Tim Leeds Havre Daily News tleeds@havredailynews.com
The Hill County Commission has scheduled a discussion of the City of Havre’s request for the two entities to undergo binding arbitration on the county’s funding of the community pool in Havre. The Commission will hold this discussion during its regular meeting at 10 a.m. Wednesday. The Havre City Council on Aug. 18 unanimously voted to request the county agree to binding arbitration to determine the validity of a 1974 agreement between the city and county after nearly two years of discussions. The 1974 agreement stated the county would pay one-third of the operating expenses of the pool, which was in the planning stages at the time. “We felt that we were at a stalemate, that there were no options available,” Council member Andrew Brekke, a member of the City Council Finance Committee, said Monday. The Finance Committee, before the Aug. 18 meeting of the Council, voted unanimously to recommend the city request the county undergo binding arbitration. The county has never paid exactly one-third of the expense since the agreement was written. The city has been requesting since the fall of 2006 that the county start paying that amount in accordance with the original written agreement, which Hill County Attorney Cyndee Peterson previously said does not meet the requirements of Montana law including having a duration. Hill County Commissioner Mike Anderson said Friday, Sept. 5, he does not believe binding arbitration is the best option, and again said he offered to negotiate with the city. “I guess I don’t see binding arbitration as a reasonable alternative. It will cost money for both agencies to hire an arbitrator,” he said. “There is no reason we can’t sit down on both sides and work this out. We’ve been willing for a year now to sit down and negotiate a new contract.” Three weeks before the council vote, the Finance Committee and Hill County Commission met to discuss the pool funding. The meeting ended with the agreement that each side would discuss the other’s proposal. The city asked that the county take full or partial ownership of the pool and submit to Hill County voters a county-wide tax to fund the pool, and county asked the city agree to negotiate a new contract. Havre Mayor Bob Rice on Monday said the issue is whether the county should follow the original agreement regardless of whether it meets the requirements of law. “That agreement in 1974 was entered in good faith by all three parties,” he said. “Many things in city and county government do not have an ending date and one is a promise.” Operating the pool through the years When the city was planning the construction of the pool in 1974, an agreement was signed by a then-member of the Hill County Commission and the mayor of Havre at the time, agreeing that the county had studied the benefits of a swimming pool in Havre and that the city could rely upon its commitment in determining the feasibility of building the pool. The agreement states that the county would pay $10,000 for funding the operation of the pool in 1975-76, and that the amount would be adjusted in future years depending on the operating expense. Havre Public Schools is not mentioned in that agreement. In 1976 the city entered an agreement with the Havre Public Schools, in which the school district agreed to pay an amount to be determined each year to help fund the operations of the pool. That agreement states that the city built the pool with the understanding that it would be used jointly by the residents of the city and county and for school purposes. It states that the school district and the county would make payments to the city to help fund its operation and maintenance. The 1976 agreement does not specify amounts to be paid by the school district or the county. According to a document provided by the city, one-third of the operations loss the cost of operating the pool minus the amount paid by users of the pool in the 1975-76 fiscal year was $4,905, and the county's $10,000 payment was more than $5,000 higher than needed. Since then, the county has paid a fixed annual amount of money or in-kind services and has never paid one-third of the operations loss. It paid $10,000 through 1979, then paid $13,000 annually from 1980 through 1983, $14,000 from 1984 through 1987, and $11,000 from 1988 through 1991. From 1992 through 2000, the county entered an agreement with the city to provide dispatching services for the city in lieu of its payments for the operations of the pool at no additional cost to the city. After the city left that agreement in 2001, the county began paying $19,000 annually, as the school district has in recent years. Increasing costs and funding shortfalls The payments by the county were close to the amount in the 1974 agreement for the first few years, including another overpayment in 1980, $1,707 above the one-third. Since then, the net operations loss has grown much faster than the payments by the county or school district. In 1991, the last year before the county took over dispatching for the city, the loss was $46,916, the city document says. After the city left the 1991 agreement, the operations loss in 2001 was $157,017, and grew to $182,778 in 2007. According to the city document, to pay one-third of that expense the county should have paid almost $61,000 in 2007, rather than $19,000. Contentious discussions The issue came to a head in the fall of 2006, when the city submitted a bill to the county requesting a payment of onethird of the pool’s operations loss including past due amounts back through 1976 totaling more than $280,000. County Attorney Cyndee Peterson advised the commission that the 1974 agreement did not meet requirements of state law governing interlocal agreements including having a stated duration and a procedure to terminate the agreement the 1974 document has neither. She also advised the commission that the past-due bill had no legal basis due to reasons including a violation of the statute of limitations and the legal principal of offer and acceptance of the county’s payments. Havre City Attorney Jim Kaze wrote in an opinion on May 9, 2007, that “we respectfully disagree with (Peterson’s) opinion,” and that the agreement is valid and effective. Calls requesting Kaze to comment on Peterson’s statement that lacking a duration and termination procedure make the document invalid have not been returned. According to the minutes of a meeting between the Finance Committee and the County Commission on March 27, 2007, the Committee said at the meeting that the city had sent a bill for one-third of the operations loss $55,319 to the county but the county representatives had crossed off that amount and written in $19,000. The commissioners said the county had budgeted $19,000 for the pool payment as it had for several years, and it was willing to evaluate paying a different amount while negotiating a new agreement, the minutes say. Both sides agreed to move into negotiations, the minutes say. Anderson said in previous interviews that in a meeting in August 2007, the Commission and Committee once again agreed that, because the county had again budgetted $19,000 for the pool, it would pay that amount and the two governments would negotiate a new agreement. In January 2008, the county sent a $19,000 payment along with an agreement for July 1, 2007, to June 30, 2008, stating that the county would pay that amount for the 2007-08 fiscal year. The city cashed the check, but Mayor Bob Rice returned the agreement unsigned, saying in a letter dated Feb. 20, 2008, that the city believes the 1974 agreement is valid, but stating that the city was willing to resume negotiations in an effort to draft a new agreement. Rice included a statement of the pool’s operating deficit for July 1, 2007, to Dec. 31, 2007 $96,940.21 and the amount due as per the 1974 agreement for those six months, $32,313.40. After receiving that correspondence, the county replied on Feb. 28, 2007, in a letter stating that no further payments would be made until written agreements are fully executed. Meeting drowns in grey water After the agreement to discuss each side’s position at the July 30 meeting, the Finance Committee decided further negotiations would be pointless, members said. “The contact that we’ve had with the county is that there's no valid contract for pool maintenance,” Bob Kaftan, member of the Finance Committee said Monday. “We believe we do have a valid contract so we thought binding arbitration would be best bring in a third party and see if we do have a contract.” The Commission has said in several letters to the city, interviews and meetings with the Committee that it believes the 1974 agreement is invalid. In a letter to the city dated April 9, 2007, the Commission said that since there is disagreement on the validity of that contract, the Commission was terminating the agreement and offered to discuss negotiating a new agreement. While Finance Committee memb e r Al l e n “Wo o d y ” Woodwick said in an interview that he shies away from a lawsuit except as a last resort, in a separate interview Committee member Gerry Veis said if the county refuses arbitration, the next step could be using the courts to resolve the issue. “Council members 20 years from now shouldn’t have to go through this again,” he said.
