City looks at new fees for stormwater
The City of Whitefish is looking at how it will finance a few stormwater system projects that have been put on the back burner.
A few years ago the city chose to reduce its yearly stormwater assessment from $72 down to $12 per residential lot. At the same time the property tax levy was raised. The net result was a shift in how the city spent its money with no increase in tax bills for most property owners.
However, the resulting change meant that rather than collecting about $350,000 per year for stormwater projects the city was only taking in about $50,000.
Public works director John Wilson is recommending the city put money back into the stormwater fund.
“We’d like to talk about possibly incurring debt and moving forward with some of the projects,” he said. “We hate to get caught when development begins again and not be prepared.”
The city council held a July 2 work session on the matter.
City manager Chuck Stearns said the council must decide if it wants to continue paying for projects as it collects the fee or finance the projects through debt.
Stearns said the advantage to collecting the fees first is that it keeps the city out of debt. However, that also means the taxpayers who pay the assessment aren’t likely to see its benefits.
“If the typical house might turn over in five years,” he said. “Then with pay-as-you-go that house turns over and the owner hasn’t seen any of the benefit. The biggest advantage of debt is that you connect who pays with who gets the benefit.”
Mayor John Muhlfeld noted that the city has promised not to increase taxes when it passes next year’s budget.
“However this works, we’re looking at an increase in the stormwater assessment,” he said. “We’ll have to lower the general tax levy if we increase the stormwater assessment.”
Stearns said he expects the city would have to increase the stormwater assessment again to the full $72 to finance the projects whether it agrees to go into debt or not.
“Done strategically you could offset some of it with a reduction in the levy,” he said. “We could bring the assessment back part way this year.”
Several on the council said they have reservations about going into debt to finance stormwater projects.
“It’s the cheapest time we’ve ever seen to borrow money,” councilor Frank Sweeney said. “But this might not be our only project we need to do in the next 20 years. My concern is that we might be dealing with other projects in the future that might need financing.”
In 2005 the city created a stormwater improvement district to collect funds for stormwater projects. However, the public works department began focusing on other projects and the stormwater improvements were pushed back as development slowed.
The city created a list of needed stormwater improvement projects. Several projects have been crossed off the list, but a few priorities remain. Work on State Park Road including creating a storm drain system and water quality detention pond, as well as creating a storm drain system for Monegan and Voerman roads area.
2005 estimates put the State Park Road work at $1.59 million and the Monegan-Voerman project at $230,000.
“These are major capital improvement projects we’d like to move forward with,” Wilson said. “We’d like to have design work done so we can get a clear picture of what that would cost.”
Ultimately, the council decided it would need current cost information for the projects before moving forward.
“I think that’s a good first step,” councilor Bill Kahle said. “We need to get engineer estimates and then we can decide on debt financing. Once you go into debt it’s hard to undo that.”