Council OKs portion of CVCC request

By Brent Shrum, Western News Reporter

The Libby City Council on Monday approved a portion of Cabinet View Country Club¹s $1.5 million loan request but voted to withhold the remainder pending further study.

The council agreed to provide $166,000 for engineering and other studies but held back on the remainder based on advice from attorney Scott Spencer. Spencer cautioned the council against approving the proposal as submitted because the country club¹s plan to expand its golf course from nine to 18 holes and develop 100 new home sites is dependant on annexation into the city and the extension of sewer service to the area.

While an annexation petition is pending, the city is not expected to take action for several months. The city council has indicated that it would likely reject annexation if grants cannot be obtained to fund the extension of sewer service to the area.

Spencer advised the council that it is inappropriate to approve the loan if it is based on sewer service being available through annexation because doing so would give the city a direct financial interest in the annexation process. Opponents of annexation could point to the loan as evidence casting doubt on the council¹s impartiality in making the annexation decision, Spencer said.

³It gives them an automatic lawsuit that they will win,² he told the council.

On Spencer¹s advice, the council approved making $166,000 available immediately to allow necessary studies to move forward. As part of the study process, CVCC will be expected to provide additional information on the viability of the project without annexation. The project may be possible with individual or community septic systems or the acquisition of sewer service through the formation of a sewer district, Spencer suggested.

The city will set aside the remaining balance of the requested loan for one year or until the final approval is approved or disapproved. If the loan is disapproved, the $166,000 debt will be forgiven.

CVCC has proposed a repayment plan tied to the sale of lots in the new development. At Spencer¹s suggestion, final loan terms will be decided if and when the remainder of the loan is approved by the council.

The Libby Area Development Co., established to oversee the city¹s $8 million federal economic development grant, approved the loan request last month and passed its recommendation on to the city council for final approval.