Great Falls managers say FY2027 budget leans on reserves; commission moves budget to public hearing

City Manager Greg Doyon presented the proposed Fiscal Year 2027 budget to the Great Falls City Commission on July 7, saying the plan uses roughly $620,000 in undesignated general fund balance to preserve current service levels while the city awaits revenue from anticipated development.

Doyon said he is concerned that continued reliance on reserves to cover operations is not a sustainable long-term strategy and emphasized the city’s goal of maintaining a roughly 22% general fund balance to ensure adequate cash flow. He told commissioners that replacing about $1.2 million in fund-balance use would require an estimated $350 million in new commercial market value, while projected new growth is expected to generate about $300,000 next year.

Finance Director Melissa Kinzler walked commissioners through the proposed budget documents and supporting materials, noting that the plan is developed and must be adopted at the fund level in accordance with state statute. Kinzler also summarized revenue and expenditure trends, saying total citywide expenses proposed for adoption are $183.1 million and that general fund expenditures are projected to increase by approximately $3.2 million (7.57%), with most of the increase attributed to personal costs such as negotiated wage adjustments and higher health-insurance expenses.

Kinzler explained the city’s use of $100,000 home-value increments in tax-rate discussions is based on state-established thresholds and cited applicable bands of $100,000, $300,000, $600,000 and $700,000 as the consistency mechanism staff uses when modeling revenue impacts.

The presentation highlighted several budget drivers: public safety staffing and equipment needs, legal staffing requirements, code compliance reorganization, and one-time and ongoing capital needs. Doyon noted that about 75% of city employees are covered by collective bargaining agreements, limiting immediate flexibility to reduce personnel costs. He also called out emerging issues including events, parks and recreation funding, parking, the health-insurance fund and the expiration of eligible tax increment financing (TIF) districts.

The proposed budget includes a grant-funded Victim Witness Coordinator position and proposes reclassifying a previously open paralegal position to a civil attorney position after part-time legal support became unavailable, Doyon said. He also reported there is no outstanding debt on two fire trucks purchased in 2015 and that essential firefighter gear was replaced.

Commissioners asked clarifying questions throughout the presentation. Commissioner Joe McKenney pressed staff on revenue assumptions and received confirmation of the $350 million market-value estimate tied to replacing $1.2 million in fund-balance use and the roughly $300,000 expected next year. Commissioner Rick Tryon and Finance Director Kinzler noted that pandemic-era cost increases persist, increasing operating pressures.

Staff reported a slight overall decline in revenue compared with the prior year (about $178,000) with some category shifts, including an increase in intergovernmental revenue driven by a one-time federal sewer grant for a redundant river crossing project and planned utility rate adjustments handled separately by future commission action.

Commissioners discussed operations such as the golf courses and noted the CourseCo management agreement as a potential model for other city services. After the presentation and questions, the commission reached consensus that no additional budget work sessions were necessary and directed staff to proceed with the required public hearing on the FY2027 budget.

The work session record shows the commission will consider separate future actions on assessments and utility-rate adjustments where required, and that the July 21 work session will include library and municipal court budgets and a Park and Recreation fee study. Mayor Cory Reeves adjourned the work session at 6:55 p.m.