Annual assessment may double

SEELEY LAKE – The Seeley Lake Sewer District Board discussed a plethora of topics at its May 21 regular meeting including more than doubling the annual District operating budget, project updates, hiring a new attorney, drilling new test wells and performing an income survey. The meeting was recessed in the middle to hold a public hearing on a grant application for Phase 2 of the collection system.

As the meeting started President Pat Goodover asked the directors in attendance, including newly elected but not seated directors, their thoughts on where the project was going.

Director Beth Hutchinson and newly elected but not seated directors Tom Morris and Jason Gilpin all said they would like to see the decision of whether to move the proposed sewer ahead be put to a vote of the electorate.

Morris noted that the notice and protest allowed only a protest of the assessment methodology. The people have never been given the chance to vote on whether or not to build the proposed system.

Hutchinson said the Board has historically refused to listen to the people.

Goodover and Hill both felt that the Board should move the sewer project forward as it has been.

Hill hopes that the project can be bid while the bidding environment is favorable to the District.

Goodover added that he felt all the alternatives had been considered and this project was the best system to accomplish what the District needed to do.

Outgoing directors Davy Good and Mike Boltz did not appear to be present at the time or they made no comment.

Curtiss presented the Board with a proposed budget of $279,525 for next year’s District operating expenses. The proposed budget was nearly triple of the current year’s budget of $95,625.

Curtiss said last year the District spent $160,000 more than anticipated out of the reserve. The main cost overrun came from the legal bills for District’s regular business, excluding litigation expenses. Curtiss attributed some of this to not being able to spend the project’s grant money on some engineering and other items due to delays in the project.

The largest increases to the proposed budget included $77,000 extra for legal expenses, $35,000 for grant writing/match and $68,000 for rebuilding the reserve.

Curtiss said she felt the legal bills should go down because last year the District worked through significant by-laws changes. The District also worked on several policies such as the Rules & Regulations as well as the User Agreements that were later scrapped after the Board resolved to mandate hookups. All required legal review.

Hutchinson recommended they add in funds to receive Board training. There were already some training funds in the budget that went unused last year.

“Can we learn enough through training that perhaps we can be more responsible in our accessing an attorney?” questioned Hutchinson.

Curtiss also felt the Board could do better about not seeking so much legal review if they learned to work together better. She also felt they could internally discuss all things further before involving the attorney to save money.

Curtiss explained that the District has to put aside the $68,000 reserve just to meet matching requirements of current grants. Without this the project will not be able to move forward. Curtiss suggested they might be able to spread that over a couple of years.

The Board shifted and whittled the budget down to $215,875 before taking up discussion on when they needed to adopt it. The Board had planned on adopting the budget at last month’s meeting but it wasn’t available. Now they are running up against a deadline in order to get it on the tax rolls for next year.

Hutchinson said she felt the public needed to have time to look at the proposed budget. It was not available to the public ahead of the meeting and even the Board members didn’t receive it until just a few hours ahead of the meeting.

Curtiss said there probably needed to be a special meeting to discuss the assessment methodology anyways so they could be done together.

There has been a lot of discussion about how to spread the assessment more fairly for some businesses. Last year when the budget doubled, Pyramid Mountain Lumber, Inc. got hit especially hard. Their Sewer District tax bill went from approximately $10,000 to approximately $20,000 while residents saw an increase from about $80 to $150 last year. The proposed budget combined with the same assessment methodology could push Pyramid’s share upwards of $45,000 per year.

This operating budget is for the District expenses only and is not tied to either the debt service for the proposed sewer or the operating and maintenance of that proposed system.

The board agreed to have a special meeting June 4 at 5:15 p.m. to discuss and adopt the budget and assessment methodology.

The meeting was recessed around 6 p.m. for a public hearing required for the District’s application for $750,000 from the Treasure State Endowment Program (TSEP) for Phase 2 of the collection system.

The District previously received $750,000 in TSEP funding for Phase 2 but all the available funds were allocated to other projects in the state before the District could meet startup conditions.

Amy Deitchler of Great West Engineering gave a presentation on Phase 2 of the collection system. The total estimated construction cost to connect the 134 lots in Phase 2 is $6.5 million.

The District currently has approximately $800,000 in grants. If the TSEP funding is awarded it will bring the funding package requested from the U.S. Department of Agriculture Rural Development (RD) to just under $5 million.

RD funding packages consist of part grant and part loan. Deitchler explained that RD does not allow projects to plan on more than a 25% grant to 75% loan. For that reason the TSEP grant application uses 25% RD grant to calculate the costs to the landowners.

With 25% RD grant, each landowner’s debt service would be $101.89 per month on top of the $27.21 per month on the treatment plant. The TSEP application shows operating and maintenance costing $44.43 bringing the total to $173.53 per month for Phase 2 landowners. If RD awards a 50% grant funding package similar to what was received in Phase 1 the estimated rate per month drops to $140.46.

The Montana Department of Natural Resources and Conservation sets a target rate for communities based on a percentage of the median household income. The combined target rate for water and wastewater is $78.22 per month.

Seeley Lake residents on the public water system pay an average of $64.58 per month for water. This makes the combined estimated rate for Phase 2 landowners $238.11 per month. This is more than 300% of the target rate. Even with a 50% grant from RD, it is estimated to be more than 250%of the target rate.

Deitchler said that these high rates are why Great West and the Board are continuing to look for more grants to bring these numbers down.

Great West is currently doing the final design of Phase 2. Deitchler said the plan is for the project to be able to go to bid as soon as possible with construction able to start in the summer of 2021.

Goodover, Hill and Boltz voted to submit the application while Hutchinson abstained saying she was not able to access the document that was provided electronically. Morris and Gilpin indicated they would have voted against applying.

Project updates:

Curtiss said the easement on Pine Drive is still in the works. The family that inherited it consists of five people from the two sides of the family. One side has decided they don’t want to deal with it so they are in the process of signing it over to the other side. Then they will have to go though a quite claim process in order to grant the easement.

Curtiss reported that the easement for the lift station located on Boltz’ property has been acquired and filed.

RD has approved the project bid documents and plans to go to bid.

EDA grant:

Curtiss recommended the District change their application to the U.S. Economic Development Administration from requesting assistance due to the 2018 flooding to COVID-19 assistance. Curtiss said the EDA grant needed to be tied to businesses and she was having a hard time finding businesses that suffered losses from the flooding. After talking with EDA personnel she felt the change could be made.

The Board voted to make the change.

New test wells:

Hutchinson asked that the board discuss drilling some new test well. She argued that there are currently no test wells in either Phase 3 or 4 of the District.

The District has test data from three wells with two located in Phase 2 and one in Phase 1. The well in Phase 1 has become unusable as a test well so the District is now only testing two wells.

Curtiss said the District does not have any money budgeted for new test wells and she was unaware of any grants that would pay for them. She said new test wells cost $75 per foot with an average depth of 50 feet costing $3,750 each.

It was suggested they might find some old existing wells that they might be able to do testing on. Morris said he asked the District years ago if they would want to use his well and the engineers told him they didn’t want to use it because it was stagnant from not being used.

Income survey:

Hutchinson proposed conducting an income survey of the District. She said it is not just for applying for grants but for the Board to understand the economics of the District. She felt they could conduct a survey using double blind envelopes and have people send them to a trusted third party like the elections office.

“We can’t very well look at helping people if the sewer does get built if we don’t know who is going to need help,” said Hutchinson.

Curtiss suggested that Midwest Assistance Program (MAP) could potentially provide some help to conduct the survey. MAP could be the third party to collect and compile the data but MAP can’t fund it.

Legal representation:

Hutchinson said she heard at a government board training session she attended that it was a good idea for the districts to consider having two attorneys, one for litigation and the other for regular business like reviewing contracts.

It has been brought up that the two new board members may have potential conflicts of interest because Morris is involved in two lawsuits involving the District. Hutchinson felt that the conflict goes the other way too and that the new board members should be able to discuss regular Board business with the Board’s attorney without it creating a conflict.

Hill didn’t think the Board could afford one attorney, let alone two.

The item was not listed as an action item so Hutchinson said she would like it added to next month’s meeting agenda.

June meetings:

There are three Board meetings scheduled in June. All the meetings are scheduled for 5:15 p.m. and will most likely be conducted electronically. Watch the District website seeleysewer.org for call in and computer log in information as well as agendas.

• June 4 is the District operating budget and assessment methodology meeting.

• June 15 is the special meeting to seat Morris and Gilpin and do Board reorganization.

• June 18 is the Board’s regular meeting.

Editor's note: This article was corrected. The original article overstated the amount of taxes Pyramid Mountain Lumber INC was assessed by the Sewer District.