Flathead County hasn’t fulfilled a nearly decade-old state Supreme Court ruling requiring Montana counties to pay full-market value for road easements across state trust lands, meaning the county – and the property owners who live on those roads – don’t have legal access.
In Flathead County, officials from the Montana Department of Natural Resources and Conservation estimate that there are at least 80 different segments of road – all of varying length – with unpaid easements. And hundreds of property owners could be affected.
“Anyone who lives on a road that crosses state trust land before their property, technically does not have legal access,” DNRC area manager Bob Sandman said. He added that it’s “unlikely that many people know” and that most will only find out when they try to sell.
Among the affected roads in Flathead County are frequented areas like Pleasant Valley Road, KM Ranch Road, North Fork Road, LaBrant Road, Jewel Basin Road and nine roads in the Happy Valley area.
The county is still grappling with how to settle its bill. With property values still high throughout the area, the cash-strapped municipality is looking at a minimum bill of about $6 million for the easements.
“And $6 million is the most conservative estimate,” Commissioner Joe Brenneman said. “Some estimates have gone as high as $20 million. Even if it was a half-million we probably couldn’t afford it.”
The easement value is determined using numbers from the Montana Department of Revenue.
The state’s trust lands were established in 1889, when Congress granted federal land to several western states for the purpose of generating revenue for public education. Today, the DNRC manages 5.1 million acres in school trust lands, leasing the parcels primarily for agriculture, grazing, recreation, timber harvest and oil and natural gas extraction.
In the 2008 fiscal year, the trust lands generated $70.7 million in total revenue for state schools.
Historically, fees for road easements across state trust lands had been sold to individuals and municipalities at a fraction of market value. But in 1997, Montanans for the Responsible Use of the School Trust – or MonTRUST – a watchdog group that follows the management of state assets held in trust for public education, sued DNRC over several uses of state trust land.
In 1999, the state Supreme Court upheld a district court ruling in favor of MonTRUST, overturning five laws on leasing of state land, including the lower fees for road easements. The court said the laws failed to ensure that government fulfills its constitutional mandate to get the most money it could from such uses.
“The agency, I think, had always assumed a county road wasn’t a use, but that was challenged and the mandate from the courts was clear: We had to determine how we’d be compensated for it,” Mary Sexton, DNRC director, said.
The 2001 state Legislature followed accordingly, giving counties until 2006 to inventory and pay for easements for all county roads crossing state trust lands.
The process since has been slow moving, with many “counties hoping this would go away,” Harold Blattie, executive director of the Montana Association of Counties, said. Sexton estimated only about one-third of the state’s counties have completed their easements so far.
In 2005, MACo successfully petitioned the Legislature to extend the easement sunset to 2011, when it became clear counties like Flathead were nowhere near meeting their requirement. Blattie said the group plans to petition for another extension during this year’s legislative session.
But counties – and their residents – should make no mistake, he cautioned the mandate to pay market value for the road easements won’t be changed.
“The fact is the state Supreme Court decided the matter, and used the Constitution as the basis of their decision,” Blattie said. “Simply put, I’ve been told by everyone for many years now that to change it would require a change in our Constitution. I can’t imagine there’s much will – nor should there be – for that.”
In order to meet their requirements, other Montana counties have budgeted small amounts to consistently buy up the easements over time. Many have also required new developments to foot the bill for access.
To pass muster with the Flathead County commission and ensure legal access for their future residents, developer Plum Creek Land Co. agreed last week to pay for easements for the Haskell’s Pass subdivision north of Marion.
“The planning board took it out and they said to go ahead and put it back in,” Commissioner Gary Hall said. “It’s tremendous of them to realize their impact there.”
For their part, the DNRC is not pushing the counties to secure their easements. “We have no intent of going out and forcing counties to do this,” Sexton said.
But the county will likely be pressured from another source, she said: “I think they’ll be pushed by homeowners because of the legal access issue.”