A move by Gov. Brian Schweitzer to hold back spending on $3.5 million in grants for infrastructure projects across Montana is causing major financial headaches in the Flathead, leaving the county and Columbia Falls on the hook for road projects completed last fall with the understanding that the state would be reimbursing their cost.
Last week, Flathead County Administrator Mike Pence learned grant funding from the state Commerce Department was on hold for improvement projects on Mennonite Church Road and elsewhere in Creston totaling $423,650. Though some follow-up work remains to complete the projects, they are mostly done.
“You try to follow the rules and holy cow, now in the middle of the game they’re indicating that we may not get the money,” Pence added. “That’s about the worst thing I’ve ever seen in my 34 years of government service.”
In Columbia Falls, payment from the state is now on hold for improvements to Third Avenue East from U.S. Highway 2 to the Rivers Edge Park – a project totaling $91,060.
“I’m surprised the governor is going to somehow order that this is a savings to the state,” Columbia Falls City Manager Bill Shaw said. “Even those of us in a contract are out in the cold too.”
David Ewer, Schweitzer’s budget director, said he hoped funding for these local grants could eventually be freed up, but as Montana’s financial situation has deteriorated in recent months the spending focus has become more limited to services like education, corrections and public health.
“We are aware of the consternation,” Ewer said. “It’s a hold, it’s not a cut, but I don’t have an absolute timeline when it gets fixed.”
“Our priority needs to be what is core in state government,” Ewer added. “I’m guardedly hopeful, but I do think revenues are going to improve.”
Although putting these projects on hold is not part of the roughly $40 million in state budget cuts suggested by Schweitzer, if left unspent the grant money will revert to the general fund for the next budget period. Federal stimulus funding freed up the state money in the last Legislature allowing for the local government grants to pay for these and 48 other projects around Montana.
While not technically “stimulus” projects, Pence said these infrastructure improvements were intended as part of a wider effort to put people to work quickly on jobs that were “shovel ready.”
“Indirectly, this was supposedly stimulus money, even though it was technically budgeted out of the general fund,” Pence said. “We earmarked that project because it was ready to go and approved.”
As a result, work was underway on these projects in Creston and Columbia Falls soon after learning the grants were coming through. But such quick work has now proven a disadvantage, since the state is no longer forthcoming with the funding. Whereas other municipalities that hadn’t yet begun work will simply have to put the job on hold, if Flathead County does not receive the reimbursement, the money will just come out of the roadwork budget.
“It will not allow us to do another project or work in the amount of $433,000,” Pence said. “It’s the overall road budget.”
Other cities and counties around the state had mostly completed projects, or were partly done with the work they presumed would be paid for by these grants. Pence said county administrators, city managers and other municipal officials throughout Montana are trying to organize a meeting in Helena and plan to invite Schweitzer to attend.
“It’s not going to be a pretty picture,” Pence added. “We’re just getting started on trying to get this remedied.”
Shaw is optimistic the grant money will eventually clear.
“I’m confident we will eventually get these funds,” he said.