Golf course dispute with city escalating

Tensions between the City of Libby and the board of the Cabinet View Golf Club are escalating again. The board held a closed-door meeting with an attorney last week to discuss and evaluate their legal options in the ongoing dispute.

The issue goes back to November 18, 2004, when the golf course borrowed $1.54 million from the city to expand the nine-hole course to a full 18 holes. The loan was to be repaid using the proceeds from the sale of lots in a subdivision to be developed by the club on property adjacent to the newly developed nine holes.

The promissory note obligated the country club to begin making payments on the no-interest loan beginning no later than Jan. 1, 2010, but also stipulates the payment amount shall be no less than 50 percent of the proceeds from lot sales, with payment due upon the closing of any lot sales.

Now, more than five years after the scheduled beginning of repayment, no lots in the new subdivision have been sold. In fact, the new subdivision doesn’t even legally exist, which is the heart of the dispute between the club and the city. 

The golf course board began sending payments in the amount of $100 to the city Jan. 1, 2010. The payments have been returned by Mayor Doug Roll, as have similar subsequent payments, even though the terms of the note specify the golf club will have the right to make payments at any time.

Roll said the amount does not constitute a good faith effort on behalf of the golf club to repay the debt.

“The City received a check for $100 last year and again this year. Both have been promptly returned. A check in the amount of $100 does not seem to be much of an effort to repay over 1.5 million dollar loan,” Roll wrote in a letter dated Dec. 30, 2011. 

Following receipt of the loaned funds, the golf club initiated the subdivision process and filed an application with the city.

The process seemed to be moving forward, city supervisor Dan Thede recommended the city add an impact fee of between $500,000 and $750,000 to the final subdivision approval. The recommendation was adopted by the City Council on Sep. 10, 2007. The impact fee was, ostensibly, to cover the cost of expanding the city’s water and sewer system to the new subdivision as well as to the existing Cabinet Heights subdivision.

The members of the golf course board said they were blindsided by the addition of the impact fee.

“The fee was never disclosed to us,” said former board president Dann Rohrer. “Had we known about that fee we would never have gone forward.”

The country club board filed suit against the city as an appeal to the impact fee assessment. The case was dismissed in 19th Judicial District Court for failure to prosecute, said City Attorney Allan Payne.

Rohrer said the board abandoned the suit at the request of city administrator Jim Hammons and then-city attorney Jim Reintsma. Reintsma and Hammons, Rohrer said, asked the club to end the suit and, in exchange, the city would drop the impact fee, but no documentation of any such arrangement exists.

Payne said the issue isn’t nearly as complicated as it seems.

“Right now, the country club needs to file an application for a subdivision,” Payne said. “There is no pending subdivision application at this time.”

Payne said a new application would then trigger the normal approval process, which would include public hearings about the subdivision as well as a review and determination of potential impact fees. 

“The trigger for the process is the application,” Payne said. “The discussion about impact fees comes after the application.”

Country club board member Kari Martell said the club wants an assurance that the impact fees will not be assessed, as the fee makes development of the property not economically viable.

Payne said making such a promise without an application would be improper, and he has advised the City Council accordingly.

“If that happened before, it wasn’t on my watch,” he said. “It wasn’t proper then and it wouldn’t be proper now.”

Martell expressed concern about the cost involved in resubmitting the subdivision application, especially if the result is just a repeat of the previous impact fee assessment.

Lincoln County planner Lisa Oedewaldt said, however, the application could be a very simple process, as the engineering work was previously completed. The city, she said, could even just pick up the old application and restart the process.

“If the application expired, it’s entirely up to the City Council if they want to pick it back up,” she said.

Payne said he would much rather see this issue settled amicably, but the decision must be made through the correct public process.

“I think they have a worthy project and it’s great for the community,” he said. “I also think they were blindsided by this impact fee, and maybe they shouldn’t have to pay it, but that’s a decision to make in an open public meeting.”

An open meeting is exactly what Rohrer and other members of the board have asked from the city.

Rohrer presented the club’s concerns to the City Council at a public meeting in January, even going so far as to ask the City Council for an immediate decision.

“If you vote no, then we will enter into potential litigation,” he said to the Council Jan. 5. “If you choose not to vote, we will also enter into potential litigation.”

Mayor Roll told Rohrer the Council needed time to review and discuss the situation before making a decision, but then also rebuffed Rohrer’s request to be placed on the next meeting’s agenda.

“We’ll let you know,” Roll said.

Nearly four months later, however, there has been little to no movement on the issue, leaving members of the country club board frustrated with the city, but not frustrated enough to seek legal remedy. Martell confirmed, following Wednesday’s meeting, that the board would send another letter to the city requesting resolution of the issue and would not be moving forward with legal action at this time.