Whitefish City Council reviewed a proposed compensation plan at a work session last week before diving into a discussion about how to allocate a portion of the city's resort tax revenue.

Jim Kerins with CMS Consulting conducted a salary survey for the city at the beginning of this year and presented a preliminary compensation philosophy to Council and staff in July. He returned last week with a final draft for Council’s review.  

The council will adopt a final draft by resolution at an upcoming meeting. 

“The compensation philosophy is going to be the city’s formal statement that outlines how it pays and rewards its employees,” Kerins said. “It is, basically, going to be a blueprint that’s going to guide compensation decisions.” 

Seven elements of the compensation philosophy are wages, benefits, professional development, incentives, cost efficiency, compliance and transparency. According to the draft, the goal is to provide the best value to the taxpayers while ensuring city employees are paid appropriately. 

Childcare support, health and wellness incentives, and paid leave are parts of the benefits and work/life balance portion of the philosophy. Another aspect of that section, remote work schedules, triggered a discussion.  

“I think the employees are ... happy to have the opportunity to work from home,” said Councilor Rebecca Norton. 

Councilor Steve Qunell expressed uncertainty about locking that feature into the philosophy.  

City Manager Dana Smith said the current policy states remote work may be approved by the city manager. She said one day per week remote is valued by people in positions that can take advantage of that schedule, and she doesn’t believe there has been a loss in productivity. 

Kerins recommended doing a salary survey every three to four years. Councilor Frank Sweeney suggested having the salary survey and the compensation philosophy reviews on the same schedule. 

THE COUNCIL also reviewed a variety of new ways to distribute the resort tax funds. Each of five options included the state legislated 5% tax relief. In Whitefish, at least 25% of the resort tax revenues have been used to provide property tax relief since the resort tax began. 

Earlier this year, Council discussed potential changes to the distribution of these funds to be more equitable, given the increased numbers of second homeowners and growth in the area. 

One option proposed distributing the remaining 20% to property taxpayers whose primary residence is within city limits. Another suggested allocating 10% to the Community Housing Fund and 10% to primary resident property taxpayers. 

A third notion was to distribute 20% evenly among registered voters, an option that would amount to each voter receiving about $300.  

“That’s any voters, so that does include anybody who is 18 years or older and is registered to vote,” Smith said. “That is closer to 5,300 checks if every voter applied for a refund.” 

Another idea distributes the 20% on a flat rate to all property taxpayers, both residential and commercial. The fifth option proposed using the 20% for community housing, streets or parks and paths. 

Since the state is currently looking into changing the tax rate, the council considered tabling the issue until the changes at the state level are known. 

“Whatever we do, whatever they do, it's going to challenge us to have to change again,” Sweeney said. “We're not going to be given any flexibility.” 

Qunell said it isn’t fair that part-time residents get the same amount of tax relief from the resort tax that full-time residents receive. 

“We need to work hand in hand with the state as they figure out how they’re going to classify second homeowners versus primary residents ... so we can quickly take that information and apply it to whatever we do,” Qunell added.  

Any changes to the resort tax distribution would be put to a vote. The next chance to have this issue on the ballot is November 2025.