01. Cover Page, Index, & City Manager LetterCITY OF KA ISPELL
MONTANA
FINAL
BUDGET DOCUMENT
CITY O
M-01VTA NA
FISCAL YEAR 2016-2017
CITY OF IALISPELL
FINAL BUDGET INDEX - FY2017
CITY MANAGER BUDGET MESSAGE: ' ' '
EXHIBITS:............................................................................................................................................1
- 23
GENERAL FUND:
1000 GENERAL FUND REVENUE AND SUMMARY
..
1000 GENERAL FUND APPROPRIATION SUMMARY ..................................................................
111 - 1V
400 GENERAL GOVERNMENT..................................................................................................................1
401 CITY MANAGER...................................................................................................................................2
401 HUMAN RESOURCES...........................................................................................................................
3
402 CITY COUNCIL......................................................................................................................................4
402 CITY CLERK........................................................................................ .................................................. 5
403 FINANCE.............................................................................................................................................6
404 CITY ATTORNEY.................................................................................................................................. 7
406 CITY COURT.................................................................................. ...................... .................................. 8
410 PUBLIC WORKS ADMINISTRATION................................................................................................. 9
412 CITY FACILITIES MAINTENANCE..................................................................................................10
413 POLICE........................................................................................................................................11
- 13
416 FIRE DEPARTMENT.................................................................................. ............... 14
420 PLANNING & ZONING DEPARTMENT ............................................. ......15
480 COMMUNITY DEVELOPMENT........................................................................................................16
1001 ON -BEHALF PAYMENTS-RETIREMENT........................................................................
SPECIAL REVENUE FUNDS:
PUBLIC SAFETY:
2230 AMBULANCE. ................................................................................................................................ 1-2
2956 FIRE GRANTS...................................................................................................................................... 3
2957 HAZMAT GRANT................................................................................................................................ 4
2399 PUBLIC SAFETY IMPACT FEE FUND .................... -
2915 HOMELAND SECURITY STONEGARDEN GRANT........................................................................7
2916 DRUG ENFORCEMENT GRANT....................................................................................................... 8
2918 CHR.P GRANT......................................................................................................9
2919 LAW ENFORCEMENT BLOCK GRANT..................................................................................10 - 11
2394 BUILDING CODE ENFORCEMENT........................................................................................12 - 13
PUBLIC WORKS:
2400 LIGHT MAINTENANCE............................................................................................................14 - 16
2420 GAS TAX......................................................................................................................................17 - 18
2500 SPECIAL STREET MAINTENANCE/ STREET DEPT. / SIGN & SIGNAL ............................19 - 24
2825 MCI GRANT....................................................................................................................................25
PARKS:
2210 PARK IN LIEU.................................................................................................................................... 26
2215 PARKS REVENUE AND FUND SUMMARY................................................................................... 27
430 PARKS MAINTENANCE...................................................................................................................28
440 ATHLETIC COMPLEX......................................................................................................................29
431 RECREATION PROGRAMS.............................................................................................................. 30
448 YOUTH CAMPS................................................................................................................................. 31
445 AQUATIC FACILITY......................................................................................................................... 32
2600 URBAN FORESTRY DISTRICT/2601 DEVELOPER. TREES..................................................33 - 34
COMMUNITY DEVELOPMENT:
2880 COMMUNITY DEVELOPMENT LOAN REVOLVING..................................................................35
2881 CO TY DEVELOPMENT LOAN REVOLVING 42
.............................................................36
2886 COMMUNITY DEVELOPMENT MISCELLANEOUS.........
....................................................37 - 38
2887 RURAL DEVELOPMENT GRANT...................................................................................................39
2888 RURAL DEVELOPMENT GRANT #2..............................................................................................40
2953 EPA BROWNFIELDS ASSESSMENT GRANT..............................................................41
2955 EPA BROWNFIELDS RWVOLVING LOAN FUND ................................... .................... 42
2991 TIGER GRANT.....................................................................................................43
2994 KIDSPORT GRANT...............................................................................................44
TIFS & OTHER:
2185 TAX INCREMENT-AIRPORT....................................................................... ..45 - 46
2188 TAX INCREMENT-WESTSIDE................... ............................................................................... 47- 48
2310 OLD SCHOOL STATION TECHNOLOGY TIF................................................................................ 49
2311 OLD SCHOOL STATION INDUSTRIAL TIF................................................................................... 50
2372 HEALTH FUND -PERMISSIVE LEVY.............................................................................................. 51
DEBT SERVICE FUNDS:
DEBTSERVICE SUMMARY....................................................................................................................... I
CAPITAL PROJECT FUNDS:
4290 SIDEWALK AND CURB CONSTRUCTION ......................................................................................2
4150 FIRE PUMPER.......................................................................................................3
ENTERPRISE FUNDS:
5160 AIRPORT OPERATIONS1-2 -- 2
5210 WATER OPERATIONS 1 BILLING ............................................. 0......................... -
5310 SEWER OPERATIONS l BILLING.................................................................0...........................10 - 15
5310 WASTEWATER TREATMENT PLANT...................................................................................1 6 — 20
5349 STORM SEWER....................................................................... .21 - 25
5510 SOLID WASTE...........................................................................................................................26 — 28
INTERNAL SERVICE FUNDS:
6010 CENTRAL GARAGE................................................................................................................... 1-3
6030 INFORMATION TECHNOLOGY............................................................................................... 4-6
COMPONENT UNITS:
7855 TOURISM BUSINESS IMPROVEMENT DISTRICT..................................................................1 - 29
2700 BUSINESS IMPROVEMENT DISTRICT...................................................................................30 - 34
FIVE YEAR CAPITAL IMPROVEMENT PLAN:
GENERAL FUND, AMBULANCE, BUILDING, & SPECIAL STREET MAINTENANCE ...................... I
PARKS, FORESTRY, AIRPORT, & WATER...............................................................................................2
SEWER, WASTE WATER TREATMENT PLANT, STORM & SOLID WASTE ....................................... 3
CENTRAL GARAGE and INFORMATION TECHNOLOGY......................................................................4
I
_ r ali*spell
City of
•Y
OFFICE OF THE CITY MANAGER
201 First Avenue East
1IONTAN -T Kalispell, MT 59903
`
April 23, 2016
Honorable Mayor Mark Johnson
Members of the Kalispell City Council
Po Box 1997
Kalispell, MT 59903
Ladies and Gentlemen,
It is my pleasure to submit for your consideration, the Fiscal Year 2017 proposed budget for all
municipal operations. This letter is intended to serve as the budget message for this proposal,
and outlines the nature of the approximate $68,000,000 budget plan for the coming year. This
budget is impacted by significant capital projects (TIGER grant, Kidsports grant, and 4th Ave
East reconstruction). This message is not intended to identify all the specifics of the budget
document, but rather provide an overview of the revenues and expenditures, fund levels, unique
attributes impacting the budget, and significant budget related activities of the organization.
Moreover, as changes will be implemented between the preliminary budget and final budget
adoption, numbers in this document may be slightly different than the numbers in the budget
document itself.
The budget document is a substantial policy and managerial tool that highlights the interaction
between the staff, the governing body, and the community. Through the budget document,
service levels are established, policy directions are initiated, and fiscal positioning is achieved.
The budget is an effort in cooperation between the entities of the City and the public as a whole.
During my time in Kalispell, we have seen the budget objective informally evolve from building
financial sustainability, to refining service delivery models, to re-establishing the service level in
many of our funds. This year's budget moves toward improving our service delivery capabilities
in some of our core functions, including police, parks, and street operations. FY16 brought an
increased amount of growth to the budget that marked the beginning of looking at these
services_ while we aren't forecasting as much revenue growth in this year's budget, we are
recommending the increase in our service delivery operations for these functions, while at the
same time keeping a tax level that is at the same as last year. we are seeing commercial
growth taping place with large projects and are involved in large scale improvements with our
own public infrastructure system, including our trails and athletic facilities. with this increased
activity in the area, we are seeing and preparing for increased service delivery requirements.
The fiscal restraint and flexibility that has been provided through all levels of the organization
over the last: four years, now provides us the opportunity and flexibility to engage in these types
of reviews and discussions.
I any pleased to present the FY17 proposed budget and am comfortable in the recommended
appropriations, the expected service levels resulting from this funding distribution, and the
efforts to adjust service levels and delivery methodologies to the community that we are serving.
ACCOMPLISHMENTS IN 2015 AND 2016
As the FY17 budget is proposed, it is appropriate to return to recent municipal
accomplishments. while the listed items are only a sample of the improvements and respective
accomplishments, they do represent a concerted effort across departments for the improvement
of services being offered by the City of Kalispell, and in some cases dictate the projects that we
will be undertaking in FY17.
Acquired ownership interest in 8 parcels of land at Old school station as a means of
managing the outstanding debt obligation for the special assessment improvements and
to facilitate the opportunity for private investment in the development. These properties
have been recently placed on the market and have seen some activity, though we have
yet to receive an offer on a parcel;
)o. Following the approval of a Resolution of Intention for the construction of the west side
Interceptor as part of the deviation process for the active management of the allocated,
but unused, capacity within the sewer conveyance system, we began the process of
land and easement acquisition for the preferred route for this major infrastructure
improvement. currently, the project is on schedule for construction in FY18;
➢ This past fiscal year, we received a $1 o million TIGER grant for the development of a rail
park and pedestrian trail through the downtown CORE area. This project includes
removal of the rail from the downtown area in an effort to open this section of town to
increased pedestrian, commercial, and residential activity. We are currently working
through requirements of the grant program. Having previously completed design work
for the rail park, as soon as we complete the pre -grant requirement, we will be ready to
move forward with construction;
> Partnered with Kidsports on a successful application for a $1.4 million grant to iprove the
infrastructure at the Mouth Athletic Complex. This will lead to the creation of 7 multi-
purpose fields and a possible Babe Ruth baseball field. We are currently in the process
of developing the final engineering;
> After several years of community discussions, passed a parking management plan for
the area around Flathead High school;
> During last year's budget sessions we discussed shifting our utility billing operations
from a schedule of billing every two months to a monthly billing cycle. We have
implemented this change as of January 1, and are currently monitoring the impact it has
had on billing collections. The early trend is that it has reduced shut offs by 50%. Not
only is this beneficial to our collection operations, it is also a benefit to those that are
impacted by water service disruption for non-payment. While it is too early to make a
definitive conclusion, the early trend appears beneficial;
Partnered with the City of whitefish to aid them in plan review for commercial
construction projects;
Anticipating the completion of the Alternate Highway/Bypass and Four Mile Drive.
These two projects will have a significant impact on traffic patterns and are leading to in-
depth discussion of how transportation will be Managed in the future. This discussion
included the recent RPA presentation which looked at 8 potential traffic alternatives;
I
Reviewed and adopted an updated Police and Fire Impact fee report. we are currently
in the update of our final impact fee. The storrnsewer update should be finished during
FY17;
)o, Implemented a social media program to aid in the overall communication efforts with the
community. we now have a social media presence on Facebook and Twitter;
Escalated Dead Elm Tree and tree stump removal by shifting resources from forestry
personnel into private contracts dedicated to those two areas;
➢ Initiated an update of the south Kalispell Urban Renewal Plan and retained CTA
Architects to facilitate this update. This plan is currently moving through the Urban
Renewal Agency and will likely come before Council in time for establishing a long tern
direction for south Kalispell, and making appropriate budgetary decisions;
Completed a review and implementation of a new rate structure for the City of Kalispell's
Emergency Medical services;
)o, Initiated and adopted an organization wide -leadership training program. This six module
program will be completed by the end of June and is providing valuable leadership,
communication, and conflict resolution training;
> Participated in a third outreach effort in Washington, D.G., with elected representatives
and Federal Agencies related to the TIGER Grant application;
Continuing a Kalispell Downtown long term review, including the nature of traffic in the
downtown area and how it is anticipated to develop with the completion of the bypass
and how it will interact with the implementation of the TIGER project in the CORE area.
PROPOSED FY17 BUDGET AT A GLANCE
Major highlights and conditions of the proposed FYI budget include the following:
The proposed FY17 budget is based on service levels needed to accomplish the goals
outlined in the budget for each department, balanced with available resources.
Property tax is the primary source of revenue for the general fund. It is limited to
increases through new growth and the allowable inflationary index as identified in state
statutes. Projecting property taxes is a difficult assumption to make as final valuations
are not released until August, when we will know what the final property tax valuation is
for the year. Reviewing new additions to county records, however, we feel comfortable
with the forecast applied to the revenue projections.
Rased on the projections we are making, we are recommending not increasing property
taxes by the allowable inflationary adjustment. Additionally, we are recommending
lowering property taxes in the general fund by the same amount that property taxes will
be increased by the permissive medical levy. This amount would be allowable to be
levied in future years if circumstances require it. But, for FY17, our property taxes will be
neutral to the taxpayers of Kalispell.
➢ Public works has scheduled an improvement project for 41h Avenue East. This includes
water and road replacement. There are 14 blocks that are part of the overall project.
During budget discussions last year, Council provided direction to staff to move this
project forward as one project in order to minimize neighborhood impact and to take
advantage of one-time mobilization costs. As such, this project has been placed into this
year's budget and is broken out as expenditures into the appropriate funds.
Information services has initiated a redesign of the municipal website. we have been in
discussion with CivicPlus, which offers a web -based experience geared toward
municipalities. In addition to providing an increased user experience and the ability to
H
more easily make changes within the website format, we are planning to incorporate
additional online billing options for some of our services through the unproved platform.
The agreement with CivicPlus is spread over four years and includes two full
redesigns/updates.
> A new fund has been created in this year's budget. To track the revenues and
expenditures for the TIGER grant, we have established it as an independent fund within
the budget. This will be of a significant aid as we work through this project. we
anticipate construction of the rail park portion of the TIGER grant to commence during
the FY17 fiscal year.
In addition to a new fund being created for the TIGER grant, we are also adding a fund
to track revenues and expenditures for the Kidsports grant. This project will likely be
substantially completed in FY17, with some finishing items projected for FY18.
The Community Development special revenue fund is reflecting the transfer of funds to
cover the annual assessments on the 0 parcels at old school Station. The community
Development fund is responsible for maintaining the parcels and paying the special
assessments on an annual basis. Additionally, it will be receiving funding from the Tax
Increment Districts to reimburse the fund for the initial land acquisition cost.
n 2010, the budget was prepared for the park's department by dedicating a set amount
of mills (22.4) that was intended to hold steady and provide a consistent revenue stream
that increases with growth relative to the general fund. The concept behind this strategy
was valuable in the belief that revenues for park operations would be consistent with the
growth and demands placed on the department. However, changes in valuations have
not been consistent with growth in general fund revenues. For example, when centrally
assessed property takes decreased, the value of the mill decreased. The corresponding
revenue in the parks also decreased as it was tied to 22.4 mills. However, the general
fund revenue did not decrease as its revenue is not tied to mills, but to the previous
year's appropriation. Thus, the general fund grows while the parks revenue decreases.
Since 2010, general fund revenue has grown by 19%. Parks revenue, if based on 22.4
mills, would not have increased, but would actually have decreased a very small
amount, less than 1 %, during that same time frame. This year's budget is appropriating
additional funding to the parks department in an effort to account for the impact of the
mill levy value not being a consistent standard when compared to overall growth. This
increased funding will provide for a greater attention to the overall operation of the parrs
department, including the parks system, the Youth Athletic Complex, and the forestry
operations. over the next five years, potential improvements in the parks system would
include:
o Additional FTE that is included in this budget that would provide help to parks,
Youth Athletic Complex, and forestry (see section on Full-time equivalencies)
o Improvements in the park assets, including renovations of bathroom facilities
proposed for Woodlawn Park in this year's budget
o ADA improvements throughout the system
o Trails maintenance
o Asphalt drives and parking lot maintenance within the parrs
o Irrigation improvements
o Playground improvements
o Landscaping improvements
Activity in the Building Department has been accelerated, especially in the areas of
commercial plan review and inspections, Revenue amounts exceeded FY16
iv
expectations and the current information regarding projects ready to be submitted would
significantly exceed last year's budgeted amount as well. As such, our department is
facing a significant increase in service delivery expectations. To account for this
increase we are looking at increasing staffing in CIS(with a correlating decrease in CIS
in planning), an increase in support staff and inspection staff. These positions are
explained more in-depth below in the full-time equivalencies subsection.
);> Full-time equivalencies:
o Building Department: 1) This year, we are proposing an increase of 0.2 (8 hours
a week) FTE in our CIS operations for the Building Department. The 0.2 hours
has previously been authorized, though not appropriated in the Planning
Department. 2) Currently, the Building Department shares 0.25 of an employee
with Community Development to aid in front desk support. This 0.25 is being
shifted completely to Community Development to aid in support for project
implementation and administration. It is being replaced by 0.6 FTE in the
Building Department for a new part time employee to aid in front desk support.
3) A new full time FTE is being added to the (Building Department as an
inspector. The current and anticipated commercial projects support adding this
position to provide the necessary service delivery for review of plans and
inspection services. The addition of the personnel within this fund is supported
entirely by its revenues and is forecasted to be able to support the increased
personnel through anticipated succession planning, should revenues at some
point in the future drop below sustaining levels for the fund.
o Parks Department: For FY17, we are proposing an additional FTE that would be
split between the Mouth Athletic Complex (0.80) and Forestry (0.20). There
would be an additional reduction of a seasonal staff at the Youth Athletic
Complex. The change to an FTE, however, would provide the complex with the
manpower at the beginning (April and May) and ending (September and October)
of the season when our part-time or seasonal help is typically no longer
available. Typically, we pull personnel into Youth Complex operations from park
activities. Having an additional staff member assigned to the Youth Complex
would allow dedicated attention to these operations and help the parks' crews
maintain their duties throughout the rest of the system. During the winter, this
position would revert to forestry to aid in the maintenance of the forestry
operations that we have not been able to get to with the emphasis on contract
duties for the removal of trees, rather than in-house personnel to respond to daily
needs of the division.
o Streets Department: The FY 17 budget is being recommended with an additional
FTE in the Streets Department to maintain our level of services. The level of
staffing in the street Department has not changed since 1093. Since then our
population has increased by over 5000 people and our roads/alleys have
increased from 100 to 153_6 miles. While all street department operations would
benefit with the added resource, it might be most notable in snow removal
operations where the added miles and subdivisions are taxing our operations.
o Police Department: Two officers are included in the FY17 budget. Both of these
officers are planned to be funded through the same grant program that is
providing funding for one of our current officers. In looking at potentially having
three officers on a grant program creates the challenge of funding these positions
once the grant program expires. This has been addressed by funding capital in
v
the same amount during this time period (explained more fully in the next budget
highlight paragraph). In addition to additional officers, we are recommending an
additional 0.5 hours for our crime analystlevidence technician activities. 10 hours
would be allocated to crime analyst activities and 10 hours would be allocated to
evidence processing.
> For the past several budget reviews, discussions have included trying to find a way to
fund capital throughout all of our funds. The FY17 budget recommends increasing our
funding designated for capital line item by about $240,000. This amount is not projected
to perpetually fund capital. Rather it is intended to provide a needed allocation for future
capital costs within the general fund and will be moved to operations when the grant
funding is no longer available. As can be seen within this budget, respectively, we are
planning to purchase a fire apparatus that would be funded through a debt instrument.
Had a capital allocation been placed to account for depreciation of this equipment, we
would be looking at being able to purchase the equipment without debt and its resulting
interest payment. our intent is to build a ba-rance to fund -these needed capital
purchases with an amount that would otherwise fund the police officers that are being
funded through grant funds. when the grant funding expires, the amount of funding
going to capital will decrease to cover the ongoing personnel costs. Thus, we are able
to provide a mechanism to fund capital in the general fund, and also add law
enforcement officers to our public safety efforts.
Previously, the ambulance fund has been a point of discussion during the budget
sessions. This past year, staffing was held at 6 personnel, rather than brining in a
seventh person on overtime in situations where we previously called in the additional
responder. At the beginning of the year, council adopted a new rate structure for EMS
services. we anticipate that this increase will make the department self-sufficient. At
the time of the recommendation of the preliminary budget, we are only looping at one to
two months of receipts, which is a relatively small data sample to make projections. As
such, the transfer being recommended from the general fund to the ambulance service
is $150,000. This is down from last year's budgeted transfer of $380,000. At the time of
final budget preparation and adoption, we will have an additional four months of data to
examine and revise projections.
We are not looking at any rate increases as part of the preliminary budget proposal.
However, we are recommending review of funding for two different areas of service. 1 j
As we are currently in the process of reviewing storrnsewer impact fees, a process that
will be completed during FY17, we feel it will be a good time to review stormsewer
assessments as well. This way, the discussion on impact fees is not held in isolation of
assessment rates. 2) Though we are not proposing a rate increase in Forestry, we do
anticipate spending significant time during the budget workshop to review the service
level in this fund and the challenges faced with its current personnel staffing levels.
While we have been able to advance the tree and stump removal in this fund, general
operations for tree maintenance is falling behind.
➢ This is the third year of including a 5-year Capital Improvement Plan for the municipal
departments that outlines expected timeframes for equipment replacement and capital
projects. This schedule helps to forecast the needs of the department and outlines
projects that are being planned in future years. The GIP is updated on an annual basis
with some projects being adjusted on the timeline and equipment being deferred, based
upon priorities and available resources.
V1
For the fourth year in a row, we are receiving a credit from MMIA for liability insurance.
This credit has been applied as a decreased expense.
➢ Health insurance costs from MMIA are projected to increase for the second time in the
past four years. This year's increase is projected to be 7.3%. we have been fortunate
to not have experienced the larger increases that have been present in the insurance
industry.
GENERAL FUND REVENUE
PROPERTY TAX
Property tax is the primary revenue source within the general fund. As we do not receive final
property valuations for the current year until the first week in August, we are required to forecast
revenues with incomplete information. For FY1 7, we anticipate the valuation to increase in
conjunction with last year's growth of taxable property. Large construction projects that are
anticipated to be built in FY1 7 are on tax exempt parcels. Thus, future year growth may not
hold to the same levels that we saw in FY 16 and anticipate i n FY 17.
General Fund Revenues by Percentage
General Fund Revenue By Type FY17
Fines and
Forfeitures
5%
Charges for
Services
7%
Permits
1%
vi1
Miscellaneous
9%
1
Pro ert Taxes
52%
-,-MOO,
Investment
Revenue
0%
GENERAL FUND EXPENDITURES
Expenditures in the General Fund are budgeted at $10,757,653. This is a 3% increase from the
total expenditures adopted in the FY16 budget, Expenditure categories are broken down in the
chart below.
Breakdown of General Fund Expenditures by Percentage
General Fund Expenditures by Type FYI
Capital
2%
Services and Debt Service
Supplies 0%
21%
Personal
Services
77%
SPENDING LEVELS BY DEPARTMENT
The following table provides a comparison of general fund departmental expenditures from
FY16 to FY17. The table is included to demonstrate the funding levels for respective activity in
this year's recommended budget as compared to the previous year. Changes may be indicative
of large capital items, significant additions to departmental responsibilities, or other changes in
operation and maintenance costs.
Table 1. comparison Increase from Prior Year- General Fund Departments
FY2016 FY2017
Adopted Proposed
General Fund Departments Budget Budget % change
City Manager
$156P111
$1�9,75-0
-3%
Human Resources
$162,534
$168,445
3.6%
Mayor/Council
$132fi77,
$147,?610
11.3°
City Clerk
$120,?694
$124?876
3.4%
Finance
$286,451
$279,316
-2.5%
Attorney
$450p658
$470,,722
4.5%
Municipal Court
$351,404
$362,869
3.3%
Public Works
$40,638
$39,711
-2.2%
City Hall
$279,179
$307,050
16%
Police
$4,4520984
$4?728t647
6.2%
Fire
$2,r735.,865
$2p670j,356
-2.4%
Planning Department
$357p954
$371j258
3.7%
Community Development
$62,165
$85.oU�A__38
ix
SPECIAL REVENUE AND ENTERPRISE FUND REVENUES, EXPENDITURES, AND
BALANCES
Below is a table of the Special Revenue and Enterprise Funds, with their related revenues,
expenditures, and fund balances. Those funds in bold are addressed in the narrative following
the table.
Table 2. Revenues, Expenditures, and Fund Balances In Special Revenue and Enterprise
Funds
Fund Revenues Expenditures Balance
SPECIAL REVENUE FUNDS
Parrs
$1,798,800
$1*781t858
$413,687
Forestry
65, 600
$317,933
$87,298
Ambulance
$1,151,000
$1,286,176
$190,788
Building Department
$534f 500
$709,186
$491,514
Light Maintenance
$386,900
$366,365
$189.122
Gas Tax
$4060748
$496,562
$250,831
Street maintenance
$3,595,518
$4.p158,r524
$1,1361,377
ENTERPRISE FUNDS
Airport Operations
,80
$76
$68,147
$152,871
Water
$518031627
$6,?776,,561
$710701864
Sewer
$41985,000
$101273,292
$41992o051
Storm Sewer
$1,404,500
$21311,483
$2,366,305
Solid Waste 1$984,600
1 $1,200,059
1$855.,054
X
FORESTRY
The Forestry special Revenue Fund was established in 2001 with the following objectives; 1)
implement a hazard reduction program, 2) replacement for removals or vacant sites, 3) pruning
cycles for inventoried trees, 4} public education and site assistance, and 5) maintain a
departmental tree maintenance unit. The primary function the department has concentrated on
the past two years is the removal of Dutch Elm Disease through an outsourced agreement with
a private contractor. This process was further extended for stump removal this last fiscal year,
While we have made definitive progress in these two areas, the other functions of the
department have been relegated to a lesser priority due to lack of resources.
While we are not recommending a increase in forestry assessments for this budget, we are
looking at having extensive discussions during the budget workshop to review the level of
service options and resulting assessment breakdown. Adding the additional 0.2 FTE will
provide an opportunity to address some of the deferred operations. A full review, Fidwever, will
be beneficial to identify the service level desired.
AMBULANCE
Previous budgets have outlined the challenges in funding this operation. History has included a
dedicated EMS levy that failed to pass in 2015. Since then, we have reduced call -in staffing
that aligned with a b person shift. This past year, we implemented a fee schedule based upon
the fees of a private company serving one a Montana community. It is anticipated that this fee
schedule will eliminate the amount transferred from the general fund. For this years' budget, we
reduced the transfer to $150,000 as we do not have enough data to forecast its elimination.
However, we do hope to have a Better idea by the time of the presentation of the final budget.
BUILDING DEPARTMENT
The Building Department acts as an enterprise fund that is allowed by state law to have a one
year contingency fund, and is required to have spending levels for the next year to lower the
reserve amount. Last year, we reached that level due to increased activity in building. To meet
this demand, we added an additional building inspector. With the addition of revenue from our
partnership with Whitefish to conduct their commercial plan reviews, and some significant
commercial projects, we are again facing the same situation as last year. Thus, we are adding
personnel to meet this demand in inspections and support with clerical and GIS operations. As
an enterprise operation, this fund's revenues and expenditures will be monitored to maintain the
proper balance.
AIRPORT
We are currently in the review of the south Kalispell Urban Renewal Flan update. This updated
plan will provide an opportunity to re --establish a vision for south Kalispell and the Kalispell City
Airport. The primary question emerging from the plan update is whether to keep the airport or to
close it? The driver for both of these options is how will it be funded? As this process is in the
final review of the Urban Renewal Agency, and has already been before the City Council at a
work -session, we are hopeful to have direction by the time of the final budget submission in
August. This would provide and funding/financing initiatives to be placed into the FY17 budget
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appropriations. Of course, if a decision comes at a later time, the budget can be amended to
account for necessary changes.
PERSONNEL COMPENSATION AND BENEFITS
Over the past four years, we have strived to create compensation decisions that provide equity
across the organization. Attempting to spread this equity to the non -represented employees of
the City of Kalispell, we have averaged the total compensation (step plus base adjustment)
increase for the three labor unions to apply that amount to the non -represented employees.
The FY17 labor contract compensation increases are 3.3%, 1.3%, and currently in negotiation
for the IAFF labor unit (these are listed in the table below). This currently averages to a 2.3%
total compensation increase which is being proposed for the non -represented employees.
Salary Increase for -Respective Labor groups
(Overall Increase- Inclusive of Base Adjustment, Longevity, Merit, etc.)
Police Contract
Fire Contract
AFSCIVIE Contract
Non-Unim
FY 15
FY 16
FY17
FY 15
FY 16
FY17
FY 15
FY 16
FY17
FY 15
FY 16
FY17
2.4%
3.0%
3.3%
3.3%
3.3%
NA
3.3%
3.3%
1.3%
3.0%
3.2%
2.3%
As part of last year's budget approval, a market -based pay matrix was implemented in order to
better align our organization with the market. Following the adoption of this process and matrix
by AFSCIVIE, we initiated the same process with the non -represented groups as a means to
further the equity across the organization. The outcome for this effort was a wage matrix that
provides consistency for advancement through a respective pay range for employees while
connecting every position with the respective market. Similar to the implementation of the
AFSCIVIE matrix, 1.3% is being appropriated as part of the total compensation to allow for step
advancement, provided training requirements have been met for each position. This 1.3% is
similar to the annual step increases in our police and fire union contracts. For FY17 an
additional 1 % is being appropriated as a base adjustment. This amount would equal the
average total compensation of 2.3% for the labor units.
Health care increases for MMIA are projected to increase 7.3% for FY17 for the City of Kalispell.
This increase is shared between the city and the employees, depending upon the respective
employee plan. Two years ago, we did not have an increase in our plan. Last year the increase
was 5.3%. overall, our average for the three years is 4.2%. In an effort to maintain lower rates,
IV MIA continues to encourage employees to participate in their wellness program activities,
which are designed to identify preventive illnesses and avoid long-term cost exposures.
CONCLUSION
The proposed budget was developed and is recommended as an appropriate use of the
resources available to the City. The focus of the budget has been in identifying areas of service
delivery need within the community and focusing resources in these areas. Specifically, we see
this in law enforcement, parks, and street budgets. With large infrastructure improvements
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being undertaken, it is important to not neglect our basic services. While there is a significant
amount of optimism and activity in our community surrounding the enhancement of the City of
Kalispell, it is important to recognize that this growth increases the need for resources to be
invested in our basic services. Hence, we are looking forward the improvements that can be
made within these respective activities over the next fiscal year.
As the local economy continues to reflect growth in commercial building, we anticipate a
continuing growth period for fiscal year 2018. Watching the market respond to the public
projects in the next several years will be closely watched as we forecast further into the future.
While the fiscal developments may always be a challenge to predict, the activity and projects
identified in this year's budget will likely have a long terra impact within the community.
In conclusion, I believe the preliminary budget preparations are a demonstration of the efforts of
the employees of the City of Kalispell in striving for an improved community through their
collective efforts. Furthermore, the direction provided by the City Council has been effective in
outlining areas of focus for service delivery in the community. Finance Director, Rick Wills, has
done an exceptional job in providing incremental changes to improve budget presentation, fiscal
sustainability, and financial oversight. The collective goal of all involved has been to create the
mechanism from which municipal services are delivered to the residents of the City of Kalispell.
With these acknowledgements, I present the proposed FY17 budget.
Respectfully,
�. 4 64"- ,
Douglas R. Russell
City Manager
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