Commissioners approve assessments, awaiting details of tax appeal
City Commissioners approved several assessments during their Aug. 15 meeting.
They set the boulevard district, park district, street maintenance district, special improvement lighting districts and the Portage Meadows assessments.
City officials had initially planned to set the general property tax mill levy and permissive medical levy during this week’s meeting, but have opted to wait until the Sept. 5 meeting due to an appeal by Calumet.
City Manager Greg Doyon told commissioners that the city received their taxable values from the Montana Department of Revenue on Aug. 7.
He said that they had projected in their budget that was adopted in July for about $400,000 in newly taxable property.
Doyon said that the DOR numbers showed about $1 million, some of the most significant tax revenue growth the city has seen since 2010 when the city dissolved a tax increment financing district and those funds reverted to the general fund.
The numbers show an increased mill value by 26.7 percent, Doyon said.
But, Calumet has requested a review of their valuation and Doyon said the DOR numbers came with a note that the valuations could change and require recertification.
Doyon said that for the department to make note of the appeal, it signaled that it’s likely to impact the city’s taxable valuation.
He told commissioners that staff doesn’t know how long the appeal will take and it “makes it really hard” to measure the impact to local taxpayers.
Doyon said it will also impact estimates on the potential tax impact of the proposed public safety levy. He said staff are working to provide the most accurate information but the appeal muddies the waters, frustrating staff and taxpayers.
The Montana Department of Revenue told The Electric that like any taxpayer, Calumet had 30 days to review their 2023 assessment notice and filed a request for an informal review for Montana Renewables and Calumet.
DOR is “currently in the informal appeal stage and working with the taxpayer to gather information. At this point, we have not finalized out review of the information provided,” according to the department.
Montana Renewables, which is the new biofuels company that much of Calumet’s local property now falls under, applied for a tax abatement under Montana law for their air or water pollution control and carbon capture equipment, according to the Montana Department of Environmental Quality.
“The application requested all equipment associated with Montana Renewables be considered air pollution control equipment/carbon capture equipment. The Department of Environmental Quality is responsible for specifying procedures necessary to identify air and water pollution control and carbon capture equipment for certification and compliance, as well as identifying and tracking compliance. Montana DEQ reviewed the application and does not consider the entire facility to be air pollution or carbon capture equipment. DEQ requested additional information regarding equipment that would be considered air pollution control equipment/carbon capture equipment. Montana Renewables has requested an informal conference. DEQ will meet with them and continue to follow the process outlined [under the state administrative rules], relative to a final determination regarding the facility tax status,” Moira Davin, a DEQ spokeswoman, told The Electric.
A civil lawsuit was filed against Calumet and Montana Renewables earlier in August by Burns and McDonnell Engineering Company of Missouri.
Calumet and Montana Renewables hired Burns and McDonnell in 2021 to “engineer, procure, and construct certain energy related facilities: on Calumet’s Great Falls property, according to the lawsuit.
The engineering company fully invoiced Calumet and Montana Renewables this summer for $231,829,466.13 for their work on the Great Falls facility.
According to the lawsuit, Calumet and Montana Renewables have not paid a remaining $17,068,660.55 of the total owed to the engineering firm.
City Commissioners adopted their budget and resolution of intent to increase taxes in July.
During their Aug. 15 meeting, city commissioners set the other special assessments, based on estimated taxable values.
The boulevard district is a special assessment for the care and maintenance of more than 15,000 street trees, including pruning, removal, planting and streetscape design.
The city assesses property owners within that district to cover the cost of those services performed by the Natural Resources Division of Great Falls Park and Recreation.
Commissioners approved a six percent increase, or $5.77 for the average sized lot, to cover increased costs of maintaining the boulevard district trees for the upcoming fiscal year.
The last boulevard district increase was 12 percent in 2022, according to city staff.
There were no increases to the assessment in 2020 or 2021 due to COVID.
Staff proposed $0.013581 per square foot, for a total of $481,875 and will equate to about $101.86 for an average size lot of 7,500 square feet.
Commissioner Rick Tryon asked about tree maintenance in the district since he takes care of his trees.
Steve Herrig, Park and Recreation director, said that the city arborist and his forestry staff maintain a list of trees needing trimming or other maintenance.
Any trees the present safety hazards are the first priority, then the forestry division schedules the rest of the needed tree trimming.
“”We’re really losing a lot of ash and elm trees,” Herrig said. “It’s unfortunate but the last couple winters have really taken a toll.”
The forestry department is starting their process of marking dead or dying trees for removal in the boulevard district and city parks.
Trees marked with an orange dot will start being removed in the fall after lead pickup and the stumps will be removed at a later time, according to the city.
There was no public comment on the boulevard district assessment and commissioners voted unanimously to approve.
The park maintenance district assessment is proposed to remain the same.
The park district was approved by voters in 2018 to cover operation costs for city parks and recreation facilities, particularly focused on needs identified in a 2016 park and rec master plan.
The funds can’t be used for programming.
Staff is proposing to keep the cost at $1.5 million, the same level set in 2018.
The assessment is based on the taxable value of each parcel within the district to raise $1.5 million.
The city is waiting to confirm the certified taxable values, but based on last year’s valuations, the estimated assessment will be $24.44 on a $100,00 market value property; $48.88 for a $200,000 market value property; and $73.32 for a $300,000 market value property.
Jeni Dodd spoke during public comment and said that commissioners told the public when the park district was proposed that after the first three years, they’d reduce the assessment.
Mayor Bob Kelly said he didn’t believe commissioners had ever made that assertion and Tryon said that the mayor was the only one on the commission who was seated when the district was approved.
No one else spoke in favor or opposition to the park district assessment and commissioners voted unanimously to approve.
The city has 27 special improvement lighting districts with about 9,429 total roadway lights.
Most of the lights are owned by NorthWestern Energy and the city pays a maintenance fee for the lights as well as a fee for electrical transmission and distribution.
The electrical supply for the street lights is from Energy Keepers on a city contract and the other three percent of roadway lights are city-owned, according to staff.
The lighting district assessment funds are used to maintain the light poles and cover electrical supply costs.
City staff estimates the district needs $1,325,660 for operations, a 14.1 percent increase over last year.
Not all of the districts will have an increased assessment as some have sufficient cash balance to cover operational costs, according to city staff. Some have been using fund balance to offset cost increases, but most don’t have enough to offset the city’s 200 percent increase in electricity costs, according to staff.
The city maintains about 393 miles of streets and alleys and the street maintenance assessment covers those maintenance and traffic operation costs.
Commissioners approved a 10 percent increase for the new budget year, which began July 1.
The last street assessment increase was 10 percent in 2015 and since then, the cost of asphalt overlays have increased 38 percent, chip seal materials have increased 49 percent and winter maintenance material has increased 65 percent, according to staff.
The increase for this budget will allow for pavement preservation to continue at the same rate and account for inflation in material costs, according to staff.
The funds, coupled with state gas tax funds, will allow the street improvement program to continue at the same rate, according to staff.
For an average-sized residential lot of 7,500 square feet, the estimated assessment factor is $0.016170 per square foot, or about $121.27, an estimated increase of $11.02, according to city staff.
The total estimated assessment for the district is $5,041,592.
Tryon asked about how the city handles potholes
Chris Gaub, city public works director, said that they budget to fix about 1,000 potholes a year.
He said they repair potholes as quickly as they can once one has been reported.
The streets division also regularly maintains city streets by chip sealing about 86 blocks annually and performing mill and overlay on about 44 blocks annually, Gaub said.
There was no public comment on the street assessment and commissioners voted unanimously to approve.
The Portage Meadows special improvement maintenance district assessment was established in 1977 to maintain the green belt of the Portage Meadows addition for materials, snow removal, water, mowing, fertilizer aerification and tree pruning as part of the original planned unit development, according to staff.
Commissioners approved a 5 percent increase, or $18.32 annually, for the average sized lot to cover those costs.
The last increase was five percent in 2022 and there was no increased in 2020 or 2021.
The district total cost is an estimated $71,941 for the new budget year, according to staff.
That equates to an estimated assessment of $0.085463 per square foot for an annual $384.67 assessment for an average lot of 4,501 square feet, according to city staff.