A $46.8 million budget plan for next fiscal year would have Kalispell hold the line on most spending and try to levy about one mill less than last year for “property tax relief” while still adding some money to its growing general fund reserves.

The 183-page document will be the focus of preliminary budget workshops Tuesday and Wednesday with the Kalispell City Council.

“We’ll go through those sessions and see what opportunities and questions emerge. This is just the first step in the process,” City Manager Doug Russell said about his proposed budget.

It’s Russell’s first budget as Kalispell’s top administrator. And it could mark the first time in years Kalispell does not levy the maximum amount of property taxes allowed by Montana law.

General fund expenditures would total $9.69 million, one-tenth of a percent lower than last year.

Property taxes supporting the general fund are estimated to grow by about $130,000 from new development. Total general fund revenues are estimated at $9.79 million for the year.

Russell’s budget plan aims to boost general fund reserves from 15.5 to 17.4 percent of revenues — short of the 20 percent target that city officials have set.

“Though there is available space within the taxation formula to accelerate the amount dedicated to reserves for this upcoming year, the budget is proposed with a balance of meeting that policy and the provision of property tax relief,” Russell said in a budget message to the city council.

The general fund would pick up the costs of two fire department positions and one police department position that were supported by grants and now must be paid for by the city.

Health insurance costs are growing less than was first anticipated — by about 2.5 percent — and an “experience factor” applied to the city results in flat premiums. That’s contrary to earlier warnings of five to nine percent growth in health insurance costs from the Montana Municipal Interlocal Authority.

Liability insurance rates also are projected to stay the same.

Russell’s budget plan proposes 2.5 percent pay raises for nonunion employees. Negotiations with two of the city’s three labor unions are ongoing.

Several “cost centers” are shifted in Russell’s budget plan.

The community and economic development department would move to the general fund. It has been funded with grants and other slowly declining revenues. “With the nature of the work being done, there is general benefit to the community as a whole,” Russell said about the department’s proposed move to the general fund.

Central garage costs would be split out of the general fund and allocated proportionally among the various city departments that use its services. Those costs totaled $544,000 in last year’s budget.

Russell proposes transferring several fire department employees into the ambulance fund and having the general fund kick in $250,000 to help pay for that service.

The transfer would pay for more than a quarter of ambulance service costs but still leave the special revenue fund with an estimated cash balance of zero at the end of the budget year. Kalispell collects on only about half of the service fees from its ambulance service.

“With the expectation of increased costs for capital replacement and rising personnel costs, and the reality that we don’t anticipate additional revenue, this is an area that will likely increase in respect to the general fund transfer,” Russell said of the city’s ambulance operations.

The budget plan does not propose any rate increases for the special assessments Kalispell levies for forestry operations, light maintenance and street maintenance, but the longer-term health of those funds needs to be discussed, Russell said.

A variety of enterprise funds, debt service funds, tax increment finance districts and component units such as the downtown and tourism business improvement districts make up the rest of the city budget. The final budget adopted for fiscal year 2012-13 totaled $44.98 million.

ONE OF RUSSELL’S pitches is to issue a request for qualifications or proposals for someone to manage Kalispell City Airport. That job is presently handled by Fred Leistiko at a budgeted cost of about $48,000 last year.

“Operational activities for the Kalispell airport are being investigated in an effort to identify revenue sources for maintenance and operation into the future,” Russell said.

More money to pay for maintenance and operation of the general aviation airport will be needed regardless of the outcome of a referendum this fall in which city voters will either uphold or overturn the Kalispell City Council’s 5-4 decision to upgrade the facility through the federal Airport Improvement Program.

“Currently, there is very little available for a sustainable maintenance operation. One of the options is to look for a contract management scenario for the airport, as has been done in other municipalities. We anticipate this leading to significant savings within this fund and providing revenue for ongoing maintenance and operational expenses,” Russell said.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.