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Harball to Hewitt-Conners/Latecomer PaymentCharles A. Harball Office of City Attorney Tel 406.758.7977 City Attorney 201 First Avenue East Fax 406.758.7979 P.O. Box 1997 charball@kalispell.com Kalispell, MT 59903-1997 • ii Linda Hewitt -Conners 100 Financial Center, Suite 100 PO Box 7310 Kalispell, MT 59901 Re: Old School Station Latecomer's Payment I Thank you for spending the time with me the other day on the telephone discussing the Old School Station Latecomer's Agreement. I'm sorry if I seemed a little bit testy. I was really failing to see or understand any legitimate argument that your clients had to deny contribution for their share of Old School Station water and sewer facility costs. I appreciate your patience with me and the explanation that you gave. You indicated to me that your clients gave you the understanding that they believed that they would not be obligated to pay any latecomers fee for the reason that the parcel they purchased was within the OSS development and that the cost of the utilities was factored into the purchase price of the lot. On its face that is certainly a reasonable explanation given the fact that the ERU factor attributed to the developer's lots are often absorbed (paid for) by the developer and built into the cost of lots within development, rather than paid through the latecomer's agreement. For example, that is the case with the latecomer's agreement for the utilities running through Section 36 to the Westview development. Now, please ask your clients to explain to you why the following would have no bearing on their view of the world. Bill Buxton, of Morrison Mairle [MM], and one of the original intended investors in the parcel in question, is the engineer that assisted in fashioning both the Section 36 latecomer's agreement as well as the OSS latecomer's agreement. MM was employed by the developer of OSS and was intimately aware of the details of the construction of the water and sewer utilities to OSS as well as the drafting of the OSS Latecomer's Agreement. It is my understanding that this work employed a number of the MM partners that are also now your clients. Linda Hewitt -Conners Attorney at Law Re: OSS Latecomer's Agreement August 22, 2008 Page - 2 I have an email from Bill Buxton, from as early as 2005, in which he explains to the City and the developer that he believes that the OSS latecomer's agreement must be drafted to include payment by the parcels within OSS through the latecomer's agreement for the reason that the utility demand of each parcel would not be known until purchased, unlike the standard residential development such as Westview. This formulation NEVER changed from that date forward. MM, and some of the individual partners of your client, represented the OSS developer throughout its work with the contractor putting in the utilities and was intimately aware of the difficulties and extended timeline in bringing forward the necessary costs in developing and finalizing the latecomer's agreement. It will be easily shown that individuals involved in the purchase of the subject parcel had actual knowledge that the parcel would be subject to an obligation under a latecomer's agreement. In fact, I have another email from Bill Buxton, dated January 2008, in which he is assuring the OSS developer that the subject parcel would be obligated under the OSS latecomer's agreement for the very reason that the purchaser did have actual knowledge of the obligation. Beyond the actual knowledge that your client held regarding the latecomer's obligation, there is still the issue of unjust enrichment if your client does not contribute to the costs of the utilities. It is convenient, if not a little ironic, that the numbers that we would employ to prove those exact costs are from the work product of some of the partners of your client. After you have had the opportunity to speak with your client, please let me know when the City can expect to receive full payment for the fee due. Sincerely, Charles A. Harball City Attorney Office of City Attorney City of Kalispell