Flathead County Administrative Officer Mike Pence’s budget memorandum to department heads this week had an air of deja vu to it — reduce spending and continue a hiring freeze.

It’s a strategy that worked for the fiscal 2010 budget and Pence is counting on it to work again as managers begin work on the 2011 budget.

“It is amazing that we are in as good a shape as we are in light of the economic situation we are faced with,” Pence said. “We’re pretty much right on track where we expected to be.”

A fiscal 2010 midyear review shows the county with a healthy cash reserve of more than $8.4 million. The county is allowed a cash reserve of up to 33 percent of the budget; currently it’s at 29.14 percent.

The tax delinquency rate is up, but not as much as county officials had feared.

As of Friday the delinquency rate was 10.3 percent, with roughly $6.7 million of the $65.5 million in property taxes still unpaid. Last year at this time it was 8.9 percent, Treasurer Adele Krantz said.

Given the statewide property reappraisal last year and the number of appeals it produced, Pence said the county expected somewhat of an increase in the delinquent tax rate.

“Eventually, most people will pay their taxes, depending on the outcome of the reappraisals,” he said.

Department heads have until March 12 to pencil out the coming fiscal year in terms of salary spread, performance measures, workload, program descriptions, goals and capital improvement plans. At a recent planning session the commissioners asked Pence to list all programs in the county and analyze them to determine what’s necessary and what’s not.

The state law that details the procedure for calculating tax levies limits the county to a tax-levy increase of one half of the Consumer Price Index average over the past three years. The three-year average for Flathead County is 2.13 percent, allowing the county to increase property taxes a maximum of 1.07 percent on the current tax base, Pence said.

“With another slow year on the construction front, we will not see a large increase in new tax dollars from development so new tax revenue based on growth will be minimum,” he said.

Given that scenario, the commissioners have asked all county departments to reduce their budget requests and make no new hiring requests for full-time employees in the 2011 budget.

Pence said it’s unlikely that any kind of cost-of-living pay increase will be figured into the upcoming budget, but earned longevity and step increases should continue, “with the assumption that we can make it work by lowering costs in other areas,” he said.

 Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com