Annual Budget

BUDGET FOR FY2025-2026

Adopted 8/26/2025

The Council considered the below budget for fiscal year 2025-2026 at its meetings on August 12, and again on August 26, 2025.  The City’s budget year begins July 1 and ends June 30th the following year.

Revenue Budgets are a little trickier to read - the City gets revenue from a variety of sources: property taxes, State Entitlement tax, Local Option tax (part of what you pay when you register a vehicle/trailer/boat/RV/ATV), Marijuana Excise tax, payments in lieu of taxes, Licenses and Permits (like business, dog, chicken, zoning, etc.), Grants, Rents, and Interest on funds within the bank.  That then gets divvied up into different Accounts.

Expenditure Budgets are how the City intends to spend that revenue.  For instance, Financial Administration is what we call internally “City Hall” and it includes staff expenses, advertising board vacancies, legal notices, IT support, training, etc.  (This can be found on page GF3 in the budget document linked below in the "Related Documents" section.)  The Planning & Research Services Account is where we budget to handle zoning permits, subdivision applications, advertising for those legally required notices, postage to mail them to neighboring properties, the upcoming Zoning & Subdivision Regulation rewrites, to name a few.

If you have any questions or comments, please call City Hall at 406-285-3431 or email Kelly Smith or Crystal Turner.

FY2025-2026 BUDGET MESSAGE (How the City intends to spend the revenues)

The 2025 Legislature via Senate Bill 542 amended Section 15-10-420, MCA, requiring governing bodies to make a choice for calculating mills based on a dollar-base or by property taxes assessed in the previous fiscal year.  The City of Three Forks has opted to convert the voter-approved mills to a dollar-base, so the previously voter-approved 5.50 mills for the Fire Control Capital Improvement Fund #2340; 3.00 mills for the Library Operating Fund #2220; and 1.50 mills of the 10 allowed for the Fire Relief Agency Fund #7120 are converted this fiscal year to $30,686.00, $16,737.82, and $8,368.91 respectively.

The mill value decreased significantly from FY24-25 to this current FY25-26 (a reduction of $1,453.96/mill).  As such the City has maximized the number of mills it is allowed to levy per the “Determination of Tax Revenue and Mill Levy Limitations”.  This will generate approximately $10,000 more in revenue over last year.   The City has set the non-voted mill levy (general property tax dollars) for the final City budget at 111.70 mills verses last year’s 79.7 mills.

Overall, the City is financially healthy.  The City Departments have all stayed within their budgeted appropriations for the past decade.  The City has adopted an expenditure-heavy budget in FY2025-2026.  That is due to having been so frugal in the past and several City projects coming to an end.

A 4% pay increase has been accounted for throughout all funds/accounts affected by employees not on probation, except the library. The library assistance received a 10% raise, and the library director received a 4.5%  raise per the Library board on July 1, 2025.  There was a 12% increase in Health Insurance premiums this fiscal year which the City covered 90% of.  There is also an increase in the budget across all affected Funds/Accounts for electric and gas projected increases.

Elements of the General Fund #1000:  The City of Three Forks increased the amount of revenue into the General Fund this year, as last year the City spent a majority of its cash reserves.  The Council allocated more property taxes, State Entitlement funds, interest on the checking account and the Magris in lieu of taxes payment to the General Fund, from fund 4004 Streets/Flood Capital Improvement Fund.  Over the past 4+ years the Council has been putting any extra funds into this fund for the flood mitigation project.  This year they chose to keep the funds in the General Fund.  The General Fund budgeted expenses are almost $160,000 less than last year’s budget.  This is the lowest expense budget in the General Fund since fiscal year 2023, and the highest amount budgeted in revenue ever for the General Fund.   The Council approved $5,000 from their budget to help fund projects of the Human Resource Development Council (HRDC). Within Financial Administration, the City will replace the CITY HALL sign and purchase a new one with larger address numbers and adding an “Established 1908” that will freshen up the exterior of the building after the remodel paid by HB355 last fiscal year.  This account includes writing a 5G Ordinance (was also in last year’s budget) which has been recommended by the City Attorney to protect the City. In the Planning account, the Zoning Code Rewrite is still in process, but this account decreased their budget by almost $40,000.  City Hall (Facilities) budget was reduced since remodel was complete last year ($87,000).  The Law Enforcement line item with the Gallatin County Sheriff’s Office was increased per the contract.  The Fire Department has requested new Storz fire hose nozzles, and one foam nozzle for airport CAFS foam, replacement of some fire hose, and four new extrication turnouts and one set of structure turnouts. The Council also approved to buy Presumptive Work Comp insurance coverage again, which covers cancer-related diseases due to firefighters contact with smoke.  Roads and Streets Administration account includes costs to get the Sweeper repaired in Billings, and some remaining on the GIS project.  Parks & Recreation includes new benches to be placed at the beach at the “Pits” Bellach Park and wayfinding signs to be placed on Main Street to help direct folks to the various parks.  This account includes resurfacing the parking lot at Bellach Park as well.  Trees budgeted was reduced 50% this year to $10,000 to help fund other Park projects within the General Fund.  The Code Enforcement account will purchase a new desk, but overall decreased their budget by $16,655.  That highlights the big changes to the FY25/26 General Fund Budget with the final expenditures set at $1,004,798, and the final revenue budget of $1,015,230.

Fund #2160 Three Forks Rodeo Arena Board once again held a highly successful annual July NRA rodeo.  The Junior & High School Rodeo in April 2025 was the largest of any year thus far.  The Board recommended a $100/month raise for the Executive Secretary. They also continue purchasing new volunteer t-shirts and Committee shirts, as well as some for resale to observers.  Improvement projects for this fiscal year include completion of electrical work for the vendor spots and engineering designs for additional “wings” on the metal bleachers pursuant to the CIP.  The Rodeo Board increased the revenue budget for this fiscal year by over $22,000, due to ticket sales and more events being held at the facility.

The Library Fund #2220 The Library Director position returned to a single-Directorship this past fiscal year.  The Library is currently advertising for a new Director and opted to offer 90% of the premium health insurance again.  With the current Director leaving, the budget includes accrued vacation and one-quarter accrued sick time payouts.  Books are still the major expense. The Summer Reading Program continues to grow, as have other Programs/Events.  The Library budgeted revenue increased almost $20,000 this fiscal year over what was collected last fiscal year.  The majority of that is expected tax revenue, and private gifts and programing donations.

Fund #2399 Fire Impact Fees has a budgeted expense  for an expansion of the Fire Hall due to growth of the community. This will add two ADA-compliant bathrooms with a shower to help address the concern to wash off carcinogens possibly attached to the firefighter after volunteering at an incident.  The addition also includes a multi-purpose space for various trainings.

Street Lighting District (Fund #2410) the budgeted expenses were increased by $7,000 due to the projected electrical rate increases, and the City is taxing $2,000 less than last year as we have a surplus in this account currently.  Street Maintenance District #1 (Fund #2500) has a $40,000 match budgeted in the event the City is successful in being awarded a CDBG grant for the other $40,000 to conduct an $80,000 Long Rang Transportation Plan.  This fund also includes dust mitigation, which is scheduled annually.  The City is taxing $5,000 more this year than last year as there are more expenses with the aging roads.  Nothing is planned for Street Maintenance District #2 (Fund #2501).

For Fund #2711 Parks Special Projects the City intends to have a concrete pad and pergola built at the “Pits” Bellach Park beach area as funds were donated to the City last fiscal year at the closing of the Summer Rec Program.

Gas Tax #2820 will pay for alley apron approach pavings in the Three Forks Original Townsite blocks 1-24, on the south sides of the blocks only, and some patching around town.  The County will stripe Talc Road and the City will reimburse them $3,000 for that work as well.  The City conducted a surplus sale at the beginning of this fiscal year and brought in $15,000 from the sale and will put this towards the purchase of a new backhoe.

The Headwaters Trail Project Fund #2957 was once again very successful in grant awards.  Repairs and maintenance of crack repairs, new asphalt and coating will take place on the section along Talc Road from 7^th Avenue East, in and around Bellach Park’s parking lot, as well as redoing a section on Front Street which was lower than the driving road and as such holding a lot of water (which deteriorates the trail).  This work will be funded in part by the Gallatin County Open Space Grant of $100,000, and a Montana Fish Wildlife & Parks Recreation Trails Program Grant of $100,000.

As stated in previous budgets, the City of Three Forks learned it was remapped by FEMA with devastating outcome of placing the west side of town in the floodway, which would create a “no build zone”.  The Council agreed something must be done and created a Special Improvement District (Fund #3510 for SID #34 Jefferson River Flood Mitigation) to cover the cost of the payments on a loan of $3,000,000 which will be used to fund the project alongside the FEMA Flood Mitigation Grant in the amount of $4.15 million!  The City learned this past fiscal year that the State of Montana also allocated $1,375,000 million of the State Resiliency Fund toward this project.  The assessment for the 20-year SID adopted in 2022 has been collected and will be used to fund the balance of the project and easements.  We anticipate this project will at least begin, and complete construction within this fiscal year, so that is budgeted.   The Treasurer recommended to the Budget Committee, and then ultimately the Council agreed, rather than applying for an SRF loan to fund the balance, to have the City loan itself the funds from the Sewer Fund, with a 2% interest rate (which is similar to SRF).  The first principal and interest payments are budgeted from this fund.   The Streets/Flood Capital Improvement Fund #4004 will have expenditures toward engineering of the Jefferson River Flood Mitigation project, permitting, easement acquisition and hopefully all the construction within this fiscal year.  There is a single audit cost budgeted for the FEMA (federal) grant money once spent over $750,000.

The Parks Capital Improvement Fund #4005 includes  $15,000 towards a new metal roof on the gazebo at Stevenson Park, and landscaping and irrigation repairs at Sacajawea Park ($7,000).

The Fire Department’s Capital Improvement Fund #4006 and the Impact Fees – Fire Fund #2399 will be used in conjunction with the Fire Impact Fund to build the above-mentioned addition to the Fire Hall.

The Water Fund #5210 budgeted expenses include 1/3 the cost of a new Cash Receipting station in City Hall, ½ the cost of a fire-resistant cabinet for permanent records at City Hall, and a custom flatbed for one of the Operator’s trucks.  $10,000 is budgeted to replace Well 10A’s pump and $25,000 for four new fire hydrants are budgeted in the event the Water Project will not cover this expense. The GIS project is incomplete, so there is a balance budgeted for that, as well as $45,000 towards a new backhoe.  Total expenditures for the Water enterprise fund are $1,089,094. There is $20,000 budgeted from the Water Impact Fees Fund (Fund #5214) towards the purchase of the backhoe, and $140,000 in local matching funds for the Water project (Fund 5215). The Water Fund budgeted revenues are expected to have an increase in charges for services of about $71,000.  This is due to the $5 per month increase in the base rate for water that began July 1, 2025, and the 24 remaining units of the work/live projected to be completed this fiscal year.  There is a decrease in interest income for the water fund as the Council chose to rebuild cash reserves in the General Fund.

The City is continuing to work on a Water Supply and Distribution System Improvement Project (Fund #5215), which started in 2019.  The full scope was to drill test wells to find roughly 400 gallons/minute to add to the existing water supply, then once quality was determined, add the supply to the current distribution system.  The project includes engineering services, drilling wells, hydrogeologic expertise and reports, construction and includes looping of existing mains, for an estimated $5.6 million.   The project is coming in well below this estimate. This fiscal year the City will bring online three wells drilled in the past year.  As previously stated, the City intends to spend funds from the Water Impact Fees and cash saved in the Water Fund (5210) on this project.  Since FY21-22, Three Forks has been successful in several grant awards including the ARPA local fiscal recovery (LFR) grants, minimum allocation grant (MAG), Gallatin County’s ARPA MAG grant, a competitive ARPA grant from the State of Montana, a Montana Coal Endowment Program funds and a DNRC-RRGL grant which all were designated toward the total project.  The City anticipates spending their remaining funds and grant funds, just over $3 million, this fiscal year.  Since all ARPA dollars must be spent by December 31, 2025, the City is working to get this project done by this date.

The Sewer Fund #5310 includes the cost sharing of the new backhoe, portion of the Cash Receipting station, portion of a fire-resistant cabinet, and completion of the GIS program (all mentioned above). This fund also has budgeted the loan to the Streets/Flood Capital Improvements Fund as mentioned above in the amount of $1,300,000.  Total budgeted expenditures for the Sewer fund are $2,230,321.  The Sewer Fund budgeted revenues are expected to have an increase in charges for services similar to the Water Fund mentioned above, and for the same reasons as above.

The City budgeted to conduct a Wastewater Preliminary Engineering Report (PER) (Fund #5311) in the last fiscal year, as per the CIP.  The City applied for and was awarded an MCEP grant in the amount of $40,000 and a RRGL grant in the amount of $15,000 to be used towards the cost of the PER.  The project is in process, and the remaining expense of $61,000 is budgeted here.

Sewer Impact Fees Fund #5312 is budgeted to spend $35,000 towards the backhoe and $200,000 for solar panels purchases at the Wastewater Treatment Plant.