05/01/06 City Council MinutesA REGULAR MEETING of THE KALISPELL CITY COUNCIL WAS HELD AT ': o
.M., MON AY, MAY � 2 � IN THE COUNCIL CHAMBERS AT CITY HALL IN
S S E ,, MONTANA. MAYOR PAMELA B. KEN EDY PRESIDED. COUNCIL
MEMBERS JIMATKINSON, KARI GABRIE , Bob RAFFERMAN, BOB HERRN, T M
KLUESN R, DUANE LARSON, AND HANK O SON WERE PRESENT. COUNCIL
MEMBER RANDY KENYON WAS ABSENT.
Also reset: City Manager .dames Patrick, City Attorney Charles Harball, City Clerk Theresa White,
Public Works Director Jim Ha .sz, Police Chief Frank Garner, Fire Chlef Randy Bro e 1, Finance
Department Director Amy Robertson, Parrs and Recreation Director Mike Baker, Community
Development Director Susan Moyer, Planning Director Tom :lent , Senior Planner Sean Conrad,
Airport Manager Fred U, isti o, and Recording Secretary Judi Fink.
Mayor Kennedy called the meeting to order and led the Pledge of Allegiance.
A. AGENDA APPROVAL
Atkinson moved approval of the Agenda. The motion was seconded.
There was no discussion.
The motion carried unanimously upon vote with Kenyon absent*
B. CONSENT AGENDA APPROVAL
.. Council. Minutes — Re la_r Meeting — April 17boo
Larson moved approval of the Consent Agenda, The ration was seconded.
There was no discussion.
The motion carried unanimously upon vote with Kenyon absent,
C. STUDENT ISSUES
None.
PUBLIC COMMENT
Stephanie Baca, 37 Bruyer Way Loop, asked Council to force the developer to put in new top soil
and grass along the bike path on Granrud Lane because the clay that is there now runs into her and
her neighbor's yards vh.e it rains and contaminates their good soil.
Phil Harris, 360 Tetrault, Hutton Ranch Plaza, asked the Council to approve the final plat for Hutton
Ranch Plaza Phase 1 and explained that even though the final approach permit has not been received
from MDT, it has been negotiated and they are j u st waiting for the formal engineering review.
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May 1., 2006
Page I
Joe Gull a lt, Lakeside, Bob Voel er"s partner in the Hilton Garden inn project, spoke in support or
the Hilton Garden inn and said the economic development impact to the community will be
substantial. He said this project will anchor the south entrance of the: community.
Rick Mosiettc, Missoula, General Manager or Hilton Garden Inn in Missoula, praised Gateway
Hospitality Group as a class act and stated he is very impressed with the scope of the proposed
project, adding it should easily provide 10 job opportunities.
Linda Anderson, Executive Director or Glacier Country Tourism, stated that tourism is very
important to Kalispell and Flathead County and said the Hilton will help them market et this area
nationwide}
Dori Hamilton, Flathead Convention and Visitors Bureau Executive .director, stated her organization
ation
is funded 0 o by the bed tax in Kalispell, which means that this project is quite significant for the
organization because it will create a significant increase in tourism. She said the Hilton will raise the
bar and raise the level of competition in the area.
Karla Levengood, 2205 Hwy 93 South, Scotty's Bar, spoke in support of the Hilton and said it will
be a great addition. to Kalispell. She said it will make a beautiful entrance to town and the trickle
down effect will be phenomenal.
Dennis Beams, 126 Rid e iew Drive, Glacier Bank, stated he is impressed with Welker and his
crew and spoke in favor of the Hilton project.
Paul Wachhol, 183 Fairway Blvd, spoke in favor of the Hilton project and beautifying the sonthem
entrance to Kalispell. He said old School Station will employ a lot of people and there will be
opportunities for therm to use the convention facilities, adding that Hilton will add a lot of value to
the tax base.
Jeremy Perkin, Cent ryT el General Manager, spoke e in support of Hilton for the business traveler and
said this facility will attract additional dollars. He said it will be a great anchor tenant for the
community and will change the way we look at the community and the service industry.
Joe Unterreiner, Kalispell Chamber of Commerce Executive Director, stated the Chamber of
Commerce Board of Directors strongly supports the Hilton proposal and unanimously passed a
resolution in favor of the project on April 25th. (Resolution is attached hereto and made a part
hereof)
Andy Miller, 175 East Many Lakes Drive, one of the developers of old School Station., spoke in
favor o " the Hilton project and stated that s are very important to help bring in businesses.
Tom Kline, 8 2 5th Avenue West North, also spoke in support of the Hilton project and said it will
be a huge asset to the community.
unity.
Shannon Malty, principal in Riverview Associates So- th ield Tower), spoke of the importance of a
convention center and TIF districts.
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May 1, 2006
lag
Joanne Nieman', , 35 4th Avenue East, stated she is not against the Hilton, but is against the
r.r.arraer..t"' that is being made with the hotel. She asked that Council take a hard look at the deal
and that the City will be preparing everything for building the hotel by giving them TIF money. She
said the City is making huge gifts to a company that says it wants to be here and it will be years
before the City gets anything back.
Clare Beaver, Executive Director, Hope Pregnancy Center, spoke in support of their request for a
conditional use permit stating they are a non-profit ministry which is solely supported by the
community. Beaver expressed concem with the cost of paving the parking lot, but added they will do
whatever the Council warts them to do.
Clarice Gates, 426 7th Avenue `west, spoke in opposition to folding the money from the dory sale
for a community center in Resolution 5114. She said the money could be a lot more useful used
elsewhere.
Clint Cathcart, 828 3rd Avenue East, spoke neither for nor against the Hilton. Garden Inn, but asked
the Council to understand that they are changing Kalispell by doing this. He spoke against using TIF
money for the project and asked Council to look at other incentives.
E, REPORT$ RECOMMENDATIONS AND SUBSEQUENT COUNCIL .ACTION
L RESOLUTION 5114 — SALE of ARMORY PROPERTY — HILTON GARDEN INN
Resolution 5114 authorizes the sale of the armory property to Gateway Hospitality Group, Inc. for a
Hilton Hotel and conference center. Gateway Hospitality Group is offering to purchase the property
for 1.2 million dollars which an appraisal recently determined is the fair market value*
Herron moved Resolution 5114, a resolution to sell certain real estate owned by the City o
Kalispell and more particularly described as Tract 1 of Certificate of Survey No.17045, a tract
of land, situated, lying, and being the north half of the Northwest Quarter of Section 20,
Township 28 North, Range 21 West, .M.1 r.., Flathead County, Montana to Gateway
Hospitality Group, Ic. The motion was seconded.
Patrick gave a staff report.
affernan commented he would be it favor of the sale if the following conditions were met: the sale
was on a. "as is" basis; the casino ordinance had been changed; and the dispensation of the money
received now and later was specified. He said setting aside the sale proceeds for a community center
has not been a Council recommendation, yet it is in the resolution. Hafferman said Patrick noted in
his memo that the City will have to provide $890,000 for site improvements which can only core
from one source, the taxpayer, because this project is in the TIF district where the money cannot be
spent for City services. He said he feels the hotel and convention center could be an asset to the
community if the developers pay for all of heir own development and buy the property --as is'', but as
it is, the City should wait because this is a valuable piece of property and other developers will come
forward.
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May 1, 2006
Page
Larson stated he was also not in favor of earmarking the money for a community center, but he has
since charged his mind because the Council will have the final say on how the money is spent. He
said he doesn't see any harm. with earmarking the money because it gives the Council seed money 1f
a community center is developed, and the money can be spent for someffiing else if it isn't.
Olson commented he can live with the agreement for now, but when it comes time to lover the debt
he's going to be a lot more excited where the money goes.
Mayor Kennedy stated this is an important piece of the sales agreement because the dory was
promised to the community for a Community Center. She said the Council formed a committee to
look into starting; a community center and the Council should also be looking at ways to fund it.
Atkinson noted the Armory world have cost City taxpayers about $500,000 to make it livable for a
community center. He also stated the $890,000 will not come from taxpayers, but from the TI
district.
The motion carried upon roil call vote with Atkinson, Gabriel, Herron, Kluesner, Larson,
Olson, and Mayor Kennedy voting; in favor, Hafferman voting against, and Kenyon absent.
E 2, ORDINANCE 1574 — ZONE CHANGE REQUEST — HILTON GARDEN INN — IST
FADING
Robert Welker has requested a zone charge from -1., Public, to B-2, General Business and a
Planned Unit Development ment overlay on a three and a half acre lot located on the Armory property.
Herron moved first reading of ordinance 1574, an ordinance to amend Section 27.02.010,
Official Zoning Map, City of Kalispell Zoning ordinance, (ordinance No. 4 0), by zoning
certain real property more particularly described as Tract 1 of Certificate of Survey No;
.. 04 , a tract of land, situated, lying, and being In the north half of the Northwest Quarter o
Section 20, Township 28 North, Range 21 guest, .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 2020and to provide an
effective date. The motion was seconded.
Patrick gave a staff report and outlined several proposed amendments.
Larson moved that the Planned Unit Development Agreement as part of ordinance 1.574 be
amended to acid, after Section IV. OBLIGATIONS of CITY, as follows and that the City
Attorney be directed to renumber the subsequent sections as appropriate:
"N. TAXES AND PAYMENT IN LIEU of TAXES
Payment in Lieu of Taxes. It is contemplated that the completed Hilton Garden. Inn and
Conference Center Proect roect Property] wiii generate annual tax revenue to the CITY in
the amount of approximately TWO HUNDRED SIXTY THOUSAND AND No/too
DOLLARS 2 o,000#oo upon completion of the Project, exclusive of City or county special
assessments. Developer, therefore, covenants to pay the City any difference between the
Kalispell City Council Minutes
May 1, 2006
Page 4
amount of tax actually generated by the Project Property, including any portion of the Project
eet
transferred to another owner, and the amount contemplated by this Agreement for a period of
TWO 2 years commencing with tax payment due November 30, 2007. 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;
1. For tax year 2007, a copy of the tax bill for the tax year 2007 shall be delivered to the
City finance office on or before November 15, 20.
2. The City finance office shall calculate the difference between the tax bill for the Zoo
tax year, exclusive of special assessments, and the sum of TWO HUNDRED AND
SIXTY THOUSAND AND NO/too DOLLARS $2 o 00o. o 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, 2007. The second half of the payment for said
amount calculated shall be due and payable, from the Developer, on or before May 31,
2o.
. For tax year 2008, a copy of the tax bill for the respective tax year shall be delivered to
the City finance office on or before November 15.
. The City finance office shall calculate the difference between the tax bill for the
respective tax year, exclusive of special assessments, and the sung of TWO HUNDRED
AND SIXTY THOUSAND AND No o DOLLARS $2 o, oo. and invoice the
Developer for the difference.
. Half of the payment for said amount calculated shall be due and payable, from the
Developer, on or before December 15, 20. The second half of the payment for said
amount calculated shall be due and payable, from the leveler, on or before May 3 11
20090
In tax years when the tax liability, less special assessments, equals of exceeds the sun of
$260,000.00, no payment -in -lien shall be due from the Developer, however, no credit shall be
given for subsequent tax years.
Payment of Faxes. Developer and his successors or assigns shall pay when due all real estate
taxes and installments of special assessments payable on the Project Property." The motion
was seconded*
Larson explained that this would force the developers to make a payment in lieu of taxes for the first
two yeas until it goes on the tax rolls. e said this has been required for otherroeots.
Herron agreed, stating he believes Southfield Towers and Ro a .e s made payments in lieu of taxes,
and in defense of the City Manager, these changes are being made by the Council, not the City
Manager. He said because of concerns by several members of the Council, these changes are
necessary to see this project happen.
Ha.ffer.a.n commented not one dine of the $260,000 will go into emergency services, the taxpayer
will have to pick up those costs.
Atkinson asked Patrick to explain the "net proceeds"' agreement.
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May 1, 2006
Page
Patrick responded the developer offered the City 0% of the net proceeds in case the property is
refinanced or sold and would take the place of any payment in lieu of taxes.
Atkinson questioned why the developer would agree to payment in lieu of taxes on the front end, and
also agree to 0 of the net proceeds on the back end.
Patrick said we don't know if the developer will agree to both.
.Atkinson noted if tamendment doesn"t pass, the ma ority of the Council will not vote in favor o
the ordinance, and if it is passed, the developer may not agree to pay both. He said either way, this
could be a deal buster and we cold lose the Hilton project.
Herron agreed it's a Catch 22 because he knows without this amendment, the previous resolution
would have failed. He said he's a poker player and he'll play this hand.
01
Olson said he sees this as negotiating, not as a deal buster.
Mayor Kennedy y concurred, stating the developer has said the Hilton will be ope-n by 2007 and i
that's the case, he should be generating the full taxable value soon after opening.
The amendment carried with Gabriel, Hafferman, Herron, Kluesner, Larson, Olson and
Mayor Kennedy voting in favour, Atkinson in against, and Kenyon absent.
Atkinson moved to eliminate the "Net Proceeds s Agreement". The motion was seconded.
Larson stated he opposes this amendment because going into this, Welker had several deal breakers
in his pocket and the City had none* He said be wants are even the playing field and he is not in favor
of tang anything away from the agreement that is already there.
Herron noted the net proceeds agreement is written so tightly, and guarantees the developer so many
things., that he doesn't think the City is gwing up much. He said he would rather have the money up
front and sacrifice this.
Hafferman said he doesn't see any point in the net proceeds agreement and it clouds the issue.
:Casson commented if the net proceeds agreement is valueless, then why did the City want it in the
first place.
Mayor Kennedy agreed, adding if it lsWt going to make a large 'impact on the developer, then why
not leave it ire.
Atkinson reiterated if we lose the development because of these extra conditions It will be a great
loss to the City.
Herron said if this was a gross proceeds agreement, then he'd never agree to remove it. As it Is,
however, he doesn't think it's necessary.
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May 1, 2006
Page
Larson emphasIzed he realizes this is great for the City, but it's also great for the developer. He said
if the developer rakes this is a deal breaker then he wasn't very serious about the project in the first
place.
The motion failed upon roll call vote with Atkinson, Hafferx a , and Herron voting in favor,
Gabriel, :l es er, Larson, Olson, and mayor Kennedy voting against, and Kenyon absent.
Larson moved that condition #9 be added to Section 11 of ordinance 1574, and condition #8 be
added to Section III of the Planned Unit Development, as follows.
"Upon completion of eaphase of the project to which tax increment funds are provided, the
developer shall provide a letter of credit to the City of Kalispell in the amount of those tax
increment funds expended to insure that the project is completed as agreed upon by the parties
to this Agreement. In the event that the project is not completed as agreed upon by the parties,
the City of Kalispell shall be entitled to recovery of all tax increment funds expended from
either the developer or the letter of credit provider." The motion was seconded.
Atkinson wanted to know the reasoning behind the amendment, adding t sounds like '`youi st d.o #t
trust the guy"' •
Mayor Kennedy said it has nothing to do with a lack of trust, it has to do with makingsure that the
City of Kalispell is covered for any expenditure that goes forward and that the development happens
as the developer has stated it will happen.
Larson said it is simply, a protection for the City,
The amendment carried unanimously upon vote with Kenyon absent.
Herron moved that Section V. of the Planned Unit Development Agreement as part or
Ordinance 1574 be amended as follows:
` "..AMENDMENT OR MODIFICAUONS of
DEVELOPMENTAGREEMENT
5.01 This Development Agreement may be amended or modified only, by application of the
owner, in accordance with the procedures set forth herein.
5.02 Application for amendment or modification may be made o� to the City Council o
Kalispell.
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Kalispell City Council Minutes
May 1, 2006
Page 7
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The motion was seconded.
Mayor Kennedy explained that all references to the Site Review Committee are being removed
because there has been a lot of community and Council input regarding this project and she would
like to see any modifications in the future, mirior or otherwise, come before the Council.
The amendment carried unanimously upon vote with Kenyon absent.
Larson moved that Section IV. of the Planned Unit Development Agreement as part o
Ordinance 1574 be amended as follows:
'-'-IV. OBLIGATIONS OF CITY
The CITY agrees that In consideration of the terms set forth above, the execution of a Net
Proceeds Agreement with GATEWAY (attached hereto) and for the general economic benefits
to be derived by the CITY and its citizens, including the additional tax base to be realized, the
redevelopment of the subject property, which has been determined to be in a blighted area,
and its usage as a conference center, which is desired and beneficial to the local economy, the
CITY shall contribute funds f".W- in the following priority.,
.. Demolition of the existing structures on the subject property; and
2. Remediation of the site as required by Montana Devartment of Environmental
Quality, .
3, Development.of.12ublicinfrastructure. .,,
r
The contribution of the City shall not exceed the total sum. of EIGHT HUNDRED NINETY
THOUSAND AND NO oo S $ o,o o DOLLARS.
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May 1, 2006
Page
The CITY shall enter into a long-term leasehold agreement with. GATEWAY to provide such
additional parking area to GATEWAY as may a required by the CITY and not available o
the Subject Property. This parking area shall be adjacent to the Subject Property and located
on CITY owned City Airport property. The specific terms of the lease agreement shall be
negotiated between the parties, however the length of the term shall be of such length as
required for GATEWAY to finance the project and the annual per square foot lease payment
sail be equal to or greater than suet payments made by other parties leasing City Airport
property." The motion was seconded.
Larson spoke in favor of the motion.
The amendment carried upon vote with Gabriel, Herron, Kluesner, Olson, Larson„ and
Mayor Kennedy voting in favor, Atkinson voting against, Hafferman abstaining, and Kenyon
absent*
Larson moved that Number 6 in Section 11 of Ordinance 1574 be amended as follows:
4 , All outdoor~ signage advertising the ea ino or gaming,activities within the facilities
shall be prohibited. the, Folakoffl
•
no is On -" The motion was seconded,
.:arson also spoke in favor of the amendment.
Olson stated he will oppose the amendment because all the other casinos have signs and he doesn't
think it's fair.
Kles er agreed with Olson.
Mayor Kennedy reminded Council that the Section 36 PUDagreement doesn't allow for outdoor
signae regarding gaming.
Gabriel said she feels this condition should e applied to all future casinos.
Herron stated he feels we are being overly restrictive on the developer, however, since this
amendment is important to certain Council members he will support it.
The motion carried upon roll call vote with Atkinson, Gabriel, Herron, Larson, and Mayor
Kennedy voting in favor, Haf 'erx an., Kl es er, and Olson voting against, and Kenyon absent,
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May 1, 2006
Page
11afferman commented a PUD has been a useful tool with past developments when it has been used
as defined in our zoning regulations, but this PUD agreement is being used to circumvent ent the
regulations.
The main motion., as amended rive times, carried upon roll call vote with Atkinson, Gabriel,
Herron, Kluesner, Larson, Olson and Mayor Kennedy voting in favor, Hafferman voting
against and Kenyon absent.
E 3* CONDITIONAL NAL USE PERMIT — CENTRAL BIBLE CHURCH
Central Bible Church is requesting a conditional use permit for the Hope Pregnancy Center to
operate In a R-4 zoning district.
Larson moved Council approve the conditional use permit for Hope Pregnancy Center subject
to conditions. The motion was seconded.
Conrad gave a staff report and answered questions.
Olson moved condition #1 be amended giving the applicants two years to pave the parking lot.
The motion was seconded#
Atkinson said he would normally oppose the amendment, but because this is a .ors -profit
organization he will support the extension.
Mayor Kennedy said she will also support the amendment, but erneoura ed the applicants to actively
seek donations for the pavement.
The amendment carried unanimously upon vote with Kenyon absent.
The main motion, as amended once, carried unanimously upon vote with Kenyon absent.
E . FINALL PLAT— CASCADE BUSINESS AK
This is a request for final plat approval of Cascade Business Park SubdivIsion that plats six
commercial lots on approximately I I acres located south of Two Mile Drive, west of the Gateway
West Mall,
Larson moved Council accept. the Subdivision ImprovementAgreement and approve the final
plat for the Amended Plat of Lot 1 of the Amended Plat of a Portion of Gateway West o i t
#34, aka Cascade Business Park. The motion was seconded.
Conrad gave a staff report and answered questions.
There was no discussion.
Kalispell City Council Minutes
May 1., 2006
Page 1
The motion carried unanimously upon vote with Kenyon absent.
E/5. FINAL PLAT— HUTTON RANCH PIAZA
This is a request for final plat approval of Hutton Ranch Plaza Phase I that plats 17 commercial lots
on approximately 46 acres located on the east side of US Hwy 93 between the Flathead Valley
Community College and Mountain view Plaza.
Atkinson moved Council accept the Subdivision Improvements Agreement and approve the
final plat of Hutton Ranch Plaza Phase 1. The motion was secondedf
Jentz explained that staff is r commernd g approval of the final plat every though approach err...ts
have not yet been received by the Montana Department of Transportation. He said a letter from. MDT
states approach permits will be issued as soon as five conditions are met, which should occur within
30 days.. entz added that one of the preliminary plat conditions required access to the Home Depot
to the north. He said despite efforts by the Hutton Ranch developers, a request :for cross access
between the two developments was denied by SCC Development Company.
There was discussion concerning the approach perms, the cross access road, and the future bypass.
Olson said the developers have done everything they said they were going to do and he doesn't see
any reason to delay approval.
The motion carried unanimously upon vote with Kenyon absent.
, TASK ORDER #4 — WASTE WATER TREATMENT PLANT EXPANSION
This task order is for the final design of the WWTP expansion project.
Larson moved Council authorize the City Manage- to execute the WWTP Task order #4 for
final design of the WWTP expansion project. The motion was seconded.
Hansz gave a staff report.
'here was no discussioll.
The motion carried unanimously upon vote with Kenyon absent.
P. AYO COUNCIL CITY MANAGER'S REPORTS....(No., Action
Mayor Kennedy asked Council members and staff to attend the training sessions by Flathead on the
Move. She also invited the public to attend the "Are You Ready for the Next Generation'"
presentation on May 25.
Hansz gave an update on the Santa Fe, Bismarck and it o v Glen water problems.
Kalispell City Council Minutes
May 1, 2006
Page 11.
There was discussion concerning the care of bike paths -round Empire Estates.
Hafferman asked for a workshop to discuss the Northern Lights Boulevard traffic problems.
Patrick announced MDT will. hold a bypass presentation on May 10 at the outlaw Ins..
G.A�D�RN
�.„
The meeting was adjourned at 10:03 p.m.
ATTEST:
.. .........
Theresa White
City Clerk
Kalispell City Council Minutes
May 1
Page 1
RESOLUTION
OF THE
KALISPELL AREA CBAMBER OF COMMERCE
A) 25,2006
At its regular Board of Directors meeting of April 25), 2006, the Kalispell Area Chamber
of Commerce adopted the following resolution, -
"it is moved that the Kalispell Chamber Board ofDirectors support the Hilton Garden
Jnn project as proposed by the City Manager in his memorandum to the Mayer and City
Council, dated April ., .. ,�
Moved by Jim oliero
Recorded by Bill Schottelkorb
Passed on a vote of 15 in favor; -- opposed
Voting in Favor:
Chris Aher, Northwest Montana Association of Reahors
Susie Burch, Flathead � SUM of e e
Dick ueha to S avv
Steve Clawson, Wells Fargo Bank
John dls ,, Crowley Law Firm
Dick Ha-r=ett, HE Simpson Lumber Company
Tom K rd , The Daily Inter Lake
Mark Lalum, CHS
Tom McElwain, Stewart Title
Carol Nelson, Carol Nelson Desigm
Jim oliverson, Kalispell Regional Medical Center
Bill Schottelkorbl, Western Building Centers
Mari. TwIchel, Mergenthaler Transfer and Storage
Deb Wilson, Brendan House
Jeff Wilson. Properties Northwest
Vo�fing in o:
None
Recorded y;
��terre?n'er-, President and CEO
ispell Area Char ear of Commerce