Growing Flathead: Building for the Future with Pete Melnick, County Administrator

How does Flathead County manage rapid growth without losing its rural character or overextending taxpayers?

Brenden Craig talks with County Administrator Pete Melnick about the pressures shaping local government, including rising service demands, land use, infrastructure, budgeting, and property taxes. Pete also shares updates on the new detention center and regional septage treatment project, along with his approach to planning for the county’s future.

Listen for a clear look at how Flathead County is balancing growth, public services, and responsible spending.

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Transcript

VB Pete Melnick

[00:00:00] 

Hello, and welcome to the Venture Boldly podcast. I'm Brenden Craig. I'm a state president with First Interstate Bank and your guest host for today's conversation. Flathead County is one of the fastest-growing counties in Montana. That growth brings tremendous opportunity, but it also means making thoughtful decisions about public safety, infrastructure, land use, county services, and how taxpayer dollars are invested for the future.

While many people interact with our county government every day, few understand the scope of what it takes to keep an organization of this size running effectively. Today, we're joined by Pete Melnick. He's the Flathead County Administrator. Pete joined Flathead County in 2021 after retiring from the United States Coast Guard, where he served for 26 years as a helicopter pilot and a senior leader.

Throughout his military career, he held leadership roles across the Coast Guard and the US Department of Homeland Security, overseeing operations, strategic communications, [00:01:00] personnel management, and interagency coordination. He holds degrees from the US Coast Guard Academy, Spring Hill College, and George Mason University, and he has been recognized with numerous meritorious service commendations and achievement medals for his service.

Today, we'll discuss some of the biggest issues facing Flathead County, including the new public safety facility and detention center, updates on county septage planning, how the County is managing growth, and the priorities shaping the future of our region.

Well, Pete, welcome to Venture Boldly. We're glad you're here. Thanks, Brenden. I'm glad to be here. Thanks for inviting me. Absolutely. Yes. Well, I wanna start off a little bit to get to know you, and I wanna touch on the Coast Guard to county government. You spent 26 years in the US Coast Guard before coming to Flathead County as the administrator.

Thank you for your service, by the way. It was an honor and privilege to serve. Yeah. Thank you. We appreciate that. Yes. Can you tell us a little [00:02:00] bit about the journey, what drew you to county government, and how your military leadership experience has shaped the way you lead an organization as large and complex as the Flathead County?

Sure. I never thought I would be in county government. It's been an interesting journey, and I'll try to make a long story short: the County hired a headhunter, reached out to me through LinkedIn, and thought I might be a good fit for county government.

And I looked at the job description and asked a couple of questions, one being, "Where the heck is Flathead County?" Never heard of it because I was in Washington, DC, at the time. Oh, yeah. And, the other question was, "I don't really know anything about a library or a sheriff's department or a solid waste district or anything like that.

What makes you think I would be a good fit?" And they said, "Well, you're Coast Guard. We have placed a lot of Coast Guard people in municipal and County governments, and it's essentially a leadership job." And if you can manage, a large, complex [00:03:00] organization like the Coast Guard in some of those roles you did, we think you have a good shot here.

So I said, "Well, what the heck. Let's give it a shot." So I came out and did the interview. Never thought I'd get the job. Booked a fly-fishing trip for the next day, 'cause I figured it was a free trip to Montana, and found out on Presenting Beach that I got the job. So it was... It's been a great, great fit for my family and me.

And, and you'd never been to Flathead County before that? No. Okay. I had served several years in Alaska, about 6 years total. Several trips cross-country. We drove through Missoula on our way to catch the ferry in Bellingham, but had never been to Flathead County and had never heard of it. Had heard about Glacier National Park, but this was all very new to me.

Oh, well, that's excellent. Yeah. And I have to assume, looking back, that you're glad you made the move. Very much so. Now, we are in 2021. It was a- Yeah ... tough time to move. But we fit right in. We met some good friends. The kids assimilated just fine as they do everywhere, 'cause we had to move every few years in the Coast Guard.

Mm-hmm. And I could not be happier to lead Flathead [00:04:00] County and work with the board of commissioners to lead the County in service delivery for the public here. Yeah. Well, excellent. Yeah. We're glad you're here, and we hope you're enjoying it.

It's just such a beautiful place to live, recreate, and raise a family. It really is. Yeah. So, well, let's talk a little bit about our County and specifically about managing growth. As county administrator, you work closely with the three elected county commissioners that you just mentioned to carry out their vision and priorities.

What principles guide the commission's decision-making, and how do those principles intersect with those of the cities in our County? Well, that's a great question. And principles are important. I think people underestimate how important principles are in shaping an organization's culture and informing its decisions.

The principles of the three current county commissioners are that the County is rural. Mm-hmm. And it depends on a population that is both self-reliant and independent, and it's focused on liberty. So, when you understand those principles, [00:05:00] it might help you make sense of how the County approaches decisions.

So a city is more focused on density-specific services, while the County is more focused on freedom and less intrusive government. Okay. Lower taxes mean less service. So a lot of times, people move into a county and want specific city services, and we have to inform them that that's not necessarily what we deliver here in the County.

If you want those specific services, we recommend you move to a city that offers them. Yep. Because- Within a city limits somewhere ... within the city limits- Yep ... because you'll get, uh, those particular services. So that's what guides and informs the county commissioners in their decisions, particularly when it pertains to land use, funding, resourcing, and taxing.

Excellent. Let's drill down a little bit on this, 'cause this is a really good conversation for our listeners. As a county, how do you balance preserving the quality of life that attracts people here while ensuring infrastructure, public safety, planning, and county services keep [00:06:00] pace with the growth?

Yes. I find that as a leader, it's part of my leadership philosophy. It's called the three leadership philosophy. But one of those threes, and the county commissioners and I both subscribe to it, one of those threes is you have to respect the past, you have to deliver in the present, and you have to predict the future.

Hmm. And you have to do it all at the same time- Right ... which makes it very hard. So, when, you know, we respect the past, we have to look at the county culture and what they expect. A lot of people like things done the same way, in a certain way. They like to see the same things. They like that tradition of Flathead County, and that's tremendously important to the county commissioners.

However, we still have to deliver in the present. We still have to get deputies on scene. We still have to answer 911 calls. The landfill has to take your trash, right? Yep. Absolutely. And it has to do it without question. We want the public not even to question it, like it's just going to happen.

So, and then of course the hardest part for county government, the hardest part for humans in my opinion, is predicting the [00:07:00] future. And I don't think anyone predicted the rocket ship of growth that hit Flathead County. Yeah. I was part of that in 2021. Yep. Mm-hmm. But the good news is, in my opinion, that growth is a good thing, managed growth, responsible growth.

, 'Cause I've lived in communities that didn't see that- Mm-hmm ... and it is an altogether different problem, and I would much rather have this problem than one in a declining growth environment. Yeah. Expansion versus- Yes ... contraction. That's right. Yep. We have to predict the future with the resources we think we'll have, which is awfully hard.

How the County approaches this is through a very conservative view of budgeting and resourcing. Mm-hmm. We under tax, we save for the future. We try to keep our growth limited because our principles are individualism, self-reliance, and freedom. Mm-hmm. So, when someone says, "Hey, my road - isn't plowed yet," we will get there, maybe a day or two, but it's [00:08:00] not instant, right?

Mm-hmm. You have to be able to manage on your own for those one or two days until we can get there in exchange for hopefully lower taxes. That's right. Yeah. In exchange for lower taxes- Yeah ... which we've been able to deliver, uh, since I've been here, for sure. Yeah. Well, and talking about growth, costs, planning, and predicting the future, let's talk a little bit about the investment in critical infrastructure.

Uh, we've got a couple of significant projects underway, including the new public safety facility and the regional septage treatment project. Can you give us an update on where those projects are currently? Yes. Yeah. The public safety facility is the future growth, right? That's the one we have to be able to fix now.

I'm very proud of that. We worked hard to get that across the goal line with the chamber's help. And we're going to take an aging, undersized facility into the future by building a new one. Mm-hmm. So the current jail was built in 1987 to hold about 63 inmates, and through some expansion, they got it up to about 110.

That's [00:09:00] insufficient right now, and we know that's going to be insufficient in the future because we hired someone to take a look at what that future could look like. They did some predictive analysis based on population growth and crime trends and figured we needed at least double the capacity. So we have a bond passed by the public to build a 260-bed facility.

It should come online in about three years. They're gonna start moving earth next week. Okay. So we're very, very proud of that. We're close. Yeah, we're close. We're super close, yeah. And we're proud of all the hard work that went into that, including our double A rating and double A-plus rating for the County on our bond, saving almost $20 million to show the public that we are going to save for this.

Fiscally responsible. Fiscally responsible. Yep. And now we're looking at operational costs, and I think we're in a good spot. So that's a, that's a kind of... If I had to leave a mark here in Flathead County, it would be helping the County cross the goal line on that public safety facility.

Yeah. Excellent. Yeah. And then what about the, uh, septage treatment project? Yeah. So that's delivering the present [00:10:00] right now. Yep, yep. Right now, there are about 40,000 septic tanks in Flathead County, and they have to be emptied every 4 to 6 years. And the current way that those septic tanks are emptied, and this is all perfectly legal, it's all perfectly normal, it's done all over the world, is a septic pumper comes to your house, sticks a hose down into your septic tank, pulls all that sludge out of the tank, drives to a farmer's field, and then injects it into the ground.

Everything. Mm-hmm. That's how it's done now. We think we can do better. So we were awarded about $25 million in, uh, American Rescue Plan Act money. And, we contracted with Lakeside Water and Sewer District to build a septage receiving facility that will treat that effluent- Mm-hmm ... both the liquids and the solids, and make it a better treatment process instead of injecting it into the ground.

This new process, , that Lakeside's building, it's, , really awesome, , [00:11:00] as far as septage goes, right? Yep. It's, uh, the pumpers come in. The solids and liquids get separated. Solids get dried, taken to the landfill, and put in there just as infill. The water is treated, sterilized, and ground discharge.

So much better than just injecting all that water and sludge into the ground. Yeah, it seems much more efficient. I'm guessing that if you're listening to the podcast right now, that may come as a surprise to you if you do have a septic tank and you've had it pumped. You may not ask, where does it go after that? That's right

, after the truck leaves the driveway. Yeah, this is like the final mile problem, right? Yeah. In shipping and receiving. Like, where does it go? The trouble with ground injection, particularly in Flathead County, is that land is disappearing. Mm-hmm. So farmers would lease their land. In fact, I was... When I first got here, I went pheasant hunting with a friend on his property in Lower Valley, and he said, "Hey, can you move your car because a septage truck is gonna be de-" ground ejecting here in a couple hours," and I thought, "Oh my gosh, I'm not eating any of these birds-

" If I shoot any of them." But yeah, a lot of people don't [00:12:00] realize that's what happens. And, uh, government responsibility, in my opinion, is to... You don't have to worry about it. Mm-hmm. So it comes, and it goes. Those farmers' fields are going away. The neighbors are encroaching on them. They don't like the smell.

They don't like the unsightliness of them. The farmers wanna sell and get out of that business. A few other vendors are also working to solve the problem, and we're very grateful to them. But we do need a better facility to handle that effluent. Yeah. We appreciate you identifying the problem and seeking solutions.

Yeah. It wasn't just me. Yep. This was almost a 20-year project. It wasn't till that ARPA money came in- Yep ... that we were able to find a solution. Yep, and create some momentum- That's right. Yeah ... with the funding. And solve a problem. Yeah. Yeah, absolutely. Well, these are substantial projects that require long-term investment.

So how does the County prioritize the long-term investments that support both residents and future economic growth? I think the County, when I got here, it seemed to me that they had under-invested in its capital assets, not just the jail, not [00:13:00] just the septage facility, but also, like, the fairgrounds and some of our other buildings.

They did a nice, very fitting remodel of the historic courthouse, but, you know, we also have to manage the assets we have. And the way we do that is when we get the tax revenue, and we get paid twice a year, if you think about it- Mm-hmm ... once in the spring, once in the fall. We allocate a portion of that money to our capital investment program.

So Most of it goes to the operational cost, right? Salaries, fuel, copy paper, all that kind of stuff. The rest goes to a capital investment program, where it's allocated. By law, it cannot come out of there to go towards major capital infrastructure projects. Mm-hmm. Bridges, grandstands, jails, all that kind of stuff.

So it sits in there. Our department heads and our elected officials are very good at identifying and predicting what we think we're gonna need. So we have about, uh, $67 million just in this year alone allocated for future capital [00:14:00] expansion, that keeps us from going out for bonds, that keeps us from going out for debt.

So everything is a cash flow solution. We'll save for a decade, sometimes two decades, to solve a problem. So, that's what we depend on. It's not quick. Mm-hmm. But it's- it's debt-free. Right. And I think that's what we like. It- it seems very fiscally responsible. I would agree, yes. Yeah. We're not overpaying for something.

We have to watch out for inflation, you know, those prices creep up, construction costs. I don't think anyone saw what was gonna happen in 2021 and beyond. But for the most part, we were able to deploy that capital to fix problems, big problems, problems that the public doesn't even know exist, and take care of those before they become huge public headaches.

And you made the comment that you may have been under-invested in capital assets. That probably came to light during the COVID period when, all of a sudden, we did have a big migration of people who were here visiting maybe for the short term, six to 12 months, and those who decided, "Hey, we're gonna move here and live here permanently."

That's where we went, [00:15:00] "Oh, we're not quite ready for- for this type of boom in population." Yeah, that's a good point. Yeah. I- I didn't think of it that way. I would tend to agree with you. - Yeah ... those sudden changes are what cause the government to react, right? And I think that's what happened here.

Yeah, yeah. Yeah. Absolutely. Well, you touched a little bit on these county budgets, uh, 'cause they can be difficult to understand. For instance, you talk about assets versus your day-to-day operations. Yes. Looking here, is there any additional context that taxpayers should know about the difference between those day-to-day operations?

I'm thinking about capital projects, bond proceeds, grants, and reserves, and how they relate to property taxes and the overall cost to county government. Sure. One thing I really wanna stress to the listeners out there is that we are limited by law on the tax rate we can implement. So, think of a bathtub, and it's got a fixed height, right?

Mm-hmm. It can only go so [00:16:00] high, and all the taxpayers have to bring in a bucket of water. Some people's buckets are bigger, and some people's buckets are smaller, and those buckets are based on the price of your house. So everyone has to put buckets in that water, but you don't keep filling it because it has a limit, right?

Yeah. The tub is only so high. So when tax values came out a couple of years ago, and everyone thought that their taxes were gonna go through the roof, their property taxes, and some did. Don't get me wrong, some did. But for the most part, we, they, we were limited in what we could assess people, and we don't really do the assessments. The Department of Revenue does.

We just get told what to assess- Mm-hmm… and then that revenue comes in. Um, so we're allowed to increase the size of that bathtub by an inflation factor and any new growth that comes in, but that new growth takes a long time because houses are built, then there's a two-year assessment cycle.

Yep. Um, and it could be just plain land, or it's uninhabited, so you have to wait another two years. So a lot of people are like, "What about all these buildings, all these [00:17:00] houses and stuff coming in?" Well, we don't necessarily- Surely there's more revenue. Yeah, we, we don't really- Right, immediately.

Immediately. Right. We don't see that. There's a lag, and again, our bathtub's only so big. Mm-hmm. So your taxes have gone up, but not as much as they would if that bathtub wasn't at a fixed rate. So we have limited resources. Please check your tax bill. Look at it. I never did till I took this job. I'm just gonna admit that.

Yep, yeah. I never looked at it; it was in escrow and went up every once in a while. I didn't even think about it. But check it. You can see that the County is the lowest taxing entity on your tax bill. Schools take quite a bit, and if you live in the city limits as I do, that's- they take quite a bit.

Mm-hmm. And the state takes quite a bit, the County takes the least, and we have the most people to manage. So, I'm proud of that. I'm proud that we are the lowest-taxed authority, but even so, at times we're gonna have to bring in new revenue to address that growth.

Yeah, and you, you bring up a good point: in our tax bills, they do a really good breakdown of exactly where every dollar [00:18:00] is going. Yes. And so that, I would also concur with you to encourage folks listening to open that tax bill, look at it, because if it is escrowed, let's say you have a mortgage and- Yeah,

you know, "Well, I got three or $400 added to my mortgage P&I payment. That's my property taxes." Uh, Don't use that as an excuse not to know where your money's going. That's right. Yeah. Yeah, yeah. Absolutely. It, uh, it helps you be well informed about how you show up at the poll. And we're very... You know, we're grant-writing machines, too.

... We have department heads. They have grant teams. We have a grant writer, and they are constantly asking the state and the federal government for those resources to help continue to build out Flathead County, uh, to improve, to fix, to correct. So I'm very proud of that, and those reserves are important, too.

So, I wanna share that July 1st is when the new budget ends, but we don't get paid through tax dollars till November. Mm-hmm. So we are operating on savings- Yeah ... for about four and a half months. - To pay salaries, to pay fuel [00:19:00] costs. That's when we are at our most vulnerable. So, again, people are like, "Why is my tax bill so high?"

Well, a lot of that is to cover the gap between those times we get paid. Well, Pete, I, I appreciate- ... the fact that you were a helicopter pilot- Yes ... for 26 years, and now you're, now you're a finance guy- Yeah ... running the County. Yeah. I'm impressed. Well, thank you. The Coast Guard's really interesting because, uh, we're unlike the other military services.

We embed in communities. In fact, I was thinking on my drive over here: I had a friend who was the businessman of the year for the Port of Houston because he was the captain of the port. So we embed, we are... You know, we're not cloistered in a military base. We own houses all over the country, all over the world, really.

So it's just a natural fit to go from Coast Guard to local government in a way. Yeah. So, yeah. And find yourself ingrained. Yes, yes. Yeah, doing well with the job. Well, as we wind down our conversation, let's maybe look ahead to what's coming. As you look to the future, what gives you the most optimism about Flathead County?

What [00:20:00] partnerships with businesses, local government, schools, let's even talk nonprofits, and the residents- what's the most important to ensuring the County remains a great place to live, work, and do business? Well, if you talk to anyone here, you feel youthful energy. You feel people want to create,

They're bursting at the seams to build wealth, to provide for themselves, to provide for the future. They're not just focused on their retirement or anything like that. They're focused on building a place for their families, for their kids, for their kids' kids. And that, to me, is a status symbol of a culture that wants to grow, that sees value in the future.

And as someone who has children who are in the area, ... And again, I alluded to it, I've been in areas that don't have that, and it's breathtaking. It's just so refreshing to live in an area. So the businesses and the chambers are very active. Sometimes the County and the chambers don't see eye to eye.

[00:21:00] Sometimes, you see those little friction points, but that's all good, because we all care, right? It's like a sports analogy. Yeah. A coach once said that, uh, you're upset because you care, right? Because we care. If you didn't care, that's a problem. But people care here, and that's a good thing.

Yeah. Well, I'll tell you: in the banking industry, we get to meet a lot of different families who move to the area. Yes. And I, I put myself in their position. If I were offered a job in the Flathead, the last thing I would say is, "Oh, man, bummer I have to move here," and be able to recreate on Flathead Lake, hike in Glacier Park, uh, go to a Range Riders baseball game.

I mean, what a killer community to move to, raise a family. We're proud of our community here. I love nothing more than walking up and down Main Street and seeing people we know. Yes. That's what makes us a strong community. Well, I know when I got this job five years ago, you put it on LinkedIn and all that.

And, I was inundated with people who had been here, old colleagues and friends, and they're like, "How did you hit the jackpot?" And I don't know. Yeah. But thank God I did. [00:22:00] Yeah. Well, we're thankful you did. Well, Pete, thank you for joining us and for sharing your perspective on the opportunities and challenges facing Flathead County.

And thank you to everyone for listening to Venture Boldly, the podcast of the Discover Kalispell Chamber, where we explore the people, ideas, and issues shaping the future of Northwest Montana. If you enjoyed today's conversation, be sure to subscribe and share the podcast with a friend or colleague. You can find previous episodes and learn more about the chamber's work to strengthen our local economy at kalispellchamber.com.

Again, that is kalispellchamber.com. And until next time, venture boldly, everyone.