Flathead County’s $102.3 million final budget — up 26 percent over last year — includes a funding mechanism to begin setting aside money for a jail expansion.

The commissioners will hold a public hearing at 9:30 a.m. Thursday before voting on the budget.

Much of the budget increase is tied to capital improvement projects and a new funding concept outlined in county Administrator Mike Pence’s budget message.

He said the 26 percent increase doesn’t reflect the actual total property tax to be collected for the coming year, which is up only 4.8 percent in actual dollars.

“Much of the budget increase is due to fund transfers,” Pence stressed. “We did so many capital transfers, it doesn’t really tell the real story as far as impact to taxpayers.”

The proposed budget adds 15 full-time employees to the county, pushing the current work force of 525 to 540 full-time-equivalent employees.

The Sheriff’s Office, Human Resources and Planning Department are each getting an additional employee. Four employees are being added to the Solid Waste District to staff green-box sites; those jobs will be funded by the current landfill tax paid by county property owners. The health department is getting seven more employees, with full funding from federal and/or state grants. The Agency on Aging is getting a full-time equivalent that’s two part-time, grant-funded positions.

“This year’s budget is not our standard ‘status quo’ operational and capital budget,” Pence noted.

While the county has levied the maximum number of mills allowed by law most years, during the recession the commissioners opted to leave some mills “on the table,” Pence said, to soften the tax burden for county residents. At the same time the county began a cost-saving initiative, asking departments to hold the line on spending and freezing pay raises for a time.

The county is able to reclaim those mills from past years and levy them in future years, Pence explained. That’s the crux of the proposal.

“The commissioners directed staff to levy to our maximum legal ability and to earmark this new tax revenue and transfer it to the capital improvement plan for construction of a long-needed adult detention facility expansion,” he said in his budget memorandum.

The additional tax money would be levied over seven years and could generate close to $10 million.

Overcrowding at the county jail, built in 1985, has been a problem for decades. A 1992 Daily Inter Lake article indicated that the jail already at that point “bulges at the seams as daily prisoner counts exceed the number of beds.”

Sheriff Chuck Curry reiterated the problem in an Inter Lake story last year that reported an average of 89 inmates in a facility built to house 63 prisoners at capacity.

Whenever the jail population reaches 92, law officials start restricting the crimes for which they will incarcerate people, although they always accept new inmates on felonies, DUIs and violent crimes.

It’s questionable whether Flathead County could get voter approval for a bond issue to pay for an expanded jail, Pence said. That’s why he and other county officials are excited about a funding concept that would gradually set aside the money.

If the county’s payment-in-lieu-of-taxes funding from the federal government continues, “we could in two years transfer some of those funds as well, to add to the mill levy dollars to potentially achieve full funding in [the seven-year] time frame,” Pence said. “We’re trying to create a financing mechanism that makes sense.”

An additional capital improvement project, a $3 million community gymnasium, also is proposed within the same funding mechanism, with the county paying half the cost and private donations matching the other half. County Parks and Recreation Director Jed Fisher has talked to the commissioners on several occasions in recent years about the need for more gymnasium space for the county’s youth sports programs.

“It’s important to note that the commissioners will need to annually determine and decide if they will authorize these capital dollars generated by levying the maximum amounts” for the jail expansion and gymnasium, he said.

If other critical needs arise in future years, the commissioners would have the discretion to reallocate those mill levies.

The final budget includes $14.5 million in capital improvements for the coming year. Over the coming five years the county plans to invest $51.8 million in capital improvements.

Among the biggest capital expenses in the fiscal 2015 budget are $3 million for a new south campus building. The other half of the funding for the $6 million south campus building will be budgeted in 2016.

Renovation of the historic jail building south of the courthouse is budgeted at $2.85 million.

Among dozens of other capital improvement projects are $235,000 for renovations to the existing jail, $2.5 million for a landfill liner project and $642,762 for a second phase of fairgrounds infrastructure improvements.

The total market value for Flathead County increased from $9.93 billion to $10.46 billion with the certification of new valuation numbers by the state Department of Revenue.

The value of a countywide mill is $246,736 this year, compared to $241,807 last year.

Taxpayers will see somewhat bigger tax bills this year. The proposed tax levy is 151.64 mills, compared to 147.98 mills last year. This represents a 2.5 percent increase in the county’s total mill levy, Pence said.

The additional mill levies — which include the jail expansion funding scenario — will total about $9.58 more in county taxes for the owner of a home valued at $200,000.

The county continues to maintain a healthy cash reserve. The budget projects a $13.2 million cash reserve by the end of the 2015 fiscal year next June 30. That’s a 24 percent level; a maximum of 33 percent cash reserves are allowed by law.

The proposed budget is available on the county website at flathead.mt.gov; go to the Finance Department and click on Financial Documents.

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