July 13, 2024

Housing Finance Development

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Helena vacancies clogging housing pipeline

With longstanding vacancies in some of the most critical departments, the city of Helena is taking drastic measures to recruit employees and tackle a backlog of work by increasing wages and contracting out tasks previously handled in-house.

Of the total about 337 full-time equivalent positions within the city of Helena, only 33 are vacant, but those 33 positions are of critical importance.

Positions such as city planners, engineers, accountants and transit operators have been vacant for months, and Helena Finance Director Sheila Danielson told city commissioners during a mid-year finance review on Feb. 1 the vacancies are creating backlogs in the respective departments.

“The engineering department is empty pretty much, and the planning department is empty,” she said. “It’s really impacted operations, and the demand for those services have not gone away and they’re going up. I know in engineering they had a huge backlog in there. In community development there’s a huge backlog.”

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Additionally, interim City Manager Tim Burton said during interviews for the full-time position in late February that he is working to contract out the backlog in the city engineering office to Great West Engineering.

Great West Engineering in Helena.

Great West Engineering in Helena.

City staff did not respond to multiple requests for more information regarding the contract, including any details pertaining to cost, timeline and a bid process.

Local developer Mark Runkle owns Mountain View Meadows LLC, which he said was responsible for about 70% of all owner-occupied new homes sold in Helena in 2022.

Runkle said he has about 300 residential lots in total now in city application limbo due to the lack of staff.

Developers, including Runkle, work with city engineers throughout the development process to draw preliminary plans, review designs and issue final reports.

“It used to be our engineering plans were reviewed within two to four weeks,” he said. “Our last one took over four months. That’s not acceptable to us.”

When asked about the importance of a fully staffed city government to his operations, Runkle said “it’s critical.”

Mark Runkle and his wife Rebecca Ryland

Mark Runkle and his wife Rebecca Ryland pose for a photo in the Mountain View Meadows neighborhood recently.

He said with the supply line issues across the globe, he has had to place orders for materials well in advance and currently has sewer and water pipes at one of his development sites waiting for work to begin.

“We could lose our whole construction schedule,” Runkle said.

City planners are also closely tied into such projects.

Helena’s Human Resource Director Renee McMahon said the city typically employs three city planners and that at one point all three positions were vacant.

McMahon said one employee has since been promoted to senior planner and that the city has “some good applicants” for the position of planner 1.

Bear in mind, Montana Department of Commerce’s population projection models estimate the population of Lewis and Clark County will be roughly 82,000 by 2040.

“Those positions are very critical,” she said. “We have lots of community development projects coming up. We’re developing at a pretty rapid pace here in Helena, and we have (American Rescue Plan Act) funding we will be distributing soon, so those are critical to plan and execute with planners and engineers.”

Mountain View Meadows

Due to vacancies in the city’s planning and engineering department, the developer behind Mountain View Meadows, pictured, says he has 300 residential lots in city application limbo.

According to the 2022 Helena Area Real Estate Market Conditions Report prepared by Shaun Moore of residential appraisal firm True Footage Inc., single-family home sales prices within a 15-mile radius of Helena more than doubled since 2015, reaching a median of $460,000.

The report also states available inventory of units has been steadily declining over the past decade as well.

“2022 was another year of historically low inventory and historically high demand,” Moore said in his report.

There are about 870 housing units tied to just four developments currently working their ways through city processes. Those include the about 170-unit Westside Woods subdivision, more than 300 units in Mountain View Meadows subdivision, and more than 400 high-density units spread across two separate apartment complexes proposed for Sanders Avenue.

The city’s public transportation system, Capital Transit, is feeling the staffing crunch as well. With shortages of bus drivers, the program was completely overhauled, moving away from fixed routes to a hail-a-ride system.

In January, the city had to suspend bus service to East Helena, the last remaining fixed route in the system, with little to no warning, citing vacant positions. The neighboring municipality contributes financially to the public transit program annually.

Capital Transit

Capital Transit vehicles are pictured at the transit station. 

“We can hire transit operators for our Capital Transit, but we have stiff competition,” McMahon said. “We’re trying to recruit and retain quality employees, but we’ve had a revolving door with our transit operators.”

Part of the problem is that the city largely shed its upper management throughout the tumultuous past four years. Burton, during his time as interim city manager, hired four department heads, including chiefs of police and fire.

“Leadership has to start at the top,” City Commissioner Andy Shirtliff said during a phone interview, citing the offering of the full-time city manager position to Burton, a move made by the commission Tuesday. “With Tim on board, we hired four department heads. We needed to fill those spots first. Now we have people in key positions who can then fill in staff around them.”

Though Shirtliff said he believes the recruitment will still be tough sledding.

“Just like every employer in the private sector, we’re trying to find good talent,” he said.

The largest contributing factor to the city’s inability to recruit and retain for these highly skilled jobs is the pay.

McMahon said the city is doing a market wage study looking at not only the market in the greater Helena area but also similarly positioned municipalities in the region and how Helena employee pay stacks up.

“We want to identify those positions that are particularly outside of market competitiveness, and we discovered pretty quickly that our transit operators, that our engineers were further behind market than others,” McMahon said. “So we immediately increased those wages and have placed those ads and hopefully that’ll garner us better results.”

The City of Helena engineering department

The city of Helena engineering department in the City-County Building.

But those city jobs are not the only ones underpaid.

“What we’re finding is on average the city of Helena employees are about 90% of market, so 10% below where we want to be,” she said. “And that’s not even our starting wages. That’s for someone who’s proficient in the profession. Our starting wages are even lower for someone just entering the workforce or not proficient yet in that particular career.”

Now 10% may sound like an easily overlooked discount at the grocery store, but McMahon said in the world of payroll, that 10% is a wide gulf.

“It is far off, again, because we have to correct those that are the outliers from there,” she said. “So we have some that are 70 to 75% of market. We’re trying to identify those that are really outliers that we need to correct. … That’s really our focus right now.”

The next step is determining how to shoehorn increased wages across the seemingly the entire organization into its budget.

“If we want to bring outliers up to say 90% of market and know that institutionally and organizationally we’re going to still be 10% below, what will that cost for our budget?” McMahon asked rhetorically. “What about a cost of living? We know the state is proposing an 8% increase, and so if we want to compete with the state or others around on cost of living, what is that going to look like for us?”

She said the city’s human resource department must also plan for future increases as well.

“The other thing is we have to keep up with it,” she said. “We have to keep up with our cost of living and keep working toward a target of being at market, so it’s a moving target. We can’t lose sight of that 90%, and those that are way below we have to bring up to that level.”

McMahon said the work will factor into the upcoming fiscal year 2024 budget.

“We’re still looking at those numbers and considering what that would cost in our budget,” she said. “We will present that and be working with our city manager in further vetting and refining those proposals to the city commission.”