By Michael Howell
The Town of Stevensville held a public hearing on Wednesday, August 31, to take public comment on the 2016-2017 FY Preliminary Budget. In the course of public comment it was noted that the budget was not balanced. Although the expenses in the preliminary budget are set at $4,592,933 and that outstrips the revenues which are estimated at $4,304,704, this difference is made up by the cash carry over from last year. The real problem has to do with the Airport Project Fund. This fund, like the enterprise funds for water and sewer, is a separate fund from the general fund of the town. But the Airport Fund has no cash carry over from last year and not enough money to cover its costs. This fund must be balanced on its own account. The actual shortfall in that fund stands at $78,903. Discussion ensued as to how to remedy the shortfall.
Mayor Jim Crews said that the Council’s plan was to seek a method of financing the deficit, but that the final cost of the airport project will not be known until the project is completed. He said the Airport Board was looking at possibly raising fees, possibly making a special assessment, or perhaps taking out a bank loan to cover the deficit.
It was pointed out that the airport was not a self-sufficient operation and this was recognized last year when the Council approved transferring $57,000 into the airport fund from the town’s general fund.
Mayor Crews said that he could not remember why that was done, but he imagined that it would probably balance out in the end.
Council President Robin Holcomb pointed out that if the town wants to take money from the general fund for the airport, it would have to do so by contract and include interest fees.
Crews said that borrowing from the general fund might be better than borrowing from a bank. That way the town would be collecting interest on the loan rather than paying it. He said that when the runway reconstruction was completed and the airport was back on its feet, he had a gut feel ing that the revenues would pick up enough to cover expenses.
Holcomb suggested that some grants might be available with the help of the Ravalli County Economic Development Authority. Holcomb said that she was against adoption of an unbalanced budget, but that there may be a penalty for not meeting the state’s deadline for adopting a budget.
A couple of people noted that the money to cover the shortfall could be made up by transferring it out of the Reserve Fund. Bill Perrin stated that the state recommendation for a reserve fund level was 25% of the budget. The town could keep 25% in reserves and still make up the airport fund deficit. Earlier, at the public hearing, Perrin advocated placing it in the town’s Capital Improvement Fund.
Former town clerk Nancy Lowell spoke against that option.
Asked by Fire Chief Jeff Motley why the town waited until the eleventh hour to deal with this shortfall in the budget, Mayor Crews said, “Actually there has been quite a bit of research going into this, trying to find ways to enhance revenue up at the airport and this is where we are at right now. We haven’t been sitting around not looking at this project. We have been exploring ideas and research so we can do this.” He said there were some issues with the way the project came about with three mayors. “Something didn’t get transferred the way it should have, so we are facing this problem.”
Asked about the history by phone, former mayor Gene Mim Mack said that under his administration, which ended in October 2015, it was recognized that the Airport Project was going to cost about $2.5 million. Even though the FAA agreed to cover 90% of the cost, that left a sizable local match of $250,000. He said a grant from Montana Aeronautics was set to cover half of that match, reducing the town’s required match to $125,000.
“We recognized at the time that the airport would not be able to come up with that kind of revenue so the Council agreed to transfer $57,000 from the general fund into the Airport Project Fund with the understanding that the Airport Board would look into increasing its revenues to cover the remaining $68,000,” said Mim Mack. He said they also set up the Targeted Economic Development District at the airport to generate some more revenue in the future.
“That’s where things were at when I left office,” said Mim Mack. “It seems like maybe nobody resolved the revenue questions before signing the contracts.”
Discussion at the Council meeting continued about whether the town could get or provide a line of credit to cover the deficit when the payments were necessary.
Crews said that he was going to follow the recommendation of town CFO April Van Tassel and recommend not adopting the budget. He said they could pursue some kind of financing in the next couple of days and approve a budget once some kind of financing was obtained.
A motion was made to postpone adoption of the budget until Thursday, September 8 in the hope that some arrangement can be made for financing the deficit. The motion was approved unanimously.
The town may hold a public meeting to consider dissolving its contract with Ravalli County Recycling. According to Mayor Crews, the town agreed in the beginning to assume the cost of the recycling bin, about $4,700, and pay it off by getting a $100 credit on each pick-up fee. The town has currently earned about $1,400 in credit toward the purchase.
When the make-up of the Council changed, some members questioned the fairness of townspeople paying for a recycling service that they may not use but that is being used by a lot of out of town people. As a result of the dispute the recycling center quit accepting cardboard at the Stevensville site. Then due to rising costs involved in recycling plastic that service was also discontinued.
Crews read a letter from Ravalli County Recycling Volunteer Coordinator Janice Lee asking the town to consider keeping the drop site operating. It was accompanied by a petition for keeping it active, signed by 63 people. Mayor Crews said that he investigated the petition signatures and found that 40 of them do not live in the town.
“That’s 40 people who do not reside in town using a facility paid for by the town taxes,” said Crews. He said recycling may be a good idea, but not if it is not cost effective.
Also coming up for discussion at the September 8 meeting is a presentation by Senator Fred Thomas of a proposed land swap between the Town of Stevensville and the Capp Ranch which would involve trading some of the ranch land along the roadside near the bridge for some of the town’s land at the north end of the park.