Whitefish Council set to OK budget

Whitefish City Council on Monday will consider approving a budget that relies on rebates from the city’s resort tax to lower property taxes.

The budget for fiscal year 2023 totals $53.4 million. The total mills levied in the budget are a reduction of 17 from the prior year, which is a more than 14% decrease in property tax revenue to be collected by the city.

“The ability to provide a reduction in property taxes is because of the significant increase in property tax relief from resort tax collections and higher-than-expected fund balances to start the year,” City Manager Dana Smith told Council in her budget memo. “Resort taxes collected in excess of the budget must be returned to taxpayers as additional property tax relief.”

City Council meets at 7:10 p.m. at City Hall, 418 E Second St.

Resort tax collections for FY22 were the highest since its inception and about 32% higher than the prior year. Property tax relief for FY23 increased by 73% or $1.2 million compared to the previous year.

Smith cautioned that the much higher amount of property tax relief is not likely to continue and the city is planning for the following years when it's expected that the relief could decrease by up to $800,000. The resort tax collections grew at unprecedented rates mostly because of rapidly increasing prices, the city notes.

“Growth of 30% over the prior year is simply not sustainable and a return to the 5% average growth rate is much more likely for resort tax,” she said. “Future fiscal year budgets will require careful planning and use of cash reserves to slowly adjust property taxes back to normal rates after this unusual year to continue providing our current level of services.”

A house with a market value of $438,700, according to the city, will see an estimated annual savings of $93 on the city’s portion of their property tax bill based on the proposed budget.

Compared to the prior year, FY23 expenditures are set to increase by $733,500 while interfund transfers are increasing by $2.8 million.

“The increase in expenditures is mostly due to increased personnel costs and rising materials and service costs, both offset by a reduction in capital expenditures,” Smith said. “The increase in transfers is mostly due to increased property tax relief from resort tax, as well as an increase in operational transfers to assist in covering costs for personnel.”

Whitefish’s budget calls for a 7% wage increase for most employees, consisting of a cost-of-living adjustment of 5% plus a 2% longevity increase. The city is covering a health insurance premium increase of about 3% for all employees.

The city’s taxable value, which is limited to growth from newly taxable property, increased by 4.5% compared to the prior year.

The final budget is set to levy 76 mills compared with 93 the year prior.

Whitefish’s FY22 approved budget was $49.8 million.

DURING THE meeting, Council is set to consider several requests by 1291 Edgewood LLC for about 92 acres at 1291 Edgewood Drive.

The requests include a growth policy amendment to the future land use designation from planned industrial to urban for 3.4 acres, a rezone of the same acreage from industrial to two-family residential, a preliminary plat for a 15-lot subdivision and a planned unit development overlay for a portion of the subdivision to facilitate a multi-family development on 3.4 acres and permit smaller lot sizes in the agricultural district to the east of East Second Street.

The properties are currently undeveloped and zoned industrial and county SAG-10 and AG-20.

On the western side of the development, the applicant is proposing five industrial lots and one lot to have 30 multi-family units in three buildings with associated parking. Six of the units are proposed to be deed restricted for affordability.

On the eastern side of the development, the applicant is proposing nine rural residential lots.

The project includes 4.6 acres of open space with a proposed 10-foot-wide shared use path connecting a new public street in the development to East Second Street.

The PUD is necessary to construct the multi-family within the WR-2 and blend the densities on the east side to spread out the lots across the entire 66 acres with lots ranging in size from 3.5 acres to 15 acres. In exchange for the zoning deviation, the applicant is providing public access, a public facility and affordable housing for the community benefit, the city staff report notes.

COUNCIL WILL also consider separate rezone requests for two large tracts of land adjacent to each other.

The city is looking to rezone about 31 acres of undeveloped land owned by Uppercut 57 recently annexed into the city limits. The property is located northwest of JP Road.

The zoning is being changed from county SAG-5 to the closest city zoning of country residential.

A rezone is also being requested for two properties located between Park Knoll Lane and JP Road. Carter Unger, on behalf of Honor Bound, LLC and Eagle Enterprises, has applied for the rezones. The 19-acre parcel is undeveloped, while the 11-acre tract on U.S. Highway 93 South has an existing house as well as commercial auto sales along the highway.

The proposal requests the half-acre zoning of estate residential to the west on the undeveloped parcel, with the denser urban zoning of WR-2-SC adjacent to the future Baker Avenue right-of-way. On the portion of the 11-acre parcel to the south, it’s proposed to be WR-2-SC

The portion of the 11-acre lot already zoned WB-2 on the highway will remain zoned as such.

Features Editor Heidi Desch may be reached at 758-4421 or hdesch@dailyinterlake.com.