What havoc is inflation inflicting upon the budget of Yellowstone County? What aspects of county operations place the greatest pressure on its budget? Why are there fewer concerts at Metra Park this year? How will the purchase of gravel mines save the County untold millions? How will a new technology circumvent the mischief of inmates? Why does the new arraignment court need $45,000?
The answers to all of these questions came during the mid-year budget hearing before the County Commissioners last week. The mid-year look at the budget is aimed at making adjustments to the budget needed by unexpected costs or shifting surpluses in one area to another to serve more pressing needs.
Inflation Big Issue
“Each County fund is feeling the inflationary pressure on their budget,” reported Jennifer Jones, County Finance Director, “Cost of living increases, equipment purchases, food and medical insurance costs continue to be the main areas impacted by the current environment.”
Wages and demands of the Youth Services Center are putting some of the greatest pressure on the county’s budget, as are other aspects of public safety.
The county budget for FY 2024-25 is based on total projected revenues of $134,460,994.
Investment yields are continuing to hold a “bit higher” than was expected at the beginning of fiscal year (July 1, 2024) and are predicted to remain elevated through this fiscal year (ending June 30, 2025).
Jones reiterated an issue that has plagued county governments for many years. Under state law, local governments are allowed to increase budgets only half the rate of inflation. While difficult, local governments dealt with the limitation when inflation was low, but now that it is high it has become very difficult. “This is especially true when a significant portion of expenditures is dictated by salaries which are driven by the current inflation environment,” said Jones.
She stressed, “It is important the County takes an active interest in the 2025 legislative session. . . with extra attention spent on these bills impacting local taxation reform.” Jones commented that no one knows what the Legislature is going to do – “there are several scenarios floating around Helena” – but no matter what “the funding structure isn’t going to be the same.”
2.5- 3% Tax Growth
Growth is estimated for FY 2026 at 2.5 – 3.0 percent about the same. It has been growing at a rate of about 3 percent and is expected to come in next year at 2.9 percent.
Jones noted that Phillips 66 is protesting their taxes this year, as they did last year. When taxes are protested the tax must be paid but it must be held in a separate account and is not spent until the case is decided.
The county’s General Fund, which had $13,344,775 at the end of 2024, is projected to end this fiscal year with about $2.3 million less than it did last year, or with $12,908,535. Jones called the decline “erosion” resulting from the decline in the value of a dollar or, in other words, inflation. The general fund is used to shore up other funds in the county budget, as needed.
Public Safety
Public safety continues to be a leading focus for Yellowstone County. A criminal justice needs assessment study began a year ago and is expected to be completed this spring. It will provide recommendations to the county commissioners for system efficiency improvements, capacity management and enhanced outcomes for both adults and youths involved in the system, said Jones. Also impacting public safety issues will be actions in the Montana State Legislature.
The three county funds expected to be most impacted by pending changes, said Jones, will be the Sheriff’s fund, the County Attorney fund and the Youth Services Center (holding facility for young offenders). Jones emphasized that the expansion of these three entities will need to be supported by a voter-approved public safety levy in which debt obligation will be an option.
Youth Services receives approximately $1.5 million from the General Fund support primarily because of food costs, medical costs and utilities. Commissioners discussed the growing demand on the Youth Services Center, as each year they see more young people incarcerated – and most are from Yellowstone County.
Sheriff’s Vehicles
Sheriff Mike Linder explained his department’s request for additional funding has to do with vehicle replacements. Over the past few years patrol car replacement has not been happening even though he has been ordering them because of disruptions in that industry. (Patrol cars must be specially configured.) Linder said that he had not even planned for them in 2025, but has been notified that a past order will be filled this year. He is requesting a $440,000 adjustment from his contingency budget to pay for them. He said he does not plan to order any replacement vehicles in 2026.
The Sheriff commented that his department has been “very frugal.” The only other request for the Sheriff’s department was to transfer $12,000 to help pay for the overtime in covering vacancies in the records department.
The Yellowstone County Detention Facility requested $25,000 to purchase security cameras, which were actually a part of last year’s budget that was rolled over into this year’s.
Malicious Behavior
The county’s facility manager, Superintendent, Tim Kaczmarek, reported that he has found a new technology that will solve a chronic and costly problem for the Yellowstone County Detention Facility. It has been the malicious practice of inmates of the jail to tear up their cloths and bedding into strips and flush them down the toilets. The materials plug up the sewer lines, requiring shutting down the whole system and engaging maintenance crews to unplug the lines at considerable cost, which at a very minimum amounts to $10,000. That doesn’t include the costs of additional staff time and other impacts, said Kaczmarek.
He has found an affordable electronic mechanism that once installed will shut down the whole system anytime a toilet is flushed more than once in five minutes, he said.
County Attorney
Because of the erosion in the value of the dollar, the County Attorney’s office is having to operate on a higher budget, although costs are being somewhat mitigated because they have not been able to fill all their open positions on their staff for the past 18 months, explained County Attorney Scott Twito. He said that they are learning how to work around that and are gaining some efficiencies.
Jones commented that while the County Attorney’s office will need no General Fund support in 2025, next year in 2026, it may.
Commissioner Mark Morse commended Twito for his lead in establishing the Criminal Justice Coordinating Committee (CJCC) which has been studying the needs of the county’s justice system to deal with the rise in crime. “We are learning you just can’t build a jail,” commented Morse, “You have to get all the other components working efficiently. I am willing to support expansion of the jail so long as we are efficient in all other capacities.”
Arraignment Court
Justice of the Peace David Carter gave commissioners an update regarding the development of an arraignment court that he and his staff have been developing. The court will allow those arrested on primarily misdemeanor crimes to appear before a judge for adjudication within 72 hours of arrest. Judge Carter said that they are in the process of testing the process and will likely be able to become operational within a matter of a few weeks. He asked that $45,000 for the court be added to his budget.
Carter said that while it is seldom noted, Justice Court actually generates some income, which helps its operations. He said that its income has increased 11.33 percent, with having generated $1,017,000 in 2023 and $1,133,000 in 2024.
Commissioner Morse commented that he believed the arraignment court, once operational will “pay for itself,” and thanked Carter and those who have been working to develop it, for their hard work.
Gravel Mines
The Road Department and Bridge Department budgets are stable year to year, although the Bridge Department is focused on a large bridge project, this year.
The County has purchased two gravel mines, which Commissioner John Ostlund said they had been trying to do for quite a while. They have purchased the Gable Pit at Huntley and another further north in the county. Ostlund said that they had been purchasing gravel from Gable, but they will now own it. Having these two options available to them will save the county “untold millions of dollars over the next 50 years,” said Ostlund.
Fewer Concerts?
There have been fewer concerts at Mera Park this year, reported Tim Wombolt, Accountant for Metra Park, which has negatively impacted its bottom line. The majority of the income for the county -owned venue is derived from concerts.
Wombolt said that the reason for the reduced number of concerts stems from the fact that so few performers have been on tour. Why they haven’t been touring, he said, “we aren’t exactly sure.” But it seems to be loosening up so they hope to get some concerts soon.
“If they aren’t out there touring,” he said, “we have no ability to get them.”
Metra Park has hosted three concerts this year, but fall about six or seven short of those projected in their budget. Revenues, so far this fiscal year are off about $1.5 million. Net revenues for Metra Park have increased from $2,851,281 in 2020 to $5,889,424 in 2024.
Metra Park Manager Stoney Field said that they hope to get some concerts that will perform outside , which means they do not have to share any of the sales with Oak View Group (OVG), a company with which MetraPark contracted to secure concerts. The contract gives OVG a percentage of any concert held in the First Interstate Arena whether or not they secured the contract.
The agreement, which runs through 2026, has not been very beneficial for Metra Park. Commissioner John Ostlund admitted the county was outmaneuvered in writing the contract and “there is not an out.” OVG’s performance is based on their ability to “influence” a concert to perform in Billings, and that could amount to nothing more than a follow up phone call after MetraPark staff has acquired the event. “They take credit for every event in that building,” said Ostlund. In the past the county has been paying OVG between $400,000 and $500,000 annually.
From the conversation it was clear that there is no plan to renew the contract with OVG once it is concluded.
Metra Park is seeking transfers to their budget of about $73,000 to help meet a number of needs including maintenance needs, temporary employment wages, cooler repair, food costs, software and contract services. They are also seeking $62,000 from their contingency fund for repairs to their scrapper/loader.
