Fiscal Services Director Coleen Balzarini reported that Ordinance 2925 would provide for the creation and organization of a non-profit corporation to be known as "Electric City Power, Inc." which would own, operate and take all other actions necessary or desirable in connection with the municipal electric utility of the City, including the provision of electricity supply services to consumers and others located within or outside of the City.

The non-profit corporation would secure and provide reliable, long-term supplies of electricity to the City, its residents and electric consumers. The proposed ordinance identified and defined the duties and obligations conveyed to the non-profit Board as well as the duties and obligations retained by the City Commission. It included items such as the purpose, powers, rules of operation, and tax-exempt obligations of the non-profit corporation and its board.

The ordinance was written to ensure that ultimate authority for ratemaking and the appointment and removal of governing board members remained with the elected City Commission.

Creation of the non-profit corporation would enable the City Commission to establish a board of directors comprised of individuals with the expertise deemed valuable to the successful operations of Electric City Power. It would also enable Electric City Power to develop a comprehensive financing package which may include a negotiated revenue bond component. The amended ordinance would continue the current Electric City Power operations including the purchase of electricity in wholesale markets and the distribution of that electricity to serve its own needs, the needs of other governmental users, large commercial users, and to small commercial and residential customers at some time in the future, when the appropriate licenses are in place to do so.

Mayor Gray declared the public hearing open. Those addressing the Commission pertaining to Ordinance 2925 were:

Stewart Lewin, 615 3rd Avenue North, stated he believed the ordinance was inadequate because there had yet to be a public debate on the issue of building a coal-fired plant east of Great Falls and because of this, he added, there was a great chance that a mistake was being made. Mr. Lewin said that the promoters for the plant say that coal is inexpensive. However, Mr. Lewin was aware that the federal government was planning on implementing new CO2 (carbon dioxide) emission standards which would drive the cost of energy produced from coal thereby not making it a cost effective energy source. He also stated that before the Commission adopted this ordinance creating a body that could sell bonds for this plant, the Commission needed to determine what the baseline mercury levels were in this area.

Ronda Carpenter-Wiggins, 3208 2nd Avenue South, explained that she was not sure if she supported this ordinance or not, but was confident that everyone wanted to supply Montanans with a safe, reliable power source. However, she stated, when the legislature considered deregulation of utilities, they did not take the time to ask a lot of questions prior to making their decision. She asked the Commission to take the time necessary to ask questions and she described some of the issues she was concerned about.

• The level of investment the City would be making for the purchase of Northwestern Energy seemed high to Ms. Wiggins. She explained that it appeared the City still needed to generate $57 million more in revenue to meet the proposed debt service. She added that, according to the MPPI information released by the City, the City would have $102 million more in interest payments than Northwestern did. However, since the City (MPPI) would not have to pay dividends or pay $10 million in bonus pay to the CEO, this brought the increase in the interest payments to $57 million.
• Citigroup, the company that stepped forward to help finance the purchase of Northwestern, had financial interests in Northwestern Energy and was a principal promoter of deregulation a few years ago which may be a conflict of interest.
• Because a municipal utility does not pay property tax she was concerned the largest tax payer in Montana (Northwestern Energy) would be removed from the tax base once the municipality purchased the company.
• Since the ultimate goal was to provide a stable and reliable supply of power, the City Commission should ask to see all the contracts that guaranteed an uninterrupted supply of energy.

Ms. Wiggins concluded stating that she supported the coal plant and believed it was a great project. However, she was not certain that tax dollars should fund its construction and operation. She asked the Commission to consider the fact that lawsuits would be filed which could ultimately increase the cost of power and that the Department of Environmental Quality could impose severe mercury standards which could cripple if not eliminate any chances of building and operating the proposed plant. Additionally, the mercury standards could become a ballot issue. And with the initiative laws, the City could not campaign on the issue. Ms. Wiggins asked the Commission to ask the questions before they committed additional tax dollars to the energy project.

Paul Zalick, 601 2nd Avenue North, stated he opposed the ordinance.

John Stevens, 1315 7th Street South #32, stated he remembered the coal furnace that was in his home when he was younger and wondered how the mercury that was emitted had impacted him. He added that he supported the plant and that it could go in his back yard.

Clayton M. Braden, 2708 4th Avenue NW, asked if four other cities were involved in the construction of the power plant. City Manager John Lawton explained that the partners in the construction of the power plant were not cities but were rural electric co-ops. Mr. Lawton further explained that the ordinance before the Commission was to restructure the Electric City Power company the Commission created about 18 months prior. Electric City Power would be wholly owned by the City and would handle all the transactions required for a power company which, at this point in time, was supplying power for City operations and for several large electricity users in the City.

There being no one further to address the Commission, Mayor Gray closed the public hearing.

Commissioner Rosenbaum moved, seconded by Commissioner Beecher, that the City Commission adopt Ordinance 2925 as amended and depicted in Exhibit A on final reading.

Commissioner Hinz stated that there was a lot of misunderstanding between the purchase of Northwestern Energy and the ordinance before the Commission. Mr. Lawton concurred and clarified that the ordinance before the Commission was to restructure Electric City Power Inc. Mayor Gray added that the ordinance would establish, without question, a public power entity.

Commissioner Beecher addressed Ms. Wiggins concern about using tax dollars for the construction of the coal plant. He explained that the funding for the plant would be through revenue bonds and that tax dollars would not be used for its construction. He added that due diligence would be conducted by bankers and purchasers of the bonds.

City Manager Lawton invited Ms. Wiggins and anyone else to visit with him about these issues.

Commissioner Hinz asked if the non-profit entity the ordinance created would remove the decision making authority from the City Commission. Mr. Lawton stated that the Commission would retain the basic powers which included setting rates and selling bonds for the electric utility. The non-profit board would make recommendations to the Commission and would not have independent authorities.

There being no further discussion, Mayor Gray called for the vote. The motion carried 5-0.

Community Development Director Mike Rattray reported that the owner of the property located at 3317 3rd Avenue North (Lot 10, Block 20, Boston and Great Falls Addition) was issued a notice to appear before the City Commission to show cause why he should not be held liable for the costs incurred in razing a structure and clean-up of the property which totaled $2,862.

Mayor Gray declared the public hearing open. No one appeared to speak in support of or opposition to Resolution 9522. Mayor Gray closed the public hearing.

Commissioner Beecher moved, seconded by Commissioner Jovick-Kuntz, that the City Commission adopt Resolution 9522.

Motion carried 5-0.

Community Development Director Mike Rattray reported that Mr. William Conklin was hired by the City to prepare a fact finding report and present the City Commission with a recommendation relative to the Joanne Dressler zoning violation that came about from staff providing inaccurate zoning information. He added that staff concurred with the facts presented and supported Mr. Conklin's recommendation for resolution of this matter.

Mr. Conklin then reviewed the report which included a chronological description of what had taken place to date as well as recommendations to remedy the situation. Mr. Conklin suggested the Commission accept his first recommendation which was the City assume the expense of placing the home on the required permanent foundation and process the necessary dimensional variance that would bring the unit in compliance with the requirements contained in the recently adopted Land Development Code.

Mr. Conklin opined that legal precedents involving the doctrine of equitable estoppel would prevent the City from enforcing the original zoning code by forcing the removal of the home.

Commissioner Jovick-Kuntz moved, seconded by Commissioner Beecher, that the City Commission approve the recommendation presented in the William Conklin report dated October 27, 2005, and authorize staff to implement the recommendation as soon as possible.

Mr. Edward Evalt, 516 4th Avenue SW, stated that this solution was not fair and equitable. Mr. Evalt stated that in 1999 he razed a house on the northwest side and when he asked the City if he could place a mobile home on the lot. The City would not allow it because of zoning regulations. He added that there was an issue with the fence the ladies at 514 4th Avenue SW installed because it was encroaching onto his property and creating a maintenance problem because of the gap between a privacy fence and the fence they installed. Community Development Director Rattray stated that the issues Mr. Evalt had were not related to the issue before the Commission.

Clay Braden, 2708 4th Avenue NW, asked if the City was going to pay to have the foundation put in and if the axles of the mobile home were going to be removed. Mayor Gray stated that if the Commission approved this motion then the City would be installing the foundation. He did not know if the axles would be removed.

Motion carried 5-0.

Acting Park and Recreation Director Patty Rearden reported that Resolution 9526 would set fees for the Recreation Center Indoor Driving Range at $5 per half hour and $40 for a ten time punch card (1/2 hour per session). She added that staff planned to implement the new program providing an indoor driving range at the Recreation Center which would be available beginning November 2, 2005, and would remain open until approximately March 31, 2006, depending on weather.

Commissioner Hinz moved, seconded by Commissioners Beecher and Rosenbaum, that the City Commission adopt Resolution 9526.

Motion carried 5-0.

Fiscal Services Director Coleen Balzarini reported that the Montana Board of Investments agreed to loan the City up to $56,000 for the installation costs of twenty-one (21) city-owned residential street lights in Eagles Crossing Phase I Addition. The loan has a variable interest rate that changes annually in February and the current interest rate was 3.80 percent. The term of the loan would be 10 years.

Staff received a signed petition from the developer of Eagles Crossing Phase I Addition requesting twenty-one (21) 150 watt HPS street lighting units on 20 foot steel poles with underground wiring, be installed which meet the requirements set forth in the policy for new street light districts.

Commissioner Beecher moved, seconded by Commissioner Rosenbaum, that the City Commission adopt Resolution 9527 and authorize the City Manager to execute the loan documents.

Motion carried 5-0.

Commissioner Hinz stated the letter of support for the Boys and Girls Club Center was well written and very general. However, she understood Neighborhood Council 9 did not support the project because of flooding and parking issues. Assistant City Manager Patton explained that this project was still in its preliminary stages. She added that the letter could assist with their fundraising efforts but did not commit the Commission beyond the conception stage of the project. As the club secured financing their plans would become more definitive, the City Commission would have further review and approvals.

Commissioner Beecher moved, seconded by Commissioner Rosenbaum, that the City Commission approve the Consent Agenda as printed.

Motion carried 5-0

Park Supervisor Giles Salyer reported that playground structures at North Kiwanis, West Kiwanis, Multi-Sports and Bloomingdale Parks would be removed in the near future because they had deteriorated to poor and dangerous conditions. He added that staff would seek funding to purchase replacement structures.

Herb Sobeczek, 121 11th Street, Black Eagle, said that he was disappointed in the 11th Street NE sewer line project. He added that issues he had noted in the past still had not been addressed. Public Works Director Jim Rearden stated he would contact Mr. Sobeczek to look at the issues and address his concerns.

Jane Whitsoe, 510 11th Street South, explained that when she voted in the primary she apparently filled out her ballot incorrectly because of the change made in the number of candidates voters were allowed to select. She also stated that the video tape quality of a work session pertaining to the coal fired plant was poorly done. Finally, she asked if Senator Burns was required to obtain a special permit to campaign in the Civic Center.

Mike Whitsoe, 510 11th Street South, reminded everyone to vote in the General Election on November 8, 2005.