(HELENA) On Monday, Helena city manager Ana Cortez will present the preliminary city budget for the 2020 and 2021 fiscal years. That budget proposal will include some significant cuts, including holding open the city’s vacant police chief and fire chief positions for a year.
Cortez said the budget reflects new priorities from the Helena City Commission.
“The commissioners and the mayor directed me to think about a new way of doing our finances,” she said. “In some ways, it’s not a new way, but it’s more of a grounded way.”
Cortez said leaders wanted three major changes in the way the city budget was set up. They felt Helena needed to establish a permanent reserve fund, to be used in case of a natural disaster or other emergency.
“The residents of the city value reliable services,” she said. “They value predictable services. They want to know that their government will be there if there’s an emergency.”
She said many cities maintain around 17% of their general fund in a reserve, but the commissioners decided on a larger reserve of 21% – around $4.7 million.
The commission also wanted to have a fund balance – initially around $1 million – that could be used to try new initiatives and see if they are something the city should be doing on a larger scale.
“The city had been stagnant for a number of years, providing the same types of services as if the needs of the city don’t change – but they do,” Cortez said. “By establishing a fund balance, we’re able to now be more reactive to those needs, to those changes.”
Finally, leaders wanted to ensure Helena spent only as much general fund money each year as it brought in revenues. Cortez said it is a matter of using taxpayers’ money prudently.
“We knew that the residents of the city are financially disciplined – that if they earn a dollar, they spend a dollar, they don’t spend a dollar and a half,” she said.
Cortez said the city will have about $22.4 million in general fund revenues this year. In order to meet the new budget criteria, she said leaders had to cut about $1.4 million in expenditures for the year. She said department heads proposed spending reductions, then she approved or rejected those proposals, and finally the commission weighed in on them.
Because the Helena Police Department and Helena Fire Department together account for about half of general fund spending, Cortez said they had to make reductions of well over $100,000 in both agencies. In one of the most notable changes, she said HPD and HFD agreed to retain their acting chiefs for a year.
“We want to recognize the commitment of our public servants,” she said. “It was a choice. They didn’t have to say yes, but they did say yes, because they understood the importance of having leaders in those two departments, but at the same time having to come up with significant savings.”
HPD Chief Troy McGee announced his retirement in March, and HFD Chief Mark Emert resigned about two weeks later. Currently, Assistant Chief Steve Hagen is serving as acting chief of police. Deputy Chief Ken Wood is the interim leader of the fire department.
Cortez said the departments have also made other reductions.
“No activity or asset or individual that affects in any way the well-being of our community has been affected by these cuts,” she said. “The cuts have been on vacancies, training that is non-essential, supplies, equipment, contracts that are non-essential. That’s how we came up with the money.”
The other major cut will be eliminating $400,000 that would usually be set aside for large capital purchases, like building projects or vehicles. The city has historically put that amount into the capital fund each year.
“Right now, we’re sitting on a very healthy balance,” she said. “It’s a multimillion-dollar fund at this point, and so it allows us the freedom to not fund it for one year.”
Cortez said all these measures are only for the first year, and leaders are already looking for more substantial changes they can make to the budget after that. She said they will have to determine every place the city government can be made more efficient.
“There’s no way that the city is going to be able to get out of its deficit trend without structural changes,” she said.
This will be the first year Helena will consider a two-year budget. Cortez said the city will continue to update its budget and hold public hearings on an annual basis, but that it is important to be thinking more than one year ahead.
“If you only budget for what’s in front of you, you’re constantly missing what’s coming, and a lot of municipalities get in trouble exactly for that reason,” she said.
The full preliminary city budget will be released at the city commission’s meeting Monday night. The final budget is set to go before the commission in June.