Most taxpayers will see smaller city bills

Good news for taxpayers — about 70 percent of Whitefish taxpayers will see lower property tax and annual fee payments to the city as a result of the budget proposal approved by the Whitefish City Council on Sept. 7.

A total of 137.54 mills will be levied, but with the resort tax rebate, the effective mill rate will be 115 mills, an increase of 14.8 mills over last year. Property taxes citywide will increase by $200,000 but will be offset by a $100,000 reduction in street maintenance fees and a $300,000 reduction in stormwater fees.

According to city estimates, the city portion of a tax bill for a home with a state-appraised market value of $168,000 will be a $0.73 decrease. A home appraised at $300,000 will see a $54.32 increase, and a home appraised at $500,000 will see a $126.40 increase.

The city's goal in reducing street and stormwater fees while increasing the mill rate is to increase the general fund's cash reserves. The tradeoff is not straightforward. Street maintenance fees are set by street-frontage, and stormwater fees will be reduced by a fixed amount, $59.47 per lot. Property taxes, however, are based on property values, which can be low in the case of vacant lots.

Using data from the county on residential and commercial property values, city finance director Rich Knapp found that the average county-assessed market value for lots in Whitefish is $191,744 (the total value divided by 5,083 lots). The median value (the middle value when arranged from highest value to lowest) is $107,181. About 70 percent of lots in Whitefish have a county-assessed market value of less than $150,000.

During a budget work session prior to the Sept. 7 meeting, councilor Bill Kahle noted that many commercial properties are valued at more than $400,000 and might see a property tax increase. City manager Chuck Stearns agreed but pointed out that 25 percent of the city's real estate value is within the Iron Horse subdivision.

The 2011 fiscal year budget tops out at $43.6 million, which includes $7.3 million in cash reserves, $2.6 million in debt service, a $12.4 million operating budget and a $3.5 million federal TIGER grant for rebuilding Second St. from Spokane Ave. to Baker Ave.

The total budget last year topped out at $57.4 million but included a number of large, non-tax supported funds, including money for the new Emergency Services Center, the downtown streetscaping project and paying off Depot Park. As a result, it's difficult to compare the two budgets.

Much of the 2011 budget's cash reserves is slated for future improvement projects, including $1.3 million for a new city hall, $1 million for water projects and $830,180 for stormwater projects.

The city's 2 percent resort tax is expected to take in $1.5 million and leave about the same amount in cash at the end of the year. The tax-increment financing fund, which is being used to pay for the new Emergency Services Center, is expected to take in $3.8 million and leave about $1.3 million in cash.

Payments for capital projects include $1 million for water, $55,000 for stormwater and $1.9 for sewer. The sewer fund will end up with $260,805 in cash, while the solid waste fund was zeroed out after $200,000 in cash reserves were used over the past five years to cover annual increases to the garbage-hauling contract.