Tuesday Feb. 16th, 2010

Bozeman’s new Fiscal Sustainability Initiative

Mike Comstock

The new Bozeman City Commission was sworn in at the beginning of January. Since that time, council member Eric Bryson resigned to pursue a job offer in Helena. The remaining council has selected Cyndy Andrus as his replacement, and she was sworn in at the January 25th City Commission meeting. I spoke with the new incoming Mayor Jeff Krauss about the challenges that he wishes to address and pursue with the new commission.
Mayor Krauss came to Montana in the late 1970s and worked with the railroad for several years. He enrolled at Montana State University in 1985, graduating with degrees in finance and accounting in 1988. Jeff is a certified public accountant, and has past experience working in the Gallatin County Treasurers office. This is his seventh year on the city commission, and second two-year term as Mayor. Jeff is 56 years old, and when not acting as mayor, is the Finance Director at the very successful Museum of the Rockies, a non-profit corporation which has a budget of several million dollars.
My first question was in regards to the economic downturn. Is Bozeman hurting financially? The answer is complex. Revenues from the tax base are not up, as growth has slowed to a trickle, but the tax base is consistent and has not dropped. However the city has to balance a constant revenue stream against raises for city employees and higher costs for some city services, and so fiscal readjustments are necessary. Realistically, some cuts will have to be made.
The big picture first agenda item is really setting priorities. Defining wants versus needs, and then prioritizing the needs. Outgoing commissioner Eric Bryson was a staunch ally of mayor Krauss in recognizing the urgency of setting priorities.
In the past, the city of Bozeman has come across as flighty and business unfriendly.  There  was the Mandeville property and ensuing lawsuit against the city, the purchase and sale of the Armory, the transfer station land on Love Lane, the Facebook fiasco, affordable housing, and the current ongoing Story Mansion problem. In the past, the city tried to levy huge impact fees, chased businesses outside the city limits, and alienated the business community and would-be investors. There were few consistent priorities, and wants and needs were indistinguishable. The council wasted time on peace resolutions and political statements rather than on real city business.
Realizing that this had been a mistake, the last city commission made their number one priority that of working towards making Bozeman “the most business friendly city in the state of Montana.” The task before the new commission, should they choose to continue with this initiative, is creating a plan for how to attract, start, grow, and maintain businesses in Bozeman. Plans need to be made for how the city will help with tax breaks, incentives, easier fast track plan approval, etc. Creating a reputation for being business friendly may take years to accomplish.
In February, Mayor Krauss and city manager Chris Kukulski will visit both of Montana’s senators Tester and Baucus in Washington DC and push for around $1 million in federal funding to help rebuild Main Street. The plan is to appropriate and spend the money by the end of 2010. Creating new jobs and businesses should grow the tax base. Krauss wants to “stalk the wily entrepreneur” and engage them to participate in the rebuilding of the downtown business district.
Another task on the mayors list of things to address and accomplish is working with slowed or stopped subdivisions and developments to try to get them back on track and make them successful. Working with developers to identify needs and resources is a better way to ensure a win-win scenario rather than policing and second-guessing their business plans.
Having a background of finance and accounting, mayor Krauss is also keen on what has not been working for the city over the past couple decades. That is, the city has never been fiscally prudent. Mayor Krauss wants to set the city on a course of “fiscal sustainability.” Currently Bozeman has outstanding deficits on the library, the new city hall, the Story Mansion, and other projects. These deficits need to be addressed and paid off, while other overlooked problems need to be addressed.
One of the false assumptions of the past was that “growth pays for itself and also for deferred maintenance.” But that has never been the case. While curbs and sidewalks could have been repaired, the Story Mansion consumed funds instead. Currently there is a large list of deferred maintenance projects which do not have funding and continue to grow in size and scope. There still is not a new wastewater treatment facility. City water supplies are nearing capacity, and the supply pipes are old. Storm water is currently not treated and is poorly managed. Sewer pipes are old, at capacity, and falling into disrepair. And even the Bogert Tennis Courts needed resurfacing as we’ve all witnessed on CNN and FoxNews  recently. The city’s infrastructure has been ignored for decades.
In the past, the city government has grown in good times, and shrunk in hard times. While that is the status quo and the mentality of bygone commissions, the new paradigm in fiscal responsibility is the mayor’s vision of fiscal sustainability. Programs which are costly, and are not sustainable (and not needs) should be eliminated, and any new unsustainable proposals need to be rejected.
Mayor Krauss points out that all levels of government seem to have this problem. We see this on a national level, and now at the state level here in Montana, a special session of the legislature will likely be called soon to address the budget shortfalls projected for this year and next. It is only prudent that the city of Bozeman get a head start on fiscal sustainability and responsibility ASAP.
At the Museum of the Rockies, Krauss points out that they began to plan for the current downturn in the economy back in 2008. The MOR is financially sound and has been running quite well on the fiscal sustainability model Krauss has implemented there.
In the past, businesses and entrepreneurs always had greener pastures to flee when economic hard times hit the Gallatin Valley and Bozeman. With this current economic downturn, that is not the case. So it is now imperative for the city to work with businesses, to change “to a culture of yes from a culture of no,” to work on business timetables, to recognize that time is money, and to budget while realizing that capital investment does have an expense. Bozeman needs to not just keep businesses here, but attract businesses and entrepreneurs from other areas.
Mayor Krauss has seen a lot of improvement over the past six years on the city commission. He says that the commission now has better communications, better rationalization of priorities, less lawsuits, civil and rational discourse, and fairer impact fees and financial decisions. Those improved attributes will make for a great foundation for creating his vision of responsible fiscal sustainability. Hopefully his fellow commissioners agree and will continue to work towards making Bozeman the most business friendly city in Montana.