Whitefish City Council considers putting resort tax change on ballot

Whitefish City Council on Monday will decide whether to place a measure before voters in the fall that would direct a portion of resort tax dollars toward community housing.

Council will vote on whether to place an item on the November ballot that would allow for 10% of resort tax collection to go to housing. The city estimates it would generate around $27 million over the next 20 years.

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

The Whitefish Housing Needs Assessment in 2022 set a target of needing 1,310 new housing units in the city by 2030 to support current residents and employees. It also said that 75% of those must be priced below the current market to meet community needs.

To fund projects that would provide housing the city is looking at asking voters to change how resort tax funds can be spent. Council will also vote on a financial plan for resort tax reallocation.

City Manager Dana Smith said a 10% allocation from the resort tax funds could make a significant difference in addressing a critical community need of creating affordable housing.

“Securing resort tax as a funding mechanism can also start the pursuit of other funding opportunities such as grants, philanthropic contributions and business community buy-in, which will further leverage funds provided by the resort tax,” Smith wrote in her memo to Council.

However, some have argued that 10% is not enough.

Shelter WF, a group that has advocated for affordable housing, suggests that 20% of the resort tax funds should go to affordable housing in order to fund a larger number of homes and programs.

“Shelter WF applauds your effort to put a significant amount of money behind affordable housing projects and programs in Whitefish by redirecting excess resort tax funds for this purpose,” the groups board wrote in a letter. “However, make no mistake — these funds, representing just 10% of resort tax revenues are not enough.”

The resort tax is a 3% levy collected on “luxury” retail sales, lodging, at restaurants and for prepared food and alcoholic beverages. Funds generated from the 3% tax go to property tax relief, streets, parks and beginning in 2025 are set to go toward maintenance of the Whitefish Trail.

Currently, 1% of the tax goes to the Haskill Basin Conservation Easement, but once that easement is paid off in 2025 funds will be diverted to the rest of the areas.

Under the proposed change, that if approved by voters would go into effect in February 2025, funds would be broken up — 25% for property tax relief, 5% for administration, 48% for streets, 10% parks, 2% for the Whitefish Trail and 10% for community housing.

Funds would be used to develop housing in partnership with private and/or nonprofit entities and create community housing programs anticipated for a workforce assistance fund and homebuyer assistance.

ALSO ON the agenda, Council is set to vote on an emergency ordinance that would place the city under stage 2 fire restrictions aligning with Flathead County.

The rules prohibit campfires and smoking except within a vehicle or building, a developed recreation site or while stopped in an area clear of flammable material. Taking vehicles off-road is also prohibited.

Operating an internal combustion engine, welding or using explosives is prohibited between 1 p.m. and 1 a.m.

Council will consider a resolution to annex 1.36 acres at 236 Jennings Lakeside Road and zone the property as suburban residential.

Council has three ordinances for consideration regarding changes to zoning regulations that are the result of changes approved by the state Legislature.

The first ordinance will make changes including requiring multi-family and mixed-use buildings to be permitted in all commercial zoning districts with reduced parking requirements, duplexes to be allowed where single-family homes are permitted and provisions of tiny homes.

Council will consider an ordinance amending city code related to the architectural review committee, architectural standards, general sign standards and architectural review standards.

The major change regards the city’s architectural review committee, which will now become a recommending body with planning staff as the final decision-maker for architectural design. Appeals of decisions will go before City Council.

In addition, duplexes can no longer be treated differently than single-family residential homes and will be absolved of architectural review.

Finally, Council will consider an ordinance with a host of changes to the zoning code. Among those is changing the review for duplexes so as not to be more restrictive than single-family homes and creating expedited review for certain requests.

The amendments do not address the Montana Land Use Planning Act, which will occur later and will dramatically change how subdivisions and other land use planning will be reviewed, planning staff notes.

REGARDING THE planned trail and bridge associated with the Whitefish Yards project at the former Idaho Timber site, Council is set to discuss logistics surrounding a pedestrian bridge planned to cross the Whitefish River and associated improvements including trails connecting the project to the existing network along the river.

The plan for the Whitefish Yards, a mixed-use development, includes the bridge and trail connection but its recently come to light that there is some confusion over who will be responsible for paying for the construction and maintenance of the sections of trail that are not part of the development, according to Public Works Director Craig Workman.

The existing trail is possible with a license granted to the city by BNSF in 2005, and the railway company is requiring a new agreement for the connector trail. The state Department of Natural Resources and Conservation requires a permit for the bridge.

Both are requiring the city to serve as the permittee for the improvements. BNSF’s fee is $4,500 now and an additional annual fee. Construction for the offsite trail is $382,000.

Workman is asking Council to discuss the costs and provide direction on the matter.

Prior to the regular meeting at 6:30 p.m., Council will hold a work session to discuss casinos and casino overlay zone, while considering the possibility of either relaxing the restriction or changing how casinos are regulated.

Casinos currently are only permitted with a conditional use in the WB-2 zoning district within the casino overlay zone, which is on the west side of U.S. 93 to Baker Avenue stretching from West 15th Street to Commerce Street.

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