TIF funds could go to school
A revamp of Whitefish High School could
get a boost in funding if the city chooses to use its tax increment
finance district funds for the project.
The Whitefish City Council recently
held a work session on the matter. The council has asked city staff
to research its options and the process necessary to allocate the
funds to the school district.
Whitefish is deciding how to spend its
TIF funds over the next nine years. The TIF district allows the
city to generate revenue based on property values and use the money
toward areas targeted for improvement in the district. The TIF fund
is expected to have a cash balance of about $10.7 million in 2020
when the district ends.
Two main methods of giving money to the
school are being considered.
One would be for the city to advance
the money the school district is scheduled to receive through 2020.
A second option would be to make a direct contribution to the
school.
A third option, that seems to be least
favored by the council, would release a certain amount of tax
increment funds to all the tax jurisdictions that contribute to the
TIF fund.
The favored options would likely mean
about $4.8 million could go to the school. However, the council has
yet to designate exactly how much, City Manager Chuck Stearns
said.
“They’ve made no final commitments,”
Stearns said. “Some of the council have different ideas on the
desired amount.”
The TIF district does not include the
high school. The tax district boundaries would have to be altered
to include it, a process that would involve public hearings.
Council member Bill Kahle said a
quality high school is important to the community.
“If we are looking at expanding our
economic base, a strong and viable high school is critical,” he
said during the work session.
The Whitefish School District is
proposing a 120,000-square foot high school remodel is projected to
cost $19 million. The plan would renovate 40 percent of the high
school and replace the remaining structure.
The Whitefish tax increment district
began more than two decades ago. Through an interlocal agreement
the school is given its share of the increase on residential
properties.
The school district receives funds
annually from the TIF district. This year’s payment was
$600,000.
Typically the district has received
about $200,000 to $300,000, according to district clerk Danelle
Reisch. The money has been used for remodel work, roof
replacements, resealing of parking lots, heating and cooling
systems and adding classrooms.
“We’ve always used it for capital
expenses such as facilities,” she said. “This year because of the
amount of money the board decided to use some for professional
development.”
The school district has already used
some of its TIF funds toward the high school. It designated
$212,000 toward matching money for a grant to renovate the gym. TIF
funds have also been used for Steeplechase Development Advisors,
the district’s consultant for the project.
Bayard Dominick with Steeplechase said
the TIF funds could help toward the $4.5 million in alternative
funding the district hopes to raise to bring a bond request to
about $15 million.
“It will start a snowball in
alternative fundraising that will help us put a dent in the bond,”
Dominick said.
Some audience members seemed
unconvinced that giving the school district a portion of the
revenue is the right choice.
“I’m not convinced using TIF is an
appropriate use of those funds,” said Paul Johannsen. “If you’re
talking about giving $3 million to $5 million to schools, then you
don’t do anything else for the next five years.”
During the work session, Stearns
cautioned that state legislators carefully monitor TIF funding.
“We could do it legally under the law,
but we might face backlash that [giving money to the school] is not
the intent of TIF,” he said. “We don’t want to kill the golden
goose.”