The Whitefish City Council on Tuesday unanimously agreed to move forward with a proposal to give $2.5 million in tax increment revenue to the Whitefish High school reconstruction project.

The vote came late in the evening after a lengthy discussion that indicated all three new council members — Frank Sweeney, John Anderson and Richard Hildner — had concerns about the school district’s last-minute request to bump up the tax increment allocation from $1.75 million to $2.5 million.

The city was using the $1.75 million as a benchmark based on a straw poll of the council last fall.

In the end, the council agreed that unified support from the city for the school project was paramount.

“It would send a stronger, more meaningful message if this council deliberates a number they’re comfortable with,” Mayor John Muhlfeld advised the council prior to the vote. “It would show that we’re doing everything to push it across the goal line.”

Approval of the resolution of intent to redraw the tax district boundaries to include the high school property and provide tax increment funding sets the stage for a public hearing tentatively set for Feb. 6. That date is contingent on the Whitefish City-County Planning Board issuing a recommendation on the proposal at its Jan. 19 meeting.

The council faced a time crunch to meet the school board’s deadline to set the amount of the bond at its Jan. 10 meeting to move forward with a public vote on the bond in March. School officials have been working to whittle the bond request to $14 million, a level considered to give the district a strong chance of the bonds passing.

Total cost of the school project is estimated at $19 million.

The funding scenario now includes $2.5 million from the city, $1 million from tax increment revenue the school already gets, $1 million in state grants and matching funds, $500,000 in private fundraising and the $14 million bond issue that needs voter approval.

Several council members quizzed consultants Chris Kelsey and Bayard Dominick of Steeplechase Development Advisors why $14 million had become the “magic number,” especially after they learned the difference between a $14 million and $15 million bond request would be about $10 a year for the average homeowner.

“It shouldn’t become a political battle for $10,” Sweeney said.

Sweeney said he wanted the school bond to pass “in the worst way,” but expressed frustration at what he saw as “a little bait and switch” by school officials asking for a larger amount of tax increment money at the last minute.

Kelsey said the school district settled on a $14 million bond request based on their best calculations of an amount a majority of voters will support.

“For whatever reason, voters fixate on an amount,” Kelsey said, explaining that in this case that amount is less than $15 million. As for the city’s commitment, “it’s almost a pound-of-flesh mentality. There’s no math behind it that makes it rational.”

Kelsey said the school district and its consultants have been pressured by some citizens to ask for as much as $7 million in tax increment funds.

“We’ve been told we’re wimps, that we need to be more assertive,” he said.

Voters twice have rejected bond requests for the Whitefish High School project in recent years. The last was a $21.5 million request in 2008.

High School Principal Dave Carlson said he hopes “the third time is a charm.

“This time, there’s no smoke and mirrors; there’s nothing but transparency,” he said. “In the last three years we’ve listened” and now are focusing more on internal classroom improvements to prepare students.

If this bond request fails, Whitefish will see some long-term changes it won’t like, council member Phil Mitchell said.

“If the bond doesn’t pass we’ll see a lot more [students] going to Glacier High School,” Mitchell said. “I don’t want this community to turn into [only] tourists and a retirement community. I think the council needs a show of support. It is personal, it is political and it is timely.”

The majority of those testifying during Tuesday’s public hearing support the $2.5 million tax increment donation from the public.

Business owner Rhonda Fitzgerald said she supports the school bond, but cautioned that the tax increment fund “is not Santa’s grab bag or a slush fund.”

She pointed out the school district will receive $6 million in tax-increment funds over the next eight years until the district sunsets. Meanwhile the city has $25 million in projects that “have been waiting forever.”

If left untapped, the TIF fund would have an ending cash balance of about $10.7 million when the tax increment district sunsets in 2020.

The city’s $2.5 million allocation is contingent on the school bond passing, City Manager Chuck Stearns said.

“It was always portrayed as just part of the total financing package,” he said. If the bond fails, the city would retain the tax increment money for future allocations to other projects.

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