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Havre loses bid to regain co-op development center

The Montana Cooperative Development Center is on its way to a new home in Great Falls, rather than back to Havre.

The board of directors of the center voted by secret ballot Tuesday afternoon during a meeting in Havre. Before the vote, the board met behind closed doors for about 40 minutes, in apparent violation of the state's open meeting laws.

The choice of the center's new home was between Bear Paw Development Corp. of Havre and the Montana Farmers Union.

Rich Owen, president of the MCDC board, said this morning the executive committee of the board would not disclose the record of the vote.

Ten board members voted. Two of the board's members who are affiliated with Bear Paw Development - executive director Paul Tuss and Bear Paw board chairman Art Kleinjan - abstained from voting to avoid a conflict of interest.

Board member Brooks Dailey, president of Montana Farmers Union, also recused himself from the vote. Dailey could not attend the meeting and would have voted by proxy.

The co-op development center was created in the fall of 1999 to promote and help develop and and strengthen cooperatives, particularly for value-added agriculture. It originally was housed at Montana State University-Northern.

The state Department of Agriculture announced last spring that the center was being moved to Helena so the department could provide direct oversight until a permanent location was selected. Several members of the center's advisory board at the time, including Public Service Commissioner Greg Jergeson, Tuss and state Senate Minority Leader Jon Tester, D-Big Sandy, spoke in opposition to the move.

The department accepted proposals for a new home for the center. After bids failed to meet the department's requirements last fall, the Department of Agriculture announced that the center would be reorganized into a private nonprofit corporation.

The corporation's board voted Tuesday to house the center in a building that holds the Montana Farmers Union and the Farmers Union Mutual Insurance Co. in Great Falls. Farmers Union will help guide the center, Diana Adamson, its vice president, said during the meeting.

The center is scheduled to move to its new home by April 1.

Ty Duncan, executive director of the center, said he thinks Great Falls will be a good location. Being more centrally located will help provide assistance through the entire state, instead of concentrating in one area of the state, he said.

Traveling from Havre to Baker, for example, would take most of a working day, Duncan said.

"There's a lot of rural Montana in the southern part of Montana," he said. "I think we'll have better access to all parts from Great Falls."

Jergeson, who proposed legislation funding the center when he was a state representative in 1999, said after the meeting that he was disappointed. Locating the center in Great Falls will probably work, he said, but an objective review of the applications would have shown that Bear Paw's familiarity with state and federal grants and the accounting needed to administer grants would have helped the center increase its operations more quickly.

"That all still needs to be constructed at the other location," Jergeson said.

The primary funding for the center is a $65,000-a-year appropriation by the state Legislature and two grants from the U.S. Department of Agriculture Rural Development totalling about $186,000 in 2003.

Tuss said during the meeting that Bear Paw's familiarity both with rural issues and the cooperative form of business would help the center.

Bear Paw often works with cooperatives in helping to fund other projects, including a community hospital project in Malta and an assisted-living complex in Chester, he said.

Adamson said during the meeting that her organization's familiarity with farm issues and cooperatives will help the center. Having the center in a location with an international airport and the amenities of a larger community will also help it in its operations and to attract staff, she said.

Duncan said after the meeting that the center has a network of seven technical assistants in the field who can provide assistance in the regions they operate from. That helps the center provide assistance through the state, he said.

The network of technical assistants was put in place while the center was in Havre.

Owen, chairman of the center's board and a director of the cooperative CHS Inc., closed the meeting to the public after beginning the afternoon session about 45 minutes ahead of the 1 p.m. time listed on the agenda.

A Havre Daily News reporter tried unsucessfully three times to be admitted to the meeting.

Scott Morrison, the board's treasurer, told the reporter the center is a private nonprofit organization and is not bound by open meeting laws.

The meeting was opened a short while later after Jergeson moved to open the discussion to the public.

Owen declined to comment about why he closed the meeting.

John Shontz, the lead attorney for the media-funded Montana Freedom of Information Hotline, said Montana law is very clear.

"If they're getting public funding, they have to be open to the public and honor Montana's public right-to-know law," he said.

Before the board of an organization that receives public funding can close a meeting, its chair must publicly apply a very specific test and show that an individual's right to privacy about issues in the meeting outweigh the public's right to know.

"There are legal tests that have to be applied so it's not subjective," Shontz said. "That needs to be done on the public record."

Members of the public who had been at the meeting when Owen closed it said the reason for closing it was not made clear.

One of them was state Rep. John Musgrove, D-Havre. He said the audience was told the center's bylaws allowed the closure.

"I felt it was a little unusual," he said.

Shontz said he will write a letter to Duncan to make sure the center's staff and directors know its procedures are subject to Montana's open-meeting laws.


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