The Whitefish City Council is weighing what type of funding mechanism it may use to pay for the ongoing operation and maintenance expenses for the planned parking garage with a new City Hall building.

Council this spring narrowly approved construction of a new City Hall with an attached parking structure the City Hall’s current site. As part of the decision, council said it would look at establishing an assessment district.

During a work session Sept. 3, council took a first look at a memo prepared by a working group of city officials and Heart of Whitefish and Chamber of Commerce representatives who have analyzed types of parking assessments.

The group chose a Special Improvement District as the most viable option, rather than a Business Improvement District as previously suggested by the council.

City Manager Chuck Stearns noted that downtown businesses are already part of a parking SID that runs through 2015 and the new SID could go into affect after the current one sunsets.

“Businesses are familiar with that type of funding structure,” he said. “The SID can take into consideration the distance from the parking structure and give credit for the number of parking spots provided to determine the assessment. The BID doesn’t have the same options.”

In its memo, the group pointed to several reasons why it felt a SID would be the better option:

• Council initiated the parking structure and therefore should initiate the assessment district.

• Council can create an SID, while creating a BID would require a petition from at least 60 percent of business owners to initiate the district.

• The SID would allow business owners to get credit for providing off-street parking.

• Affected property owners can prevent the SID if those owners bearing more than 50 percent of the cost protest creation of the district.

Dave Boye, who served as a chamber representative to the group, said a SID seems to more closely follow the process that is happening.

“I didn’t see this as the business community bringing something forward, but the council doing it,” he said.

Seeking more time to discuss options, council chose to delay a decision until it can hold another work session on the matter.

The working group is asking council to provide guidance on not only the type of district it would like to see, but an estimate for operation and maintenance costs, district boundaries, when the assessment will begin and if parking spots will be leased as a way to generate revenue.

Annual cost estimates

Parking consultant Kimley-Horn and Associates have estimated that operational and maintenance costs for the parking structure could be as high as $125,000. The working group surveyed Montana cities with parking structures and came out with an estimate of up to $75,000 annually, including placing about $10,000 into reserve for capital expenses.

Councilor Bill Kahle said he felt the Kimley-Horn estimate might not be that far off.

“Should we be putting more into the reserve?” he asked. “We might be seeing that our annual operational and maintenance is less, but what Kimley-Horn is actually saying is that we should place more in reserve annually.”

Stearns said the cost estimate number should become firmer once the city narrows in on a design for the garage.

Boundaries

The working group suggests creating two tier zone boundaries around the parking garage to determine the assessment fee. Two circles were drawn with a radius from the center of the parking structure at one-eighth of a mile and one-quarter of a mile.

The two circles are meant to represent the very direct beneficiaries of the parking structure, those in the one-eighth of a mile circle, and the less direct beneficiaries, those in the one-quarter area.

The two different zones could be assessed differently, likely with those closer to the structure paying more.

Within those boundaries, single family and duplex units would be excluded. However, whether to assess multi-unit complexes as commercial use is still being considered.

Beginning the assessment

Because the current Downtown Parking SID ends in the fall of 2015, the group felt that any new assessment could begin in the fall of 2016. The district could be formed prior to the parking structure being built, but the city could not begin assessing properties until the structure is operational.

“We want to make sure we have this going forward,” councilor Chris Hyatt said. “We don’t want to build the structure and not have the SID in place.”

Leased spaces

The working group sees setting aside a portion of the parking structure for leased spots as a way to generate revenue for operational and maintenance costs and thereby reduces the assessment on property owners.

As an example, if 135 spaces were leased for $40 per month, that would generate $64,800 of annual revenue, which could pay most, if not all, of the operational and maintenance costs.

Chris Schustrom, who represents the Heart of Whitefish for the working group, said leasing spots could help with costs, but also does create more available parking.

“Every structure that leases spaces sees the highest benefit because that opens up on-street parking spaces,” he said.