Administrative budget more than doubles

SEELEY LAKE – The Seeley Lake Sewer District Board passed a budget for the 2021 fiscal year at their June 4 special meeting that is a little more than double last year’s budget. They tabled the decision on how to spread the assessment over the landowners. In other business the Board didn’t take action to authorize the project to go to bid because there are still a handful of things that are incomplete.

District Manager Jean Curtiss presented the Board with a proposed budget between $224,329 and $283,329. The $59,000 difference was what was budgeted for attorney fees.

The current year’s budget is $95,625. This leaves the District around $50,000 in the red. The deficit is mainly due to attorney’s fees associated with Board business.

The attorney fees were discussed at length during the May 21 regular meeting. Based on the current year, Curtiss recommended budgeting $84,000. Board training was proposed to help cut down on the need to ask questions of the attorney and the Board felt they could be better at not using the attorney as often. Curtiss presented the lower option of $25,000 for legal fees.

Other big-ticket items in the budget included: $68,000 to rebuild the reserve to an acceptable level for the U.S. Department of Agriculture Rural Development (RD), the main funding agency; $28,000 for the District’s reserve; $15,000 in grant matching; $13,504 for grant writing; and $15,000 for an easement purchase off the north end of Pine Drive.

RD is requiring the District to have a reserve set-aside before going to bid. The Board discussed setting this aside over two years but left the full $68,000 in the budget for this year.

Curtiss said the $28,000 District reserve could be taken out of the budget this year but there are some other things that the District needs that reserve for such as the operating and maintenance subsidy for Phase 1. In theory that subsidy money won’t be needed for at least a year while the system is being constructed.

The Board also discussed budgeting for an election on the proposed sewer. At last month’s meeting Director Beth Hutchinson and newly elected but not seated Directors Tom Morris and Jason Gilpin all said they supported putting the system to a vote.

Curtiss suggested that rather than budgeting for an election with unknown cost, they could leave the $28,000 in for the reserve and then they could use that if needed.

The Board opted to leave reserves in but further reduce the legal budget to $15,000. This brought the total budget to $214,329.

The Board voted unanimously to pass the budget.

The Board then took up discussing the assessment methodology.

For the last several years the assessment method put a flat rate on properties with a dwelling unit on them and a rate based on the square footage of all the non-dwelling unit properties.

The Board looked at several ways the assessment could be spread including the existing method, equal amount per parcel for all landowners, basing it on the market value or taxable value of the land excluding all improvements and a combination of flat rates for dwellings, flat rates for commercial and square footage rate for all others.

The existing method has created some heat from Pyramid Mountain Lumber, Inc. because they own about a fifth of the land in the District. That made Pyramid liable for about a fifth of the budget. It also meant that several of the commercial properties that were small lots were paying less than homeowners.

By charging equal assessments everyone would pay the same but it lays a significant amount more on homeowners.

Using the market value method each lot would pay based on the value of their land excluding improvements. This method reduced the tax burden on most residential lots but would greatly increase the cost to lakefront property. For example, a half-acre residential lot in town would cost approximately $140 whereas a half-acre lot on the lake would cost approximately $1,400.

Using the taxable value was similar to the market value but it eliminated some parcels from having to pay anything such as schools and churches.

The combination method put a flat rate on dwelling units resulting in sewer taxes a little more than double that of last year. The flat rate on properties used for commercial purposes would be a significant increase for most businesses with the biggest increase landing on small commercial lots. The remaining lots would be assessed on square footage and approximately double last year’s assessment.

Hutchinson said she liked using the market rate because it reduced the burden on residents living in poorer parts of town and also didn’t hit businesses that were on small lots. She took issue with the combination method because it meant that the floral shop would be paying the same as gas stations and the mill. She didn’t feel that small businesses had the ability to absorb such a high increase.

While the Board was able to see how the assessment methods impacted each landowner, the spreadsheets were not available to the public ahead of the meeting. Hutchinson felt that the public should be able to see how the different methods affected them personally and suggested the Board choose two methods to focus on and publish those ahead of the next meeting.

The Board voted to publish the numbers for the market value and the combination assessment methods and put the decision off until the June 15 meeting to give the public time to look at the numbers. The proposed assessment methods will be available on the District’s website seeleysewer.org ahead of the June 15 meeting.

In other business, President Pat Goodover explained that because the lawsuit against the District filed by Don Larson has been dismissed, the approval to put the project out to bid was added to the agenda.

After a conversation with Steve Troendle, Director of Community Programs, Montana State Office of RD, Goodover said there are four things that still need to be accomplished before the project can go to bid.

At the meeting Curtiss said the four things were just providing some documents to RD regarding the things like the budget and easements. However, based on the email the District received from Troendle that was provided to the Pathfinder after the meeting, there appears to be more than just providing some documents.

Troendle writes that RD cannot authorize the District to go to bid yet. He listed four things that are not complete: Not having all the right-of-ways; not having enough user agreements signed; being short $800,000 - $1,000,000 in contingency and not having all of the bond documents executed. He also noted, “This is not the full list. We will issue a full list later.”

Troendle explained that the District has only about 50 of the required 148 user agreements signed and does not have a documentation confirming the revenue will be sufficient to operate the system.

Regarding the shortfall in the contingency, Troendle writes that the plan to use the latest Water Resources Development Act grant will not work as that grant cannot be used for Phase 1 or the treatment plant.

The bond documents that are not completed appear to have been held up by Larson’s other legal action against the Missoula County Elections Administrator. The judge has since ruled against Larson and that case is now closed as well.

The Board’s regular June meeting will be on June 15 at 5:15 p.m. and will be hosted electronically. For information on the meeting and how to join the meeting visit the District’s website seeleysewer.org or look for the posted agenda on the bulletin board at the post office.