01/24/00 SP City Council Minutes1566
A SPECIAL MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 7:00
P.M. MONDAY, JANUARY 24, 2000, IN THE COUNCIL CHAMBERS AT CITY HALL
IN KALISPELL, MONTANA. MAYOR WILLIAM E. BOHARSKI PRESIDED. COUNCIL
MEMBERS JIM ATKINSON, DON COUNSELL, DALE HAARR, RANDY KENYON, DUANE
LARSON, FRED LEISTIKO, DOUG SCARFF, RON VAN NATTA AND CITY MANAGER
CHRIS KUKULSKI AND CITY ATTORNEY GLEN NEIER WERE PRESENT.
Mayor Boharski called the meeting to order and led the Pledge of
Allegiance.
AGENDA APPROVAL
Haarr moved approval of the Agenda as presented. The motion was
seconded by Scarff.
There was no discussion.
The motion carried unanimously upon vote.
HEAR THE PUBLIC
None
PUBLIC HEARING - WEST SIDE URBAN RENEWAL PLAN
The purpose of this public hearing is to gather citizen input on
several proposed modifications to the West Side Urban Renewal Plan,
specifically Stream International's plans for the Gateway West
Mall.
Boharski explained Stream International has approached the City
about locating a technical and customer support service in
Kalispell which would employ approximately five hundred employees.
He said in conjunction with the Flathead County Port Authority, the
City has identified several different revenue sources as part of a
four million dollar incentive package to Stream over the next ten
years.
Kukulski said the incentive package includes rent reduction
equaling $2,750,000 over the next ten years; an EDA grant of
$500,000; donations from CenturyTel and Flathead Electric in the
amount of $250,000 each; and a CDBG Training Grant in the amount of
$400, 000 for a total of $4, 150, 000. He said because of the 7.2
percent unemployment rate in the valley, the City and the County
are very interested in Stream which plans to hire the majority of
the employees from the area and has a starting wage of $7.50 with
a full benefit package. Kukulski said the proposal includes selling
$2.5 million in tax increment bonds through the Montana Board of
Investment to buy 50,000 square feet of space at the Gateway West
Mall from American Capital Property Management, Inc., the purchaser
of the mall and the underlying real property. He said Stream has
agreed to invest $3.5 million dollars in improvements to that
section of the mall and has agreed to pay the City, at the minimum,
$140,000 in taxes per year. He stated at the end of ten years, the
City and the Port Authority will own property worth much more than
the $2.5 million dollars. Kukulski said the debt retirement on the
ten year, $2.5 million dollar loan at 6.9% interest would amount to
$346,780 annually. He explained the Port Authority has agreed to
dedicate $125,000 annually toward the debt, with the balance coming
from tax increment funds.
Don Bennett, Port Authority Chairman, said he truly feels this is
a "good deal" for the City and Flathead County, and in terms of the
amount of benefit, he doesn't feel there's much risk in the
investment.
Myrt Webb, Port District Manager, said the purpose of the Port
District is to stimulate the economy and to help create good jobs.
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
1567
He said the Board of Directors feels the Stream proposal does
exactly that and the Port is excited about the partnership with the
City.
Warren McConkey, Flathead Electric General Manager, stated FEC had
$300,000 in past due bills last year, which was then passed on to
everyone. He said because of the 500 jobs promised, FEC has agreed
to donate $125,000 to this project because they expect to see more
than that in the reduction of unpaid bills over the next ten years.
Craig Weinstein, Stream International, said Stream is based in
Boston with six thousand employees worldwide, roughly forty five
hundred of those in the United States. He said Stream assists
hardware, software and internet companies with technical questions
and customer support. Weinstein said employees receive between four
and eight hours of technical training every week. He said Stream,
if allowed to expand to Kalispell, will hire approximately five
hundred people, most of which will be local, and bring in a payroll
of between eight to ten million dollars annually. He stated at an
open house held in Kalispell recently, about six hundred people
submitted resumes and another two hundred resumes have been
received since then. Weinstein said the response in the area to
this type of employment has been overwhelming and he feels Stream
would be very successful in Kalispell.
Kathy Hughes, FVCC, said Stream values education and the college
wants to express its strong support.
Boharski opened the public hearing.
Proponents
Virginia Sloan, Job Service, stated she has been working closely to
help bring Stream to the area and feels it's important to support
the creation of 500 new jobs when 92.5% of the businesses in the
valley employ fewer than 20 employees.
Margaret Lekander, KDC President, said Stream is an excellent
example of a clean and diversified industry that is perfect for the
valley.
Dale Williams, County Commissioner, stated many high school
graduates have to move due to lack of jobs in the area and this
would allow them an alternative to leaving.
Joe Unterreiner, Chamber of Commerce Executive Vice President,
stated he supports Stream because it's a clean industry, it
provides excellent training opportunities and would be the start of
urban renewal for the west side.
Alex Hilton, Bigfork, asked how many of the 500 workers would
qualify for the benefit package.
Weinstein answered almost all of the employees will be full time
because the training is so intense and costly that it wouldn't make
sense for part time employees.
Doug Rauthe, NW Montana Human Resources Executive Director,
commented not only is Stream offering employees a liveable wage,
it's not competing with any other industry in the valley.
Doug Hahn, 1995 5th Avenue East, said he's been selling computers
for a couple of years and would love to work for Stream.
Jim Oliverson, Kalispell Regional Hospital, stated the core issue
is progress and you can either go forward or backward. He said
this is a good way to go forward.
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
Page 2 of 6
1568
Tom Marx, 401 Sylvan Drive, commented "Thank You!" He said it's
time we stopped exporting our best products, the young people, and
Stream is perfect for the area.
Hap Peters, Whitefish, said with the multiplier effect, when all
500 employees are hired, it could conceivably add an additional 130
jobs in the area.
Dick Griffin, 312 Northridge Drive, stated he works with 8th
graders at a local middle school and the majority of their parents
are out of work. He said the City needs to keep up its efforts to
increase the job market.
Cliff Van Ostin, Whitefish, said he supports Stream because he
would love to break into the computer industry.
Steve Geiszler, 134 Sherry Lane, stated he's a business owner and
a member of the Chamber Board of Directors and said Stream is one
of the best things to happen to the City.
Joel Hardy, 118 4th Avenue West, said he spent 8 years as a network
engineer for the Marine Corp. and said it's "mind boggling" what
Stream is offering. He said the training will open up a lot of
jobs for the employees.
David Riddle, 2209 West Reserve Drive, commented it's because of
diligent work from several people that has made this possible and
their work has created a model for the state.
Van Kirk Nelson, South Foys Lake Road, said 40% of the young people
he sees as an obstetrician are covered by medicaid and this
proposal will allow them to finally get off public assistance.
Steve Van Helden, Glacier Bank President, applauded everyone who
has been involved in trying to bring Stream to the area.
Barry Roose, Regional Development Officer for Montana Department of
Commerce, said he can't remember when a company has offered to
bring 500 quality jobs into a Montana community and this
opportunity should be taken very seriously.
Jon Amkreutz, Somers, stated this is an unbelievable proposal and
told Council members, "don't screw this up".
Opponents
Clare Hafferman, 1337 3rd Street West, said if incentives and taxes
were not involved she would be in favor of the proposal, but she
doesn't feel tax increment money should be used to entice
businesses.
Bob Domrose, 376 6th Avenue East North, asked Weinstein to explain
the salary ranges.
Weinstein stated there are three tiers involved with Stream. The
first tier is the entry level position at $7.50 per hour, the
second is hardware and software support which ranges from $8.50 to
$10.00 per hour, and the third tier, called advanced services,
carries a salary of between $10.00 to $16.00 per hour. He said the
company starts with tier one positions, adds tier two as the site
matures and then eventually tier three. Weinstein said it typically
takes between 18 and 36 months to go from tier one to tier three
and any employee is given the opportunity to move through those
tiers.
Howard Stockwell, 874 5th Avenue West North, said most small
business owners won't be able to match the pay wage and benefit
package and stated the issue should be voted on.
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
Page 3 of 6
1569
Roxanne Brothers, 786 4th Avenue West North, asked how people can
live on $7.50 per hour and why a neutrality agreement hasn't been
discussed. She said it looks like this is already a "done deal".
Patricia Johnson, 714 4th Avenue East, agreed that $7.50 per hour
isn't enough and said people "can't eat benefits".
Henry Oldenburg, 119 2nd Avenue East, said he isn't pro or con but
has concerns about tax increment funds being used.
Mayre Flowers, Citizens for a Better Flathead, asked how many
projects will be delayed with the use of the tax increment funds.
Kukulski answered the projects already on line for the area will
not be delayed, such as the Meridian Road reconstruction, and added
it's proposals like this that will provide increment for future
projects.
Greg Stevens, 31 Lower Valley Road, said he isn't pro or con, but
is concerned that nothing's being done to save the American Timber
mill. He said Stream's jobs will not offset the loss of $15.00 per
hour jobs.
Council Questions
Kenyon asked if the company plans on hiring any tier two employees
in the beginning.
Weinstein answered the first 150 people would all be tier one
because the technical knowledge just won't be there yet.
Kenyon said he wants to make sure the movement from $7.50 to higher
wages becomes a reality.
Weinstein said the business plan for Kalispell is no different than
that of any other site, it just takes time for a site to mature and
the quality level to be consistent. He said movement within the
company depends on the employee's training and performance.
Atkinson commented that even though $7.50 may not be considered a
living wage, he feels that by moving through the tiers, employees
could actually end up making one of the higher wages in the valley.
Counsell asked what kind of community involvement does Stream
normally offer to an area.
Weinstein said Stream actually has some programs in mind that it
would like to support, but he can't announce which ones they are
right now. He said Stream also offers matching funds for programs
employees choose to support.
Leistiko asked if the Port Authority has agreed to buy the mall
from Kalispell at the end of the ten years.
Neier said the intent is to have the City dispose of its interest
at the end of the lease, but the agreement isn't finalized yet.
Jeffrey Funk, Bigfork, commented it's frustrating coming to a
public hearing when so many details have been worked out and the
public feels their input will have no impact. He said one of the
opponents mentioned unionization and asked if there are any unions
within Stream.
Weinstein stated there are no unions at any of the sites. He said
the philosophy of Stream is such that if the benefit package is
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
Page 4 of 6
1570
comparable or greater than the average, and if employees are
allowed to grow within the company, then they will be satisfied.
Boharski stated State and Federal Labor laws prohibit any company
from taking hostile actions against employees attempting to form a
union.
Pam Kennedy, 1036 6th Avenue West, thanked Weinstein for his candor
and said she feels $7.50 per hour is a living wage because the
majority of jobs in this area start at minimum wage. She added
that she believes "wholeheartedly" this is a proper use of tax
increment money.
Boharski complimented the media on their accurate reporting of the
project, the audience for their attentiveness and Weinstein for
being so candid and direct.
Boharski closed the public hearing.
ORDINANCE 1347 - 1ST READING
This ordinance modifies the West Side Urban Renewal Plan by adding
certain projects, such as Stream International, and to amend
Ordinance 1259 regarding the procedure for approving projects.
Atkinson moved Ordinance 1347, an ordinance relating to the
modification of the Kalispell Montana Urban Renewal Plan (The Urban
Renewal Plan) to approve certain projects as Urban Renewal Projects
and to amend Ordinance No. 1259 regarding the procedure for
approving projects. The motion was seconded by Atkinson.
There was discussion.
Haarr said the proposal offers an opportunity to many people in the
community and he doesn't have any reservations this project is
economically feasible. He suggested that very few restrictions be
placed in the agreements to allow Stream to run the business the
way they see best.
Larson said he's also in favor of the proposal and quoted from a
letter written by Melody Downs stating people want jobs with
training, benefits, career potential, etc. He said this is a
desirable project and the City should do everything it can to help
it become a reality.
Van Natta agreed, saying he feels there are far more pluses than
minuses with the proposal.
Leistiko complimented the staff and Mayor on keeping Council
members informed every step of the way.
The motion carried unanimously upon roll call vote.
RESOLUTION 4533
This resolution calls for a public hearing to be held on February
7th to gather input on a proposal to appropriate loans for Stream
and United Way.
Atkinson moved Resolution 4533, a resolution calling for a public
hearing to amend the annual appropriations of the City of
Kalispell, Montana, as set forth in the 1999-2000 budget adopted by
the City Council for the purpose of appropriating loans for Stream
International, Inc. and United Way of Flathead County. The motion
was seconded by Larson.
There was no discussion.
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
Page 5 of 6
1571
The motion carried unanimously upon roll call vote.
1
PUBLIC HEARING - COMMUNITY DEVELOPMENT BLOCK GRANT
The purpose of this public hearing is to gather citizen input to
identify and prioritize community development needs for economic
development, housing, community revitalization and public
facilities.
Susan Moyer, PECDD, explained over the past 21 years, the City has
applied for grants through CDBG, the Community Development Block
Grant. She said one source the City has never tapped into is a
training grant through CDBG. She added on February 3rd, the
decision will be made on whether training dollars will be added to
the CDBG program. She said if successful, she would like the City
to apply for a training grant for Stream. Moyer said this is the
first of two public hearings, with the second planned for February
7th.
Barry Roose, Department of Commerce, said this grant would equal
$5,000 per employee, for low to moderate income people, to provide
training for employees in positions such as Stream has proposed.
Boharski opened the public hearing.
Proponents
Doug Rauthe, NW Montana Human Resources Executive Director, stated
Montana has never had a pot of money to offer for training and this
would be a wonderful addition to the CDBG program. He encouraged
the Council to authorize staff to apply.
Kathy Hughes, FVCC, said she supports the City in applying for
these funds and added FVCC is committed in helping Stream with the
training.
Virginia Sloan, Job Service, said there has never before been
training dollars available in Montana and this is a great
opportunity.
Opponents
None
Council Ouestions
Leistiko asked who would handle the
Moyer said if the grant is received,
that the PECDD administer the funds.
Boharski closed the public hearing.
administration of the grant.
it would be her recommendation
ADJOURN
The meeting was adjourned at 11:00 p.m.
ATTES
Theresa White
City Clerk
approved February 7, 2000
Lim-7 BfiD& a
Wm. E. Boharski
Mayor
Kalispell City Council Minutes
January 24, 2000 - Special Meeting
Page 6 of 6