Council to Vote on Funding Avenue for Haskill Project

One percent resort tax increase the most likely measure to go before voters

WHITEFISH – A ballot measure to partially fund a land conservation easement on 3,000 acres in Haskill Basin could go to voters for approval in April.

A draft resolution of the measure will go before Whitefish City Council for a vote Feb. 17. If passed, it will be subject to approval by voters through a mail-in ballot.

The Whitefish City Council has been working to identify funding avenues for the conservation easement on prime land owned by the F.H. Stoltze Land and Lumber Co. and located beside Whitefish Mountain Resort on Big Mountain, a tract of land vulnerable to pressures of development and the source of 75 percent of the municipal water supply in Whitefish.

On Feb. 2, the council unanimously directed city staff to bring forward a resolution for a resort tax increase from 2 percent to 3 percent, a resolution councilors will vote on at a Feb. 17 meeting.

If passed, the revenues generated through Jan. 31, 2025 – the date when the existing resort tax expires and goes back to Whitefish residents for a vote – would be used to fund the $8 million needed for the conservation easement. Twenty-five percent of the 1 percent increase would be rebated to taxpayers in a similar fashion to how the current 2 percent works.

In addition to a resort tax, which would work in tandem with funding from federal programs such as the U.S. Forest Service, city officials have considered public measures like a general obligation bond, private and philanthropic contributions, and an increase to water rates.

While those options remain on the table, council expressed its broadest support for a resort tax increase.

“We are still contemplating all funding options, including a general obligation bond and water revenue bond, but as of last week, the Council has determined that the best funding option is to pursue an increase in the city’s resort tax,” Whitefish Mayor John Muhlfeld wrote in an email.

A resort tax increase would be subject to approval by the voters, which would be a mail-in election in April, if the council acts on Feb. 17.

Last year, Stoltze and the nonprofit Trust for Public Lands reached a deal that would keep the land permanently protected for water, wildlife and recreation uses, while still allowing Stoltze’s sustainable timber management to continue.

Stoltze values the land at $20.6 million, but the company has offered to sell it for $17 million, according to Alex Diekmann, project manager for the Trust for Public Land, which is the nonprofit organization working to raise money from federal programs, private donors and public funding sources in order to bring the deal to fruition.

Earlier this year, the project received a funding boost from the U.S. Forest Service, which ranks such projects for funding through its Forest Legacy Program, awarding grants to states to purchase permanent conservation easements.

The agency has given the Haskill Basin Watershed Project its No. 1 spot, positioning it to receive $7 million in Legacy Project funding. An additional $2 million will come from the U.S. Fish and Wildlife Service’s Habitat Conservation Plan Land Acquisition Program. Together, the grants give the project significant purchase toward raising the $17 million needed to buy the development rights from Stoltze by the end of 2015, leaving a balance of about $8 million.

On Feb. 2, the Whitefish City Council hosted a work session at council chambers, gearing the discussion toward identifying avenues of funding.

Following the meeting, which drew about 100 people, the council voted to draft the resolution for a resort tax increase after community members and business owners voiced support for a ballot measure.

While some business owners balked at the notion of raising the resort tax as it could impact sales, smaller retailers supported such a measure, while community members in the outlying Whitefish “doughnut” said their only means of contribution would come through a resort tax, since they are not subject to city property taxes.

“At risk of being enemy number one with my fellow retailers, I support the 1 percent resort tax increase,” Kelly Marchetti, owner of the downtown boutique clothing shop Sprouts, told the council. “I can only speak for myself, my business, and my customers. I understand some of the other business owners who have larger-ticket items, but I don’t deal with huge-ticket items so it just wouldn’t impact me or my business that much.”

Karen Reeves, a doughnut resident, also voiced support for the measure.

“I fully support the Haskill Basin watershed project. As someone who doesn’t participate in water and sewer bills, I still love to shop in Whitefish. I don’t go to Kalispell so I can dodge the tax payment. I believe in paying my fair share anytime I can throw into the pile,” she said. “And I can do that with the resort tax where as I can’t with the property tax. So full steam ahead. What a great project.”

Heidi Van Everen, executive of the Whitefish Legacy Partners, the nonprofit organization helping to push the easement forward, said in addition to protecting the community’s municipal water supply, the easement would also provide permanent access to recreational amenities, protect wildlife habitat and preserve the viewshed.

“We are extremely proud that this Haskill Basin project is even an option and that it’s something you are considering, and we think that it is a huge value to the community,” she said.

According to city data tracking resort tax collection since it was implemented 17 years ago, the three sectors subject to resort taxes – motels, bars and restaurants and retail – have seen an average annual uptick in resort tax collection of more than 6 percent, with the bulk – 45 percent – coming from retail. The data shows that, following the resort tax, the aggregate retail sector did not decrease in sales and resort tax collections, and continued to increase until two years during the recession.

“I do feel for the retailers who are specifically impacted, but retail has thrived since resort tax was implemented 17 years ago,” said Lisa Jones, a Whitefish resident and supporter of the easement. “I’m personally willing to spend an extra penny every time I spend a dollar to make this a homerun.”

Whitefish residents are encouraged to weigh in on plans for the easement at a Whitefish Town Hall meeting on Thursday, Feb. 12 at 7 p.m. at council chambers.

Mayor Muhlfeld will deliver a 30-minute presentation on the project and the various funding options.

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