12/03/84 City Council Minutes266.
THE REGULAR MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 7:30 P. M. MONDAY, DECEMBER 3,
1984 IN THE COUNCIL CHAMBERS AT CITY HALL. MAYOR MCDOWELL PRESIDED. ALL COUNCILMEN
PRESENT.
APPROVE MINUTES
Councilman Manning corrected minutes of November 19, 1984 to read "City -County Planning
Board" rather than "Flathead Regional Development Office". Councilman Manning moved to
approve minutes of November 19, 1984 as corrected. Seconded by Councilman Gfainger.
Motion carried.
OPEN BIDS - 12 T Dump Truck
DeMarois Oldsmobile-GMC
Bid
Bond
$47,583.00
Roy Stanley Chevrolet
Bid
Bond
45,849.00
Montana Mack
Bid
Bond
64,280.80
Peterbi,lt Company
Bid
Bond
60,089.00
51,950.00
Councilman Palmer moved to refer the bids to the Street & Alley Committee with power
to act. Seconded by Councilman Schindler. Motion carried.
PUBLIC HEARING - Industrial Revenue Bonds - Mall
Mayor McDowell stated that this public hearing is held to hear the request of Kalispell
Center Limited for $10,000,000.Industrial Development Revenue Bonds for the Mall Project.
Proponent Mike Fuller, owner of First?". Avenue West, spoke favorably for the issuance of
the bonds so that the mall project goes.
There were no opponents.
Public Hearing declared closed.
RESOLUTION #35575'
Councilman Saverud moved to adopt Resolution #355911a resolution authorizing a project
under MCA, Title 9'0, Chapter 5, Para 1, the Financing thereof and the issuance and sale
of a $10,000,000 Industrial Development Revenue Note (Kalispell Center Limited Partner-
ship Project): Approving the preparation of documentationin connection therewith; and
authorizing the execution and delivery of the note and documentation. Seconded by
Councilman Nystul. Roll call vote. All voted aye.
ADDRESSING THE COUNCIL
Mayor McDowell made three calls for anyoce wishing to address the Council. No one
responded.
COMMITTEE REPORTS
PARKS
RESOLUTION #355
Councilman Springer moved to adopt Resolution #355f a resolution providing for the
issuance of General Obligation Bonds of the City of Kalispell, Montana in the amount of
$550,000.00 for the ptnrpose of reconstruction, renovating and repairing the Municipal.
Swimming Pool located in Woodland Park. Seconded by Councilman Nystul.
Councilman Ruiz inquired if we are asking a bonding company for assistance. Councilman
Springer replied that letters have been Wrr.itten to five companies for rates.
Question called. Roll call vote. All voted aye.
Councilman Springer reported that the Parks Committee voted to recommend that the Mayor
and City Council be authorized to sign an easement through park property for Pacific
Power & Light for power to a church. Seconded by Councilman Nystul. Motion carried.
COMMUNITY DEVELOPMENT
ORDINANCE #1049
Councilman Saverud moved second reading of Ordinance #1049 an ordinance to amend
Ordinance 41000 regarding administrative fee on Industrial Reue11ue-.Bonds. Seconded
by Councilman Ruiz.
Councilman Saverud stated that he agreed with the general. concept of the original
ordinance. When the city lends its name there should probably be an administrative
fee. To date, nothing has been collected on past projects. When IRB's are sold in
conjunction with a UDAG, which is a loan that will be repaid to the City, and carries
a $15,000 administrative fee, then it seems equitable to waive the IRB fee. If the
Council.had.known:about-UDAG,it might have included a waiver in the ordinance.
267.
Councilman Ruiz spoke against the motion. He stated that it was passed to generate
extra revenue and all 8 councilmen voted favorably. These bonds are a good break
for companies because of the low interest rate. Two revenue issues - Buttrey-Osco
on October 5, 1981 and The Outlaw Inn on November 2, 1982 were not eligible for the
fee as the.ordinance did;not become effective until February 4, 1982. Another point -
it was almost special legislation - City Attorney Neier going to Spokane to talk to
theDeveloper - did not go to committee - what is to say we could not take $5,000
from the Developer - do'not want this - it is immoral and unethical. A memo from
the City Attorney on January 18, 1963 cautioned the Council that it is a dangerous
practice and inappropriate for any official to meet with the Developer.
City Attorney Neier explained that the meeting he attended in Spokane was called by
the Bond Counsel, not" the Developer, and related to loan papers, mortgage:4 commit-
ments by banks, Developer and.City. Bond Counsel called the meeting_.to determine
changes or objections. The Attorney for the Developer objected to some language in
the loan documents that required the Developer to be responsible to the City for
all fees, licenses, etc. "At that point I had a copy of Ordinance No. 1000. In
accordance with the ordinance, the administrative fee for IRB's was a payable fee.
At that point, they stated they believed the payback of the UDAG, building permit
and sewer connections were legitimate, but objected to the IRB administrative fee."
Neier continued, "I did not have the authority to waive the fee, but stated I would
bring it back to -.the City Council and City Development Committee and explain their
position. There wasr_.no deal. It was going to require $25,000 prior to signing the
bond papers on December 14th or waive the fee. I reported to the City Development
Committee at an open meeting which was posted. The Committee recommended that I
draw Ordinance #1049 exempting the fee."
Councilman Ruiz stated that the point was not monetary even though we should not give
up the •$25_000'- the more important issue here is that this amendment to this ordi-
nance is coming about because of a meeting with the Developers who have indicated
to us that they did not want to pay that fee and they wanted to negotiate the fee
out and I think that is ekact_l.y what we are doing and that is what is wrong.
Councilman Springer stated that at the meeting of the 19th we discussed the differ-
ence between the waiver of this fee as an exception to this ordinance and this amend-
ment. Councilman Springer stated he would second everything Councilman Ruiz said
and would take credit for the words "special legislation". It is a flagrant example
of special legislation and I think that is wrong. Notwithstanding the statement that
the monetary thing is not important - it is important - the precedent that is being
set, whether it is because ofi:the UDAG or any other reason is wrong. We have caved
in, since I have been sitting in this chair for the past 9 months, on no less thdn
4 occasions when the Developer has demanded and if the $25,000 fee in this case is
going to stop this project, particularly when they have known all along that this
expense was geared into their project, then something is wrong. If this Council
decides to allow the amendment to this ordinance, then I think we ought to take the
ultimate step and get rid of the ordinance altogether.
Councilman Saverud stated "I think there is legitimate room for differences of
opinion as to what is right in this case, but I object, and object strenuously to
any innuendo that anything improp-sx,..has gone on or been done. Our committee met on
Thursday, the 15th of November and reviewed what the City Attorney said of the
findings of his meeting with the attorneys for the Bond Counsel and the Developer.
I personally was under the assumption up until that time, in fact, -a little after
that time, that the fee on that ordinance had been collected from the other de-
velopers. We found out that was not so. And, I do firmly believe that it is a
case of equity. We are getting a very good fee for lending our name to this
Industrial Revenue Bond and to put any other construction on that has to be•._one for
something other than rational understanding."
Councilman Nystul stated he is in favor of the motion. "There is some differentia-
tion between the regular IRB we have contemplated in the past where the City is
lending their name and should get a fee, but I would agree with Howard that the City
should not charge a fee from anyone and that would be a reasonable conclusion. In
the regular TDB issue, you are getting back the increased value in the property.
In this case we are getting back more than our fair share of the taxable value of
the.property because it is in the tax increment district. We are also getting back
the UDAG loan plus interest and had I been aware of the.UDAG type of arrangement at
the time of the passing of the bond fee, it would certainly have been something
to think about. The City is in this case getting back a little more. The timing is
unfortunate, but these things come up and in the long run, ii is in the best interest
of the City.'
Councilman Grainger stated "When we voted on this in 1981 we were looking for revenue
there was no doubt about it. Whether we want to admit it or not, we were assuming
that Osco and The Outlaw would in fact, because of the issuance of the IRB!s pay a
fee, and it is really immaterial whether they did or did not. When we passed the
III MIF
IRE Ordinance, we were told then that it was a tremendous ahiouht of work for the City-
now,we are told it is not. There again, that is a moot issue, without getting into
personalities. I do not agree that these things are political because I sure am not
political. When we passed that ordinance for these bonds, that .is all we were talking
about - we were told at that time that these things were.goin:g to flock in -.then they
ceased because we thought they were not going to be issued anymore - from 1982 to this
one in 1984. I really would like to know what.we are, going to receive from UDAG. If
it is $15,000, that is fine. We know the property tax will be more. I really do not
like to change an ordinance, and we have not done that vevyvof.ten. If this is a change
because of a new concept which we did not have when we passed this in 1981, whether it
be this issue or any other issue, I am sure that we look-atcthub,,istue6!T�.If:::we do not,
we are wrong the other way. I.think you have to take change when it comes. Ybu can
not set an ordinance in concrete. If it is for the betterment, you have to change."
Cpuncilihan Ruiz stated that each ordinance must stand on.its own. The ordinance in its
concept was a good ordinance. It would .generate some revenue for the city. UDAG
grants, which are a different type of IRE should not necessarily.!exempttthem from
this ordinance., They also have built into them an ability to loan this money to the
developer at ---this rate that they did not have available to them from outside sources.
Every,_,one'of these government .loans gets into the philosophy of "give away" and that
is costing the taxpayers a lbt of money. The UDAG loan should be able to stand on its
own merits, just as our ordinance should. I think that is the point that you are miss-
ing on this. And do noii`:forget this $568,000 we are depriving the City of Kalispell tax
payers from in our tax increment financing fund, which is also going to this Developer.
That tax money should be divided between the schools and County and we are depriving
the taxpayers of that. And how long is<_it going to take them to pay that back. Your
can talk about the philosophy of thds also.
Councilman Gr;tinger asked if they were so informed that they had to pay the $15,000
plus this 525,000. Councilman Ruiz replied that they knew exactly what they had to pay.
Question called.
Councilmen Saverud, Nystul, Manning and Palmer voted aye.. Councilmen Springer, Grainger,
Ruiz and Schindler voted nay. Tie vote. Mayor McDowell voted to break the tie. Mayor
McDowell gave his reason for voting for the amendment as increased tax base, more employ-
ment and general progress for the City.
Councilman Saverud stated that according to Ordinance #933, the Redevelopment Ordin-
ance, if`a project is over a certain size or amount, the:project must be reviewed for
approval, by the Council. The Building Department has reviewed and will complete
their review by December 13th; the Board of Adjustment has heard it because of the
134 unit Motor Inn that needs a conditional use permit and will pass it on as soon as
the findings of fact are written and everything is in order. Since the deadline for
approval is December 15th and there is not another meeting before, Councilman Saverud
moved that Mayor McDowell be authorized to sign after the City Development Committee
reviews and approves.Seconded by Councilman. Grainger. Motion carried.
EMPLOYMENT
Councilman Grainger had no report.
FINANCE
Councilman Ruiz moved that all November claims found to be in order be paid. Seconded
by Councilman Palmer. Motion carried.
Councilman Ruiz reported that the Finance Committee met and reviewed bids from various
banks on our Daily Repurchase Agreement. The committee recommended the bid he awarded
to Norwest Bank at a rate of 9.48% for.one year with a 2.2 million cap and Councilman
Ruiz so moved. Seconded by Councilman Palmer. Councilman Saverud abstained. Motion
carried.
AMBULANCE ACCOUNTS
Councilman Ruiz moved to write off $8,988.35 in ambulance bills. Seconded by Council-
man Grainger. These are bills which have been partially paid .:by Medicare and Medicaid;
deceased, unable to locate, etc. Motion -carried.
The Finance and Safety Committees will meet at 4:00 P..P4.,T.hursday, December-160U, to
discuss raising the ambulance rate. Councilman Palmer aked for more information on
the Ambulance Fund. Councilman Grainger stated that an ambulance in Ronan is $145.00
and in Great Falls, $150.00. Kalispell charge is $80.00 and has not been raised for 4
years. Councilman Nystul reported that the ambulance showed a profit of $9,600.00 in
1981; $14,800 in 1982 and $12,000 in 1983. He asked for a currerit•.financial statement
before the rate is raised.
1
269.
SEWER & WATER
Councilman Nystul reported a letter from Scott Anderson, asking that we go no fur-
ther on the WWTP project until studies of Ashley Creek for pollution are completed-
6 to S months.
ANNEXATION
RESOLUTION 03551
Councilman Manning moved to adopt Resolution #3557 a resolution of intention to annex
Ken -Way Addition #3. Seconded by Councilman Springer. Roll call vote. All voted
aye.
RESOLUTION #355-4
Councilman -Manning moved to adopt Resolution No. 355,9'a resolution
to adapt;-_ - -_ recommended amendments to the Xalispell Land Use Plan.
This is for the Dorothy
Breck Property, an area bounded by West Evergreen School, Calvary Lutheran Church,
Willow Drive and Risen Christ Catholic Church in the Evergreen area. Seconded by
Councilman Springer. Roll call vote. All voted aye.
The public hearing for amending the zoning Ordinance is set for January 7, 1985.
STREET & ALLEY
Councilman Palmer reported that City Attorney,,Neier is drafting a resolution to cover
an agreement with the State on street work, such as striping, etc.
Councilman Palmer displayed a map showing proposed street work for the City. The
areas selected are where sewer and water lines need to be replaced and will be done
in conjunction.
SAFETY
Councilman Schindler reported some confusion as to the demolition of the burned out
M& M Building. The City is going ahead with abatements procedures and has called for
bids for demolition. The owners are putting out their own bids. According to DPW
Hammer, the building is ours as of 5:00 P. M. tonight. Council agreed to go ahead
with our own proceedings until we see what the owners are doing.
Councilman
Schindler moved to
give
the Safety Committee power to open demolition
bids on December
23th at 2:00
P.M.
and power to act on the bids. Seconded by
Councilman
Ruiz. Motion carried.
Councilman
Schindler reported
that
the Safety Committee awarded the bid for two
police cars
to the low bidder,
Roy
Stanley Chevrolet.
MISCELLANEOUS
Mayor McDowell appointed Councilman Schindler as ex officio member of the Local Study
Commission. They will meet tomorrow morning at 10:00 A.M.
Councilman Saverud reported that,the City Development Committee will meet at 4:00
P. M. Tuesday, December I1th to review.the building permits for the Mall. Project.
Councilman Manning askedsthat the Council address rescinding Ordinance_ #1000.
Councilman Springer moved to adjourn.
Approved as corrected December 17, 1984. / ) j
eRayrllmcDowell
ATTEST:
�f
Marjorie. G ermann, Clerk -Treasurer