Conundrum

Philip M. Faccenda on April 29, 2017

noun co·nun·drum

Our City Commission seems to be faced with a difficult decision, or as Commissioner Bill Bronson says, “it’s a conundrum.”

Here’s the issue; to vote for a zone change which would allow a four story motel, approximately 50 feet high, close to the 10th Ave S/Fox Farm intersection, or to vote against it in order to stem the proliferation of casinos — although none are immediately proposed — in the same area. The proposed change from a C-1 zone to C-2 zone would only be necessary to increase the allowable height restriction from 35 feet to 65 feet.

Re: Great Falls, Montana Code, Land Development Chapter 20, 17.20.4.020, Exhibit 20-4.

Some say that we don’t need anymore motels and those new jobs aren’t really economic development, or that the potential property tax generated by the project would not decrease our existing residential property taxes. Both of these arguments are false and here’s why. Any project built in Great Falls that provides jobs, both construction jobs and permanent jobs, is economic development, something we sorely need, even if at the very least it replaces jobs we have lost for the past several years. Simple enough to understand.

Also, any project that grows the City tax base lessens the burden on residential tax payers because the cost of government, if it remains somewhat constant, requires smaller contributions from each taxpayer.

Bronson’s “conundrum” that is keeping him awake at night is not a musical instrument, but it can be beaten. If the City Commission is too afraid of casinos, the solution that everyone can live with is a no-brainer and it does not require a zone change, only a project specific height variance for the potential four story motel property. The variance allowed under Chapter 20, 17.16.32.040 would not adversely affect the area since the motel site is a stone’s throw from the tallest building in Great Falls, the Country Club Tower, which itself is eleven stories high.

The existing C-1 zoning would remain intact, require substantially more landscaping and setbacks than a C-2 zone, and not allow additional casino development in the area.

So what’s actually going to happen? According to the Great Falls Tribune, it’s likely Commissioner Bronson will personally intervene to complicate what should otherwise be a simple process:

Bronson recommended that time be used by city planners to develop an alternate “Planned Unit Development” proposal that would give the City of Great Falls greater control over the scope and nature of development in the area.

The problem with this misguided approach lies within the City’s Municipal Code, which states:

“17.16.29.010 – Generally.

A Planned Unit Development may be proposed as a subdivision or as a single development project with multiple buildings involving a homeowners or property owners association.”

The creation of a PUD for a single building with a single owner does not satisfy the intent of the code. In this case, you would have a property owners association for governance of the PUD with one member. If you included all the properties in the existing C-1 zone, it could not be defined as a single development since those properties have already been developed.

By not finding a solution that makes sense and adheres to governing codes, the attitude of the City Commission, particularly Bronson, appears short-sighted and antithetical to City’s adopted 2013 Growth Policy;

Eco3.4.2 Promote a “business friendly” attitude and support the use of an ombudsman role in all facets of business development.

Sure, a PUD district will allow Bronson to position himself as a “compromiser” on a thorny issue, but if government refuses to get out of the way, as Gregg Smith calls for, the obvious compromise here is much simpler: it’s to grant a height variance, not create a single-property PUD.

Cracking The River City Echo Chamber

Philip M. Faccenda on April 4, 2017

“We created an echo chamber,” he admitted, when I asked him to explain the onslaught of freshly minted experts cheerleading for the deal. “They were saying things that validated what we had given them to say.” – Ben Rhodes, former deputy national security advisor to President Barack Obama, in the New York Times Magazine.

While a surprisingly candid admission by Rhodes, the Obama administration’s tactics in selling the Iran deal were not in and of themselves revolutionary. It’s called spin, and self-interested government officials are regular practitioners of it. In fact, we have an “echo chamber” right here in Great Falls.

If you consume the Tribune, TV news, or if you follow the City Commissioners at work, chances are you often hear about how “Great Falls is on the move,” that our community is teeming with “momentum,” or any number of other platitudinous forms of cheerleading. It’s been that way here for as long as I can remember. Despite the rhetoric from politicians and a complicit, pro-incumbent media, the “momentum” has never materialized into something truly tangible or measurable. Over the course of decades, Great Falls, in almost every way possible, has either declined or more or less stayed the same.

This “happy talk” reached a nadir in 2015, when Bob Kelly, Bill Bronson, and Tracy Houck won the City elections. Almost overnight, media swooned about a resurgent Great Falls. If you thought Great Falls was going places before, it was really going to be something now. A November 27, 2015 guest editorial from Mike Dalton pointed to a spate of “progressive” politicians newly in power:

Obviously, a new era, an era of solid, dedicated change and growth has arrived with the appointment, hiring and electing of a new generation of leaders to guide our city’s evolution.

To name a few, we have Bob Kelly, mayor; Bill Bronson and Tracy Houck, commissioners; Jane Weber, Cascade County commissioner; Superintendent Tammy Lacey of Great Falls Public Schools; Susan Wolff, dean of Great Falls College Montana State University; Craig Raymond, city Planning & Community Development director; Jolene Wetterau, CDBG grant administrator, and Joe Petrella, city Park and Recreation director.

A January 11, 2016 Tribune headline gushed, “Kelly: Great Falls is on the rise.” Over time, the echo chamber calcified behind a rah-rah narrative built and regurgitated so many times it is now repeated without audit and has finally been accepted as “fact.” The editorial board of the Great Falls Tribune has evidently bought into the notion that it better serves the public by acting as community cheerleaders first and journalists second. When the Tribune endorsed the school bond last year, the editors pointed to our “growing” community:

We don’t buy the old arguments that Great Falls is stagnant and shouldn’t spend any more money on its schools. Great Falls has about 60,000 people and it’s growing [emphasis added]; the city has positive leadership with fine hired professionals such as Lacey and City Manager Greg Doyon, and new, energetic leadership exhibited by Mayor Bob Kelly and others. The future of Great Falls is bright.

A town of “60,00 people and it’s growing”? Amazingly, the Trib shot down its own dishonest talking point just last week, when one of its newest reporters, Seaborn Larson, published Census data showing a population decline over the past four years. (It’s not often that a media outlet busts itself for running “fake news.” Ha ha.)

That all brings us to the present, where Brett Doney wants a pile of cash for the GFDA. Over the course of lobbying the public (demonstrating a “need” for an economic development levy), Doney, in an apparent break from protocol, has actually told the truth about the state of Great Falls. According to Doney, jobs are being sucked out of Great Falls and there is a bit of a problem here — so much so that he has never been this “scared” in his 32 years of working in economic development. Meanwhile, the politicians are as clueless as ever. In the Trib’s Census story:

Great Falls Mayor Bob Kelly said the number decline doesn’t scare him. In fact, he laughed out loud when asked for comment on the decline.

With Kelly now up for re-election, and after his touting for over a year the “momentum” in Great Falls — you know, since he’s been in charge — it will be interesting to see if he is capable of graduating from amusement to substantively addressing the issue. The old adage comes to mind: The first step to solving any problem is first admitting that you have one. (Just a guess: Kelly didn’t actually find the population decline funny.)

He did offer more than laughs in the Trib article, though:

‘I think what’s important when looking at any kind of statistic like that is whether it’s the beginning of a trend or the end of one,’ Kelly said. ‘I think that away from the economic aspects, which are driven by the private entities in town, our obligation as a city is to make this town as attractive and safe here as possible.’

Well, first, we know we’re not at the beginning of a trend. The population has been declining since 2013. Last year’s drop was the largest of the four years. Second, what does Kelly mean by “attractive?” Does he mean aesthetically? I’m an architect and planner, and even I wouldn’t suggest that it is feasible or good policy to legislate aesthetics. If Kelly means attractive to private enterprise, then he and his colleagues have failed miserably. Just look at Calumet. When have you ever heard of anyone willing to invest $450 MILLION DOLLARS into our community? Doney and Jolene Schalper of the GFDA are right. We have to retain as well as attract talent. Denying Calumet a tax abatement tells you all you need to know about this City Commission. When a wealthy developer like Brad Talcott wants a TIF for retail and service jobs, the City can’t wait to throw money his way. But if the high-paying manufacturing sector comes calling — the jobs everyone claims to want here — too bad, they’re out of luck. (By the way, I have no problem with the City granting Talcott or anyone else TIF’s. It’s simply worth noting who the City has picked as the winners and losers in business.)

Think about the chill the Calumet decision sent throughout the private sector. If you’re in business and thinking of relocating or expanding here, why would you? It’s better to look elsewhere, to a community that doesn’t produce these types of headlines, one that is unapologetically “open” for business. There are plenty to choose from. And while denying the abatement absolutely devastated Calumet (this year, no employees received raises or bonuses — they didn’t even have a Christmas party), it also affects the companies that do business with Calumet, big vendors like Northwest Pipe Fittings and Loenbro. But the City just had to have that money — $6-7 million spread over 10 years, which of the City’s roughly $100 million annual budget, results in less than 1%. And remember, even if the City had granted the abatement, the amount of tax collected would have still exceeded Calumet’s pre-expansion tax rate. How much is ever enough for the City?

I wish I could tell you that at least one of the City Commissioners took a principled stand on behalf of the business community, but none did. The motion carried 5-0. Put bluntly, what this means is that there is virtually no real vision on the City Commission. For our City leadership, short-term thinking carries the day, and in their minds, nothing they do is ever wrong. Don’t believe it? In January, the City Commissioners went on a retreat at MSU-Great Falls. The minutes are posted here:

“2. COMMISSION INITIATIVES

City Manager Greg Doyon and the Commission began discussion of a look back on past year accomplishments that included:

 Parking survey
 Arco water rights
 Sale of Med Tech lots
 Sign Code revision
 Library Board Updates
 HPAC
 Cell phone ban/fines
 Holman property
 West Bank Landing TIF
 Wild fire response
 Fireworks town hall discussions
 Paris Gibson mural
 Final ECP audit
 Park Master Plan
 August flooding/look at infrastructure
 Hired three cops/GFPD good use social media
Purchased fire trucks

The parties discussed the emphasis on making public safety a priority. The City Commission stayed focused and made progress. Discussion continued that, even though emphasis has been on public safety, each department is valued. The parties discussed the positive feedback they have been hearing from the community, and that the attitude of Great Falls has changed. No one has heard anything negative except at City Commission meetings. Great Falls has good momentum in the right direction.” [emphasis added]

If there was ever any question as to whether or not our City Commissioners exist in an echo chamber, your doubts can be put to rest. Great Falls has “momentum in the right direction?” Really? We’re losing jobs, population has declined for four straight years, and crime is on the rise. Meanwhile, the folks who run City Hall seem completely addicted to raising taxes and fees. They also want to grow government, never mind the declining population. How’s that for positive momentum?

Now, lest you think I’m some sky-is-falling alarmist, I can assure you that I am not. I’ve lived here continuously for the past 36 years, and in that time, Great Falls has remained largely the same community it is today. But when we constantly hear about “momentum” in the face of negatively trending big picture statistics (like jobs, population, and crime), at what point does somebody call, “Bullsh*t”?

Politicians like the mayor perpetuate this echo chamber for two reasons. First, they do so in self-congratulatory fashion to bolster their re-election chances, and second, they gin up faux-growth sentiments to convince us it’s OK to expand government and habitually raise our taxes. Bob Kelly campaigned as a “change” candidate who would “hold public meetings and commission meetings at venues that deserve attention, such as the Natatorium, on a public bus if possible, in the welding classrooms of Montana State University-Great Falls College.” I haven’t been on the public transit lately, but it doesn’t feel like the City has made any effort to come to the people. If anything, government is more insular than ever.

I don’t want elected officials whose default is to produce just positive (or negative) rhetoric. Good, bad, or indifferent, I’d just like to hear the truth. If Great Falls is to really move forward, we need to hear the truth.

We can handle it, and moreover, we deserve it.

Tryon: Wages, Population Stagnant; City Taxes And Utilities Up

Rick Tryon on March 28, 2017

With the City of Great Falls moving past the financial fiasco of the $5,553,054 bailout (decrease in unassigned General Fund balance) in 2013 to cover the electric power business (see City 2014 CAFR Financial section, p. 14), the City’s financial position has improved, but the needs of the City are still great.

The façade of the Civic Center needs fixing. It’s a big ticket item and the money has to come from somewhere. City staff reports that costs to repair the Civic Center are estimated in the $6 – 8 million dollar range.

City officials are also discussing a “need” to increase legal staff and increase staff workspace. And then there is the recently passed Park and Recreation Master Plan, which cost the City $89,970 to produce, as reported in October of 2015.

As E-City Beat reported on February 17, from the City Manager’s packet: “After discussion about implementation of the Park Master Plan, it was the consensus of the Commission to pursue a Park Maintenance District, but agreed that the fees imposed should be reasonable and not include golf or the Natatorium. Manager Doyon suggested that a more robust maintenance fee may result in more money in the general fund to support public safety and ultimately less cost to the public versus a public safety levy. The Commission concurred.”

Manager Doyon gets it: how far can we stretch our property tax dollars? How many more increases, beyond the ever-seeking public school administration and the Great Falls Development Authority, can fixed income and lower income families bear?

The City routinely raises annual property taxes under the inflationary percentage allowed by State law, which is one-half of the average rate of inflation for the prior 3 years. For the 2016-17 budget year, that rate was .67 percent. Here is a brief description of the 198.24 mill levy passed by the City Commission for the budget year 2016-17, as taken from Resolution 10152:

Section 1. – Determination of Mill Levy Limit

Appendix A shows the determination of the total mill levy limit of 167.26 mills.
An additional 26.14 “Permissive Medical Levy” is allowed under 15-10-420(9)(a)(vi) for increased health insurance premiums not included in the Appendix A calculation.
An additional 1.90 mills is allowed under 15-10-420(2) for additional voter supported mills. On November 4, 2003, a $2.5 million general obligation bond was approved by voters for construction of a soccer park. It has been determined that 1.90 mills for soccer park debt service payments is needed for Fiscal Year 2017.
Lastly, an additional 2.94 mills is allowed under 15-10-420(2) for additional voter supported mills. On November 7, 2006, a $2.27 million general obligation bond was approved by voters for repair and improvement of city pool facilities. It has been determined that 2.94 mills for swimming pool debt service payments is needed for Fiscal Year 2017.

The 20-year soccer park bonds were issued in June 2004. The 10-year pools facilities bonds were issued in May 2007, expiring after this year.

To provide a snapshot of yearly property tax levies, here is a rundown for Great Falls over the past 7 years (information from annual property tax increase and mill levy requests to City Commission):

Year	Base Mill Levy	Permissive Med Levy	Soccer Park	Pools Facilities	TOTAL	Base Inflationary % increase taken	Perm Med Infl %
2010-11	152.94	15.54	2.45	3.83	173.10	0	1.06
2011-12	164.27	15.44	2.56	3.72	183.24	0	0?
2012-13	169.13	17.93	2.58	3.93	193.57	1.2	1.4
2013-14	172.19	20.06	2.57	3.92	198.74	1.03	1.3
2014-15	175.77	22.87	2.82	3.62	205.08	1.03	1.25
2015-16	162.17	23.03	1.97	3.12	190.29	.67	2.17
2016-17	167.26	26.14	1.90	2.94	198.24	.5	2.48

The base mill levy is a formula regulated by the State under MCA 15-10-420. A portion of that code reads:

“The maximum number of mills that a governmental entity may impose is established by calculating the number of mills required to generate the amount of property tax actually assessed in the governmental unit in the prior year based on the current year taxable value, less the current year’s newly taxable value, plus one-half of the average rate of inflation for the prior 3 years.

(b) A governmental entity that does not impose the maximum number of mills authorized under subsection (1)(a) may carry forward the authority to impose the number of mills equal to the difference between the actual number of mills imposed and the maximum number of mills authorized to be imposed. The mill authority carried forward may be imposed in a subsequent tax year.”

The result of the mill levy increase over the years results in a continual increase by the City in property taxes with the exception of 2015-16. And while the base mill levy for this year, 2016-17, is just under the rate of 2013-14, property taxes have increased with increases in streets, lighting districts, the boulevard district and the permissive medical levy. It is evident by the statistics on the permissive medical levy that government regulation of the health care industry has done nothing to stop the rising costs of medical care and insurance, an issue both the public school system and the county are also dealing with.

Additionally to property taxes, city utility rates have increased each year. While these increases may be necessary to maintain critical infrastructure, many citizens in this town do not get cost of living increases or annual raises, and often work two or three jobs to make ends meet. Increases in taxes and services for them means a decrease in other household spending.

To provide a snapshot of just one area of yearly increases, here are the basic utility service increases for Great Falls over the past 7 years and this year’s proposed increases (information taken from annual utility rate increase requests to City Commission):

2010: water 5%; sewer 7.5%

2011: water 5%; sewer 7.5%

2012: water nearly 5%; sewer nearly 10%

2013: water 5%; sewer 10%

2014: water 5%

2015: water 7%; sewer 3%; storm drain 10%.

2016: water 10%; sewer 3%; storm drain 10%

2017 (proposed) water 10%; sewer 3%; storm drain 10%

You get the picture. Are utility increases now a standard and a FOREVER thing? And when did these annual rate increases actually begin? Are we trying to outclass other cities in Montana with our rates? The conundrum is that infrastructure in communities across America is aging, is costly to repair and update, and is becoming more costly with federal regulations.

The City Commission set a public hearing date of May 2, 2017 to address the proposed utility increases for this year to be effective in June. There would be public outcry if the same annual increases were applied to gas and electric rates.

Take a drive around areas of town in the summer and you see more and more dried up lawns. Seniors and low income families water their lawns less as the cost of water services increase.

The answer to the tax dilemma is complicated. Taxes and utility fees are a necessary component of suburban living. In comparing the tax climate of Great Falls to other major Montana cities, Great Falls appears to be reasonable in how much taxes are levied on the average homeowner.

What Great Falls really needs is an expanding tax base to ease the burden on individual property owners. That means more and better paying jobs. The more property owners and business owners there are to spread the wealth of tax burden, the less impact tax increases have on each individual. The more TIFs and tax breaks given to select projects, the more the average Joe tax payer has to provide for every aspect of the community, city, schools and county included.

More On The GFDA

ECB Staff on February 2, 2017

After our reporting (and thanks to our tipsters!), KRTV ran a story about Brett Doney’s gloomy review of the Great Falls job market. Apparently, the state of Montana disagrees with Doney:

But the Montana Department of Labor says the GFDA report is inconsistent with state numbers.

Chief Economist Barbara Wagner says there were roughly 300 jobs lost in Great Falls between July 2015 and July 2016 which could be attributed to the closure of the Asurion call center in downtown Great Falls.

Wagner says job growth through the rest of 2016 cancelled out the loss, showing virtually no change in the number of jobs in Great Falls.

The GFDA and the Montana DoL clearly rely on different metrics. It’s unsurprising, then, to see conflicting data on Great Falls jobs. What is surprising, though, are the conflicting reports from within the GFDA. We were intrigued by a Facebook comment by Sandra Guynn, who opined:

So who at the GFDA knows what they are talking about? According to an article in the Jan 28 print edition of the Great Falls Tribune, the chairman of the GFDA board, Ted Lewis, was quoted as saying, ‘the year 2016 was one of the best years for the Great Falls economy in many years. We’re very excited about our prospects for 2017, including several that haven’t been announced yet.’

So, which is it? Are we doing well, or aren’t we? And if the GFDA wants to push a mill levy, shouldn’t they develop some sort of coherent narrative explaining to the public why it’s a good idea? Should we vote to raise our taxes because we’re struggling and need the extra resources, or because we want to keep up the positive momentum?

We’re open to supporting this levy. But first, we’d like to know exactly why our community needs it.

Dismal Jobs Report Means It’s Time For Real Change In Great Falls

Rick Tryon on January 30, 2017

We should be at the Defcon 1 level of concern after hearing Brett Doney’s comments about our local economy. His analysis in this instance is very disturbing but not surprising.

Not surprising to me because I’ve been watching what I call the ‘Glass Half Empty/Half Full Switcheroo” for a long time in this town. Here’s how it works:

Politicians and the heads of taxpayer funded non-profits and government agencies all understand that there are lies, damn lies, and statistics. The various organizational and political poobahs have become adept at massaging statistics to meet their situational needs. When it’s election time or time for the public and/or higher-ups to be convinced how great you or your organization are, out come the ‘facts’ and figures showing how rosy and wonderful everything is. But if you’re not an incumbent or your organization needs more funding, you trot out the dim and dire numbers to convince everyone how essential you or your organization is to the survival of common interests.

Doney’s statements are disturbing for obvious reasons. A net loss of 707 jobs in our already stagnant, low-wage economy is potentially devastating. To hear such alarming stats and assessments coming from the leader of our local economic development agency makes me wonder when the usual suspects who comprise the good ol’ boys and girls network here are going to start calling for his head for such negative blasphemy.

“We’ve lost the equivalent in the last couple of years in the City more than the nation lost in the Great Recession.”

“And frankly, these numbers scare the hell out of me.”

Good heavens! If I were to make a public statement coming anywhere even close to these made by Doney, the City Commission and the downtown elite would have my head on a spike in front of the Civic Center with a placard reading, “Such will be the fate of all nay-saying nabobs of negativity who dare to question.”

The fact is that Doney’s pitch for CDBG grant funds here actually contains the brutal and inconvenient truth: things are not all sunny and rosy right here in River City. I’m afraid that because most of the power players with money and influence who are currently calling the shots in Great Falls are doing well, they assume that everybody else must be too.

Unfortunately, it appears to me that the little bubble of old Great Falls money, non-profit organizations and government entities is blissfully unaware of the struggle going on here. Doney touched on it by pointing out that there are too many citizens working two or three low wage service sector jobs to make ends meet. And this lack of higher wages combined with a stagnant population “…puts tremendous pressure on the City, on the County, on healthcare, and all of the social agencies in town.”

Great Falls has a thriving poverty industry – non-profits and government agencies that do pretty well for themselves under the mandate to help the less fortunate. It’s a good mission but the goal should be less poverty and dependence and fewer non-profit/government jobs, not more. And certainly not a local economy based on poverty which benefits the few. We are also seeing a growing child abuse, substance abuse, gambling and crime problem here, which are all exacerbated by low wages and a stagnant and limited tax base.

We need a growing population and an expanding economy with more primary, private sector employers paying higher wages. Unfortunately, Doney’s assessment makes it clear that we are moving in the opposite direction.

My personal opinion is that we’ve been doing the same thing and getting the same results for a long, long time in Great Falls. We should try something new, encourage new and different solutions from outside the box. We should invite new and different voices and try some bold action. We have a whole lot of potential in Great Falls but we need more hard and honest evaluation, and most of all we need a common vision and agreed upon goals.

Poll: Economic Development Mill Levy

ECB Staff on January 28, 2017

As we reported a couple of days ago, and as the Tribune reported yesterday, the GFDA is recommending that:

…Cascade County commissioners place a three-mill economic development levy before county voters this spring during a special election to generate $450,000 a year that can be used to create more jobs.

It won’t be a large one:

A three-mill levy would add about $6 to the tax bill of a county resident owning a home valued at $150,000, Cascade County Budget Officer Mary Embleton said.

So, we thought we’d ask, will you support this levy?

[poll id=”4″]

Brett Doney Said What?!

ECB Staff on January 27, 2017

Phil Faccenda made reference to it in his very good piece yesterday, and we have received a number of tips about it recently… but we’re still grappling with some of the comments made by Great Falls’ economic development chief, Brett Doney, at the Jan. 3 City Commission meeting. Most glaringly, Doney said that Great Falls lost “707 net jobs” in 2016.

He also said:

And frankly, these numbers scare the hell out of me.

The jobs drain has been comparatively worse in Great Falls than nationally, even in darker times:

We’ve lost the equivalent in the last couple of years in the City more than the nation lost in the Great Recession.

Doney is clearly alarmed:

I don’t have any prescriptions for you, I just want to say that I have never in my 32 years in economic development seen numbers as scary as these, and we need to continue to work together to address them.

To be fair, Doney also cited strong growth in manufacturing (despite the City’s “F you” to Calumet), among other positive happenings. Speaking under the Public Hearing portion of the Commission agenda, a discussion on CDBG funds, he billed himself as otherwise a “cheerleader” for Great Falls, which is true. Doney and the GFDA do excellent work in this regard. (You can read the latest GFDA newsletter and sign up to receive it here.)

Two days before Doney’s appearance before the Commission, on New Year’s Day, the Tribune ran glowing, above-the-fold coverage about a resurgent development sector in Great Falls. The reader is left with the distinct impression of a soaring Great Falls economy.

So, what gives? Construction is one thing, and an area in which Great Falls is strong, but aren’t jobs also an important metric when evaluating the economic health of a community? How well are we really doing, and more importantly, how should our community address this issue?

We appreciate Doney’s candor. After all, the first step to solving any problem is to acknowledge that there is one.

GFDA Angling For Mill Levy

ECB Staff on January 26, 2017

There are some interesting items in today’s GFDA Quarterly Investor Letter, and perhaps none more so than priority #2:

2) Put a 3-mill economic development levy before Cascade County voters on the special election ballot to replace Ryan Zinke. Passage of this small levy would generate about $450,000 a year to make Great Falls and Cascade County more competitive in securing business investment for startups, expansions, and attractions. We need to raise $90,000 to mount this effort and ask that you consider a special one-time investment.

If successful, the GFDA will pose this question to voters 85 to 100 days after Ryan Zinke officially vacates his Congressional seat. Zinke is set to be confirmed as Secretary of the Interior on Feb 6.

On Calumet: Red Lobster Or Red Herring?

Philip M. Faccenda on January 26, 2017

Ask your average person on the street what they would like to see relative to economic development in Great Falls and there is a good chance they would say, “Red Lobster.” Then ask them if they would rather see a Red Lobster, or an expansion of the Calumet Refinery, and again they would probably answer, “Red Lobster.”

Evidently, the citizens and the Great Falls City Commissioners are in sync. The City Commission’s unanimous decision to deny Calumet’s application for a graduated tax abatement was shortsighted and unfair to the company, which recently made a $454 million dollar commitment to the future of the only true manufacturing company left in Great Falls. By that, I mean a manufacturing facility that takes a raw material and makes something out of it.

Since 1922, the refinery has processed crude oil, first the Shelby fields, and more recently from the Bakken fields and Eastern Montana, and produced fuels and asphalt we use every day. The refinery is the remaining operation of what was once a booming Great Falls manufacturing backbone that supported many local families by providing good paying jobs. Of course, agricultural processing is also as old as Great Falls itself, but gone is the potato chip company, the corn nut company, the foundry, the brick plant, and of course, the Anaconda Company. These companies provided great paying jobs that supported families, educated young people and donated to our community in many ways – in addition to paying taxes.

The City’s staff report confirmed that Calumet’s application met all statutory eligibility criteria, that the expansion had a significant positive effect on the overall tax base of the City, that it had a positive impact on employment, that it will likely result in additional industrial development, that it contributes to the goals of the City’s Growth Policy, and that, overall, it is in the best interest of the City. The Calumet expansion is responsible for the creation of 40 new refinery jobs, and should spin off 276 new jobs worth a total earning impact of $14 million annually. Calumet paid $3.9 million in County property taxes in 2015 and with the abatement schedule it still would have paid a total of $46.5 million through 2026.

So what’s the rub? Well, with the tax abatement on the new investment of $454 million, Calumet would contribute $6 million less to the City and $6 million less to the School District over 10 years, but that would not have reduced its existing tax liability, only the future tax liability of its $454 million expansion. In other words, Calumet is being penalized for making a huge investment in our community, while other companies making much smaller investments have received tax abatements.

Recently, Brett Doney of the Great Falls Development Authority reported to the City Commission that the City lost 707 jobs in 2016 and that he has never seen numbers so scary in his 32 years working in economic development. But aren’t these exactly the types of jobs the City should be doing everything in its power to attract and retain?

You can have your personal opinions about tax abatement incentives on a whole, but the City’s denial of Calumet’s application was wrong, shortsighted, and not in the best interest of Great Falls.

On one hand, we don’t have a Red Lobster because we are half the size of Billings and not growing at the same rate as the other major cities in Montana.

The City’s decision to dismiss Calumet, by far our largest manufacturer and one of our community’s leading charitable donors, sends an ominous message to businesses: “You, and all of those you would employ, would be better off someplace else.”

And that is the real reason why Great Falls does not have a Red Lobster.

Gregg Smith And Rick Tryon Discuss The State Of Great Falls

ECB Staff on January 24, 2017

Recently, the Tribune’s Peter Johnson wrote about Great Falls’ building boom; 2016 was the City’s strongest year for development since 2008. A lot of folks agree with the notion that Great Falls is on the uptick, while others point to a lack of good-paying jobs, low population growth, and drug abuse as significant community problems.

We thought we’d ask Gregg Smith and Rick Tryon to participate in an email back-and-forth to tell us what’s really going on in town…

ECB STAFF: In your most recent Tribune column, Gregg, you concluded that, on a number of issues (including opinions of Great Falls), “maybe all sides are right.” Rick wrote in the comments section:

“I mostly agree with my friend Gregg here but take a little exception with the implication that someone has to get a bank loan and open ANOTHER casino or gas station before they can credibly comment on the state of the GF economy. I think that anyone who busts their butt everyday at the 2 or 3 jobs it sometimes takes to make a living here is fully qualified to comment any time they please …”

Gregg, does Rick have a point here, and moreover, how do you generally assess the state of Great Falls moving into 2017?

SMITH:

This answer to this question can be addressed on so many levels, economic, cultural, social, it is hard to answer without writing a ‘book.’ First, though, yes, of course Rick has a point. All is not daisies in Great Falls, and any citizen is entitled to comment on it. Most of us have real lives where people depend on us, so we cannot go to the City and County Commission meetings every week to keep up with what these folks are doing. (Which, as an aside, is one of the reasons for this blog.)

I was a little taken aback by his response to my suggestion, though, that some of the naysayers complaining about the lack of economic activity make some of their own. As someone who has borrowed money (lots of it) to stir up some economic activity with the hope that there will be some left for me every month, I am a little bit resentful of the people who complain about the lack of good restaurants, etc. If you want a different restaurant, no one is stopping you from opening one. If you think there are too many casinos or gas stations, then open something else!

But my column that started this discussion, though, was not intended to poke at Rick Tryon, a fellow I like. Instead, it addressed, and this response will address, the general attitude of inferiority in this town.

You stated that some “point to a lack of high-paying jobs, low population growth, and drug abuse as significant community problems.” I agree that these are community problems, but I also think that my fellow Great Fallsians(!) tend to focus on these things more than people in other communities.

I remember a few years ago I was at a planning session for a local charity board I was serving on at the time. We had a facilitator come in from Missoula. When we were asked to brainstorm about how Great Falls is perceived, someone shouted out, “Meth Capitol of Montana!”

The facilitator stopped, cocked her head, and said, “Really? I would have that that was Kalispell and the Flathead Valley.”

My point is this: Yes, Great Falls has problems. Yes, other communities grow faster, or have a Costco or a Chic-Fil-A.

But I think that Great Falls is different from other Montana communities in that we have a really high percentage of our population, including at the more active levels of business and government, who often walk around like Eyore, complaining that we’re not Missoula. This matters, because other people from other places who interact with us absorb this as the face or character of our community. When you meet a Missoula family whose kids are here playing in a basketball tournament with your kids, and you put down your own town, that fuels their perception of our town too.

I can’t explain it. But it has been this way almost as long as I can remember, and that dates at least into the 80’s.

I like it here. Yes, there are problems. But there are a lot of good people in this community, and not everyone who makes a buck is a “crony” or a part of the “old boy network.” Putting people down does not make them more inclined to work with you.

I think if we can improve our residents’ perception of this town, this is an important first step in improving the town itself.

TRYON:

Gregg, just to reiterate my earlier point – anyone and everyone who works hard and pays the taxes that pay the bills in this town has every right to voice their concerns about our economic and jobs situation. And they should be able to do so in any forum they choose without fear of being labeled a ‘naysayer’ or a ‘negative nanny’. It’s not just the folks who take risks to open casinos and restaurants who create economic activity; it’s also the people who spend their hard earned money around town and who pay the taxes for the streets and utilities and the jobs for city employees, who create economic activity. So, yeah, those folks should be listened to and their opinions respected, not brushed aside as Eeyore clones.

When I hear local Great Fallsians (Great Fallsites?, Great Fallsters?) say they wish that “they would open a Red Lobster here,” I think what they’re really saying is, “I wish our local economy was such that we could support a Red Lobster or Olive Garden.”

We both know that opening an Olive Garden or Chic-Fil-A is not the answer to economic development in Great Falls. Chain and franchise operations like that are the result, not the cause, of true economic development. And I love me some Chic-Fil-A spicy samich and curly fries!

We also both know that a casino/motel/gas station economy is a dead end. Only so much local money can be traded around. Right now it looks a little like a game of whack-a-mole around here – one restaurant closes and leaves an empty hole, another opens somewhere else. One casino goes belly up and another opens on the other side of town. By the way, just anecdotally and judging by the number of empty commercial buildings and office space I see around town, it looks like there’s more whack than mole lately.

Now having said all of that, believe it or not, I am extremely positive and upbeat about the future of Great Falls. We have enormous human and geographic potential here, being the center of the state, and having a hardworking, well-educated populace, for the most part. I remember that we were once a thriving, bustling, busy community with lots of stuff going on and we will be again, I’m certain. But to get there we have to be honest about where we are now and we have to have a common vision and goals.

I love this piece of God’s good dirt called Great Falls. I was raised here, raised my kids here and now my grandkids are being raised here. Four generations of my family live here right now, so I am staked inexorably to this community.

Let’s never mistake honest evaluation for negativity or the desire to see us live up to our potential as being “down on Great Falls”. I know you want the best for this town also, Gregg, so let’s agree to find the common ground and make it happen, my friend.

ECB: Most everyone agrees that Great Falls is a great place, but there always seem to be questions about the role of local government in economic development. Recently, the City Commission denied Calumet a large tax abatement request. Were they right to do so?

TRYON:

I admit I’m a little conflicted on this issue, but in the final analysis I have to agree with the City Planning and Community Development Department’s recommendation and the City Commission’s decision to deny Calumet’s request for a tax abatement in the wake of its expansion in Great Falls. Government, whether city, state or federal, doesn’t create jobs. The role of government in economic development is to create a jobs-friendly tax and regulatory environment, but to do so within the means of everyday taxpayers while still providing public infrastructure and services.

Calumet requested this tax benefit from the City at a time when we are still in fiscal recovery mode brought on by the disastrous Electric City Power boondoggle and a major national recession. The loss of revenue to the City of Great Falls, had Calumet been given the tax abatement, would have been unfair to local homeowners, small business and other taxpayers, who are already being hit repeatedly with tax increases and raised City service charges and fees.

The estimated cost to the City in lost tax revenue over 10 years would have been $6,345,185. For the school district the figure is an additional $6,222,143, and for the county it’s $4,930,365.

Tax benefits for companies providing good paying jobs is a good idea and the tax abatement tool is a powerful one. Certainly the Calumet expansion is a positive thing for Great Falls, providing 40 new full time, good paying refinery jobs. This is why, as I mentioned, I am conflicted about this issue.

In my opinion, the tax abatement tool should be reserved for bringing in new development and jobs rather than rewarding an expansion of an existing enterprise. Even then we should be very careful in making sure we’re not “giving away the store” and passing on the cost of additional city infrastructure and services to local taxpayers. Quite frankly, I’m hearing from friends and family that they are starting to feel like their homes and small businesses are being treated like ATM machines to fund local government.

One of the many factors to be considered when assessing this issue is well-stated on page 6 in the staff recommendations submitted to the City Commission for consideration:

However, Calumet’s expansion has an impact on public safety, planning, training, and response that cannot be specifically quantified, but cannot be ignored.

There will also be operational impact to the City’s Waste Water Treatment Plant and discharge regulation in terms of compliance monitoring, permitting and treatment as Calumet’s processing capacity increases as a result of the expansion.”

I think we should be very cautious in using our taxing tools for job creation here. We should be focusing on growing our population and raising income levels by examining and re-doing our city/county regulatory environment and policies first. A subject for further discussion I hope. That and the topic of TIF’s going to local good ol’ boys to develop more huckleberry syrup shops, casinos, and motels which pay minimum wages to part-time employees.

SMITH:

I am going to have to confess ignorance here, because like many issues in this community it was not well-publicized in advance (hopefully E-City Beat can change that!), and then when the Tribune did cover it after the fact, the coverage was so bad that I couldn’t make heads nor tails of what actually happened. Therefore, I am going to have to default to some general principles here.

First, in a free market economy, the government has no role in subsidizing any private enterprise. Government should be doing what government does, i.e., streets, police, armies, and keep its nose out of the marketplace. Of course, that model has been irretrievably altered in the United States as virtually every municipality, county, state, etc., offers tax and other incentives to businesses to locate there. Thus, we have to play the game if we want development.

Second, I think Rick raises a good point that, perhaps, the City’s budget is still tight because of the Electric City Power fiasco. If that is true, it sure isn’t being reported. And if that is true, it’s a damn shame. It’s an example of city government hindering, rather than helping, development.

Because you can be sure this decision will hinder development decisions, at least from Calumet, and quite possibly from other large companies who are thinking of expanding into the Great Falls market. ‘Word on the street’ is that Calumet feels betrayed, and that Calumet’s management had every reason to believe this abatement was going to be granted. (I’ve also heard rumor that all charitable contributions in Great Falls by Calumet stop now.)

Rick points out that some people get breaks and some people don’t. Welcome to Great Falls (or, should I say, small town America?).

I think the City was wrong to deny the tax abatement, while admitting I do not know all the details that could change my mind. The best way I have to look at it is prospectively. If a company in Great Falls, any company, came to the City Commission and said, “We are going to invest nearly half a billion dollars in your community, and create at least 40 permanent jobs paying $30,000.00 a year, if you will give us a $600,000.00 a year break on our taxes for just 10 years,” would we take that? Or, as many in the business community suspect, does the City just view a new or expanding business as a revenue source? What can you do for me?

COMING NEXT WEEK: PART II…