Superfund cleanup is No. 1 story

Underground diesel plumes threatening Whitefish River and the Railway District, skyrocketing property reappraisals, a $440,000 ruling against the city, a contentious city council election and medical marijuana businesses coming to Whitefish are last year's top five stories.

The end of 2009 marks the close of the first decade of the third millenium, and what a decade it was. Rapid growth and development topped the news cycle, with annexations — including Whitefish Lake — and new subdivisions changing the local landscape and fueling an economy that also saw a boom in tourism.

While Whitefish became the fastest growing city in Montana, the government responded by initiating a wide range of environmental protections — including regulations on signs, outdoor lighting and critical areas — and a new Growth Policy and Downtown Master Plan were drafted by citizens and adopted by the city council.

Reactions by the public and government to rapid growth and change were behind many of this year's news stories, but the legacy of more than a century of railroading drove our top story of 2009.

The big cleanup

The story began in mid-March as rumors emerged that BNSF Railway was buying up properties in the Railway District. Concerned about the impact to property values, especially in light of the renaissance the neighborhood underwent in recent years, owners held meetings with railroad officials, but many were tight-lipped.

Speculation quickly turned to the underground diesel plumes that have been gradually migrating south from the company's fueling facility. BNSF began clean-up efforts at the site in 1973 when it constructed a 364-foot long interceptor trench between the spreading plume and the Whitefish River.

Government action didn't begin until a citizen complained about an oil sheen in the river in 1986. But after nearly two decades of cleanup efforts, the Department of Environmental Quality estimates as much as 110,000 gallons of fuel remains underground at the Superfund site. DEQ also stepped up its interest in cleaning up BNSF properties across the state after Gov. Brian Schweitzer took office.

A recent Montana Supreme Court case also moved the cleanup to the front burner. In the 2007 Sunburst School District v. Texaco case, the Court set two important precedents — approving restoration damages that exceeded the impacted properties' market values and opening the door for individual property owners to sue for remediation before DEQ took action in a Superfund case.

In an attempt to mend fences with frustrated locals, railroad officials announced on July 7 they were no longer buying up downtown properties. Charles Shewmake, BNSF Railway vice president and general counsel, also told Schweitzer, other state and local officials and concerned residents that no human health hazards exist in the Railroad District.

With the cat out of the bag, however, property owners turned to the city for help. With a $50,000 state grant, the city hired Roger Noble, of Applied Water Consulting, in Kalispell, to oversee 22 geoprobe borings at the affected properties to determine the extent of the underground plumes. Results from that study are not yet public.

By mid-September, the focus turned to the Whitefish River when the Environmental Protection Agency ordered BNSF to begin removing contaminated sediments in the river's upper reach by Sept. 25. The order followed a finding in March that the company was responsible for the river contamination under the Oil Pollution Act.

A portion of the popular BNSF Loop Trail was closed to walkers and bikers through December while crews set up a coffer dam near the interceptor trench and began excavating the contaminated river sediments. By early December, before cold weather descended on the Flathead, 20 rail cars had been filled and 14 more were ordered.

BNSF spokesman Gus Melonas said the company would spend about $1 million to $1.5 million in the fall removing 1,000 to 2,000 cubic yards of contaminated sediment. The Whitefish City Council, however, continued to raise questions and concerns about the cleanup project — particularly how the shoreline was being torn up. Winter conditions halted the cleanup before Christmas.

The railroad's contamination problem expanded after the Whitefish Lake Institute announced in mid-December that an old diesel spill in Whitefish Lake needed additional cleanup. In 1989, a Burlington Northern train derailed and spilled 20,000 to 25,000 gallons of diesel fuel in Mackinaw Bay. Institute director Mike Koopal said he contacted DEQ, which agreed to reopen the file for the 1989 spill and assign the case to the remediation division.

Property

reappraisals

Skyrocketing reappraisals had some Whitefish property owners wondering if they'd be able to hold onto their homes for another six years. One longtime Whitefish Lake property owner nearing retirement saw her reappraisal jump 380 percent, from $535,300 in 2002 to $2.58 million in 2008.

Whitefish-based investment adviser Jim Stack noted that reappraisals for vacant lots increased 200 to 400 percent in spite of a 10-year inventory in the Flathead. The long-term effects would be a transfer of nearly all lakeshore property to out-of-state ownership and a severely depressed local real estate market for many years to come, he said.

Statewide, residential property values increased an average of 54 percent in 2009, compared to 20.2 percent in 2003, the last time the six-year property reappraisal took place. In Flathead County, a high-growth area with higher-valued 'recreation" properties, about 76 percent of the 31,632 homes were expected to see higher property taxes.

Flathead County led the state in filing informal property tax protests with about 29 percent of the state total. One protester, however, turned to the ballot box. After failing to get enough signatures for a constitutional initiative last year, Kalispell resident John McMenamin returned with a proposal to cap increases in assessed values at about 3 percent per year.

Meanwhile, the recession continued to impact real estate values. The median price of a residential property in Whitefish declined by 8.4 percent in the third quarter from $295,000 in 2008 to $270,000 in 2009, and total volume declined from $32.83 million in 2008 to $25.78 million in 2009. The average number of days a Whitefish residential property stayed on the market was 164 days.

The Walton case

The Montana Supreme Court's Oct. 27 ruling in the Walton case cost Whitefish about $440,000 at a time when most cities were making budget cuts, but it didn't affect the city's legal authority to enforce its Critical Areas Ordinance. And coming one week before election day, during a contentious city council election in which the ordinance was a top issue, the ruling also had political implications.

The case arose at a time when the city was seeing rapid growth and the council was considering new regulations to protect water quality in area streams, lakes and wetlands. William and Theodora Walton claimed the city violated their right to equal protection when they were denied a permit to build a new home on a steep slope overlooking Whitefish Lake.

The Court upheld three rulings by Flathead County District Court Judge Ted Lympus, in particular that the ordinance did not provide any criteria for its 'reasonable use exemption" provision. As a result, "The city's planning director, Robert Horne, was the ultimate authority on RUE issuance," the court ruled.

City attorney John Phelps said the Court's ruling ended the case for the city — there will be no further appeals. The Montana Municipal Interlocal Authority paid the city $84,154 for its defense team.

The council election

Three seats on the Whitefish City Council were up for re-election this fall. Nancy Woodruff, whose four-year term ended this year, chose not to run, while Nick Palmer announced he was dropping out at the conclusion of a difficult Aug. 17 meeting.

Two of Palmer's amendments failed earlier that night — one to strike language in the mobile vendors regulations and one to reduce the width of sidewalks in the Third Street and Central Avenue streetscaping projects.

Streetscaping and the Critical Areas Ordinance were two issues in what turned out to be a contentious election. Governance in the city's two-mile planning and zoning "doughnut" area and the Mrs. Spoonovers sign ordinance case were two more.

The three challengers — Chris Hyatt, Bill Kahle and Phil Mitchell — were fairly or unfairly lumped together as a slate of candidates opposed to the current council. That 'spin" on the election was often made by political action committees and individuals who paid for mailers and print advertising calling for change.

Frank Sweeney, the remaining incumbent, who was appointed by the council in January to fill the seat vacated by Shirley Jacobson, came in fourth. Hyatt received the most votes — 1,415. Kahle came in second with 1,344, while Mitchell had 1,057.

Medical marijuana

Five years after Montana voters overwhelmingly approved the Montana Medical Marijuana Act, interest has boomed, with more than 600 licensed patients in the Flathead alone. But when several individuals approached the city with plans for grow operations and retail outlets, including one across the street from Whitefish Middle School, the council decided to act.

Concerns were raised about how the medical marijuana industry had affected other cities in the U.S. — from reports of patients selling their medical marijuana on the streets, robberies at dispensaries and the possibility of organized crime taking over what appeared to be a rapidly growing and profitable industry.

The solution the council chose was an urgency ordinance prohibiting all medical marijuana businesses inside the city and within one mile of the city limits. The six-month ordinance would provide the city with enough time to consider how to permanently zone such businesses so they were not set up near schools, churches and other culturally-sensitive areas.

Mayor Mike Jenson broke a tie vote on Dec. 7 enabling the interim zoning ordinance. Councilors Sweeney, Woodruff and Ryan Friel had favored an alternative ordinance that would allow medical marijuana businesses to operate under a conditional-use permit.

A few weeks later, Michael Smith said his Bozeman-based nonprofit, The Healing Center (THC), was considering suing the city over the moratorium. Smith had been successful earlier in the year in persuading the Billings city council to table a similar interim zoning ordinance.

Smith also said a "collective" associated with The Healing Center will open in Kalispell after Jan. 1. The collective will offer hemp food and lotions and operate like a private club where patients help each other.