Council to address loan default; seeks meeting with golf course officials

Libby City Council members on Monday unanimously voted to forward a letter to Cabinet View Golf Course  officials seeking a meeting with club officials to prompt payment of a $1.54 million loan that is in default.

“We had (City Attorney Reintsma) Jim look at it, and it appears they’re in default,” Mayor Doug Roll said. “I think it’s time we bring them in and have a heart-to-heart.”

Reintsma said he is concerned because until CVGC sells parcels of the adjoining home lots to the links, there may be little the city can do.

“It has no teeth in it,” Reintsma said of the loan paperwork. “It says they pay us money when they start getting it.”

Roll said he’d like to know more about the club’s financial status.

“I’d like to know even if they have any money to pay,” the mayor said. “We should have Jim draft a letter.”

According to city records, CVGC was to begin making payments on the $1.54 million loan in January 2010, but payments have not been forthcoming. Now, 18 months later, the city has yet to receive even the first payment from the club.

   The city made the loan as part of an $8 million economic development grant received from the federal government.

   The improvements, reportedly, were that of constructing an additional nine holes on the course.

   As it received the revenue for the loan via a federal grant, the city and its coffers are not suffering a shortfall because of CVGC’s default. However, as City Administrator Jim Hammons pointed out, if the club were making payments, the city could in turn use that revenue for further economic development by offering it to another enterprise.

   “Economically, it seems it’s not possible to make payments until they sell lots,” Hammons said. “It’ll be up to the council to see what they want to do.”

   “We’d like to have this meeting as soon as possible,” he said.

   In other action, the City Council:

• Agreed to pay a portion of the medical insurance increase for city workers. Accordingly, the average cost of the increase is about $480. City officials agreed Monday to pay half of the 10 percent increase, or about $24 a month. The annual increase amounts to about $7,000 for all city employees covered on the plan.

• Agreed to reduce the water suppression fees for the CARD building from $106,926 to $2,796.88. City officials heard from Mike Noble and Kim Rowse who said most of the bill was inherited when CARD purchased the building. City leaders agreed and approved the fee reduction.

• Tabled for future discussion the forgiving of an estimated $59,000 water bill the city is owed from the Port Authority. Initially, it was suggested the bill be reduced to $3,500, but Councilman D.C. Orr questioned whether the city should forgive the bill and instead urged city officials to seek a land for cash deal with the Port Authority, as it owns land adjacent to City Hall. “We’re forgiving a $60,000 debt here when we could have negotiated a settlement?” Orr questioned. Did anyone try to negotiate some land out of this? I already know where this vote is going, but I feel like I need to ask the question,” Orr said. Councilwoman Robin Benson who spoke on behalf of forgiving the debt, then offered then to table the topic for future discussion. Councilwoman Vicky Lawrence, who made the motion to approve the fee reduction, then rescinded her motion for passage. The Council agreed to take up the discussion at a later date. “I think it’s something we should pursue,” Benson said.

•  Heard a passionate plea from Marlene Nelson of 905 Commerce, who asked that Libby Cemetery workers be more compassionate when digging graves at the cemetery. Nelson said her sister and brother-in-law are buried at the cemetery and their graves were run over with machinery and dirt spilled over onto stone markers. “I think it’s very disrespectful,” Nelson said. Mayor Roll said he would look into the practices of workers.

• Heard Councilwoman Barb Desch say the city is working toward repairing the ally between Third and Fourth streets. She also said there are plans for 1,350 linear feet of sidewalk around the Senior Center and Care Center toward Mineral Avenue. Desch said work would be done in two phases.