Finance staff briefs Stevensville council on budget process, flags revenue uncertainty and potential water pipe costs

Stevensville finance staff on Wednesday gave the town council a detailed walkthrough of the municipal budget process, the town's fund structure and notable financial risks as the staff and mayor prepare a budget for adoption by Oct. 1, 2026.

The presentation explained roles and timing: the council has authority to adopt the budget, the mayor prepares and executes it, and finance compiles department submissions and state accounting codes. "The town council ... has sole authority to, by the majority vote, to adopt the budget," finance staff said, and staff urged council members to raise questions early so staff can research answers before public hearings.

Staff highlighted near-term revenue uncertainty tied to state valuation notices and recent policy changes. "We get about $380,000 in taxes, about half of that moving to the general fund," finance staff said, adding that the final taxable value is set when the state’s valuation letter arrives, usually in late June or early July. Until that form arrives, property-tax revenue figures are estimates.

The presentation flagged a planned reversion of tax-increment (TIF/TED) money that staff said will require returning roughly $300,000 to the county; staff warned the school district will receive about 80% of that reversion, a change that could complicate local school budgeting. "So now we have to get back about $300,000 of the TIF money ... The school is gonna get 80% of that, and they don't even know it's coming yet," finance staff said.

Staff discussed restricted accounts and federal grants. They said airport and water project funds carry grant assurances and other restrictions that limit how monies are used; recent FAA and state aeronautics grants had covered some airport projects fully. On water, staff described an ongoing lead-service-line survey and said a finding of lead could require replacing service lines "including the homeowners up to their house," a cost the town might have to share even if grants cover most of the work: "If we can't prove that there's not lead on the ground, we may have to replace all the pipes, including the homeowners up to their house," finance staff said.

Staff reviewed the town's cash report and reconciliations, noting differences between budgeted appropriations and actual bank balances. At the time of the report staff said the general fund cash balance was roughly $336,000 and cautioned that large tax receipts expected later in the spring will change that figure.

Grant compliance and audits received emphasis: staff and a council member warned that mismanaging grant requirements can jeopardize future funding. As one council participant summarized the risk, "If you mess up on a grant ... you're blackballed ... and no more grants will come to you until you've cleaned up your problem."

Next steps announced: the chair said he will coordinate with the mayor and finance to schedule focused budget workshops by department, limit workshops to about an hour and avoid overlapping council meetings. Staff also recommended finalizing wage decisions before July 1 to avoid retroactive pay complications.

The council opened the meeting to public comment and then adjourned after a motion and second. The council is expected to continue budget workshops in the coming weeks before returning to consider a proposed budget for formal adoption by Oct. 1.