1. Council Minutes - Regular Meeting - May 15, 2006A REGULAR. MEETING of THE KALISPELL CITY COUNCIL WAS HELD A7:00
P.M., MON AY, MAY .5, 2 o , IN THE COUNCIL CHAMBERS AT CITY HALL IN
KALISPELL., MONTANA. MAYOR PAMELA B., KENNE Y PRESIDED. COUNCIL
MEMBERS JIM A KINSON, BOB HERON, RANDY KENYON, TIM KLUESNEP4,,
ANE LARSO , AND HANK OLSON WERE PRESENT. COUNCIL MEMBER BOB
HAFFERMAN WAS ABSENT, COUNCIL MEMBER KARI G BRIEL ARRIVED A :5
• M•
Also present: City Manager James Patrick, City Attorney Charles Harball, Deputy CIt r Clerk Judi
Funk, Public~ Works s Director Jim Hansz, Police Chief Frank Garner, Fire Chief Randy Brodehl,
Parks and Recreation Director Mike Bauer, Planning Department .director Tom Jentz, and Building;
Official Craig Ker n .a.n,
Mayor Kennedy called the meeting to order and led the Pledge of Allegiance.
A. AGENDA APPROVAL
Kenyon moved approval of the Agenda. The motion was seconded,,
Kenyon roved to amend the agenda by moving items Et (ordinance 1574 - Hilton Garden
Inn Zone Change), and E2 (old School Station SID 344 Engineering Amendment), to the end
of the Agenda. The motion was seconded.
Mayor Kennedy explained that Gabriel will be late and wanted to be present for the discussion on
those topics.
There was no discussion.
The amendment carried unanimously upon vote with Gabriel and Hafferman absent.
The main motion as amended carried unanimously upon vote with Gabriel and Hafferman
absent.
CONSENT AGENDA APPROVAL
I. Council Minutes — Regglar Meeting — May 1200
2. Police officer Confirmation
Officers Ryan Shima and Dare Thomason have successfully completed their probationary
period with the Kalispell Police Department and Council confirmation was requested.
Olson moved approval of the Consent Agenda, The motion was seconded.
There was no discussion.
The motion carried unanimouslyupon vote with Gabriel and Hafferman absent.
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C. STUDENT ISSUES
None.
D. PUBLIC COMMENT
,doe G ilba .lt, lakeside, spoke .favorably about his partner Bob Welker and the proposed Hilton
Garden Inn. He said he has known Welker .for 15 years and be is a man of his word. G 1lba It stated
be would not be involved in this project if he didn't sincerely believe it would be a great thin; for the
City,
Bob Welker, Hilton Garden .Inn developer, explained that providing the City with both the payment
in lieu of taxes and the net proceeds agreement would be difficult because the hotel will need time to
get up and running. Welker asked that Council give them time to get started and eliminate the net
proceeds agreement. He announced they would like to open the hotel by the end of May, Zoo , and
be showed the Council a sample of the casino sign they would like to use which does not include the
word "casino".
E, REPORTSJUCOMMENDATIONS AND SUBSE NT COUNCIL ACTION
E 1, ORDINANCE 1575 —ADMINISTRATIVE RULES AMENDMENTS —1ST READING
Due to recent changes made by the Montana Department of Labor and Industry, Kalispell is required
to make mi*nor amendments to the C ty s building, plumbing, mechanical, and energy codes.
Atkinson moved first reading of ordinance 1575, n ordinance to amend ordinance No.1499
y adopting, by reference, the amendments to the Administrative Mules of Montana [ARM] at
24.301,1-3 124.30.1.1.4 , 24.301...16 t q 24,301.1729 24.301, 09, 24,301..301124,301.401., 24.3 1.421,
24.301.431, 24.301...441, 24.301.451, 24.301.4 1 24,301,4 1, 24,301,5019 24,301.5589 24301,7 11,
24,301.718, and 4.301. 01, the adoption of new Rules 1 through 1x, and the repeal of ARM
24,301,4719 24,301, 011 24,301,6t25 24,301, 139 24.3 1,614� 24,301,61524.301.621 and
24.301.622 as they may pertain. to those portions o the "International Building Code(IBC)",
2003 Edition',the `�1n�tern. tion i Residential Code(IRC)", 2003 Edition; the "International
Existin g Building Code", 2003 Edition; the "International He l m*1 cal Code" 2003 Edition;
and the "Uniform inn in. Code", 2003 Edition, as previously adopted by the City o
Kalispell in ordinance No.1499 as the building codes of the City of Kalispell, and applicable t
the j urisdiction l area thereof; sub,subj e t to the amendments made, adopted and approved by the
Building Codes Bureau, Department of Labor and Industry, State of Montana; to provide
penalty for the violation of any lawful order issued pursuant thereto; and establishing an
effective date. The motion was seconded.
Ker man gave a staff report.
`.ere was no discussion.
The notion carried unanimously upon roll call vote with Gabriel and. Hafferman absent.
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May 15, 2006
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� 2. RESOLUTION 5115 — PLANNING DEPARTMENT FEE STRUCTURE
Resolution 5 ..5 addresses an increase in planning fees.
Kenyon moved Resolution 5115, a resolution establishing planning fees to be charged by the
City of K is a 's planning department and declaring an effective date. The motion was
seconded.
Jentz gave a staff report and answered questioils.
Kl es. er commented that after the Council discussed this issue in a work session, he felt the fees
should be higher because the general. fund should not have to subsidize growth.. He stated developers
should cover of all of the administrative costs associated with a project.
Olson agreed, stating he didn't realize that growth wasn't paying for itself'. He said he also feels that
the fees should cover 00 f the costs.
Jentz noted that not all of the planning de awe t"s work deals with new growth and development.
He said that phone calls, walk-in traffic, etc. do not deal with any specific developer or subdivision.
Olson stated a lot of the walk-in traffic and phone calls are generated because of development and be
still feels the developers need to pay 1.00% of the costs.
Mayor Kennedy countered that development fees should pay for the individual developments, ents, but the
planning office e performs a lot of other work that does not deal with any specific developments. She
said the Councilcan't justify makin e the developers pay oo of t.he work in the planning office.
Mayor Kennedy suggested Council adopt the proposed fees and then review the issue again in a later
work session.
K-luesner asked for breakdown of the Planning Department's budget prior to the work session.
Kluesn er move. that Resolution 511 be tabled to the first meeting In June. The motion was
seconded.
The motion to table failed upon vote with Herron and Kles er voting in favor, Atkinson,
Kenyon, Larson, Olson, and Mayor Kennedy voting against, and Gabriel and Hafferman
sent.
`.ere was no further discussion.
.e motion carried upon roll call vote with Atkinson, Herron, Kenyon, Larson, Olson and
Mayor Kennedy voting in favor, Klu s er voting against and Gabriel and. Hafferman absent.
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May 15, 2006
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E/3. BOARD APPOINTMENTS — BOARD OF AD US"TMENT
Three letters of interest were received for three openings on the Board of Adjustment. Clint Cathcart
and Jobe Michael Knok are requesting appointment along with John Parsons, who is requesting
reappointment.
Mayor Kennedy recommended the Council appoint Clint Cathcart, Jobe Michael Kno ik and John
Parsons to the Board of Adjustment.
.parson moved the Council accept the .Mayor's recommendation and appoint Clint Cathcart
and John Michael Kno ik and reappoint John Parsons, to the Board of Adjustment. e
motion was seconded,
There was no discussion.
The motion carried unanimously upon vote with Gabriel and Hafferman absent.
E . BOARD APPOINTMENT — BUSINESS IMPROVEMENT DISTRICT
Bill Goodman .
submitted the only letter of interest for two openings on the Business Improvement
District Board.
.mayor Kennedy recommended the Council appoint Bill Goodman to the board.
Atkinson moved the Couned accept the Mayor's recommendation and appoint Bill Goodman
to the Business Improvement District Board. The motion was seconded.
`here was no discussion.
The motion carried ul nimou ly upon vote with Gabriel and Hafferman absent.
E , BOARD APPOINTMENT — CONRAD MANSION Bow of DIRECTORS
is .dobbin has requested reappointment t to the Conrad Mansion Museum hoard of Directors. No
other letters of interest were received.
Mayor Kennedy recommended the Council reappoint Tia Robbin.
Larson .moved the Council accept the Mayor's recommendation and reappoint Tia Robbin o
the Conrad Mansion Museum Board of Directors. The motion was seconded.
There was no discussion..
The motion carried unanimously upon vote with Gabriel and H .fferman absent.
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IP16, BOA" APPOINTMENT ....., PARKING COMMISSION
John n i e ey is requesting reappointment to another term orn the Parking Commission. No other
letters of interest were received,
Mayor Kennedy recommended the Council reappoint John Hincbey.
Olson moved the Council accept the Mayor"s recommendation and reappoint Jobe Hlaebey to
the Parking Commission. The motion was seconded.
There was no discussion.
The motion carried unanimously upon vote with Gabriel and Haterman absent.
E7. BOARD APPOINTMENTS — PLANNING BOARD
There are three openings on the Planning Board. John H nc ey and Bryan Schott are requesting;
reappointment. Clint Cathcart, Robyn Balcom, and John Michael Knopik are also interested in
serving.
Mayor :Kennedy recommended John Hinchey and Bryan Schutt be reappointed, and Robyn :Bal o
be appointed to the Planning Board.
Larson moved the Council accept the Mayor's recommendation and reappoint John Hinchey
and Bryan Schutt, and appoint Robyn Balcom to the Planning Boar. The motion was
seconded.
There was no discussion.
The motion carried nor vote with Atkinson, Herron, Kenyon, Larson, Olson and Mayor
Kennedy voting in favor, YJesner voting against st and Gabriel and Hale man absent,
E /8. BOARD APPOINTMENT — POLICE COMMISSION
Joan Jellison s requesting; reappointment to the Police Commission. No other letters of interest were
received.
Mayor Kennedy recommended the Council reappoint Joan Jellison to the Police Commission.
Olson moved the Council accept the Mayors recommendation and reappoint Joan Jellison to
the Police Commission. The motion was seconded.
`here was no discussion.
The motion carried unanimously upon vote with Gabriel and Haller an absent,
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E . BOARD APPOINTMENTS OINTMENTS — RECREATION CENTER ADVISORY BOAR
Gib Bissell, Robert Germane, and Bob White are requesting appointment to the Community
Recreation Center Advisory Board.
Mayor Kennedy recommended the Council appoint Gib Bissell, Robert Germann, and Bob White to
the board.
Olson moved the Council accept the Mayor's recommendation and appoint Gib Bissell, Robert
Germano, and Bob White to the Community Recreation Center Advisory Board. The motion
was seconded.
There was no discussion.
The motion carried unanimously upon vote with Gabriel and Hafferman absent.
E 1o. BOAS APPOINTMENTS — REVOLVING LOAN COMMITTEE
Four letters of interest were received for three openings on the Revolving Loan Committee. Those
interested in serving are Wade :elder, Daniel Leclerc, Dave Hanson, and Justin Sher. Hanson is
currently a board member.
Mayor Kennedy recommended the Council reappoint Dave Hanson, and appoint Wade Elder and
Justin S .iter to the Revolving Loan Committee.
Larson moved the Council accept the Mayor's recommendation and reappoint Dave Hanson,
and appoint Wade Elder and Justin Suter, to the Revolving Loan Committee. The notion was
seconded.
Where was discussion.
The notion carried unanimously upon vote with Gabriel and Hafferman absent.
E I. . BOARD APPOINTMENT — STREET TREE COMMISSION
Jana Ostrom has requested appointment to an open seat on the Street Tree Commission.
Mayor Kennedy recommended the Council appoint Jana Ostrom to the Street Tree Commission.
Atkinson moved the Council accept the Mayor's recommendation and appoint Jana Ostrom
to the Street Tree Commission. The motion was seconded.
There was no discussion.
The motion carried unanimously upon vote with Gabriel and Haffermau absent.
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Xv12. APPROVE INCREASED ENGINEERING CEILING — OLD SCHOOL STATION
SID 344
SID 344 infrastructure has changed from a single phase, 70 construction days project, to a three
phase,, 150 constr-uction days, project. The requested increase of $121,767 xs necessary to fund the
extra 80 days of construction engineering support for the project.
Larson loved Council approve the increased project engineering ceiling for old School
Station SID 344 infrastructure construction. The motion was seconded.
Mayor Kennedy announced for the record that Gabriel .had arrived.
Ha sz gave a staff report.
Olson asked why this was not defined earlier.
Hansz explained that when Morrison & Maierle was brought on board their Job was to help the City
design and put this into the form of a project. He said at the time the City had not made the final
decisions on exactly what the scale and scope of that project was going to be. Hansz stated as the
SID process unfolded, the decision was made that the SID was going to include virtually all of the
public infrastructure inside that development. He further explained that the engineers made the best
estimate on what little was known at the time and it was understood that once there was a better
understanding of the project, a change would he requested. He said the water phase project was
completely restructured and the engineering and repackaging of the bids had to he done to make the
project more attractive to bidders, adding the money has been factored into the SID and the project
budget. Hansz noted this is unusual because the City is not usually involved in a project like this.
Herron commented that to put this in perspective, bonds were sold for 4.5 million dollars and the
proposed budget is 4.375 million dollars, He said even though the engineering contract is double, it
is still within the total budget.
Larson added the time frame has doubled, so it follows the cost would double.
Kluesner stated regardless of how it came about, the increased cost doesn't rake him happy.
Larson restated his motion that the Council authorize an increased project en ineeri ceiling
for old School Station SID 344 infrastructure co .str c io In the amount o $239,835.00 which
is an increase over the original contract o $121,767.00. The second concurred,,
The amended motion carried unanimously upon vote with Hafferman absent.
E/ 13, ORDINANCE 1574 — ZONE CHANGE REQUEST — HILTON GLEN INN -�
2ND READING
Robert Welker has requested a zone change from P-1, Public, to B-2, General Business, and a
.planned Unit Development overlay on a three and a half acre lot located on the Armory property.
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Ordinance 1574 passed on first reading May 1 with several amendments.
Kenyon moved second reading of Ordinance 1574, an ordinance to amend Section 27.02.010,
Official Zoning Map, City of Kalispell Zoning Ordinance, (ordinance No. 1460), by zoning
certain real property more particularly described as 'bract 1 of Certificate of Survey No.
17045, a tract of land, situated, lying, and being in the north half of the Northwest Quarter of
Section 20, Township 28 North, Range 21 west, .M.M., Flathead County, Montana
(previously zoned City -1, Public) to City -2 (General Business), with a Planned Unit
Development overlay in accordance with the Kalispell Growth Policy 2020, and to provide an
effective date. The motion was seconded.
Mayor Kennedy explained several amendments ents have been provided to the Council and are being
offered by the developer.
Larson moved that Ordinance 1574 and all referenced documents be amended to replace the
name Gateway Hospitality Group or Robert Welker with the name of the Montana Entity of
Kalispell Hotels, LLC, a Montana Limited Liability Company, of P.O. Box 1068,741 Lakeside
Blvd., Lakeside, MT 59922. The motion was seconded.
There was Tio dsso.
The amendment carried unanimously upon vote with Haffer n.an absent*
Patrick addressed the remaining amendments requested by the developer. As far as the payment 1
lieu of taxes, he stated the developers concern is that it takes time for a hotel to start making money
and that's why they are asking for an amendment t concerning the payment in lieu of taxes. He said
Welker would like to pay the normal amount of taxes due during the first year of operation and
place the payment in lieu of taxes on the back end at full cost. Patrick further explained that the other
amendment the developer would fike is for Council to remove the requirement of a Net Proceeds
Agreement.
Atkinson moved that the Ordinance No. 1574 and the Development Agreement at V. TAXES
AND PAYMENT IN LIEU of 'FAXES be amended to state as follows:
"V, TAXES AND PAYMENT IN LIEU of TAXES
Payment in Lieu of Taxes. It is contemplated that the completed Hilton Garden Inn and
Conference Center Project [Project Property] will generate annual tax revenue to the CITY in
the amount of -approximately Two HUNDRED SIXTY THOUSAND AND N /too
DOLLARS $2 o, oo.00 upon completion of the Project, exclusive of city or county special
assessments. Developer, therefore, covenants to pay the City any difference between the
amount of tax actually generated by the Project Property, including any portion of the Project
transferred to mother owner, and the amount contemplated by this Agreement for a period of
TWO 2 years commencing with tax payment due November 30, :2008. Payment under
the provisions of this paragraph shall be made directly to the City, after certifying the tax
generated by the Project Property through the City finance department subject to verification,
and in accordance with the following:
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May 15, 2006
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of the tax bill for the tax year".: shall be
delivered to the City finance office on or before November 1 4
2. The City finance office shall calculate the difference between the tax bill for the:::Aftq
tax year, exclusive of special assessments, and the sum of TWO HUNDRED AND
SIXTY THOUSAND AND N 1oo $2 o1,000.00 and invoice the Developer
for the difference.
3. Half of the payment for said amount calculated shall be due and payable, from the
Developer, on or before December 15, The second half of the payment for
said amount calculated shall be due and payable, from the Developer, on or before May
3,
. For tax year a copy of the tax bill for the respective tax year shall be
delivered to the City finance office on or before November 15.
5. The City finance office shall calculate the difference between the tax bill for the
respective tax year, exclusive of special assessments, and the sum of TWO HUNDRED
AND SIXTY THOUSAND AND No loo DOLLARS $2 o,000.00 and invoice the
Developer for the difference.
. Half of the payment for said amount calculated shall be due and payable, from the
eve o er, on r before December , : The second half o he payment for
said amount calculated shall be due and payable, from the Developer, on or before May
319 .
In tax years when the tax liability, less special assessments, equals or exceeds the sum o
$260,000.00, no payment -in -lieu shall be due from the Developer, however, no credit shall be
given for subsequent tax years.' The motion was seconded.
Atkinson asked Patrick if the amendment would net the City the same dollar amount as the original
ordinance would have.
Patrick stated this has the potential of actually bringing in addidonal revenue, because in the first
year the developer would pay taxes on the land that is currently not taxed plus on whatever portion o
the building that 1s constructed in November and December.
Mayor Kennedy asked for clarification, stating the original motion has the payment in lieu of taxes
starting in Zoo . She said delaying it one year would not bring in more money; it would bring in less
money by one year.
Patrick noted the developer would be paring taxes on whatever portion or the building that is u
starting December 1 of this year, along with the taxes on the land. He said the following two years
the developer would be making; the payment in lieu of taxes ensuring that we would get up to
2 o,000 the third year.
Mayor Kennedy still disagreed that it means more money for the City.
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May 15, 2006
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Larson commented he feels the City will be losing $ 3o,000 if this amendment passes because the
City carp"t make hire. pay at the end of the agreement. He said if the Council approves this
amendment tonight, we are going "to gut what we did two weeks ago". Larson said you have to ask
whether you want the money to go to the citizens of Kalispell, or into the developers' pockets.
Herron emphasized that none of this money is going into the general end for the next 15 years; it is
going into a 1� district. He said this i what 11� districts are .meant for, to bring businesses and
put them on the tax rolls. Herron stated the City is getting a convention center that nobody else
would ever build in this community with these kinds of doll ars# He said it is our obligation to use the
T1F district, and we should not penalize the developer for wanting to use it.
Mayor Kennedy stated that once we have spent the $890,000, there will be no money available for
other projects in the TIF district until the following tax year and the City would not be able to meet
additional needs if they arise. She said that is why the Council wanted the payment in lieu of taxes, to
put money back into the TIF district.
Olson reminded everyone that the $890,000 will be replaced and will go into another project in that
TIF district to redevelop something else. .l e said he would like to have the 1_ 0,000, but he agrees
this project will be of economic benefit to the entire community and because of that he will vote n
favor of the amendment.
Larson agreed that this is a good project, but we are making the assumption that if we don't do
everything the developer wants, he will back out. He stated we don't need to make that assumption
and the money in the TIF fund could be replaced a lot faster with the $130,000.
.mayor Kennedy commented she was prepared to vote in opposition to the amendment earlier, but
aster the discussion tonight she has decided she will vote in favor of it. She said she can understand
the developers' concern with thebottom dollar and even though the City may be losing a little bit o
money by extending the payment in lieu of taxes one year, it won't be a significant loss to the
district. Mayor Kennedy added, however, the Net Proceeds Agreement is an important piece of the
project and it should rernairl.
Kenyon agreed with Mayor Kennedy and noted that the City has given -up the height restriction, the
casino, the site remediatxo , and now we are looping at rolling over on the 2007 TIFand potentially
the net proceeds. He agreed that $1.30,000 the first year puts the developer in a difficult position, but
he hopes we don't roll over on the net proceeds aspect of the deal.
Larson commented we have given up everything; so far, and if we give up the first year we'll never
get it back.
The amendment carried upon roll call vote with Atkinson, Gabriel, Herron, Kluesner, Olson
and Mayor Kennedy voting in favor, Kenyon and Larson voting against, and. Hafferman
absent.
There was no further discussion.
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May 15, 2006
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The main notion, as amended twice, carried upon roll call vote with Atkinson, Gabriel,
Herron, Kenyon, Kluesner, Olson. and Mayor~ Kennedy voting in favor, Larson voting against,
and Hafferman absent.
F. MAYo COUNC CITY MANAGE "S REPORTS No Actlon
Mayor Kennedy reminded Council that City Hall is hosting a blood drive for City employees and
Council members this Friday from 10:00 am to 3:00 pry.
.mayor Kennedy informed the public that an easement has been granted for the Foys to Bla ktail
''rail project on the ridge overlooking Herron Park and Smith Lake. She invited Council members to
attend a presentation on the trail project at Herron Park this Friday at 9:00 a.m..
Mayor Kennedy reminded Council and the public about the presentation "Are You Ready for the
Next Generation?"" being held. on May 25 from noon until 2:30 p.m. at the West Coast Kalispell
Center Hotel with a reception following at Reds, 'Fines and Blues.
Patrick -updated Council on the slope failure at Granary Ridge; the engineer's report stated the slough
was a continuation of a past slip and not due to the Granary Ridge project. He said that high ground
water and old fill materials aggravated the problem and that the developers have complied with all
recommendations that were made and no adverse issues were found.
Patrick stated there will be a TIF seminar in Helena on May 25 at :00 am and if anyone is interested
in attending to let him know.
G. ADJOURN
The meeting was adjourned at :20 p.m.
AT_fES :
Theresa Whit
City Clerk
Pamela B. Kennedy
Mayor
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