The Billings Heights Water District has quietly functioned through its 63 year history providing water to what is now a “city” of some 30,000 people, without much fanfare, but for a while now there have been growing rumbles about how the board has been managing its business. The situation has resulted in the introduction of legislation that is partially aimed at dealing with those concerns and the concerns have brought about a rare election of board members.
Introduced by Rep. Larry Brewster, (R), HD44, a Billings Heights resident, HB 255 went through its first hearing on Feb. 4. HB 255 would hold a district, found in violation of state law, liable for all attorney fees and costs and would extend the time period allowed for the protest of proposed assessments. Brewster said that “the bill is pretty minimalist” and would improve the operations of all water and sewer districts, and his hope is that it would be an impetus to the Heights Water District.
But it isn’t all about that one district. Brewster said during testimony that he has talked to three districts that had serious problems– mostly to do with rates and how they are developed.” However, he said, “The Heights Water District is the poster child for disaster.”
Others testified in support of the bill talking about the Heights Water District criticizing the board’s lack of openness, closed meetings, arbitrary rates, no elections, and resulting harm to the economic development of the Heights. But other testimony opposing the bill came from other water districts concerned that the more stringent regulations pose “harsh” burdens and costs on all boards which ultimately fall to the ratepayers of the district.
Speaking on behalf of the Montana Rural Water Systems, Steve Wade, said that water districts oppose the bill because it takes “a sledge hammer to all the districts,” for a “one system issue.” He pointed out that typically such districts are the smallest of governmental units performing a very important community service. Boards typically have trouble getting volunteers to serve on them and increasing their liability serves to make that situation worse.
Wade said that the bill would penalize boards “for the smallest technical glitch and the district has to pay attorney fees….Extending protest periods – moving them even a little bit — can upset the apple cart … it puts at risk potential capital improvements and getting financing, grants and bonds.”
A relatively new member to the Billings Heights Water District Board, appointed by the county, Pam Ellis, recently, publically highlighted problems she encountered in her new role, in letters to the editor, in which she cited having difficulty getting full agenda’s and other information. Ellis said that three members of the public who came to observe a meeting on Dec. 9, were refused entrance and the door was locked to keep them out. She was also concerned that the staff was given $100 bonuses and shared a refund from Worker’s Compensation.
At the hearing, Ellis testified that she was especially concerned about how the board’s decisions and rules are impacting the growth of business in the Heights. “We have franchise businesses that have walked away from Billings or gone to other parts of the city.”
Developers are laying pipe under roads to get access to City of Billings hookups, and “We have businesses that have existing water supplies that wanted to redo their buildings and wanted to get water hookups…that were told that water hook ups would be $50,000 to $80,000 to hook up to a warehouse.”
She said the district’s board decisions impaired “for an extended period” the building of Pizza Ranch. “When I spoke to the [water district] director he said, ‘I don’t know what they are complaining about I gave them a special deal.’ And yet it was the most expensive water hook up of any Pizza Ranch built anywhere in the United States,” said Ellis, “The reality is there are no actual laws .. and I don’t think the board knows.. .they don’t get information in writing.. they make decisions haphazardly.”
“… actually everything they do occurs in violation of the law,” said Ellis, noting that each board member gets $150 for attending a meeting and $100 if they don’t. She said that she has asked to see evidence that they followed statute in increasing benefits but “cannot get a reply.”
“…the financial reports say that there is no checks and balances, so the auditors can’t stand behind the data. It is a totally rogue operation.”
“If you are the City of Billings you are required by statute to have an independent audit to justify your rates or fees but the fees for the water district are just being plucked out of the air,” continued Ellis, “We have an instance of a board chair threatening a developer in town saying ‘if you say anything about us you won’t get any cooperation.’” Ellis said that while HB 255 is a good start she wants to see it expanded.
Also speaking in support of the bill was City of Billings Administrator Chris Kukulski, who said that he was barred from attending a meeting “to understand how they are making their decisions.” Upon questioning about his experiences with boards as a public administrator for many years and other cities, Kukulski said, “…this is the first time I have run into something this dysfunctional.”
The city is in its own conflict with the Heights Water District involving a billing error on the city’s part, for which they are now trying to collect.
The city and the district have reached an impasse over a $3 million claim by the city against the district that resulted from a billing error discovered in 2018 which happened because of a programing error in a new billing system installed in 2015.
The City of Billings sells water to the Heights Water District. The district is a stand-alone organization that operates under its own authority with no oversight from any other government, although the city and the county appoint one member to the board. The district was formed under state statute which governs how such districts should function, and since it collects and spends public monies it is subject to open meeting and public information laws under state statute.
Others who testified in support of HB 255 were Jennifer Owen, who is chairwoman of the Billings Heights Neighborhood Task Force. Expressing concern about the impact on economic development, Owen said, “…time after time we hear that the Heights Water District is charging rates that are unreasonable and establishing conflicting requirements that make development impossible.” The Task Force hears frequently, she said, about issues brought…. “by concerned residents, frustrated business owners, and exasperated developers who desire to invest in our neighborhoods but are stymied by our county water district. ..It appears that in our community and perhaps others around the state rate studies are not being routinely completed in order to support rate making and there is in the Heights Water District a lack of election integrity.”
Ming Cabrera, Chairman of the Billings Heights Business Association, also expressed concern about the negative impact the District’s actions and policies on the Heights’ economy. It won’t do any good to improve Heights infrastructure, such as the construction of the Billings Bypass and the Inner Belt Loop, without change in how the Water District functions, he said.
Seeing very little new businesses moving into the Heights despite the fact that it was large enough to support two grocery stores, Cabrera said he started two years ago to inquire about why. “Contractors told me that the Heights water department is a problem,” he said.
Given the controversy, John Muessig, who was the City of Billings’ appointee to the board resigned, requiring the city to make a new appointment to the board. The city appointed a Billings Heights contractor, Jeff Engel.
The District Board is in disagreement about seating Engel on the board saying that Muessig’s term does not end until the end of 2021, while the city claims the term had already expired. The board seated Engel in public seating at his first meeting.
The City will wait until after what may well be the District Water Board’s first ever election to resolve the disagreement. Ellis said that the board never announced elections and if someone inquired about vacancies on the board they were always told there were none.
The Billings Heights Water District is in the process of conducting an election to fill three vacancies on the board. It is the first they have held an election in the 16 years that Elections Director Bret Rutherford has been elections director. Rutherford reported that eight people have filed for the positions, for which filing deadline was February 8. Filing for write-in candidates remains open until March 1. The mail ballot election will be held on May 4.
Rutherford said that there are about 11,000 eligible voters in the district. That does not include property owners who live outside the district. Rutherford said that he has no information about absent property owners and if they want to vote they must complete a form at the Elections Office to confirm they own property in the district. Each property has but one vote so properties with more than one owner must designate a representative to vote.
Board positions that are open are those of current board members Steven Blood, Donna Dinsmore, and Roger Ostermiller.
Filing as candidates are incumbents Steven Blood, Donna Dinsmore, and Roger Ostermiller, as well as Ming Cabrera, Janet Carson, Joshua Benson, Laura Dragger, and Dennis Cook.
