City gets high credit rating; additional CDBG funds for COVID-19; looking at “economic recovery” budget; adjusting operations
The City of Great Falls is operating its emergency operations center in a limited manner and changing regular operations due to the COVID-19 outbreak.
“The whole operational nature of local government has changed in the last three weeks,” City Manager Greg Doyon told commissioners during their April 7 meeting.
He said the city is receiving guidance from federal and state agencies regularly and it’s not always clear so the city is doing the best with the information it has in managing operations during the pandemic.
COVID-19 CDBG funds
The city has received some federal funding related to the pandemic.
On April 6, the city was notified it had received $475,515 in special Community Development Block Grant funds from the U.S. Department of Housing and Urban Development through the CARES Act.
The special funds are “to be used to prevent, prepare for, and respond to the coronavirus pandemic in your community and to mitigate the impacts of COVID-19.
City staff said they’re reviewing the guidelines for those funds to determine how they’ll be used within the city.
Commissioner Rick Tryon asked is those funds could be used to provide property tax relief for local businesses.
Doyon said the program is specific to low to moderate income related activities so some businesses may not be eligible at all for those funds and that he hasn’t seen anything in the program guidance talking about tax deferments.
Taxes, upcoming city budget
Doyon said the city has been referring business owners to the Great Falls Development Authority, Great Falls Area Chamber of Commerce and the Montana Department of Commerce as those agencies were taking the lead on sharing information on resources available to small businesses.
The city does not assess property values or collect property tax. The state assesses the values and Cascade County collects property taxes and then allocates the city’s share to the appropriate entities within the county.
Doyon said if businesses, or residents, were concerned about meeting their tax obligations, they should call the county treasurer’s office to discuss options or potential penalties to help make their plans.
Under the law, the city manager does not have the authority to defer payment of property taxes and that the Montana League of Cities and Towns is strongly opposed to such measures since municipalities depend on those tax funds to provide the critical services being called on during this emergency, such as police and fire.
Doyon said he knows small businesses are struggling with governor’s stay home order in effect and the restrictions to restaurants.
“It’s going to be a real hardship” for some small business, he said.
Doyon said that going into the budget discussions, he’s planning to keep the budget largely the same as last year and only making changes to honor contracts.
His plan is to make it an “economic recovery” budget by limiting increases.
Moody’s credit rating
Moody’s Investors Service issued its credit rating for the city on April 7 as Aa3, a high quality rating.
According to Moody’s: “The city has solid financial position, which is slightly favorable in relation to the assigned rating of Aa3. Great Falls’ cash balance as a percent of operating revenues (18.2 percent) is materially lower than the U.S. median, and fell modestly between 2015 and 2019. Also, the fund balance as a percent of operating revenues (21.6 percent) is weaker than other Moody’s-rated cities nationwide.
Debt and Pensions: The debt burden of Great Falls is exceptionally light and is quite
favorable in relation to its Aa3 rating. The net direct debt to full value (0.1 percent) is materially below the US median, and was flat from 2015 to 2019. That said, the pension liability of the city is elevated and is a weakness in comparison to the assigned rating of Aa3. The Moody’s adjusted net pension liability to operating revenues (3.0x) unfavorably is materially above the U.S. median.
Economy and Tax Base: Overall, the economy and tax base of Great Falls are strong and
are comparable to its Aa3 rating. The total full value ($5.8 billion) exceeds the U.S. median, and increased dramatically between 2015 and 2019. Also, the full value per capita ($98,308) approximates other Moody’s-rated cities nationwide. Yet, the median family income is just 86.1 percent of the U.S. level.”
Currently, city employees are working alternating in the shifts, some in the office, some remotely to be able to physically distance so they stay healthy and productive.
Doyon said staff needs to be health in case emergency operations ramp up. He said the city is working to minimize the disruption of services as much as possible. He does not plan to close the Civic Center, unless there’s a spike in local cases, since it’s already a “ghost town” and most offices are closed to walk in traffic. Things like building permits and other planning functions are still happening though.
He said the human resources department is working with the labor groups on changes that have happened due to COVID-19 and so far, it’s been smooth, but expects more issues the longer the pandemic continues.
During the April 7 meeting, commissioners asked if any of the federal relief money would be coming to Great Falls.
Doyon said he expects any federal aid to come through grant programs already in place, such as CDBG. The city may be reimbursed later by the state or federal government for response efforts, but there are not firm details on that yet, he said.
Mayor Bob Kelly said he was on a conference call in which an official said the COVID-19 relief funds from the federal government were only going to municipalities with more than 500,000 so that money won’t come to Great Falls.
Instead, the money would be funneled through governor’s office to be distributed and discussions are already beginning on how that money will be used, Kelly said.