OPINION: City Hall project doesn't increase property taxes

In recent weeks, there has been much speculation and misinformation being distributed around town regarding the costs and how the construction of the new City Hall and parking structure scheduled to begin in September will be paid for.

In order to avoid further speculation and to correct the record, I would like to provide the facts about this project. As a preamble to this letter, the one take-home message for readers is simple: Property taxes will not be increased to build, operate or maintain the new City Hall and parking structure.

The City Hall and parking project has been contemplated since adoption of the city’s 1987 Urban Renewal Plan and has been at the forefront of public discussion for more than 12 years. Both projects were also identified as priority, catalyst economic development projects in the city’s 2006 Whitefish Business District Downtown Master Plan, which upon adoption amended the city’s Growth Policy. Similar to other major capital projects completed in town, including the O’Shaughnessy Center, our public library, Central School, the downtown streetscape, The Wave and others, this project has been carefully planned out, and a thorough and inclusive public process preceded all of the major decisions made by your city councils, both past and present.

Property taxes will not be increased to build the City Hall and parking structure. This project is being funded entirely by Tax Increment Financing (TIF) and a possible downtown Special Improvement District (SID) which will essentially be a continuation of the city’s current downtown parking SID. The city began setting aside TIF funds annually in a City Hall Construction Fund on Nov. 17, 2003. The use of TIF funds, both from cash saved up and from a new TIF bond, will not affect or increase the property taxes which property owners pay.

Per state law, TIF funds are intended for projects that will stimulate economic development and produce new tax revenues for the community. This project does exactly that. Inadequate downtown parking is a priority issue for downtown businesses. In 2013, the city commissioned a parking needs assessment to determine the number of parking spaces that would be required to serve current and future needs as the downtown business district grows and expands. The proposed parking structure responds to that study by providing over 220 parking spaces that will be centrally convenient to serve the central business district, and the growing Railway District.

The total construction costs to build a new City Hall and parking structure so that the architecture is historically consistent with Whitefish and acceptable to our community is $13.9 million (includes contingency). Estimated annual maintenance costs for the parking structure are $50,000 to $75,000, which includes a reserve for capital needs.

Extensive research comparing operation and maintenance costs of comparable structures across Montana was undertaken to arrive at these estimates. Some parking spaces will be leased in the structure to local businesses and their employees at a reasonable rate so that on-street parking can be kept open for shoppers who support downtown businesses. Revenues generated from leased parking will cover the annual maintenance costs, not property taxes.

Just as Whitefish invested over $19 million to rebuild Whitefish High School to keep Whitefish competitive academically, Whitefish is investing in helping our local government run more efficiently for our citizens, and in keeping our economy strong in the face of ever increasing challenges to locally owned and operated businesses.

Our strength in Whitefish has always been in the ability of citizens to see through last-minute speculation and misinformation in order to do what is best for our town and its future. Out of respect for the extensive public process leading up to the decision to break ground this September, and the hundreds of thousands of dollars already spent on engineering and design, let’s not make this project the exception.

Muhlfeld is mayor of Whitefish.