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City Council calls special meeting to discuss Cabinet View

by The Western News
| January 19, 2012 2:39 PM

Libby City Council members, seeking to avoid the possibility of litigation with the Cabinet View Golf Club over a disputed $1.5 million loan, has scheduled a meeting to discuss options and a plan of action.

“We want to avoid a lawsuit,” said Libby Mayor Doug Roll. “We feel like we’d like to sit down with both sides and come to an agreement without going to court.

“We plan to meet with City Council members Monday, involve Kristin (Lincoln County Planning Department Director Smith) to see what our options are,” Roll said.

At issue, is the sum of $1.5 million the city loaned to Cabinet View Golf Club for the purpose of adding the “Wilderness Nine” holes to the course, bringing the links to a total of 18 holes.

City Council President Bill Bischoff echoed Roll’s sentiment to avoid litigation, and it was his calming words during the City Council meeting in November that sought to lower the escalation of conflict.

“I do think, as I believe the Council does, that we need to resolve this without involving the courts,” Bischoff said Thursday.

In addition to the loan, Bischoff said he would like to see some sort of agreement with CVGC that allows for at least a partial payment of a sewer trunk line that was extended to the golf club.

“Right now that (cost) is being passed along to the (sewer) rate-payers,” Bischoff said. “I’d like to see an agreement where they agree to some sort of payment, which is only fair.”

The cost of the sewer project was $1.68 million.

In 2009, eager to remedy failing septic systems for homeowners in the Cabinet Heights neighborhood, the city sought a grant to assist in the cost of extending sewer service to the neighborhood and in the process extend service to the CVGC clubhouse. Initially, the city was told it was successful in obtaining a $600,000 Rural Development grant from the USDA.

In that grant application process, the city was advised from Morrison Maierle, Inc., a Kalispell, Mont., engineering firm, the estimated cost of the project would be $2.29 million, so it submitted paperwork with those figures.

However, a slower economy coupled with a competitive bidding process in which contractors were eager for work, the bid was accepted at $1.68 million, or about $600,000 less.

Roll said initially, there was jubilation in the low bid, but the USDA, upon learning of the city’s good fortune in the lower-than-anticipated bid, rescinded the $600,000 grant.

“Basically, they took the grant away because we got a good deal,” Roll said. “Yes, it then was a wash.”

So, the city proceeded with the sewer-line extension, which Roll defined as necessary for the homeowners.

“There’s something about the soil up that way,” Roll said of the Cabinet Heights neighborhood. “I think it contains too much clay. Homes up there were having multiple septic systems trying to cope.”

On Friday, Roll presented The Western News with a copy of the letter dated June 3, 2009, from the U.S. Department of Agriculture indicating the rescission of the grant.

Meanwhile, for the same reason the city received a low sewer-line bid — a slow economy — CVGC was unable to sell lots it had banked on to repay the loan when the note came due January 2010.

“Basically, they have no money, no income,” Roll said Thursday. “They probably won’t until the land is developed. Still, we need to come up with something. That’s why we need to talk.”

In the interim, CVGC Board of Trustees has sent the city two checks for $100, both of which, according to Bischoff, have been returned to the board.

“We didn’t cash them. They were sent back,” Bischoff said.

Bischoff, the president of the City Council, has said

Meanwhile, Mayor Roll has sent a letter to the Board of Trustees that seeks dialogue — a willingness — to discuss the situation.

“The letter was sent last week,” Roll said Thursday. “We’d just like to see them hold to the obligation that they agreed to in 2004.”

Dann Rohrer, chairman of the Board of Trustees of Cabinet View, said Sunday he planned to attend the open meeting.

“We have a contract, a verbal agreement with the city,” Rohrer said. “As far as resolving this, we’d be all for it. We just know until we get our plat agreement, we can’t sell the land. And we can even begin to pay back the (loan) until we sell property. All we’re asking is that (the city) abides by the letter.”