Whitefish mulls cost of Haskill Basin land deal

Is Whitefish willing to help fund the protection of Haskill Basin and the city’s source for drinking water through a tax?

That’s the question Whitefish City Council is hoping to answer in the coming months as it determines if and how the city might contribute to fundraising efforts to purchase a conservation easement on the 3,000 acres north of the city.

The overall purchase is expected to cost $20.6 million, but F.H.Stoltze Land and Lumber Co. has agreed to contribute $4 million to the project, while the U.S. Forest Service is expected to provide a $7 million grant and a $2 million grant from the U.S. Fish and Wildlife Service is expected.

Nearly $8 million is still needed to complete the land deal.

The project would permanently protect the working forestland in Haskill Basin through a proposed deal between The Trust for Public Land and F.H. Stoltze Land & Lumber Company.

Representatives from The Trust for Public Land recently presented the city with a finance feasibility study that sets out possible ways the municipality can raise funds to contribute to the funding gap.

While the council made no formal decision on the matter, council members did ask questions about the report and seemed to favor some type of funding mechanism to raise city dollars for the project.

“It’s really important that we preserve Second and Third creeks on Haskill Basin,” council member Richard Hildner said, noting the potential pressure on water sources for the city in the future.

The study sets out how the city could issue a general obligation bond, increase the resort tax, raise water rates or increase the property tax levy to generate funds. The city could use one funding method or could look at using a combination of methods.

“We look at this as a quilt of funding,” said Dee Frankfourth of TPL, said. “It’s not going to come from any one source.”

Frankfourth recommended the council narrow the funding options to those that match the needs of the city and conduct a public opinion survey that would help determine whether to run a election for a property tax levy.

Council noted that public funds won’t make up the entire gap, but donations will also have to come from private sources.

“It works better in Whitefish to have a couple different types of funding,” council member John Anderson said. “Public and private funding — it works better if everyone has a stake in something.”

The council could adopt a resolution for a general obligation bond and submit the issue to city voters. The term of a bond is limited to 20 years. As an example, the TPL study noted that a $3 million bond would cost the typical homeowner an average of $38 per year for the life of the bond.

Raising the resort tax from 2 to 3 percent is a second option, which would also have to be approved by voters. Increasing the tax to 3 percent would generate about $1 million annually. The city could then issue revenue bonds backed by a commitment of resort tax revenues.

The city could consider increasing water rates as a way to generate funds for the conservation easement. A 5 percent increase in rates would generate about $124,000 per year. Council would have to vote to approve a change in water rates.

The city can impose a new mill levy, if approved by voters. A 10 mill property tax levy would generate about $228,000 annually at a cost of $43 per year to the average homeowner in the city.

Some council members said holding any kind of ballot election should come sooner rather than later with spring 2015 suggested as the timeframe for holding a special election. The land deal has to be finalized by the end of 2015.

“I think if we wait until November [2015] that’s too long — if it fails, we only have 60 days until the option expires,” council member Andy Fuery said.

Regarding the land deal, Alex Diekmann of TPL said “the stars are completely aligned on this.

“There is generational changes in ownership happening at Stoltze, which has a long legacy of protecting this property. First and foremost now is protecting the city’s water rights.”

If the property were to be developed it could damage the watershed, which provides about 75 percent of the city’s water supply.

The Trust for Public Land has secured an option to purchase the development rights from Stoltze through the end of 2015.

During public comment, John Kramer reminded the council of several multimillion dollar fundraising efforts in town that are recently completed or are still underway.

“We have to succeed at this and we will,” Kramer said. “A lot of people in the community are paying off their pledges for the new food bank. There is a fundraising effort going on for the high school and there’s still fundraising going on for the Beaver Lake trail project. It’s very awkward to go out and ask the same people for money for different projects.”

Heidi Van Everan, executive director of Whitefish Legacy Partners, said she supports the project.

“I’m thankful to Stoltze that they are open to this project,” she said. “What an amazing community to have this vision.”