Dear Mr. Graves:
The Whitefish Chamber of Commerce has and continues to be a valued partner of the city of Whitefish, The chamberís involvement and input to help the City Council make informed decisions is always welcome and appreciated. I received your letter regarding your request to reconsider demolition of the Depot Park building and leasing the space to the Whitefish Chamber of Commerce. As a standard policy, I place all letters addressed to the Council as agenda items on the next regularly scheduled meeting. Your letter will be included in the Feb. 5 packet under Communications from Mayor and City Councilors, at the end of the regular scheduled meeting. It will be at the discretion of the Council if they wish to address the letter, or move to add this request to a future meeting agenda and public hearing.
However, I wanted to clarify a few things that need to be addressed so that all stakeholders can effectively develop informed opinions regarding this request.
Most relevant to the request by the chamber is the estimated cost of demolition of the Depot Park building. As you correctly stated in your letter, the original cost estimate of demolition was approximately $20,000. However, that estimate was limited to the building demolition and did not include asbestos remediation, adaptation of utilities, removal of the parking lot and shed improvements to address drainage issues for the old pond, and the reclamation of the land to a useable greenspace. With additional items added to the scope for this project, the estimated cost has reasonably increased as expected. This increase in cost will not place an additional burden on city taxpayers as the Depot Park building demolition and other added improvements are within the approved budget for fiscal year 2018 and will be paid for with tax increment funds as part of the implementation of the Depot Park master plan. As you are aware, development and adoption of the Depot Park master plan was vetted extensively through numerous steering committee meetings and public hearings at both the planning board and City Council. The adopted plan reflects a vision that from the cityís perspective benefits the greater community rather than attempting to benefit a single user group or groups.
The city is committed to providing exceptional services and amenities for community members and visitors alike. Cost-effectiveness and operational efficiencies are always taken into consideration by the city when adding new services or taking on new projects. While taxpayers have seen an increase in property taxes, one of the significant contributing factors that is often unaccounted for is the increase in property values (and resulting taxes) that are determined by the Montana Department of Revenue, not the city of Whitefish. In fact, the city controls only 20-25 percent of an individualís total property tax bill, and we have kept the number of mills levied steady over the past seven years and have not levied the full amount allowed by state law, unlike our neighboring jurisdictions.
Without raising general property taxes and with ample opportunities for public involvement, the city built a new City Hall and parking structure. Both projects were primarily financed using tax increment funds, which included both cash available and tax increment revenue bonds.
The bonds outstanding are held by two local banks and will be paid in full by July 2021.
Downtown businesses also contributed to the project through a $750,000 parking special improvement district, which was basically the reauthorization of an existing SID that built two surface parking lots in the downtown core. The parking structure not only provides 212 additional parking spaces in the Cityís downtown core, but there are also two retail lease spaces in the parking structure that provide a transition into the Railway District, as called for in the Cityís downtown master plan. The benefits resulting from the new parking structure will continue to support economic growth for our downtown businesses.
The resort tax, paid by citizens and our many visitors, has not only provided for street and park improvements that would otherwise not have been funded, but it has also provided over $8.6 million in property tax relief since its inception. This tax has been one of the more popular taxes, as can be seen by the nearly 84 percent approval of the 1 percent increase in 2015, which provides funds to pay for the Haskill Basin conservation easement that not only protects the cityís primary water source in perpetuity, but also provides a recreational treasure for all. Given the December 2017 sewage overflow at Big Mountain that discharged into First Creek, Iím sure you can appreciate the value this easement provides our citizens in terms of protecting surface water quality and the cityís water supply.
The wastewater treatment plant project is required due to changes in the regulatory treatment standards mandated by the U.S. Environmental Protection Agency and the Montana Department of Environmental Quality. Based on information available at this time, the estimated cost for the wastewater treatment plant upgrade is currently $17.5 million. There is a push by regulatory agencies for further reductions in nutrient limits for nitrogen and phosphorus which may require a new tertiary unit process. This process is expensive (at nearly $10 million), but it is one option to consider if the variance is not approved. City staff continues to work diligently alongside project engineers to find and apply for eligible grants and other funding mechanisms that may help reduce the financial burden that the federal government and state has mandated on the ratepayers of our system.
In your letter, you estimate that the city could realize $36,000 or more a year in rental income from the chamber. At face value that seems great, but that rental income estimate does not take into consideration the costs that the city would incur to bring the building up to an acceptable standard including a new roof, on-going costs for maintenance of the building, the cost of property insurance, and the expense already incurred by moving forward with the demolition of the building including design costs for that section of the park.
Creating and amending master plans is not something we shy away from. We recognize over time that circumstances and other factors may prompt us to amend plans for the good of the community. We also recognize there are people in the community which would prefer one direction over another. This is why we have a thorough public process that includes public hearings for most items at the both the planning board and city council, exceeding what is required by state statute. This process provides an avenue for all to voice their opinions and concerns during the decision-making process. I assure you that all opinions were heard and valued, not once but multiple times on this issue. As you are a valued partner in continuing to make Whitefish a wonderful place to live, learn, work, and play, the City Council will once again consider this request. I cannot promise you the decision will change but I can promise you your opinions will be heard.
With these clarifications, I believe stakeholders will now have a better understanding of the project changes and economics of your concerns. Again, we appreciate the chamberís continued participation in the public process and we are committed to transparency and community involvement in the many decisions that come before us. We look forward to continuing our partnership to build and maintain a vibrant community for both our citizens and visitors of Whitefish.
John M. Muhlfeld
Mayor, city of Whitefish
Editorís note: The Pilot received this letter addressed to Dan Graves, Board Chairman of the Whitefish Chamber of Commerce, from Whitefish mayor John Muhlfeld. It is in response to a letter published in the Jan. 31 edition of the Pilot and submitted to City Council at its Monday meeting.