State officials are searching for answers as to why Montana State Parks, an agency hampered by staffing shortages and a mounting maintenance backlog, was not spending all of the funding it had available in recent years.
After chronically underspending its budget authority, State Parks' ending fund balance has nearly doubled since the end of fiscal year 2012. The agency currently has $11.2 million in the bank.
The large lump sum doesn't necessarily put State Parks on firm financial ground, however, and the governor's office has directed the agency to fix its structurally imbalanced budget after projections indicated the division will spend more than it receives in the future.
House Bill 5, commonly known as the “infrastructure bill,” includes $5.95 million in requests for three of Montana’s state parks. The funding comes from Parks’ $11.2 million fiscal year ending fund balance, and needs legislative approval for spending on major capital projects at Lewis and Clark Caverns, Makoshika and Bannack state parks.
The projects, including road construction and electrical systems, are sorely needed to bolster public safety and historic preservation, according to a state-commissioned engineering report and numerous statements from Parks staff and advocates.
But why the funding is available remains unclear and is the subject of legislative attention, as Parks has pushed hard for more revenue to address staffing and maintenance challenges.
Unlike many state agencies, as a division of Montana Fish, Wildlife and Parks, State Parks gets no money from the state’s general fund. Funding comes from multiple sources, which include optional fees on vehicle registrations, park use fees, and bed tax and coal tax interest. The Legislature grants authority for Parks to spend those revenues.
Former chief of administration for FWP Sue Daly told the Montana State Parks and Recreation Board last August that under House Bill 2, past Legislatures granted Parks authority to spend operations funding for staffing and other day-to-day needs, but about $1 million went unspent each of the last five years.
“This is a continuing saga – we’re not getting money spent the way we could be,” she told the board.
“We own that and we need to fix it.”
Parks’ ending fund balance hit more than $11.2 million at the end of fiscal year 2016, compared to about $5.8 million at the end of fiscal year 2012. The unspent funding and future projections of an unbalanced budget led to concerns from the governor’s budget office.
“Parks has been in a structural (funding) imbalance for some time,” Dan Villa, the governor’s budget director, said in a recent interview. “The Parks folks need to figure out how to make revenues and expenditures align.”
While the governor’s office and the agency agree that spending down the $11.2 million must happen, a chief concern is how that money is spent. By paying for needed capital projects, Parks does not create a long-term obligation such as a new program that it cannot fund once balance is achieved.
“With this cash we’re sitting on, taking the $5.9 million will effectively cut the balance in half, and we will spend it on three very important parks projects,” current FWP Administration Chief Dustin Temple said in a recent interview.
The needs for State Parks are many, as the division’s strategic plan pushes resources to premier parks while considering what to do with lower priority sites. With a less than $8 million annual budget, which includes management of several recreation programs, how Parks will finance a more than $23 million maintenance backlog has been an ongoing debate for years. Staffing also runs about a third less than neighboring states, yet Montana’s 54 parks continue to see record visitation.
Montana State Parks Foundation coordinator Marne Hayes says her organization supports the HB5 spending to address the “extreme needs” posed by the maintenance backlog. Although separate from the agency, the foundation formed in response to an identified need to strengthen public support for the Parks system and drive advocacy.
“These are some of the biggest needs at some of our most valuable parks,” she said of the HB5 ask. “We believe parks deserve a fair shake in funding consideration, however it's coming.”
Parks staff and advocates have consistently spoken out for more funding and staff, so why the division apparently starved for resources did not spend the money it had is a question FWP says it cannot yet answer, but must.
Last week, during a Parks work session with the Joint Subcommittee on Natural Resources and Transportation, Rep. Jim Keane, D-Butte, asked new FWP Director Martha Williams about the Parks budget issues.
“I recognize that it looks terrible and it is a hard issue to step into, and we need to explain why there is this discrepancy and why we say there is this structural imbalance, but we have this ending fund balance,” Williams, who took her post just this month, told the committee. “The question is why, and believe you me I’m trying to find out why and we’re trying to explain that.”
Keane was just one of several legislators to voice concerns.
“If indeed expenditures are routinely outpacing revenue, how do you end up with a $6.5 million ending fund balance in ‘19?” Sen. Mike Phillips, D-Bozeman, asked FWP officials.
“Mr. Chairman, Sen. Phillips, that’s the $100 million question,” Temple replied. “It’s a seemingly inconsistent set of problems, and it’s a really odd set of facts. How do you say that you don’t have enough revenue, you’re spending more than you're taking in, and your fund balances are climbing?
“There have been decisions made in the past in regards to not spending funds, I can’t speak to the why that was done, that have contributed to these fund balance issues. But our plan we’ve worked out with the (governor’s) budget office addresses both these issues over time, so by the end of our current funding cycle in 2021, we have the fund balances spent down and have our expenditures and revenues lined up.”
Structurally balancing the budget would essentially come down to either cutting costs or increasing revenues, or a combination of the two.
As State Parks is currently without an administrator, the future administrator will bring forward budget proposals to the director and governor’s budget office for approval in a legislative budget request, Temple said. Once legislatively approved, decisions on operations expenditures are made by division administrators.
Daly, who retired last year, identified underspent operations as the reason for ending fund growth, but she did not elaborate to the parks board as to why the funding went unspent.
Daly declined to comment when contacted by the Independent Record.
Inquiries to FWP also did not provide a reason for why Parks budgeted as it did. Department spokesman Ron Aasheim said that while the question was fair, no one at FWP could answer it.
Members of the parks board have also expressed frustration not only at the imbalance and governor’s office directive, but at the lack of answers as to why the funding went unspent.
“I don’t know how we got there and I don’t know how we get out of it, but it’s a problem we need to solve,” Board Chairman Tom Towe said at the August board meeting.
Towe said recently that many of those questions still remain unanswered. The board plans to play a much more active role in the budget process going forward, he added.
Board member Jeff Welch echoed Towe, saying he has not received an answer as to why State Parks underspent its authority.
Vice chair Mary Sexton noted that not all of the ending fund balance could be chalked up to unspent operations. Uncompleted projects such as a plan to put a boat dock on Wild Horse Island on Flathead Lake was pulled due to local opposition, returning that funding to the balance sheet.
Staff were also hesitant to spend some revenues out of concern that there may have been an error due to new software, she said. Sexton called it “unfortunate” that it was decided the ending fund balance could not go to operations given those needs.
In August, Daly twice referenced then-State Parks Administrator Chas Van Genderen in her testimony, saying that he would play a role in planning for a structurally balanced budget and spending down the ending fund.
“We need to work more closely with Chas so that we don’t leave unused money on the table the Legislature has given us to spend,” she testified at the time.
Van Genderen was fired late last year after eight years as Parks administrator. FWP says that personnel rules preclude them from commenting on the termination, but Towe believes it was the result of a long-term rift between department divisions.
A records request filed by the Independent Record asked for four months of Van Genderen's emails, and those of former FWP director Jeff Hagener, related to the State Parks budget. None were found, Aasheim said.
The request also asked for any budget related grievances related to Van Genderen’s dismissal. The state denied that request, citing personnel policy.
A message left for Hagener was not returned.
Van Genderen has hired attorney Eric Holm, who says that based on the structure of FWP with accounting and budget analysis outside of State Parks in the administration office, his client had been largely unaware of the budget issues.
“He also had a lot of these questions and he was in the dark on a lot of these things,” Holm said. “We would like some answers too.”
Towe said that he believes Van Genderen was surprised to learn, along with the board, of the ending fund and budget imbalance. Towe offered one potential answer to the inflating end balance, saying that he believes certain funding requests were coming forward from Parks, but were being denied by either the director’s office or the governor’s office.
In May, Van Genderen told the Environmental Quality Council that he was requesting an additional 13 full-time employees. He did not make clear if the request was for the interim or for the funding cycle the Legislature is currently considering.
Temple says records show that request did come forward last April or May, but was held by the governor’s office because “it would have exacerbated the problem with the structural imbalance.” FWP staff looked into whether the request began as an interim request but later moved into this funding cycle, but could not find evidence that occurred, he added.
The decision against adding employees appears to back up assertions from the board and staff that additional operations funding was considered but decided against due to concerns about long-term costs once the ending fund balance is spent down. While the employee ask or other requests may have spent down the ending fund balance, the Independent Record has been unable to substantiate whether those denials contributed to its growth.