Budgeting launched along a whole new track for the city of Kalispell Monday night.

That's when City Manager Jane Howington began the informational process of moving, as she put it, from the big picture to the very focused view.

On the fourth Monday for the coming six months, the council's regularly scheduled work session will be devoted to learning what goes into decisions behind setting a municipal budget and then honing in on specifics in each city department.

In the seventh month, they will review the budget that staff compiles from the series of sessions.

Monday night was devoted to land planning, legal and financial issues that define Kalispell today.

Planning Director Tom Jentz gave an overview of the city's growth history, its inventory of residential and commercial lots and what the council might expect down the line.

The 2000 Census put the city's population at 14,223. The current estimate is between 20,500 and 21,000, Jentz said, a phenomenal growth after decades of hovering around 10,000 and 12,000.

"We grew as much in 60 years [combined] as we did in the last 10 years," he said.

An estimated 23,000 people live in the county just outside Kalispell city limits, he said, using city services but not contributing to the tax base. Annexations sprouting off from Kalispell's core over the years produced "a city growing around a city … a constricted city" trying to play catch-up with its boundaries.

Housing availability always has been a roller coaster here, he said, with it standing near 1999 levels this year after a string of high-rolling years from 2004 to 2007.

"We should build about 100 units this year," he said, "which isn't bad but we got used to living high up in the thin air."

Commercial growth has seen a shift along with policy changes.

A million square feet were built in Evergreen in the 1990s, he said, but beginning in 2000 it "pretty much all went to Kalispell" with almost a million square feet of commercial space built in the city since then. It primarily followed U.S. 93 and U.S. 2 and essentially avoided downtown.

Annexed land grew, with much of it - from Silverbrook Estates on the north to Old School Station on the south - now sitting empty. That can be good, Jentz said, because it allows the city to do a good bit of planning without the developer having to wade through the arduous process beginning with annexation and initial zoning.

There are 840 platted lots sitting vacant today, he said, with a third of them in the high-end Silverbrook.

Remove them from the equation and the remaining 500 or so lots represent a five-year supply in today's market. Another 1,300 lots are in the preliminary plat process, a 10-year supply in today's market, although some will drop out of the process.

Jentz doesn't expect Kalispell's market to stay where it is today, though. It will be bleak through February or March, he conceded, but his office already is talking with builders interested in moving forward next spring.

The allure of the intermountain West, urban flight from the population centers and the Flathead's natural beauty point to growth here, he said. As markets recover elsewhere, people will be able to sell their city homes and move here.

Commercial land is scarce in the city, however, making it tougher to attract new businesses. If it had stayed on the same track it was on, the city would have been out of commercial land already. But the pads in Spring Prairie's north end went vacant when Kohl's and PetSmart backed out, and Glacier Town Center has come to a stop.

The Evergreen space that will be vacated when Wal-Mart moves to Hutton Ranch Plaza will fill a minimal need, Jentz said.

He said the city needs to update its growth policy and address many of these issues. The current one was written around 1999-2001, he said. But with 7,000 more people and a changed economy, the city needs a new policy to guide it into the future.

City Attorney Charles Harball led off Monday's session with a rundown of Montana law as it applies to the way a city runs.

Kalispell is a Class 1 city that is required to provide services such as a health department, police department, and fire department with no volunteers.

After the 1972 Montana Constitutional Convention required a public vote every 10 years to decide if a change in city government is needed, Kalispell voters chose a manager-commission form of government. Kalispell crafted a hybrid, Harball said, of a city manager with the council ward system and mayor.

It's a "general powers" city, running under the authority granted in the state constitution rather than becoming a charter city that writes its own constitution.

Finance Director Amy Robertson later explained that the city must run its finances according to Generally Accepted Accounting Principles, an industrywide standard.

Within the city budget, governmental funds must be grouped together and proprietary funds grouped in another category. Annual audits are required, with Denning Downey and Associates CPA the only local firm on the state list of qualified auditors, Robertson said.

Montana sets a city's debt limit at 2.5 percent of its assets, capping Kalispell's debt at $31 million. The city is far from that with its current debt load of about $3.6 million.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com