Building slowdown spells budget changes

City manager recommends a mill levy election for 24/7 emergency services

By RICHARD HANNERS / Whitefish Pilot

Slowing growth has put the skids on next fiscal year's city budget, the Whitefish City Council learned May 5, but the city is looking for a way to implement 24/7 emergency services this year.

The city was unable to secure a federal grant to assist in the transition, and city manager Gary Marks has proposed taking a mill levy to the voters to fund 24/7 coverage.

While population continues to grow in Whitefish, reaching a projected 8,353 residents by next year, residential construction has sharply fallen from a high of 292 units in 2005 to 74 in 2007.

Nevertheless, Marks said in his preliminary budget overview, impacts from the building slowdown are slow in coming, as the "tail" of the boom continues to pass through the economy.

The number of new properties on the city tax rolls increased by about 18 percent from 2005 to 2007.

The city picked up nine new employees during that time period, but Marks pointed out that while population grew about 66 percent since 2000, staff has increased by 48 percent. Whitefish is also near the bottom when compared to its peer Montana towns for number of city employees.

Whitefish has maintained its 111-mill property tax rate since 2002 — the lowest among the top-13 cities in Montana. And that doesn't include the resort tax rebate, which brings the effective property tax rate down to 84 mills.

Higher real estate prices in Whitefish could boost actual tax dollars paid by homeowners, but using Whitefish's median home price, $335,000, Marks showed that homeowners pay about the same in property taxes in Whitefish as they do in Columbia Falls and Kalispell.

While the building slowdown has not meant a significant change in property tax revenue, Marks said, it has meant less revenue from zoning permits and planning fees. There's also been a decline in court fines, which Marks could not explain.

Marks recommended freezing general fund expenditures and staff levels and dipping into the city's healthy cash reserves as needed to address new union contracts.

"We can ride this out," he told the council.

Making the transition to 24/7 emergency services will require a levy election, Marks said, and he presented telling statistics to make a case for the fire department.

The number of city firefighters has held steady at 10 since 2005, but the number of calls for fire and ambulance services has increased by 43 percent since 2004.

The number of night calls for the same time period increased by 30 percent, reaching more than two per night on average in 2007. That could reach 2.35 calls per night by next year.

"That means firefighters work all day, then answer more than two calls at night, then show up at work in the morning," Marks said. "We're using them to the max. They could make mistakes when they're too tired."

To put that in perspective, Marks noted that emergency-response time in Whitefish is about 3 minutes in daytime and about 10 minutes at night, but the maximum needed response-time to avoid death from a cardiac arrest or stroke is about 6 minutes.

The city council does not have the authority to raise mill rates for property taxes, Marks told the Pilot.

"Only the voters can authorize an increase in the millage rate to support 24/7 emergency services," he said.

The council will consider a resolution at their May 19 meeting to call an election for a levy request, Marks said. If approved, a mail-in election could occur sometime in mid-August. If the voters approve the levy, the new levy could be assessed in time for property tax bills in November-December.

"This schedule would allow us to transition to 24/7 fire sometime in the first half of the fiscal year — prior to January 2009," he said.

Marks said he wasn't sure how many mills will be requested in the levy, but he will have the numbers by May 19.

City staff increased several times in the past three budgets without raising property taxes. In 2005, the city added two firefighter/EMT and two police positions; in 2006, it added three public works positions and one planning department position; and in 2007, it bumped up two existing positions in city court.

Public works employees are supported by utility fees, Marks noted, not property taxes. He also said there may not be a need to increase staff to implement the new Critical Areas Ordinance in the new budget.

"We are monitoring the situation at this time," he said. "Existing staff may absorb extra duties for now, but we are still evaluating and trying to get a glimpse of what to expect on the growth-front in the future."