City budget talks turn to public works, resort tax

Whitefish City Council recently took a look at the second half of the fiscal year 2018 preliminary budget for the city.

The proposed budget includes an increase in taxes for property owners this year after a one-time increase in the resort tax rebate caused a reduction in tax bills last year. Council on June 19 approved the preliminary budget, but will vote on the final budget document in August.

The fiscal year 2018 budget includes a property tax mill levy increase of 8.24 mills. The increase is the result of a reduction in resort tax relief of 6.24 mills. Last year property owners received a one-time windfall when only one debt payment had to be made in 2016 for the Haskill Basin conservation easement, according to the city.

However, property owners will still receive a rebate on their taxes from the resort tax. The total rebate for the city is $1.12 million.

Spending for fiscal year 2018 is expected to be 24 percent lower than last year’s budget. The city expects to spend about $12.5 million less this year. The bulk of that decrease in appropriations — $10 million — is as a result of the completion of the new City Hall and parking structure.

Finance Director Dana Smith said it’s difficult to know exactly how much more property owners will pay in taxes because it’s a tax reappraisal year and new property appraisal numbers won’t be available until early August.

“We’re assuming we’ll have growth of about 8 percent in taxable value,” Smith has said. “Some would be from new growth and some is the growth in property values. We feel pretty confident in that.”

To fund the city’s capital improvement program, some assessment increases are proposed in the budget. Homeowners are expected to pay roughly $22 more in special assessments for street maintenance, lighting and parks. Commercial owners would pay slightly more.

The Montana Legislature this spring approved a bill that includes a six-cent increase in the gas tax. As part of that bill the city can apply for additional funding to be used for streets, according to Smith, and therefore would not need to raise the street maintenance assessment the entire 11.5 percent that is proposed.

The preliminary budget call for increasing the assessment about $13 per household resulting in an additional $95,000 in revenue.

City Manager Adam Hammatt said he would rather see the full increase go forward knowing that the city needs to make incremental increases to that assessment to pay for capital improvement projects.

“If we wait it becomes a big hit to taxpayers,” he said.

Councilor Katie Williams said the assessment should be decreased based upon the new funding source from the state.

“We need to try not to tax people out of the city,” she said.

Councilor Jen Frandsen said while she understood not wanting to increase the assessment the city is already trying to dig itself out of a hole from deferring projects.

“We can’t continue to put off those costs,” she said.

Municipal Court

Some increases were proposed to the Municipal Court budget.

Those included requests that would likely be the result of a new judge taking over after the November election. Municipal Judge Brad Johnson is retiring at the end of his term.

Smith explained that the court is looking for an increase in its supplies that would pay for some of the expenses like a robe and gavel for the new judge. In addition, the court is looking to increase its training budget to allow for training for the new judge as well as anticipated training for the Court Administrator.

There was no representative from the court available to attend the meeting, so Council asked for further explanation on some of the requests before it authorizes any increases in spending.

Johnson did request a compensation review of his salary in addition to the standard cost-of-living adjustment. Council dismissed the idea of increasing his salary further than the standard increase for inflation.

“Our judge is well compensated for the work that goes through the court,” Frandsen said. “I see no reason to adjust the salary.”

Public Works

The street fund includes a number of planned improvement projects totaling $221,000. The fund also calls for street overlays and chip seals at $125,000, which is an increase of $25,000 from last fiscal year.

Public Works Director Craig Workman said the city had 60 snow events this winter, which is 25 percent more than its average.

“The budget is reflective of the condition of our streets,” he said. “We have our work cut out for us.”

The largest item on the improvement list is $150,000 set aside for easement acquisition and construction of an extension of Flathead Avenue.

In the stormwater fund, three major projects are planned. Improvements to the Riverside Park stormwater treatment pond are budgeted at $25,000, Armory Road drainage improvements at $20,000 and a project on the Whitefish River looks to stabilize the riverbank near the wastewater treatment plant at a cost of $27,500.

The fund is also set to pay $30,000 for an upgrade to the floodplain map near Cow Creek.

Workman said after the new subdivision, known as High Point on 2nd Street, was constructed on Second Street near the creek the city is required to update the map for the area.

The water fund includes an increase in revenue for water usage in the amount of about $50,000.

The budget anticipates using $500,000 in impact fees in the water fund to pay for the purchase of land for a new water reservoir on the south side of town.

There are also $800,000 in improvements planned in the water fund. The largest is a $500,000 project for replacement of cast iron watermain on Third and Fourth Street West near Jennings Avenue.

The wastewater fund includes an increase in revenue for usage in the amount of about $656,000.

The wastewater fund sets out $765,000 in improvements including $100,000 for sewer on Flathead Avenue and $500,000 in wastewater treatment plant design costs.

Other capital expenses in the public works budget, include the purchase of machinery and equipment.

The budget includes the purchase of one pickup at a cost of $45,000, a loader at $150,000 and a dump truck at $45,000.

Resort tax

The city’s resort tax shows an increase in revenue of about $270,000 due to anticipated increases in collections.

The largest project under the fund, is expected to be the design and reconstruction of Somers Avenue from Second Street to East Eighth Street. The project is budgeted for $1.82 million in resort tax funds.

Workman said the street will be reconstructed including new curb and gutter, along with new sewer, water and some sections of new sidewalk. New decorative street lights will also be installed.

At its first budget work session earlier this month, council discussed planned work at Riverside Park. The budget calls for $20,000 in resort tax dollars to be spent to improve the river and boat access at Riverside Park.

At the June 1 meeting, Councilor Richard Hildner said the figure seems low and believes a site plan is needed before city moves forward with repairs.

“There is an erosion problem [on that section of the Whitefish River] that needs to be corrected and then access can be created,” he said.

Parks and Recreation Director Maria Butts said the city could spend $20,000 on a plan and wouldn’t be able to get anything accomplished. She noted the current expenditure is expected to only used to improve the access site.

Councilor Andy Feury said if a plan for the entire river bank is created that could be four years before any work is done there.

“I’d like to see what we can do now to improve that one access point,” he said.

Also budgeted under the resort tax fund is paving of the road and parking lot at the WAG dog park at a cost of $75,000.

Tax increment fund

The city’s tax increment finance fund shows an increase in revenue of about $473,000.

Major projects on the list include $500,000 for the Central Avenue reconstruction project, $500,000 for improvements to Depot Park, and $210,000 for construction of a new parking lot on Woodland Place near City Beach.

Smith said the next few years for the TIF before it sunsets in 2020 will be a balancing act as the city makes sure it completes the projects on its list before the district ends.