The Whitefish City Council tonight will begin mapping out a plan for how to spend millions of dollars in projected tax increment finance district revenue over the next decade.

A work session from 5:30 to 7 p.m. at Whitefish City Hall will focus on revenue projections for the district, which sunsets in 2020, and future possible uses for that money.

The discussion is timely, since the city intends to use tax increment money for a new City Hall, and some candidates in the upcoming City Council election favor giving a portion of the city's TIF revenue to the Whitefish school district to help pay for upgrades to the high school.

The Whitefish tax increment district, which includes most of the city, is expected to generate in excess of $4 million annually, with more than $42 million in projected revenue by the 2020 sunset.

Figuring in projected expenditures and debt service for the bonding of the district that occurred in 2000, it leaves Whitefish with an ending cash balance in 2020 of about $10 million, according to information supplied by city officials.

The city has penciled in $5 million in 2014 for a new City Hall.

A tax increment district allows any increases in taxes within the district to go into a special fund for projects to improve the value of property within the district.

The Montana Legislature in 1974 authorized cities with urban renewal plans and district to use tax increment financing for projects that would reduce blight and increase the tax value of districts.

The Whitefish TIF district was created in 1987.

At the time, City Manager Ralph Freedman drew up an urban plan for the projected TIF revenue that included improvements to City Beach and a new City Hall. The City Beach improvements were made early on using roughly $1 million in tax increment money, but 24 years later a new City Hall is still on the to-do list, though the city did use some tax-increment revenue to remodel the current City Hall and purchase adjoining buildings.

When the Whitefish TIF district was established, the Whitefish school district, realizing what it would be giving up, successfully negotiated an interlocal agreement - unique in the state - that gives the school its share of the increase on residential properties.

That foresight has paid off handsomely for the school district through the years.

Since 2000, Whitefish School District 44 has received $3.57 million in tax-increment payments. The annual payment to the schools has increased to about $600,000 annually.

The city also showed foresight when the council opted to bond the tax increment district in 2000 and use roughly $15 million in bonds for street reconstruction, paving and infrastructure projects.

Bonding the district has allowed Whitefish to take a progressive approach to rebuilding city streets and get projects done much sooner than otherwise would have been possible.

By 2007, tax increment revenue had generated more than $22 million for Whitefish improvement projects since the district was adopted in 1987.

Urban renewal/tax increment projects accomplished since 1987:

- Reconstruction of City Beach.

- Purchase/remodel of City Hall.

- Construction of downtown parking lots.

- Installation of infrastructure in downtown area to support cultural arts and library development projects.

- Implemented business rehabilitation program.

- Resurfacing of 14 street sections.

- Reconstruction of Baker Avenue, First Street, Second Street, Fourth Street, Dakota Avenue, Edgewood Place, Greenwood Drive, and a portion of Columbia Avenue.

- Construction of 13th Street and 13th Street Extension.

- Purchase of Sky Park next to the Whitefish River for future expansion of the bicycle path network.

- Construction of Riverside footbridge.

- Implemented housing redevelopment program.

- Partial funding of Kay Beller Park construction project.

- Partial funding for indoor ice rink pavilion.

- Partial funding of aquatic and health fitness facility.

- Partial funding of reconstructed boat ramp at City Beach.

- Partial funding of one block downtown for a City Park.

- Partial funding of skateboard park.

- Purchase of the remaining portion of a half block downtown for a future parking garage.

- Construction of bike path sections to include BNSF Loop and Hope Trail.

- Remodel of armory for community events and youth activities.

- Partial funding of downtown master plan.

- Added public parking spaces in downtown city lot.

- Constructed a park maintenance building.

- Construction of Emergency Services Center.

- Purchase of Depot Park/Credit Union building.

- Purchase of lot north of City Hall.

- Demolition of Big Mountain Tire Building.

- Partial funding of emergency services equipment.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.