Flathead County has received a $2.4 million payment from the federal government under a long-running program that compensates local governments for nontaxable federal land.

The annual allocation pushes the county’s payments-in-lieu-of-taxes fund to $5.7 million. 

The money will be used for a number of county building projects such as the renovation of the historic jail building next to the courthouse and construction of a multipurpose building on the county campus that will house the Agency on Aging and other county services.

Flathead County was one of 1,900 local governments throughout the country that received a total of $436.9 million. That’s about $37 million more than last year’s distributions made amid federal sequestration.

Montana’s slice of the payments-in-lieu pie is $28.8 million, of which Flathead’s allocation is the largest. Other counties with sizable amounts of federal land include Ravalli County, which received $2.1 million; and Lewis and Clark County, at $2.3 million.

Some 70 percent of the 5,088 square miles of land in Flathead County, or 2.4 million acres, is federally owned.

Each year the county earmarks $500,000 of the payments-in-lieu money to the road department, and that will continue this year, county Finance Director Sandy Carlson said.

The jail renovation, which will allow the County Attorney’s Office to relocate from the Justice Center to the historic building, will tap the payments-in-lieu fund to cover the $2.9 million cost.

The $6 million building planned as a companion facility to the Earl Bennett Building on First Avenue West will use $4.5 million spread over the next two years. 

The Health Department, which will locate its dental clinic and other services in the south campus building, will put in $1.5 million.

The county has loaned payments-in-lieu money in the past to various county entities or departments, and those loan payments become part of the fund, Carlson said. This year loan payments are expected from the Hungry Horse Fire District for $7,250; county records department for $25,000 and the fair for $282,000.

“We’ll end up with a positive balance, but not a ton of money” once the payments-in-lieu money is distributed, Carlson said. “It will probably leave a couple hundred thousand dollars.”

The money has been put to good use for past building projects, according to County Administrator Mike Pence. The $2.6 million courthouse renovation was done largely with payments-in-lieu funds, as was a restoration of Courthouse West. A parking lot next to the Earl Bennett Building also was paid for with payments-in-lieu money.

Last year the county used a portion of the money to buy the State Farm Insurance building that now houses the Montana State University Extension Service and 4-H program.

Payments-in-lieu-of-taxes program eligibility is reserved for local governments in mostly rural counties that contain nontaxable federal lands and provide vital services such as public safety, housing, social services and transportation. These jurisdictions provide significant support for national parks, wildlife refuges and recreation areas throughout the year, Secretary of the Interior Sally Jewell said in a press release. 

This year’s program is the last to be funded under the Agriculture Act of 2014, which reauthorized payments-in-lieu-of-taxes for 2014 and funded full entitlement levels of the program. President Obama’s fiscal year 2015 budget proposes to extend mandatory full funding for the program for another year while a sustainable long-term funding solution is developed for the program.

The Interior Department collects about $14 billion in revenue annually from commercial activities on federal lands, such as oil and gas leasing, livestock grazing and timber harvesting. A portion of those revenues are distributed to states and counties in the form of revenue-sharing payments. 

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.