County moves to terminate doughnut deal
Flathead County Commissioners on June
22 took a major step toward scrapping the 2010 revised interlocal
agreement concerning the two-mile planning “doughnut” around
Whitefish when the board unanimously adopted a resolution giving a
one-year termination notice to the city of Whitefish.
The action from the county comes as a
preemptive move in anticipation of a Whitefish ballot referendum
that seeks to end the revised agreement. The board fears that if
voters choose to end the agreement, it will lead to more litigation
and hurt doughnut property owners.
“If things don’t go right in November,”
Commissioner Jim Dupont said at the meeting, “at least we are six
months into termination.”
Dupont was a key player in helping
craft the 2010 agreement, which is considered a compromise between
the city and county. Commissioners Dupont and Dale Lauman, and past
commissioner Joe Brenneman unanimously approved the restated
interlocal agreement on Nov. 30, 2010.
The Whitefish City Council narrowly
approved the agreement on Nov. 15, 2010 by a 3-2 vote with
councilors Ryan Friel and John Muhlfeld in opposition, and mayor
Mike Jenson and councilor Bill Kahle absent.
The agreement included a five-year
duration and provided a way for the county or city to unilaterally
withdraw with a one-year notice.
Doughnut resident Lyle Phillips spoke
to the board June 22 and requested the termination. He said he
supported the 2010 agreement.
“I agreed with the [revised]
settlement, not because it gave the doughnut residents everything
they thought should be in it, but I understood it was a compromise
and ended the current litigation,” Phillips said. “It brought the
county and city together. It promised certainty and stability for
the doughnut, which we desperately need in this current real estate
market.”
He’s requested termination because of
the referendum, which he says “guarantees” more litigation.
“We in the doughnut are tired of
litigation,” he told the board.
He named referendum supporter Richard
Hildner, of Whitefish, and accused sponsors of the referendum of
pushing for even more litigation. Phillips said referendum
supporters are working so that “we in the doughnut have no
say.”
Hildner told the Pilot that referendum
sponsors have “no desire for more litigation.”
“We have a desire to allow Whitefish
residents to vote on the decision made by City Council whether or
not to accept the restated interlocal agreement,” he said.
Hildner cited that no city residents
spoke in favor of the agreement at past council meetings, and that
more than 1,000 signatures were collected in favor of putting a
referendum on city ballots. Hildner, a city council candidate,
helped collect the signatures.
“The referendum has nothing to do with
the agreement,” Hildner said. “It only calls into question the
decision of the Whitefish City Council.”
Supporters of the referendum believe
there is “overwhelming public opposition” to the revised doughnut
agreement, and fear the new agreement “has crippled the city’s
ability to govern itself effectively.”
In the June 22 termination notice from
the Board of Commissioners to the Whitefish City Council,
commissioners said that if Whitefish voters approve the referendum,
“it will create more litigation that could potentially continue for
years.”
“While we at the County had hoped that
the 2010 Agreement would allow us to begin a new cooperative
relationship with the City of Whitefish, we cannot postpone
governance of the doughnut indefinitely while the referendum and
its inevitable litigation plays out.”
Commissioners stated their reasoning in
the letter. They said that uncertainty in the doughnut “undermines
economic development” and that doughnut residents remain in legal
limbo without representation.
“Doughnut residents deserve the same
level of self-determination that the City of Whitefish referendum
seekers have so robustly exploited for themselves.”
Finally, commissioners again cited
potential litigation and its affect on real estate.
“When the many legal questions about
the referendum are litigated in district court and then appealed to
the Montana Supreme Court, we can expect at least three to five
more years of uncertainty and attorney’s fees.
“Our doughnut constituents don’t need
more litigation and the uncertainty it brings to their property.
They are having troubles selling their home. They are reluctant to
improve their property, and hire more electricians or plumbers,
because they don’t know the rules.”
Hildner questioned whether the board
had any facts to support their claims about property values and
jobs lost.
The city has 90 days to propose a
resolution and both the city and county are required to engage in
mediation.