Council OKs VFW grant

By Brent Shrum Western News Reporter

The Libby City Council on Monday approved a $350,000 bailout for the Veterans of Foreign Wars club from the city¹s economic development fund.

The council approved the measure by a unanimous vote of the five council members in attendance. Councilman Lee Bothman, who had helped craft the proposal along with City Attorney Scott Spencer and Timberline Auto Center owner and VFW advocate Terry Andreessen, was not present at Monday¹s meeting.

Under the proposal approved this week, the city will use the payments from a $320,000 loan made earlier this year to the buyers of Kootenai Paving ? $4,374 per month ? to help the VFW pay off its debt. By combining that with $1,100 per month from the VFW ? less than half the group¹s current monthly loan payment of $2,366 ? the loan will be paid off in 79 months. The VFW will then begin paying the city back at a rate of $1,500 per month for about 25 years.

In the end, the city will have invested about $350,000 and the VFW will have paid back $443,000.

Mayor Tony Berget said the loan to the VFW effectively drains the city¹s economic development account, which was started with an $8 million federal grant the city received in 2000.

Several previous requests from the VFW for a $250,000 grant had been rejected by both the Libby Area Development Co., which was set up to review requests for assistance from the economic development fund, and the council itself. Most recently, the council allowed the VFW to present its proposal during an October meeting in which a vote was taken to discontinue the use of the LADC. At that meeting, the council listened to the VFW¹s request but took no action on the issue.

VFW representatives told the council that the club was unable to make its loan payments and would be forced to sell its building without help from the city. The VFW built the structure after its old hall collapsed under a heavy snow load in the winter of 1996-97.

Last month, the council heard two alternate proposals from Andreessen and Bothman. Andreessen asked the council to consider a $145,000 grant to help the VFW refinance the loan on its building. Bothman¹s proposal, which he had worked out with Andreessen, involved giving the VFW $10,000 per year for the next five years along with the $5,000 the Center for Asbestos-Related Disease had offered to repay annually in return for a $250,000 grant from the city. The CARD¹s initial proposal had been to award the $5,000 as an annual scholarship to a local student pursuing a medical education, but in approving the grant the city council reserved the right to change the nature of the repayment.

At a special meeting later in the month, the council reviewed the proposal which was ultimately approved this week. Spencer said the new package is preferable to the proposal previously offered by Bothman because it provides a long-term solution and gives the city an interest in the building.

Because VFW representatives had expressed an inability to make the club¹s December loan payment, the council agreed last month to make that payment in full with the understanding that if the loan proposal were to be rejected the payment would be ³a gift.²

In seeking aid from the city. club representatives cited services the VFW offers to the community including loaning free medical equipment like wheelchairs and walkers, providing emergency shelter and a space for the distribution of government surplus goods and commodity foods, and placing flags along the streets on holidays.