Whitefish Mountain Resort

A skier makes his way down a run at Whitefish Mountain Resort. Whitefish Lake is seen in the background.

JAMES WOODCOCK, Billings Gazette

WHITEFISH – Missoula isn’t the only place where water is a hot topic this spring.

For more than a century, Whitefish has relied on the largesse of a private landowner for most of its water supply.

That landowner, F.H. Stoltz Land and Lumber Co. of Columbia Falls, owns more than 3,000 acres in Haskill Basin, where the watershed Whitefish uses is located. The basin is just east of Whitefish Mountain Resort.

Two small creeks – Second Creek and Third Creek – flow out of the drainage, and supply Whitefish with roughly 75 percent of its water. The city owns the rights to the water, but has no control over the land it comes off.

Stoltz has “been an excellent neighbor for 100 years or more,” says former Whitefish Mayor Mike Jenson. “But everything changes. If they want to sell it off, or develop it themselves, there is nothing preventing them from doing that.”

So on Wednesday, the Flathead County Elections Office mailed ballots to 4,134 Whitefish voters, asking if they want to increase the city’s resort tax – a sales tax on certain goods and services – from 2 percent to 3 percent.

The city would use the money raised to help pay for a permanent easement on the land.

***

The value of such an easement has been appraised at $20.6 million, but Stoltz is offering it to the city for almost $4 million less.

The $16.7 million deal would prevent development on the 3,000 acres in perpetuity, no matter who owns the land, and also provide permanent access for hikers, bikers, skiers and hunters.

Increasing the resort tax would allow the city to leverage $9 million in federal grants for the easement, and raise the money needed to pay the $7.7 million balance.

However, the legal option to secure the conservation easement expires at the end of the year.

“We’ve never had this opportunity before,” says Jenson, chairman of Vote YES for Water! Project Haskill Basin, “and there’s nothing saying we’ll ever have the opportunity again.”

Were the city to lose the Haskill Basin supply, it would be forced to take its water from Whitefish Lake. Proponents say treatment and pumping costs would run $500,000 a year, and would have to be passed on to city residents through water rate increases.

The resort tax, an option for Montana resort towns with populations under 5,500, allows communities to fund municipal projects through a tax paid by both residents and visitors.

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Second and Third creeks actually supply Whitefish with 100 percent of its municipal water most of the year, Jenson says.

“Only in the dry months, usually August and September, do we also have to pump out of Whitefish Lake,” he says. “If we had to pump 100 percent out of the lake year-round, it would increase costs tremendously.”

In extremely dry years, the lake may be used as an auxiliary source up to three months a year, Jenson says, while in extremely wet years, the lake may not have to be used at all.

There is also a First Creek. It too was once a part of the municipal water supply, but it comes off the land where the ski resort is located, and development there forced the city to abandon it in the 1970s, Jenson says.

Meantime, Whitefish’s population has likely doubled since 1970, and is up approximately 30 percent since 2000. The 1990 census put its population at 4,368, under the 5,500 limit established by the state for the resort tax, which allowed it to ask voters to implement the local sales tax in 1995.

But by 2010, the census showed Whitefish with 6,457 residents. The continued growth makes the 3,000 acres near Whitefish Mountain more attractive to developers, Jenson says.

“As land values escalate and pressures increase to sell lands for development, we cannot assume that this informal handshake agreement (with Stoltz) will continue,” the Vote YES for Water group says.

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The law allowing for the resort tax caps the tax at 3 percent. Whitefish is one of four incorporated cities to enact the tax (the others are Red Lodge, West Yellowstone and Virginia City), and the only one that opted for a lesser percentage when it was voted in.

Unincorporated resort communities with fewer than 2,500 people are also allowed to implement resort tax “areas.” St. Regis, Seeley Lake and Big Sky have done so.

In addition to protecting Whitefish’s municipal water source, the proposed easement would also provide for continued public recreation access and allow Stoltz to log its property.

“That’s a positive thing,” Jenson says. Stoltz has always logged it, he says, but only a certain amount, and only at certain times of the year, and “With the land managed with best practices, it decreases the chances of a devastating wildfire and protects the watershed even further.”

Seventy percent of the revenue raised by an increased resort tax would go to help pay for the conservation easement. Another 25 percent will go to property tax relief for Whitefish homeowners, and 5 percent would be returned to businesses to cover costs of administering the tax.

Ballots are due back at the Flathead County Elections Office by April 28.

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