City sets priorities for remaining TIF funds

Whitefish has an ambitious list of project it plans to organize before its tax increment finance district sunsets next summer.

City Manager Adam Hammatt recently presented City Council with an updated list of the top projects that the city needs to make a priority before next July when the TIF district ends. Any funds that remain in the coffers not used for planned projects will go toward the city’s new wastewater treatment plant. The city needs to engineer, go out for bid and either complete or at least have the projects under contract, before the end of the district to utilize the funds.

The city’s fiscal year 2020 budget shows it spending about $8.9 million from the TIF fund. The current TIF is budgeted to receive about $7.5 million in property tax revenue in FY 2020 and the district has seen growth in property tax revenues over 10% on average since FY2000.

The priority list includes six major projects — though the city is already working on some already approved projects as well. Council gave its OK to move forward with the items on the list, but it will still have to vote on any related contracts for work.

“We do have enough money for all the projects, but we have ranked them in order of importance,” Hammatt said.

Topping the priority list is the Baker Avenue underpass at a budgeted $1.3 million. The city had been hoping to receive grant money from the state for the project, but Hammatt says at this point that is unlikely to occur before the TIF sunsets, and recommended diverting $900,000 from other areas for the total set aside for the project.

An underpass to span under Baker near the O’Shaughnessy Center connecting Depot Park with the city’s bike path off of Railway Street is called for in the city’s downtown master plan.

Hammatt said the city has been in ongoing negotiations with BNSF for a lease that would be required to make construction of the underpass possible, but the railway company has said their policy is to only accept a 10-year term for a lease.

“They say that’s the new standard that they only do 10-year leases,” Hammatt said. “We’d like to do longer, but I do think it would be a [public relations] nightmare for them to grant the lease and then revoke it after 10 years.”

Councilor Frank Sweeney said he wouldn’t be comfortable accepting a 10-year lease unless it was automatically renewing.

“I don’t think they care,” Sweeney said in regards to public backlash of revoking a lease. “If we’re going to spend that kind of money it has to be longer than 10 years.”

Most Councilors seemed to agree, and Hammatt said he would see about negotiating a longer-term lease.

A bike and pedestrian path along Whitefish River at the Riverbend Condos is second on the list. The city has a signed agreement from 1983 with the condos to allow for the path to be constructed thus connecting two segments of the path that are only accessible now by using the streets at the Second Street bridge. The project is budgeted at $250,000.

Third on the list is wall replacement and rehabilitation for the wall abutting City Beach. The wall has had issues over the years, and the city continues to maintain it. The budget calls for spending $250,000 to replace part of the wall and address drainage issues that are impacting the wall.

Listed in the fourth spot is the new wastewater treatment facility. The budget of TIF funds for this project is listed at $50,000, however, any funds not used for other projects that may not work out will be diverted to the line item.

“This is a very significant project for the city,” Hammatt said. “City staff has been working tirelessly trying to keep project costs down, but it will still cost just under $19 million.”

The city did receive $750,000 in grants for the project, Hammatt noted, but that still leaves a large balance for the project.

Spending $30,000 for an interior remodel of the Whitefish Community Library is the fifth priority. The library is already planning a $30,000 remodel, and Hammatt suggested the city kick in funds for this.

The final item on the list is purchase of blighted property budgeted at $850,000. There are a few properties that the city has been interested in purchasing near City Beach and in downtown.

The TIF district was established in 1987. The amount of revenue from property taxes going to the city’s general fund was fixed at that time and additional revenue as property values increase or development occurs is diverted to the TIF fund where it is saved for future use on projects within the district.

Editor’s Note: City Manager Adam Hammatt resigned from his position on Sept. 6 after this story was written.