YELLOWSTONE COUNTY — The Montana Department of Public Health and Human Services (DPHHS) announced Friday that Laurel will be the new site of the new 32-bed state mental hospital, a decision that has left multiple counties surprised.
The $26.5 million facility was approved by the 2025 Montana Legislature with the goal of boosting care for the eastern part of the state. Montana has one state mental-health hospital in Warm Springs, which is near Anaconda.
Custer and Big Horn counties actively pursued the facility and submitted formal proposals to the state. Laurel, however, showed little interest in the project and did not submit a formal proposal.
Watch county officials talk about the location for state mental hospital:
“Custer County, as well as Big Horn County, Miles City and Hardin, were the two entities that felt we had the resources that would meet the state's needs,” Custer County Commissioner Jason Strouf said Monday.
The lack of a formal proposal from Laurel has frustrated leaders in competing areas.
“To have a decision made that site was selected that was not one of the two proposals submitted seems a little disingenuous in regard to the process that the state chose to put forward,” Strouf said.
Instead of a formal proposal, Laurel sent a letter from Chief Administrative Officer Kurt Markegard stating there was no suitable location within city limits to build the hospital.
Leaders in Big Horn County expressed disappointment over the missed opportunity.
“I think the state overlooked us and saw what it could have did for us generationally. The impact would have been great,” Big Horn Economic Developer Director Lawrence Killsback said.
Some cities had hoped the mental health hospital would provide an economic boost to rural counties in eastern Montana.
“That's where our economic base philosophy comes from, is having those individuals in your community, those circulate dollars within your economy,” Strouf said.
Yellowstone County Commissioner Mike Waters was surprised by the announcement.
“I was surprised. And I think my colleagues were surprised,” Waters said.
Waters also has questions about the implementation of the project.
“Without a real plan and resources committed to it, what does it look like in the future?” Waters said.
MTN has reached out to the state seeking more information about why Laurel was chosen and to Markegard to learn exactly where the hospital will be built. Those specifics have not been announced.
Earlier this fall, Laurel Mayor Dave Waggoner pointed to a piece of land along Old Highway 10 just west of town as a possible site.
State health department officials did not share any new information, providing only a statement attributed to Director Charlie Brereton, shared on Friday with the announcement of Laurel.
“Laurel provides access to a critical health care workforce and infrastructure necessary to ensure the facility’s success. Furthermore, Laurel’s geographic location is ideally situated for improving transportation logistics for patients and their families, staff, and law enforcement across central and eastern Montana,” the statement read.
Despite the questions surrounding the selection process, officials acknowledge the need for additional mental health capacity in Montana.
“We all understand that we need more capacity for, you know, forensic facilities in Montana,” Waters said.
“At the end of the day, it benefits us all if the state is successful in getting this project completed,” Strouf said.
