by John Dowd
During the last Stevensville Town Council meeting, on Thursday, September 11, the main concern was passing the final budget for 2025-2026, which has been pending for the last few meetings. According to Stevensville Mayor Bob Michalson, “passing this moves everything forward.” However, the budget did not get passed, and several concerns were voiced regarding the budget, resulting in one council member walking out of the meeting.
During the budget review, Robert Underwood, a Stevensville town finance officer, spoke about numerous aspects of the budget. After his review, and following a motion to pass the budget, Stevensville council member Wally Smith raised several concerns and moved to table the passage of the budget.
One of these concerns, according to Smith, was that the budget “did not balance.” Smith made the motion three times, and each time cited a different concern. These included a lack of the same document being available to the public in the meeting agenda packet. Another concern was that Smith believed there needed to be a separate document, laying out employee wages. He would, in a following interview, refer to the Montana Code Annotated 7-6-4020, 3f, wherein it is stated:
“(3)(a) Before June 1 of each year, the county clerk and recorder shall notify the county commission and each board, office, regional resource authority, or official that they are required to file preliminary budget proposals for their component of the total county budget.
(f) schedules or summary tables of personnel or position counts for the prior budget year, current budget year, and proposed budget year. The budgeted amounts for personnel services must be supported by a listing of positions, salaries, and benefits for all positions of the local government. The listing of positions, salaries, and benefits is not required to be part of the budget document.”
The Bitterroot Star reached out to Dan Clark, Director of the MSU Local Government Center and, according to Clark, Smith was correct that the information on employee positions and compensation should be included.
Smith continued to press for budget passage to be postponed again for further review, and the correction of the concerns he brought forth. However, the rest of the council did not agree. Council member Stacie Barker said, “It could have been brought to the town beforehand. Why have we waited so long?… It could have been an easy solution.”
Smith said he did not get the packet and notice the issues until the Tuesday before the meeting. Barker argued that the council received the budget as it appeared in the meeting over a week earlier, a comment that was verified by town employees during the meeting.
Smith said, “It’s still a problem for the people that it’s not there. They have the right to know.” Smith said he did not believe the public packet was the same as what he was looking at for this meeting.
After his third attempt to pass a motion, Smith collected his stuff and walked out of the meeting. Clark commented on this action, stating, “They have sworn an oath to work together as a council to pass the budget, and to walk out is a behavior that is inconsistent with their oath.” Clark further expressed that council members should act with decorum and respect, and need to get their budget passed. The oath states council members will, “discharge my duties with fidelity.” Clark said Smith’s actions were also “not in good faith,” by not acting as soon as he discovered a concern, prior to a council meeting. According to Clark, a council member can always come to town hall and address issues, and it is in fact their responsibility to do so, and to stay up to date with the contents of the budget.
“You want the city to work, you don’t want to set it up to fail,” added Clark.
Unfortunately, Smith was not in attendance during the public comment period that took place after he left, during which members of the public asked questions spurred by Smith’s concerns. Some of his concerns were determined to be invalid or based on misunderstanding of the material. One example was that the budget did not balance. In fact, the $26,000 Smith claimed was unaccounted for was located in another line item, titled “investment accounts.” This accounted for the missing funds. Smith did note, in a later interview, that the format being used by the town for their budget may not be the official one given by the state for municipalities. It is unclear if this is in violation or not.
Underwood answered many of these types of questions during the meeting. Another concern was that the town was over-spending, a concern Smith did not bring up during the meeting, but community members did.
According to Underwood, this is a common process towns undergo known as “spending down.” This process can be described with the following example, according to Underwood:
“A person plans their gas bill for the following month. They come up with a figure, and proceed through the month with those funds set aside. At the end of the month, the bill is in fact lower, because the person was frugal with their gas spending, and in fact prices fluctuated up and down throughout the month. By the end of that month, the fund put aside for the gas bill has excess funds in it. These funds are then used in the next month’s gas budget planning.”
Planning a budget in this way provides “wiggle room,” and can help avoid not budgeting enough money for a “worst-case-scenario.” It is also a standard practice, and not “unbalancing,” as Clark explained. According to Michalson, last year the town did the same thing, and only used 87%. They carried 13% forward into this year.
A budget therefore could be considered more of an “intent to spend,” and sometimes there can be consequences if this money is not accounted for. That money could be in a “use it or lose it” situation, or a municipality can be said to be under- or over-taxing. According to Clark, the budget process for towns and municipalities is more of a
“long term multi-year planning” process.
During Underwood’s explanation at the meeting, he echoed Barker and Clark’s thoughts, saying as a general rule, “If you find something, you should bring it forward immediately.”
In a meeting with town officials afterwards, Underwood stated that the town is in fact projected to spend around $46,000 more than they will take in. In the past, this number has been far higher. In the last 10 or so years, said Underwood, this has been as much as $80,000. He and other town officials confirmed that they are in the process of slowly cutting this down to tighten the budget wherever they can.
One area they can increase income is in water and sewer rates, an option that has been unpopular with the public. According to Michalson, the town will be hosting an expert from Montana Rural Water during the September 25 council meeting, which they encourage the public to attend. Montana Rural Water will be speaking on the importance of implementing standard rates.
At Thursday’s meeting, the Stevensville town council proceeded to vote to pass the budget. However, this was done in error as they did not have a quorum, since council member Cindy Brown was not in attendance and Smith had walked out.
Town officials reached out to Clark, and he confirmed the vote was not legal. The council will now consider the budget again at a special town council meeting set for September 23 at 6 p.m.
During an interview after the meeting with town officials, including Michalson and Underwood, they expressed concern over the stalling of the passage of the budget. The largest of these is the sewer system. If the budget goes down again, the town will not be able to pay to have the sewer system fixed. That would mean the town’s only recourse would be to go into an emergency session and vote to pay for those fixes. These costs could be significantly higher than if the budget were to pass and allow the projects to continue as planned out in the current budget.
According to Underwood, and Public Works Director Stephen Lassiter, the sewer treatment plant has been on its last legs for some time, with employees coming in during off-hours and weekends to keep the system limping along. The chief problem is the computer management system, which controls the plant. This system is very outdated and continually crashing.
Lassiter added that there are also several pumps out, and they have constantly been having to take pumps from other pits and have an electrician come in and rewire them every time. Lassiter said this process of “playing musical pumps” just cannot continue.
The cost of each pump is a minimum of $6,000, and they need four pumps just to get back to a basic level of function. Additionally, many of these parts are special order, out of Germany, and will take weeks to get.
According to the public works director, the treatment plant is on year 25 of a 20-year lifespan, and is in fact one of the oldest of its kind still in operation in the world. “It’s been bandaged and patched together for so long that the bandaids aren’t holding anymore,” said Lassiter. If they cannot fix it, and the system has more serious problems like it has been flirting with, things could be bad. “There is no off switch. It won’t stop coming and it has to go somewhere,” clarified Lassiter. He wondered how they might convince the community they are going to need to stop using the bathroom.
The budget allotted money for replacement and repair to bring the system back up to modern standards and buy another 20 years. With the system currently hemorrhaging money to avoid fines, and for repairs and staff overtime, Lassiter says they can’t pass that budget fast enough.
The town also wanted to note that they are required to turn their budget in by October 1, or 60 days after receiving taxable values from the Montana Department of Revenue at the latest. If they do not, they can be dinged during their annual audit at best, receive serious fines and more at worst. According to Clark, if they do not pass it, they would fail to meet their statutory obligation, as laid out in MCA 7-6-4003. They also could be at threat of action being brought against the municipality, as laid out on MCA 7-6-4037, if they do not do this within two years.
According to Michalson, all of this stalling is “only hurting the town.”
In an interview with Smith after the meeting, Smith said he backs his decisions. “I did it for myself and for the town.” He is of the opinion that passing the budget as it was could be an illegal act, and he as a council member, and the town officials, would be liable for that action. He then reaffirmed his actions were on behalf of “the public’s right to know.”
Michalson said the council may consider a response to Smith’s conduct. Municipal code states, in Section 2-55 Rules (Code 1970, 2.12.040):
“The council may determine the rules of its proceedings, punish its members for improper conduct, and expel any member for the same by a two-thirds vote of the members elected, and must keep a journal of the proceedings, which must be open to inspection.”
It should also be noted that the community can always attend any meetings of the town council, and all town officials encourage the public to exercise their civil right and responsibility to attend, both budget and regular town meetings, in order to decide for themselves.