Salary savings and stimulus funding have enabled the City of Missoula to keep its FY21 budget more than $4 million under last year’s projections, placing the municipality in a strong position as it gears up for the summer budgeting season.
At the midway point through FY21, the city expects to have an ending fund balance well beyond its target of 7%, according to Leigh Griffing, the city’s director of finances.
“We’re in a much better position than what we originally budgeted for,” Griffing said Wednesday. “The expenditure savings are really coming in from salary savings. The major departments are where we’re seeing a lot of those savings.”
Many city departments left vacancies unfilled last year as the pandemic kept workers at home and made hiring difficult.
Those vacancies are now beginning to fill, including Development Services, which has filled several key positions, and the Missoula Fire Department, which announced the hiring of five new firefighters during Wednesday’s update.
Griffing said the city’s total revenues are currently $770,000 higher than anticipated while its net expenditures are down by more than $2.1 million. That leaves the city with an ending-fund balance of around $4.6 million midway through FY21.
“That’s over our 7% target,” she said. “This is the first time we’ll be reaching that number in quite a few years. It does go back to the CARES Act funding and the departments’ belt-tightening.”
Griffing said anticipated property tax collections are also on mark, coming in just $144,000 under the $25.8 million that was projected to be levied in the current budget.
“That’s a good indicator of what’s happening in the community so far,” Griffing said.
Aspects of the American Rescue Plan remain unknown. The city will receive $14.3 million in revenue from the stimulus plan, half this fiscal year and half in the next fiscal year.
Griffing said the revenue must be spent by December 2024, and the funding can’t be used for employee pensions or tax cuts.
“We don’t have a lot of information on what the eligible uses of those funds are,” she said. “We’ll know more sometime in early May.”
The state will also receive $10 billion in stimulus funding, though it hasn’t yet decided where it will direct that revenue. It can go toward various capital projects including infrastructure and broadband.
“We’re waiting to hear from the state exactly what they’ll be spending that on,” Griffing said. “I do believe water, wastewater and stormwater are likely very eligible for the some of the funding from the state.”