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Council approves port grant, leans toward VFW

| December 7, 2004 11:00 PM

By Brent Shrum Western News Reporter

The Libby City Council on Monday approved a $300,000 grant to the Lincoln County Port Authority and agreed to consider a bailout of the financially strapped Veterans of Foreign Wars club.

The port authority had previously asked for all the unallocated funds remaining in the city¹s economic development account, which at the time of the original request was around $800,000, plus the remaining monthly loan payments from a $320,000 loan to Kootenai Paving approved last spring.

The fund originated with an $8 million federal grant, earmarked for economic development and infrastructure, in the fall of 2000.

In the time since the port authority developed the proposal, the city has granted $250,000 to the Center for Asbestos-Related Disease and $145,000 to the Libby Area Chamber of Commerce along with a $15,000 grant to fund plans for a public swimming pool. At Monday night¹s meeting, Mayor Tony Berget said around $391,000 remained available.

³I don¹t even know what to give you for a number anymore,² said port authority chairman Jim Mayo. ³Whatever we get from you folks will be used for the betterment of the community.²

The port authority needs the money for improvements at the former Stimson mill site, which it acquired at the end of 2003. Most of the usable space in existing buildings on the property is already rented or soon will be, and the port authority is negotiating with a light manufacturing firm that would employ 40 to 50 people but would need a new building, Mayo said.

The funds from the city would be used for ³pure economic development,² he said.

³Anything the port does is going to be directly for the creation of jobs, period,² he said.

The city previously loaned the port authority $96,0000 to subsidize the operation of the former mill site for one year. Rental agreements on the property currently bring in $5,800 per month, Mayo said. If a deal with Revett Silver Co., which plans to use a portion of the former plywood plant to store concentrate from its Troy mine, is finalized, that figure would be $8,800 per month and the port authority would be self-sufficient, he said.

Councilman Lee Bothman moved to award the port authority a flat one-time grant of $300,000 — leaving out the requested loan payments from Kootenai Paving — and the council approved the motion unanimously.

Dealing with another request for a grant from the city¹s economic development fund, the council agreed to consider a proposal to provide the VFW with $75,000 over the next five years to help the club pay off its mortgage.

The VFW had earlier presented a $250,000 grant proposal to the Libby Area Development Co., which had been formed by the city to review proposals for funding and make recommendations to the council. The LADC had rejected the request and not forwarded the proposal to the council.

The council voted in October to discontinue using the LADC to review proposals and instead to review proposals directly. The council¹s decision to forego the LADC led to the approval of the CARD proposal, which had been rejected by the LADC. At the same meeting where the CARD request was presented, the council allowed the VFW to submit its proposal but took no action toward approving the request.

On Monday, numerous supporters of the VFW returned to the council with Terry Andreessen speaking on their behalf. Andreessen said he¹s not a member of the VFW but doesn¹t understand why the city is willing to lose the organization and the services it provides.

³I don¹t know what it is, but there¹s something inside me that says this is morally wrong,² he said.

Andreessen said there¹s no doubt a lot of mistakes were made when the VFW built a new building to replace the one that collapsed under a heavy snow load in the winter of 1996-97, but he said the hall was built with the community in mind. The fact that the VFW operates a bar and casino — cited by the LADC as a reason for rejecting the grant request — is not an issue because if the VFW loses its building it will find a smaller space to operate its bar and casino, Andreessen said.

³The only thing that will really be lost is the vital services that are provided,² he said.

Andreessen argued that a double standard has been used for approving grant and loan requests. While the VFW was denied because it has a liquor license and competes with existing businesses, the Memorial Center received $1.2 million and competes directly with the VFW and allows liquor to be served at some functions, he said. He added that Cabinet View Country Club was also approved for a $1.5 million loan even though it has a liquor license.

The VFW owes $361,000 with 22 years left on a 30-year loan, and its monthly payments are $2,366, Andreessen said. The club is comfortable with a payment of about half that, he said.

Andreessen proposed a $145,000 grant to help the VFW refinance its loan and lower its monthly payment. He said the organization is trying to raise $10,000 from its membership over the next two or three months, and the club¹s auxiliary is planning to apply for non-profit status to become eligible for grants. He also acknowledged ³that they have to run a tighter ship, and eliminate the excess leakage that has occurred in the past.²

Andreessen said he had discussed the issue with Bothman, who had come up with an alternate proposal.

Bothman suggested to the council that the city provide the VFW with $10,000 per year for the next five years along with the $5,000 the CARD offered to repay annually. As a form of repayment to the community in return for its grant, the CARD board had originally proposed creating a $5,000 annual scholarship for a student from Libby pursuing a medical education. The council approved the CARD grant without formalizing the scholarship proposal, leaving repayment as an issue to be worked out later. In moving to approved the CARD grant last month, Councilman Doug Roll said there had been some discussion concerning having the $5,000 paid back to the city fund each year rather than handed out as a scholarship.

Under Bothman¹s proposal, the council would revisit its commitment to the VFW after five years. In the meantime, the aid would cut the VFW¹s monthly payments roughly in half.

Councilman Gary Huntsberger moved to put the issue on hold until the council¹s next meeting to allow time for a formal proposal to be developed and reviewed.

Councilman Walt McElmurry suggested approving the grant immediately but ultimately agreed along with the rest of the council to consider the proposal at a special meeting scheduled for Monday, Dec. 13.

³I¹d vote for it tonight, but we do need that week or two of time,² said Roll, who seconded Huntsberger¹s motion.