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Council decides another meeting needed on loan issue

| June 4, 2004 12:00 AM

By Brent Shrum, Western News Reporter

After initially voting down a motion to approve a loan to fund a potential buyer¹s purchase and expansion of Kootenai Paving, the Libby City Council decided Monday to have another meeting on Thursday to make a final decision on the proposal after talking with a state economic development specialist.

The Libby Area Development Co. last month recommended that the council approve participation in an $800,000 financing package based on a Small Business Administration loan program. First National Bank would provide 50 percent of the funding, the LADC 40 percent and the buyers, George and Sheryl Niemi, 10 percent. The city would make $320,000 available to the bank, which would administer the loan and provide the city with a monthly payment for seven years at 4-percent interest.

Councilman Gary Huntsberger said he has discussed the proposal with Eric Hanson, a regional development officer with the Montana Department of Commerce, and has no problem with making the loan based on Hanson¹s review. Hanson had looked at the proposal at the request of Kootenai River Development Corp. director Paul Rumelhart.

³I support it 100 percent,² Huntsberger said, moving to approve the LADC¹s recommendation.

The recommendation was seconded by Stu Crismore.

Councilman Walt McElmurry said he was worried about using the city¹s economic development fund to support a business that would be competing with existing businesses if it expands into more general construction activities as the Niemis plan.

³I don¹t think that according to our charter we can do that,² he said.

Councilman Doug Roll said he thinks the LADC should have had the same information the city has received in a letter from Hanson.

³Then I¹d have a little more faith in what they are saying,² he said.

Roll said he doesn¹t think there is a problem with the loan itself but indicated he doesn¹t think the LADC reviewed the proposal thoroughly enough before making a decision.

³I¹m upset with the LADC for not taking care of this,² he said.

Councilman Lee Bothman asked if there is any guarantee that the mobile asphalt plant would stay in Libby. George Niemi said his business plans are to work within a 70-mile radius of Libby. He said he doesn¹t have a problem with agreeing to keep his base of operations in Libby until the loan is paid off but doesn¹t want to be precluded from moving the plant outside the area if necessary for a specific job.

³That¹s why you have portable plants, so you can move them to the job site and then bring them back,² he said.

Huntsberger¹s motion failed by a 4-2 vote with Huntsberger and Crismore voting in favor of the motion and Bothman, Roll, McElmurry and Charlene Leckrone voting against.

³We got put on the spot, is what we did, before we even had a chance to review it,² McElmurry said.

³I don¹t want to shut this down, I just want someone to look at this,² Roll said.

McElmurry said he just wants proper procedures to be followed by the LADC before making a recommendation to the council.

³Do you know the procedures they went through?² Crismore asked.

³I¹ve talked to a few of them and it sounds like they didn¹t do a heck of a lot,² he said.

Mayor Tony Berget asked the council if it would consider taking another vote on the proposal after getting an independent review of the proposal. Crismore pointed out that Hanson has already reviewed it and given his recommendations to the city.

³But it wasn¹t at our request,² Berget said.

Crismore said he was confused.

³We said we wanted a second opinion,² he said. ³Paul went and got a second opinion and now we say we didn¹t get it.²

The council agreed to contact Hanson and ask him to participate in a special meeting on Thursday, June 3, to provide input on the proposal. The council is scheduled to make a final decision on the proposal after talking with Hanson.