The Whitefish City Council on Monday approved a $42.5 million preliminary budget for fiscal year 2022 that's dramatically lower than last year due to a decrease in capital project spending.

Spending in the proposed budget is expected to decrease by nearly 42%, which is mostly due to a decrease of $21.4 million in capital expenditures.

The previous year’s budget included two major capital improvement projects — a new wastewater treatment plant with $11.6 million spent last year and expansion of the water treatment plant with $8.8 million spent last year.

The draft budget continues the decrease of 10 mills that was part of the previous year’s budget and an additional reduction of 5 mills is proposed to account for additional property tax relief from resort tax collection and the transition of the Flathead Emergency Communications Center from a city tax levy to a county-wide district assessment.

Under the proposed budget, a home valued at $400,000 can expect to see an increase in city taxes of about $17 per year.

City Manager Dana Smith said the budget is reflective of providing services for the city.

“This budget completes our goals while continuing operations at the lowest cost to taxpayers,” she said. “We run a pretty tight ship; if anything we run a little understaffed because of the amount of growth.”

Since it is a reappraisal year for property taxes, some homeowners could see a larger increase in their total tax bill as a result.

The city is expecting its taxable value to increase by an estimated 7% compared to the last budget year that ends June 30, but won’t receive its official taxable values from the state until the beginning of August.

“There will likely be a modest increase for taxpayers due to the reappraisal year, but we can’t say what that will be and it will vary based upon the property,” Smith noted.

The council this month held two work sessions to go over the numbers in the draft budget document.

During those sessions, the idea was floated of creating a 4-mill levy that would increase taxes for funds to be set aside for affordable housing initiatives, but on Monday it chose not to include the increase. That levy would have increased the taxes of a home valued at $400,000 by about $40 per year or just over $3 per month.

The increase in the levy would have brought in about $172,000 annually to the city.

Though the council asked for information regarding the levy, saying it could assist by providing funds for affordable-housing projects, ultimately council members decided the levy wasn’t the right option.

“Now doesn’t seem to be the right time to raise taxes,” Mayor John Muhlfeld said.

The council said it plans to look into using some of the American Rescue Plan funds allocated to the city for affordable housing. The city is set to receive about $2.1 million.

INDIVIDUAL DEPARTMENT budgets largely are reflective of planning for and responding to growth in Whitefish.

The Planning and Building Department budget reflects dealing with the continued growth in residential and commercial construction. Planning Director Dave Taylor pointed out the city issued about 270 land-use permits in 2020 and things haven’t slowed down in the first quarter of 2021.

To handle the growth, the building department is planning to hire a new building administrative assistant at a cost of $66,500.

For the last few years, the planning department also has budgeted for a hiring housing coordinator/planning position and now intends to fill that position. Also in the budget is spending about $120,000 for professional services for contracting for the update to the city’s housing needs assessment, completing a tax-increment finance fund study and a possible consultant for an update to city’s subdivision code.

“Hiring for professional services will help with long-range planning projects that staff can’t get to,” Taylor said.

In the Fire Department budget, there are increases for the hiring of two additional firefighters and equipment purchases. Equipment includes a new brush truck at $50,000 and an ambulance at about $250,000, and a Type 3 Fire Engine at a cost of $450,000. To pay for the engine the city has applied for an Assistance to Firefighters Grant and expects a matched contribution from the rural fire service area.

Since 2010 the department has maintained 15 firefighters while managing growth in calls from year-round residents, but also visitors.

“My biggest concern is staffing,” Fire Chief Joe Page said, noting a fire on one side of town while a medical call on the other, such as a heart attack leaves his department stretched thin.

To improve the level of service and reduce the cost of overtime from current staff, the fire department adds two 40-hour work week firefighters that will be used to assist during peak hours and provide coverage when the full time firefighters are on longer-term leave.

The Police Department budget includes spending for capital equipment purchases but no increase in staffing. The department logged about 15,000 calls for service in 2020.

While the Police Department requested adding an additional officer, the position was not included in the draft budget but is expected to be a priority for the fiscal 2023 budget. Police Chief Bill Dial said his department remains at the same staffing level as in 2008.

“It’s not an easy time to be a cop, but with good leadership we’ve been able to sustain a good level of service. We continue to do our best and I hate that we can’t be more proactive rather than reactive.”

The Parks and Recreation Department includes changes as a result of operating shifts for recreation programs and planned projects for the parks.

The budget expects a decrease of about $3,000 in revenue from the after school program as a result of the impacts of the COVID-19 pandemic. However, there is an estimated increase of about $4,000 in revenue from the summer recreation programs due to additional programming and enrollment from the summer camp program.

The budget also expects an overall increase of $25,000 from City Beach concessions, boat launch passes and facility use due to an increase in demand expected for this summer.

UNDER CAPITAL projects, the budget shows work on the third phase of the Armory Park master plan at a cost of about $375,000. The city has a Land and Water Conservation Fund grant for the project and also plans to provide matching funds through the resort tax and stormwater fund.

The Public Works Department budget is seeing a large decrease in spending in the upcoming fiscal year of about $19 million as a result of completing large capital improvement projects with the new wastewater treatment plant and an expansion of the water treatment plant. Both projects are set to be completed in July.

However, that department budget still includes a number of planned projects and equipment purchases.

For streets, the budget calls for $235,000 in overlays and chip seals on Greenwood Drive, Spokane Avenue and Hospital Way. It also includes $800,000 for improvements to the BNSF viaduct on Baker Avenue.

Under the water fund, the city is planning to spend $1 million on cast-iron water-main replacements. This has been an ongoing project for the city to replace leaking pipes throughout the city.

The council will hold a public hearing on and subsequent vote on the final budget in August.