211
Kalispell Montana 59901
Phone: (406) 751-1850
Fax: (406) 751-1858
tricity@centurytel.net
MEMORANDUM
TO: COLUMBIA FALLS CITY COUNCIL
KALISPELL CITY COUNCIL
WHITEFISH CITY COUNCIL
FROM: TOM JENTZ, DIRECTOR NJ
DATE: JANUARY 21, 2002
RE: TRI-CITY PLANNING BUDGET ISSUES
The Tri-City Planning Board has called a special meeting of all three city councils to review
budget and funding issues concerning the Tri-City Planning Office. The meeting will be
held on January 28th at 7:00 PM in the Kalispell City Council Chambers. For this
meeting staff has compiled a considerable amount of budget information to help give the
three cities a better perspective of the budget issues. The Tri-City Planning Board inter -
local agreement requires the preparation of the annual budget for the next fiscal year by
January 31st in order for the member jurisdictions to review the budget and determine if
they wish to continue participation. They must give notice by February 1-t if they purpose
to withdraw by June 30th. This year, by mutual agreement of all three city councils the
withdrawal date has been moved back to March 1, 2002. Staff has identified five areas of
concern that need to be discussed at the January 28 meeting:
• The projected budget shortfall this fiscal year,
• The fiscal 2003 budget,
• The change in the funding formula that sets the individual cities' contributions,
• The existing accrued financial liabilities of the Tri-City Planning Office
• The status of contested funds held by the County
Fiscal 2001-02 ShortfaU
In simple terms, the Tri-City Planning Office began the year with a deficit in the budget in
the amount of $42,110 with the understanding that revenues would probably be higher
than anticipated and that the cash carryover of $256,000 that FRDO had would be used to
address the remaining shortfall. Revenues were up as anticipated. However, the County
did not release the contested cash at the time of County withdrawal last June, thus the
shortfall continues. Based on our latest figures, staff projects a $36,470 shortfall at the end
of this year based on current expenditures and revenue. The actual short fall this year will
more likely be in the $20,000 range based on above average applications and application fee
Providing Community Planning Assistance To:
- City of Columbia Falls • City of Kalispell • City of Whitefish •
Tri-City Planning Board
Re: Budget Issues Memo
January 21, 2002
Page 2 of 3
activity and as we monitor expenses during the rest of this year. However, the Tri-City
Planning Office will cease to operate strictly on a cash basis after mid March.
Year 2002-03 Budget
In order to assist you in reviewing the future of the organization, please find attached a
draft FY 2002-03 budget. Also, find two sheets entitled Budget Assumptions, which form
the basis for the budget revision proposed for next year. Note that the budget is proposed
to increase $22,637 (7.6%) over the adjusted 2002 budget. If member contributions were to
stay the same as 2002, there would be a $59,314 deficit originally intended to be covered by
the contested FRDO cash reserve. This budget short fall will be in addition to this fiscal
year's shortfall of $20,000 to $35,000 for a total shortfall of $80,000 to $95,000 for next
year. In preparing the 2003 budget, the concept of maintaining a deficit was eliminated and
member contributions were accordingly increased to place the budget on a balanced basis.
This budget then would no longer be dependent on the cash reserves held by the county.
Revised Funding Formula
The issues we are dealing with become slightly more complicated as this is the year we were
going to phase in a new funding formula. Historically FRDO used a formula that dated
back to 1984 and was based 100% on the taxable value of each jurisdiction. When the
cities modified the FRDO Interlocal Agreement and renamed the office the Tri-City Planning
Office this past July, a new formula was proposed. This formula was intended to use three
indicators each equally weighted; 2000 population; current taxable value of the city and a
5-year rolling average of permit activity. In actual application, staff has found that this
formula still needs some minor modifications to provide greater equity in the process. In
light of this, staff is proposing that the formula be based 2/3 on taxable value and 1/3 on
the average application activity for the past 5 years. The formula as proposed would then
serve to keep the level of funding fairly close to existing patterns.
Staff has included an analysis of the funding formula in a table labeled "FUNDING
FORMULA " The original formula would have increased Columbia Falls contribution from
10.7% to 13.3% and it would have lowered Whitefish from 32.65% to 32.54% and Kalispell
from 56.64% to 54.15%. The modified formula as proposed by staff cuts in half the
increase for Columbia Falls, increasing Columbia Falls to 11.9%. Whitefish would also
increase to 34.3%, while Kalispell drops to 53.8%.
Office Projected Liabilities
The very last attachment is intended to show the accrued liability for each jurisdiction at
the end of this fiscal year (June 30, 2002). This table accounts for the accrued staff
liabilities of sick leave and vacation as well as the budget year 2002 deficit of $20,000 -
$35,000 and illustrates each communities financial liability.
Status of County contested Reserves
The current balance on June 30, 2001 stood at approximately $256,000. The cities of
Whitefish and Kalispell are pursuing legal action to determine the status of these funds.
-2-
Tri-City Planning Board
Re: Budget Issues Memo
January 21, 2002
Page 3 of 3
ISSUES PENDING
1. Resolve the cash shortfall for fiscal year 2002
2. Review 2003 proposed budget.
3. Finalize a funding formula for distributing office costs for next year and get
planning office on a fiscally sound basis.
4. Resolve the $256,000 cash carryover issue with Flathead County
5. Consider whether to continue in the Tri-City Planning Organization
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TRI-CITY PLANNING
BUDGET ASSUMPTIONS FOR 2002 — 2003
January 23, 2002
A. Operations and maintenance expenses
Proposed adjustments:
• Postage would be increased $200 to address increase in postage rates and
increased volume.
• Legal Notices would be increased $500 to reflect increased activity
• Telephone would be increased $3000 (54%) to address fixed costs of phone,
cell phone, long distance, internet and WEB page
• Insurance would be dropped $200 to reflect actual costs
• Office rent would increase $1000 to reflect rent and utility increases
• Net effect is an 8.3% increase in O & M of $4,500
Unresolved issues:
• The administrative charge to be charged by the city of Kalispell.
• Anticipated extra charge if Planning Office has access to the County data
records
B. Personnel Expenses
Proposed adjustments
• For budget purposes a 2% COLA was used for all 5 staff. The actual number
will not be released for some time and will be used when available.
• Based on the adopted salary schedule, Planners Narda, Eric and Cookie are all
in mid step. Administrative Supervisor Sandie is eligible for a step increase
(2%).
• Tom has also been factored in with a 2% increase. He is not part of the salary
schedule and did not receive a raise last year.
• These adjustments total $6,637
Additional adjustments
• Contract employee for Planning Board minutes - $4,000. Board approved this
position in September 2001. We were recently, able to contract, on a
temporary basis our former board recording secretary.
• Cookie Davies, GIS coordinator position, started the year at 3/5 time. The
board added 8 hours/week in September 2001 for an additional expense of
$7,500. Recommend that we add 8 hours to make her full time to assist
secretarial vacation and overflow. - $7,500
-5-
C. Total budget changes
Total O & M adjustments - $ 4,500
Total personnel adjustments - $18,137
Total increase - $22,637
D. Revenue assumptions:
• Planning fees for the first six months have averaged $6,020/month. This is
above the 3-year average of $4,100. Staff proposes using $5000/month as a
budget figure, which provides $60,000 per year in revenue. Using these
figures and projecting the same contributions by members as the current year,
we are at a shortfall of $59,314.
Staff proposes to submit a $15,000 CDBG Planning Grant in March for next
year. They typically can be spent out over two years ($7,500 per year) for the
purpose of updating the Columbia Falls Master Plan to Growth Policy status.
The uncertainty arises in whether the County will cooperate in the approval
process. This would reduce the shortfall to $51,814 if awarded.
ME
1:k1u i ar zva
TRI-CITY PLANNING OFFICE BUDGET
RECOMMENDED FORMULA
COMPARING 2002 CONTRIBUTIONS
Kalispell
Whitefish
Columbia
Falls
% Value
Weighted Factors
Tax. Value (7-01)
40.70
18.15
7.82
66.67
A 5 Year Ave.
13.10
16.15
4.08
33.33
Total % of budget)
53.80
34.30
11.90
100.00
Difference between the
current and proposed
formulas
Current Budget Share-%
56.64
32.65
10.71
Over Under %
-2.84
1.65
1.18
2002 contribution
$102,360
$59,020
$19,350
If the new formula were
applied to the 2002
funding level
$ 97,233
$61,990
$21,505
Difference
-$5,1271
$ 2,970
$ 2,155
2003 BUDGET - LOCAL CONTRIBUTION AND FEES
(Assumes $60,000 in fee revenue and no deficit)
Kalispell
Whitefish
Columbia
Falls
2002 contribution
$102,360
$59,020
$19,350
2003 contribution
$128,484
$81,914
$28,419
Difference
$26,124
$22,894
$9,069
-7-
TRI-CITY PLANNING OFFICE
PROJECTED STAFF LIABILITY — JUNE 30, 2002
The Tri-City Planning Board requested that numbers be prepared to show what the projected
liability to the member jurisdictions as of June 30, 2002. The numbers below reflect the
current staff of five employees. Those employees are Director Tom Jentz, Senior Planners
Narda Wilson and Eric Mulcahy, GIS Coordinator Cookie Davies and Office Administrator
Sandie Mueller. The accrued values of sick leave and vacation are listed below for both years
2001 and 2002. The June 30, 2001 figures are actuals. The June 30, 2002 figures are based
on the actual values as they stood on January 15, 2002 with the assumption that no vacation is
used by staff and 50% of those sick leave hours accrued over the next 6 months would be
saved.
TRI-CITY ACCRUED STAFF LIABILITY - JUNE 30, 2002
Activity
Value 6-30-01
Value 6-30-02
Vacation
$19,141
$ 25,799
Sick Leave
$ 9,573
$ 10,817
TOTAL
$28,714
$ 36,616
The table below shows the individual city's liability. The percentage share per jurisdiction is
based on the individual city's contribution rate in fiscal 2002. The accrued liabilities are
outlined above. The projected budget deficit used is $36,470 is based on projected revenues
and spending through the end of this year.
TRI-CITY PLANNING OFFICE PROJECTED LIABILITIES
JUNE 30, 2002
JURISDICTION %
ACCRUED STAFF
LIABILITY
2002 BUDGET
DEFICIT
TOTAL
Kalispell (56.64%)
$20,739
$20,657
$41,396
Whitefish (32.65%)
$11,955
$11,907
$23,862
C. Falls (10.71%)
$3,922
$3,906
$7,828
100%
$36,616
$36,470
$73,086
-8-