The City of Whitefish's proposed budget for fiscal year 2023 reflects the region’s record growth by showing an increase in resort tax collection which results in additional property tax relief, while simultaneously making the hiring of staff in several departments a major issue for the city.

The budget provides spending authority to accomplish projects and continue to provide services during the fiscal year that runs from July 1, 2022, to June 30, 2023.

The total proposed budget for fiscal year 2023 is $50.9 million compared with last year’s approved budget of $49.8 million. The budgeted fund balance at the end of FY23 totals $5.2 million and represents 38.91% of total budgeted expenditures.

In her report, City Manager Dana Smith concluded, “The proposed FY23 budget, as presented, will continue to support the City’s endeavor to provide exceptional services to our community, adjust to growth and demand, and improve our facilities all while keeping increases in property taxes and assessments at a minimum.”

During a work session last week to review the proposed FY23 budget, Smith said that while the resort tax brought in more money than ever and would result in some additional property tax relief, her main focus is personnel. City employees have been spread thin, covering for vacancies in the staff.

Resort tax is a 3% tax collected from lodging, retail purchases, and at bars and restaurants. The projected amount collected in FY22, $4.79 million, is the highest total since the resort tax began in 1996.

Revenue from the resort tax is used to service streets, parks and greenlands and the Haskill Basin Conservation Easement while a percentage of it is used for property tax relief. According to Smith, the Haskill Basin Conservation Easement bond is expected to be paid for in whole by resort tax in FY23. The record amount of resort tax collected will also provide an additional tax rebate to property owners.

While a residential property with a market value of approximately $440,000 will see a tax savings of $41 on the city’s portion of their property tax bill, there are other areas where taxpayers will likely see an increase.

“That savings also does not take into account the water and sewer increases and the trash bill increases that are due, not only to the switch to animal-resistant bins, but also to staffing shortages and a rate increase,” Smith cautioned.

It is predicted that the number of total mills levied will decrease by 8.431 from FY22 and FY23.

Amounts spent on capital projects fluctuate annually as projects and needs change. Total capital spending in FY23 is projected to decrease $5.2 million compared to the prior year as construction wraps up on both the wastewater treatment plant upgrade project (decrease of $3.49 million) and the water treatment plant expansion project (decrease of $1.2 million).

According to the city, the need to retain employees is of the utmost importance to ensure exceptional service to Whitefish. Modest increases of 4% to 3.5% for the past two years means wages have not kept up with the rate of inflation. The FY23 proposed wage adjustment is 7%.

Additionally, the increase in health insurance premiums of approximately 3% in FY23 will be paid for by the city. This way, employees will see the full 7% increase in their paychecks.

At the work session, Smith and some council members discussed the difficulties the city is having recruiting employees. They said while Whitefish has a high cost of living it does not have high pay and mentioned that other towns, like Bozeman, are offering stipends and bonuses to retain and lure employees.

The budget includes adding seven new positions and increasing the hours of two firefighter positions due to the record growth Whitefish is experiencing. The new staff includes a police officer, a firefighter, a second assistant fire chief, a new human resources position, a code enforcement officer for the planning department, a building inspector and new facilities maintenance position in the parks and recreation department.

The city says increased licensing fees for short term rentals will help pay for the code enforcement officer position and the record amount of building activity in Whitefish allows the building code fund to pay for the building inspector position.

There is a second budget meeting slated for June 13 at the City Hall conference room.