Stanford, Sheridan, Circle, Cascade, Hot Springs — One Year Later

Updated on May 13, 2019: On Friday, May 10, the governor signed HB 11 into law. This bill provides funding for the 14 rural communities that lost their state money for infrastructure projects in 2017. The bill also authorizes grants for 21 other water, sewer and bridge projects across the state.

Very rarely will you hear a politician say “I don’t care about rural water projects.” A statement like that would be a career-killer. And yet, time and time again, the infrastructure projects that keep our rural communities vibrant and livable go underfunded.

That may change this year. Right now, as the 66th Montana Legislative Session draws to a close, there are a handful of infrastructure bills still alive and kicking. That’s good news for all of us since Montana has a $2 billion backlog in infrastructure projects, according to Darryl James, the executive director of the Montana Infrastructure Coalition, and a C-rating from the American Society of Civil Engineers.

How have we found ourselves in such dire straits? For one, our elected officials have gone years without agreeing how to fund large infrastructure projects through bonding. Also, there have been times when communities have gotten approval to begin upgrading their water, sewer or bridge projects, only to have the rug pulled out from beneath them when the state cut their funding..

Last year, we told the stories of 5 of the 14 communities that lost their state money for their rural infrastructure projects. These communities applied in 2016 for a state grant from the Treasure State Endowment Program (TSEP), which awarded money in May of 2017. But by December, 2017, their funding was gone.

There is a bill (HB 11) in the state legislature that guarantees funding to those 14 communities and potentially authorizes TSEP money for 21 more communities. We at Prairie Populist are happy to see that this bill passed unanimously hearing after hearing and is bound for Governor Steve Bullock’s desk for signing. But this entire situation begs the question: When elected officials kick the can down the road, how are real people impacted?

So what exactly is the Treasure State Endowment Program?

Montana’s State Legislature created the Treasure State Endowment Program (TSEP) in 1992. It’s a state-run grant program funded by the interest earned on the coal tax trust fund, a savings account of sorts created in the 1970s. Mining businesses that produce over 50,000 tons of coal per year pay into this fund, and the state uses the interest earned on this account to pay cash for projects such as upgrading wastewater, stormwater, water and bridges.

Image courtesy of the Montana Department of Commerce

The state Department of Commerce administers TSEP. Every two years, the department receives applications from communities across Montana. A committee prioritizes them based on a range of criteria, such as the project’s impact on public health and safety, a community’s financial needs and the availability of other funding sources.

Many of our rural communities lack the tax base or revenue stream to pay for the multi-million dollar infrastructure projects that keep our towns livable and strong. Through grant programs like TSEP, the state invests in our rural communities and the people who live there. Ask the folks who ranch outside of Circle or own businesses in Hot Springs, rural Montana is well-worth the investment. And putting off that investment, even if just for a year or two, can have huge implications.

Stanford: water project moves forward out of necessity, but costs higher than expected

The town of Stanford did not lose all of its TSEP money when the Legislature made the budget cuts; instead of receiving the $500,000, the town received $288,638. The Stanford folks still hope to receive the other half of what the legislature promised them for much-needed improvements.

Stanford originally applied for the TSEP grant to help dig a newer, deeper well. At the time, their four existing wells couldn’t meet the demands and weren’t able to safely fight fires. What’s more, the town’s drinking water didn’t meet state standards and many of their water mains were undersized or old.

Unfortunately, Stanford residents couldn’t wait for the TSEP award to start their water upgrades. Earlier this winter, there was a leak in the water system and their storage tank drained. The town’s four wells didn’t have the power to refill the tank and for two weeks the town’s water pressure dropped to 10 percent. Not only was that inconvenient, but it was also dangerous because that pressure was too low to effectively fight fires. After two weeks, maintenance found and patched the leak, but it was apparent the town couldn’t go much longer without a new, reliable water source.

As Stanford mayor Ken Ridgeway said at a January 28 meeting in Helena: “The town had no choice but to move forward with the project.”

The town hired engineers to drill a 3,500 ft well deep into the Madison Aquifer. The people of Stanford now have reliable, high quality water. Previously, the town’s four wells could produce only 90 gallons of water a minute; now, the new well can produce up to 1,000 gallons per minute.

Unfortunately, the total cost of that project was $2.6 million, which would drastically raise the water and sewer rates for Stanford residents, many of whom are elderly and on a fixed income.

“Bids for new wells came in higher than anticipated due in part to an increase in steel casing prices,” Ridgeway said. It’s fair to speculate that the metal pricing would have been lower had the town placed a bid in 2017, before the federal government imposed the steel and aluminum tariffs.

To increase rates would be a financial burden on Stanford’s elderly residents, Ridgeway explained. On behalf of the residents, he implored the legislature to grant full funding.

Sheridan: water system developed new problems

Sheridan applied for TSEP funding in 2016 to help address its water distribution system, which consisted of undersized, deteriorating and leaking water mains, as well as insufficient water storage. Like the folks in Stanford, the residents in Sheridan came face to face with an immediate problem that needed to be addressed. Unlike the folks in Stanford, Sheridan’s towns people lost all of their TSEP funding in 2017.

“Since (December 2017), we’ve had even further and more significant problems with our water systems, this time actually on the supply side,” said Robert Stump, the Sheridan mayor.

When the town submitted the TSEP application in 2017, there were four operating wells. These days, they’re down to one. The town focuses on upgrading its water supply, rather than worrying about distribution.

“We may not have water to put in our lines, so there’s no use (building) any lines,” said Stump.

In early 2018, Stump applied for an emergency grant and loan through the USDA. The project cost forced the town to raise its household rates for the new well from $30 to $45 per month. That’s a big leap for a town where 28 percent of the population is over age 65 — including the mayor himself — and where 10 percent live below the poverty line and 51 percent receive Social Security.

Unfortunately, due in part to some delays with the government shutdown last winter, Sheridan still doesn’t have the well. And since TSEP funding was delayed, the town still doesn’t have a new distribution system. Towns people are frustrated, and Stump aims to avoid raising rates.

“We’ve had a lot of issues in the last two years,” Stump understated. “I do not want to have to go through raising rates again. It is painful … it’s very difficult for small towns in Montana to survive.”

Circle: water system improvements and other grants on hold

Circle applied for a TSEP grant in 2016 to replace 14 blocks of water pipes and meters. Many of Circle’s outdated pipes — some of which are made of asbestos cement — leak and 70 percent of the water system can’t deploy enough pressure to safely fight fires.

After the legislature took away Circle’s TSEP money, the town still managed to replace six blocks of old water mains with other grants. However, they still need the TSEP funding to upgrade the remaining eight blocks. Without it, they’d have to increase their water rates to $89.45 per household to complete this project. That price is 153 percent above the ideal “target rate” for a town of that size and income. Also, if Circle doesn’t get the TSEP money, the town could lose access to other grant dollars.

“Right now, the town has matching funds in place to utilize the TSEP grants. This may not be the case in the future,” said Clint Haynie, Circle’s town chairman.

When Circle and the other communities that lost money in 2017 reapplied for funding this year, the Department of Commerce simplified its application process. These communities didn’t have to re-do the in-depth application from 2016; they only had to submit a letter to the Department of Commerce saying they were still interested in the money. Anything more would have been a lot to ask. While bigger cities have staffers who fill out the applications, in our smaller towns the work often falls on the already overburdened shoulders of the mayor, who then relies on state staff and engineering firms to help.

But when Circle lost its TSEP funding, the mayor and town council also had to inform other grant and loan programs for which they applied. That situation likely happened elsewhere, too, since most TSEP-funded projects draw on other funding sources, too, in the form of cash payments, federal loans or state grants. Many of the state and federal funding sources intertwine, and losing one source can potentially cause a town to lose the others. That can throw a monkey wrench in the whole situation, or in this case, a pipe wrench.

One of the water mains that the town of Circle needs to replace.

“We can have the project shovel ready within three months,” Haynie said, proving that communities are ready and eager to jump-start much-needed improvement projects.

Why the sense of urgency? Because there are five more phases of water projects after this one in order to get Circle’s water system up to snuff. The next phase, also a TSEP application, will replace 12 blocks of leaky water mains and add fire hydrants and valves.

“If the town has to do all phases without TSEP grants, rates would jump to over 225 percent of the target rate when the projects are done,” Haynie said.

Cascade: sewer projects, roads and sidewalk upgrades on hold

Like Circle, the town of Cascade had to delay other projects after the legislature took away the promised TSEP money.

In 2016, Cascade Mayor Murry Moore applied for a $500,000 grant to fix and clean blockages in the town’s sewer system. On several occasions, wastewater had backed up and spilled out onto the streets, so the town spent excessive money and manpower to keep the problems at bay. The town’s sewage lagoon, installed 20 years ago and recently paid off, is also due for a cleaning.

When the legislature awarded the TSEP money in the spring of 2017, the town of Cascade immediately got to work and started incurring costs. The project’s team of engineers moved forward with the design, but the funding went away before the project ever went to bid.

After chatting with Moore about the town’s infrastructure projects, we at Prairie Populist aren’t too surprised that he and his team hit the ground running once the legislature gave them the go-ahead. Mayor Moore described his town as fiscally conservative and proactive about infrastructure. They don’t put things off, he said, and they’re always ready with the next project.

“We’ve done a tremendous amount,” Moore said. “We’ve got our infrastructure pretty up to snuff … I think we’ve replaced every main in town in the past 20 years.”

The town has received a lot of grants over the years, he said. And luckily, all of their sewer and water bonds are paid for, so the town shouldn’t have to raise water rates to upgrade the sewage system — as long as it receives TSEP money.

Once the sewage upgrades are done, it’s on to the next project. The town was ready to coat and seal the streets last summer, but it made sense to wait until the underground sewage lines are fixed. After fixing the sewage, draining the lagoon and chip sealing the roads, the town maintenance crew plans to fix the sidewalks. Next fall, Moore hopes the town can start upgrading its swimming pool, which fundraising and the town’s general fund will cover.

“(The delay) just puts us a little further behind schedule but I don’t think it has a big impact on anybody too much,” Moore said.

We’re looking forward to getting this grant so we can finish our water line and get our lagoon finished for the next 20 years,” he added. “We’re on track to hopefully get this grant restored and move on with our projects … we’re good for another 100 years.”

Moore seems to be equal parts shovel-ready and realistic when it comes to the funding. He’d like to get projects moving, but he plans to wait until he has cash in hand.

“(The legislators have) promised us that we’ve got first shot … we’ll see how the legislature turns out,” he said. “We won’t spend it yet, but we’ll keep our fingers crossed.”

Hot Springs: delayed water upgrades strain town savings

The 544 Hot Springs residents have an outdated water system that needs some pretty big upgrades. The main well, drilled in 1976, produces tasty, high-quality water. But it’s vulnerable, as it runs off a 40-year-old pump and 25-year-old controls. There are two back-up wells, but neither is ideal. The town’s second well, built in 1964, taps into the mineral water aquifer, but the water tastes bad and reeks of sulphur. The third well is never used because it has elevated levels of radium from nearby decaying uranium.

In 2016, Mayor Randy Woods applied for a $478,632 TSEP grant to address some of these serious issues. The grant — in conjunction with a renewable resource grant and loan, a community development block grant, and an Intercap loan from the state — would help pay to drill a new well, install new water meters and replace the roof on the water storage tank.

“We were already told that we were getting (the money) and that the project is going forward, and people were so excited for it,” Woods told us in an interview last year. “In any community, you have to have water.”

And that necessity hasn’t changed. One year later, our rural communities still need water improvements.

“It was kind of a blow to the town of Hot Springs,” lamented Woods earlier this year about losing the TSEP money. “We were putting (the project) out on bid. We were finalizing all that for the summer of 2018.”

It’s not easy for a hands-on mayor to lose control of a project. Woods is the kind of mayor who goes down to the lift station at 2 a.m. to fix a control box. Woods is also conscious of making sure taxpayer dollars stretch as far as possible. He expressed some frustration to us that grant-funded infrastructure projects often cost more because they demand a lot of  paperwork, red tape and engineering costs. In addition, because of the timing of the grant cycles, by the time communities put out a bid, most contractors are booked and charge higher rates.

Hot Springs’ water project is bound to be more expensive now than it would have been two years ago, he noted. For one, prices naturally increase each year due to inflation. Also, any savings the town would have sustained disappeared when it couldn’t complete water and sewage upgrades at the same time.

During the summer of 2018, Hot Springs upgraded its sewage system. Town maintenance workers installed a screening system to catch non-compostable items before they flushed into the lagoon. They also replaced some sewer lines, upgraded other sewer lines and replaced some manhole structures. Many of the same engineers who worked on the sewage upgrades could have worked on the water project, too. The town could have saved a couple thousand dollars if the projects were coordinated.

Ultimately, Randy Woods and the folks in Hot Springs are ready to start their water project so they can finish it and move on. Like a lot of other mayors whose towns lost funding in 2017, Woods also went to Helena to testify to legislators on why the TSEP grant matters so much to people in his community.

When the project is complete, the town can start to save money. There is still a lot of work to do on the sewer, but hopefully the town won’t have to upgrade the water system for another 30 years of so.

“Now we can start fresh and start putting that money away every month, and five years down the road, 10 years down the road, if something comes up, we’ll have the money to fix it,” Woods said.

Quit kickin’ that can!

What these small Montana towns tell us is how much can happen — or not happen — when infrastructure projects are delayed, even if only for another year. Prices go up. Unforeseen problems arise. Other projects are delayed.

Mostly, town leaders try hard to do the right thing; they’re doing their best to keep up with the backlog of infrastructure needs. Even as it seems that many of our beloved, historic small communities appear to be drying up as youth move to our bigger Montana cities, it’s time for the state to invest consistently in these communities and the people who live there. We at Prairie Populist hope our legislators do what they can to fund infrastructure, which lead to community improvements, and keep our rural communities livable and strong.

-Amanda Garant

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Here’s our complete 2018 coverage of 5 of the communities that lost their infrastructure funding: