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City has plan to fund Cabinet Heights project without SID

| January 18, 2007 11:00 PM

To the Editor:

On Jan. 5, Jim Rostorfor wrote a letter to the editor and expressed concerns about the funding for the sewer system to be installed at Cabinet Heights.

I would like to respond to those concerns.

Although not adequately expressed at city council meetings, there is a plan for funding the sewer system that will not require a special improvement district. In fact, an SID could not be implemented without the approval of the landowners in the Cabinet Heights area.

The installation of the sewer system is now estimated by the project engineer to cost approximately $3.4 million. The anticipated funding sources for the sewer system are a Treasure State Endowment Program grant (already awarded) for $500,000; a Department of Natural Resources and Conservation Renewable Resource Grant (already awarded) for $100,000; and combined hookup fees for an estimated 200 households in the amount of $359,600.

In addition, the city is applying to the state of Montana for approval of tax increment financing, which it estimates would raise approximately $600,000; the city has applied for and believes it has a good chance of receiving a State and Tribal Assistance Grant in the amount of $2.49 million and/or a Water Resource Development Act appropriation in the amount of $2.49 million.

If necessary, other sources of financing being looked at are a Rural Development grant and loan, a Community Development Block Grant grant, an EDA grant and loan, funding from developers in the area needing sewer services, and a zero percent interest loan from the local power company.

If enough additional funding is received, the hookup fees would be reduced or eliminated. Although a complete funding plan has not yet been identified and approved, the city does not intend to rely on an SID, increased taxes or decreased services to fund the project.

The city sought annexation of Cabinet Heights pursuant to a law that allows the city to annex users of city water services, unless such users ask the city to be disconnected from such service. The law states that, if such users don't ask to be disconnected, they impliedly consent to annexation. After appropriate notice, none of the users asked to be disconnected. Thereafter, the city proceeded with the annexation of Cabinet Heights.

The annexation ordinance was passed by the city council on Dec. 27, 2006, at a special meeting duly noticed to the public. The council would have waited until the January monthly meeting to do so, but the ordinance needed to be approved before the end of the year in order to qualify for tax increment financing for 2007.

This letter does not address all the concerns raised by Mr. Rostorfor, but I believe it addresses the concerns of greatest interest to the residents of Libby.

Charles Evans

Libby City Attorney