Libby, Cabinet View Golf Club Still at Odds Over Loan Payments

By Beacon Staff

A disagreement between Libby and the Cabinet View Golf Club about who should pay for the installation of a sewer system has continued into the new year. Now the city wants the negotiations to start over because a 2007 plat agreement was never formalized.

Libby Mayor Doug Roll said the city doesn’t want to burden taxpayers with the cost of the sewer system, which would connect the new development to the city system. But golf club board chairman Dann Rohrer said there was never an agreement stating the club would pay for the extension, only the $1.5 million loan. He said the city’s desire to rewrite a 2007 plat agreement is just another effort to cover up its own mistake.

“The city continues to pull rabbits out of their hat and I don’t care what anyone says, that’s what they are doing,” Rohrer said.

In November 2004, the golf course, then known as the Cabinet View Country Club, applied for and received a $1.5 million loan from a federal economic development grant fund managed by the city of Libby. The loan was meant to extend the golf course by nine holes and develop housing around that expansion. The loan, signed Nov. 18, 2004, was to be repaid with proceeds from the sales of each subdivision lot. Payments, according to the loan agreement, were to commence no later than Jan. 1, 2010 or due no later than the closing of a sale on any lot in the development.

Because no lot in the development has been sold, Rohrer said the golf course is not yet responsible to begin payments. He also said that no lot will be sold until the club gets a plat extension, something that is now held up because of terms the city added in 2007, which required the club to pay $581,085 to cover the cost of the city sewer extension. Rohrer said this was not part of the original 2004 agreement and that the golf club was not told about the additional costs until last year. Roll said the condition was added on later and the golf club should have been informed by the Lincoln County Planning Department of the changes. Either way, he expects the city to be paid back in full.

“They didn’t know about our demands and we didn’t know that they didn’t know,” Roll said.

Because the letter expressing the city’s additional conditions was never formalized or sent to the golf club, Roll said the city now wants to rewrite the 2007 plat agreement and restart the process from that point. The plan was recommended by City Attorney James D. Reintsma, who wrote in a memo to the city that a 2002 Montana Supreme Court decision provides precedent for the city to reissue the plat agreement. Roll said no changes would be made to the conditions, only further explanation of why the conditions were added. The city expects to issue the rewritten plat agreement in the coming weeks.

At a Jan. 17 city council meeting, Rohrer said the golf club rejects the additional conditions and the 2004 contract will “stand the test of time.” Rohrer said the problems between the two parties are the fault of the city, not the club. He added that the club helped the city cut costs by putting part of the sewer system underneath a section of the golf course and building a pump station on the club’s property – a move Rohrer now says he regrets. He also said since the sewer extension benefited other homes in the area, the club shouldn’t be stuck with the bill.

The one thing both Roll and Rohrer still do agree on is that they would rather solve this issue outside of a courtroom.

“The probable outcome will be us sitting down and negotiating,” Roll said.

“They still want to work it out and we’re still very much interested in that,” Rohrer said.