The city of Whitefish’s preliminary budget for the coming year is $14.6 million less than last year (a 23 percent decline) and property taxes are projected to decrease about 5 percent.

Last year’s budget — which at $63.3 million was more than 60 percent higher than normal — was an anomaly because it included $8.5 million to complete the Haskill Basin conservation easement and $14.4 million for the City Hall and parking structure project that’s now being built.

This year’s proposed budget totals $48.6 million of transfers and expenditures for all funds for the fiscal year beginning July 1.

The proposed property tax levy reduction of 7 mills is due to voter approval last year of an increase in the resort tax from 2 to 3 percent. Seventy percent of the revenue from the extra 1 percent will go toward the cost of the conservation easement. Twenty-five percent of resort tax revenue across the board is used for property tax rebates to city property owners.

Another significant impact to this year’s budget is the change in management of the Stumptown Ice Den. Because the ice rink is now privately managed, it slices $464,861 from the city budget.

City employees are on track to get a 3.8 percent pay increase. Last year’s increase of 2.3 percent did not include a 2 percent step increase in the pay matrix, according to City Manager Chuck Stearns’ budget message.

“Last year’s pay increases were the lowest among Flathead County cities and the county, so I believe the 3.8 percent pay increases are justified,” Stearns said.

The preliminary budget outlines increased staffing in four departments, including a new full-time information technology position, a three-quarter-time receptionist in the Planning Office, a new full-time maintenance facility technician and a seasonal Parks and Recreation employee who is being bumped up to full time.

Stearns said this is the first time in about 20 years that there will not be a phase-in of property value increases from a reappraisal. With the state Legislature adopting a two-year reappraisal cycle, there is no general valuation increase this year. The only property valuation or mill value increase available will be from new construction going on the tax rolls and some other classes of valuation such as centrally assessed property, Stearns said.

“We are projecting and hoping that the mill value increases by 3.1 percent to $22,000 per mill this year,” he said.

Whitefish historically has had low property tax mill levy rates because of its resort tax rebate for property owners, along with high property valuations and maintenance district assessments.

Statewide, only West Yellowstone has a lower property tax mill rate for cities over 4,500 population. Havre, Missoula and Lewistown have the highest mill rates.

The city has budgeted $175,000 for a new ambulance, but the entire cost is offset by a state equipment loan and debt service for that loan won’t begin until fiscal year 2018.

The preliminary budget proposes a 10 percent year-end cash balance, but Stearns offers a few options if the City Council opts to increase the cash reserve.

One option would be to reduce or eliminate the lifeguard positions at City Beach. Other options would be eliminating a Municipal Court receptionist position that is currently vacant, eliminating one police car purchase or cutting the one month of overlap in city managers in December when Stearns, who is retiring, would train in a new manager.

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