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Local Government Expert: Special Improvement Districts Could Be Solution to Havre’s Road-Repair Woes

A crowd at Havre City Hall Wednesday night learned about the many ways Montana law allows special improvement districts to be used to reconstruct streets.

Dan Clark, director of the Local Government Center at Montana State University in Bozeman, cited his experience as mayor of a small town to show how financially strapped cities can use SIDs to provide services for which there are no other funding sources.

Havre voters have twice rejected proposals to assess a mill levy to bond for reconstruction of the city’s increasingly dilapidated streets.

Clark, an expert in Montana law, said there are basically two types of special improvement districts that can be used:

  • A citywide improvement district that the City Council could establish. 

Property owners could file objections to creation of the district, and if “a sufficient numbers — usually 50 percent of the property owners  — oppose the district, it would be defeated.

  • Smaller improvement districts could be created in neighborhoods throughout the city.

Smaller districts could either be created by the city or by neighborhoods petitioning the City Council.

Dan Clark

Each property would pay an assessment to finance the construction, he said. The city could determine how the levy is assessed, he said. Frontage on the street often determines how much a property owner pays, he said, but the city makes that determination.

The assessment is not a tax, though it is included on the property tax bill. Organizations that are tax-exempt, such as a school district, can be assessed an SID payment, Clark said.

One man in the audience said he owns a corner lot and feared he would have to pay an assessment on each linear foot that abuts the street. Clark said that would be up to the city, but council members could decide to assess only the footage on the front of the house. 

SIDs are used for projects because cities throughout the state, including Havre, are stretched thin because of limits on their taxing authority. Property taxes pay for most city services, but can be raised only half the inflation rate, according to Montana law, Clark said.

“We are getting further behind every year,” he said.

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Since Havre residents believe street reconstruction is a priority, SIDs are a good financing option.

“We all seem to agree that doing nothing is not an option,” he said.

People in the audience seemed to disagree about just what approach to take.

City Council Member Terry Lilletvedt was an ardent supporter of the mill levy, but said she is reluctant to support a citywide SID because there was such strong objection from local residents.

Others seemed to agree that neighborhood SIDs might be better.

People from the Bullhook Road area said their individual streets were not in immediate need of repairs, but Bullhook Road was in terrible shape. There are few residences on the street and many governmental agencies, they said.

Clark suggested that a 20-year SID be created for the area, that Bullhook Road be reconstructed first and other streets be dealt with as repairs are needed. 

He said in Bozeman, the main street to the university had fallen into terrible disrepair. A combination of solutions was used. A citywide SID contributed some of the needed money, a neighborhood SID paid some and the city general fund paid the remaining part.

Clark said Montana cities are doing a good job of providing services to people, but are taken for granted.

“People should stop and think about how often they interact with the city of Havre every day,” he said.

When people get out of bed in the morning, they turn on the water, go to the bathroom and take out the garbage, he said.

Email John Kelleher at (406) 262-7778
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