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City commission hears from economic development committee

POLSON — With a voice roughened by emotion, Mayor Heather Knutson began the June 1 Polson City Commission meeting with a request that commissioners and attendees join her in a moment of silence honoring Commissioner Dan Morrison, who passed away last week. 

Then the commission dived into the agenda. 

Economic Development committee vice chair Becky Dupuis updated the commissioners on the progress of the newly appointed committee. 

Their first task has been to look at the possibility of a resort tax for Polson.

The group has met twice, determined that there is enough interest in a tax and have been compiling information from other communities who have a similar tax.

“Now we are crafting the meat of the tax — who will be taxed, what will be taxed and what it will be used for,” Dupuis said.  “We thought it should be a six-month tax.” 

The first public meeting will be June 24, and the committee wants to have a basic format for people to see, according to Dupuis. The maximum that can be taxed is 3 percent; a maximum of 13 percent of the collected taxes can go back to property taxes to be divided up between landowners in the city of Polson. 

Commissioner Todd Erickson asked what communities similar to Polson had a tax and what was the most taxed retail business. 

“Unfortunately, I don’t think any of the communities really match us,” Dupuis said. “We don’t just have tourists, we have summer people, too.”

Guessing at the most taxed business, Polson City Manager Mark Shrives said restaurants, bars and hotels. 

Although many communities started with the Whitefish model for resort tax, Dupuis said Red Lodge has the most comprehensive list of what’s taxed.

Commissioners asked what the Confederated Salish and Kootenai Tribes thought of the tax; Shrives and Knutson had previously made a brief presentation to the tribal council.

“They were interested and wanted more information,” Shrives said. He and Knutson will return to the tribal council in two weeks with an update.

Dupuis said tribal members would be exempt from paying the tax, “although you can exempt anyone you want,” she said. “It doesn’t seem any of the other communities have an exempt status for anybody.”

Another question was whether the 3 percent tax would drive consumers out of town. That’s a question all communities ask, according to Dupuis.

Also discussed were ways to keep the process as simple as possible for merchants. The tax under discussion would provide for a 3 percent administration fee. 

“If you collect $100 (in taxes) as a business, you write a check to the city for $97,” Dupuis said.

The committee will meet with Whitefish merchants and city officials on June 3 and get their perspective on a resort tax. 

In other business, commissioners revisited the subject of impact fees, tabled from the May 18 meeting. Impact fees are what people who are building new houses or businesses in the city are assessed to pay their part for water, sewer, fire, parks and administrative work.

Polson City Finance Officer Cindy Dooley collected information from Whitefish, Hamilton, Livingston and Conrad. She also contacted Lewistown and Columbia Falls, but neither city has impact fees. 

Whitefish’s impact fees are at $5,372 — 95 percent of their maximum — and are the most split, going to paved trails, emergency services, parks main fund, city hall, and water and sewer. Hamilton charges $8,163 at 100 percent of their max, but included in that is a transportation fee for roads. Livingston’s fees are $3,237 at 100 percent; and Conrad’s fees for water and sewer are newly instituted, and nobody has applied yet. 

Commercial fees are based on square footage, Dooley said. None of the entities charge park fees for commercial buildings, she said. For a 7,000 square foot building, Whitefish would charge $9,730; Hamilton, $15,975; Livingston, $12,598; and Polson, at 100 percent, $18,897.

The impact fees go towards what the cities know they need, Dooley said. 

The commission voted to table the issue until next meeting so they can study it more.

Commissioners awarded the bid to drill a test well to O’Keefe Drilling Company, Butte. 

Bjorn Johnson Construction, Missoula, received the bid for building the golf cart storage building at Polson Bay Golf Course. 

Commissioner Stephen Turner asked if there were any Polson bidders, and was told there was one, but in this case the city manager was required to accept the lowest bid. 

As the commission continues to work its way through the City of Polson Book of Ordinances, they adopted Polson City Ordinance 2015-006 that deals with basic nuts and bolts specifics to include stormwater, utility poles, public works standards and infrastructure articles. 

The next commission meeting will be held June 15 at 7 p.m. at Polson City Hall, 106 First Street E.

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