Staff received a signed petition from the developer of Eagles Crossing Phase I Addition requesting the installation of twenty-one (21) 150 watt HPS street lighting units on 20 foot steel poles with underground wiring.

Staff mailed letters regarding the City's intention to create the special improvement lighting district along with a copy of the legal notice and a description of the protest procedures, to each property owner in the proposed district. During the 15-day protest period, the City received one valid protest which represented one parcel or one percent of the amount of the assessment to be levied against the parcels.

The special assessment for the installation cost shall be payable over a term not to exceed 15 years. The estimated annual special improvement assessment (inclusive of capital, financing, operations and maintenance costs) would be $141.51 for an average lot of 14,070 square feet. The property owners have the right to prepay the assessment. After the payment of construction costs are satisfied, the on-going estimated annual maintenance assessment was anticipated to be $60.66 for an average lot of 14,070 square feet for energy, transmission, distribution.

Mayor Gray declared the public hearing open. No one appeared to speak in support of or opposition to Resolution 9525. Mayor Gray closed the public hearing.

Commissioner Jovick-Kuntz moved, seconded by Commissioners Beecher and Hinz, that the City Commission adopt Resolution 9525.

Motion carried 5-0.

Adoption of Resolution 9528 would approve an amendment to the Inter-local Agreement with the cities of Missoula, Helena, Bozeman and the city/county government of Butte-SilverBow which created the Montana Public Power Authority. The purpose of the amendment was to authorize the City to invest an additional $100,000 into the Montana Public Power Authority which would assist MPPI in due diligence and other expenses related to the acquisition of NorthWestern Corp., should NorthWestern, Corp. agree to the due diligence phase.

The Amendment also acknowledged that the City, along with each of the other four cities, may assume a $100,000 obligation to NorthWestern Corp. in the event NorthWestern terminates the purchase agreement on the grounds that MPPI committed a willful breach of any representation, warranty, covenant or agreement that remained uncured for 30 days. This was known as a Reverse Breakup Fee.

Commissioner Hinz moved, seconded by Commissioners Beecher and Rosenbaum, that the City Commission adopt Resolution 9528 amending the Inter-local Agreement which created Montana Public Power by authorizing up to $100,000 of additional funding to be used upon reaching an agreement with NorthWestern to enter into a due diligence phase.

Mayor Gray asked if anyone in the audience wanted to address the Commission.

Pat Corcoran, vice president of governmental and regulatory affairs for NorthWestern, said that MPPI asserted that NorthWestern was not doing a number of things that ultimately affected their ability to provide reliable power to its customers. His reply to this assertion was that NorthWestern was indeed providing reliable power. In fact, he said that NorthWestern was a leading utility for reliability according to industry standards. He added that NorthWestern was emerging out of bankruptcy as a financially strong utility company. He asserted that MPPI was asking Montanans to venture down an experimental path of public power. He suggested that MPPI host public meetings regarding the proposed purchase of NorthWestern. Mr. Corcoran asked the Commission to consider the following questions before acting on the Resolution. "Why was the purchase necessary?" "Did the State need another round of turmoil with this utility company?" "Where was the detailed business plan MPPI alluded to having? "Where was the legal analysis?" "When is the public going to get involved?" "When was the Public Service Commission going to get involved?" In conclusion, Mr. Corcoran stated that NorthWestern was exploring the possibility of building transmission lines to other markets.

Mary Jolley, 1910 2nd Avenue North, explained that she was skittish about the intent of this resolution versus what the resolution and motion actually said. She asked Staff to ensure that the intent was to provide $100,000 only if MPPI entered into the due diligence phase and that the documents specified that.

Missoula Mayor Mike Kadas, chairman of MPP, said that Mr. Corcoran was trying to portray the public power utility as an experiment that would lead to more uncertainty in the electric utility. He replied that NorthWestern and it predecessor Montana Power Co.-Touch America, caused a lot of turmoil through speculative ventures that bankrupted each and eroded any reliability or stability of electricity. He emphasized that the goal of MPP was to get power to customers and not to meet the demands of shareholders. He stated that NorthWestern's shareholders were still talking with MPP while Northwestern's management was not willing to sit at the table.

Sally Tucker, 2905 8th Avenue South, read a letter of opposition to the resolution. In the letter she stated that running a power utility was not a function of city government.

Tom Alfrey, Chamber of Commerce, stated that the Great Falls Chamber was working with the State Chamber of Commerce to host a series forums in each of the five cities that joined together to develop Montana Public Power.

Mike Whitsoe, 510 11th Street South, stated he was opposed to the public buyout of NorthWestern Energy.

Dennis Druffle, 2621 S. Higgins, Missoula, Montana, explained that the Missoula Council had a tie vote when they considered this same request from Montana Public Power and it was Mayor Kadas who broke the tie in favor of the additional funding. He reminded the Commission that the concept from the beginning was to save ratepayers money. However, he cautioned, the purchase was going to cost a substantial amount of money before ratepayers would ever see any savings.

Mayor Gray asked for Commission discussion. Commissioner Hinz asked Mayor Kadas to explain the governance of MPP and what it might look like in the future. Mr. Kadas replied stating that currently the governance included representatives from each of the partner cities. However, should they purchase NorthWestern, the board would be expanded to allow representation from its service districts although the exact details of how it would be expanded had not been decided.

Commissioner Beecher stated he wanted to make four points. The first was during the work session Mr. Corcoran stated that NorthWestern had an agreement with the Public Service Commission whereby NorthWestern agreed not to pursue business opportunities in the unregulated part of the utility business. Commissioner Beecher pointed out that this agreement did not prevent the company or owners of NorthWestern from getting back into unregulated business at some future date.

Secondly, after reading the Liberty Consulting Report, he was concerned about the amount of funding NorthWestern budgeted for capital improvements. He stated that the capital improvement budget had declined from $90 million in 1996 to $45 million. And, while NorthWestern budgeted $75 million in 2006, it was still less than what MPP had proposed. He said that the amount of capital improvements had a direct correlation to the company's reliability which was why he supported the proposal from MPP.

Third, he stated that a public power company was not an experiment and that there are over 2200 public power companies in the United States and some of them had been in business for over 100 years.

Finally, Commissioner Beecher stated that underwriting the risk for the public utility would be done by investment bankers, not the cities who partnered in this venture. He stated that the proposal must be attractive to investors and that it was the underwriters, the banks, that would be completing a thorough due diligence on this proposal, and if they weren't satisfied, the purchase would not be completed.

Commissioner Rosenbaum stated that the purpose for the proposed purchase of NorthWestern by MPP was to ensure stability in the electric utility rather than turmoil. He added that if MPP doesn't buy the company, some other entity would. He concurred with Commissioner Beecher's comments regarding reliability of service and prices to electric utility customers. He said that was the primary reason MPP formed was to address that issue.

Commissioner Jovick-Kuntz asked how long MPP would negotiate for the purchase of NorthWestern given the fact that the company has declined MPP's offer. Mike Kadas replied that it may take longer than initially thought.

Mayor Gray stated that he supported the motion and added that while the Commission had not hosted a meeting specifically to hear public comment on the purchase of NorthWestern, there had been many public meetings in which it was discussed and afforded the public an opportunity to attend. He disagreed with Ms. Tucker's comment that municipalities should not be in the electric utility business. He said that the primary business of municipalities was to provide utilities to the public. He also stated that if the purchase were to go through, it would be funded by revenue bonds which were not backed with tax dollars. He emphasized that the reason why the City was considering this idea was because NorthWestern reneged on its contract to the cities in Montana which ultimately cost Great Falls taxpayers an additional $1 million in energy bills. He clarified that the motivation for this purchase attempt was not revenge; it was to establish a reliable, stable electric utility. He said that the people who use the electric utility should be the ones who owned it.

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

On November 1, 2005, the City Commission adopted Ordinance 2925 which restructured Electric City Power as a non-profit organization. The Official Codes of the City Great Falls (OCCGF) 5.20.040 states that the City Commission shall approve the articles of incorporation and the bylaws by resolution. Resolutions 9529 and 9530 were submitted to the Commission.

The Articles of Incorporation specify that the only member of the corporation was the City of Great Falls and that the corporation was organized for the transaction of any lawful activity as provided by the Nonprofit Corporation Act. The Articles also stated that the Corporation shall not issue or incur bonds, notes or indebtedness without permission from the City Commission. Additionally, the Non-profit Corporation could not obligate the faith and credit of the City.

Highlights of the By-Laws included the structure of the Board of Directors which would consist of five directors appointed by the City Commission. The term of office for each of the Directors shall be staggered 6 year terms. Offices such as chairman, vice-chairman and secretary were determined and described. Additionally, the By-Laws specified that all meetings were subject to the open meeting law and that records shall be maintained and were public.

The Board cannot change either the Articles of Incorporation or By-laws. Any changes or amendments to these documents must be done by adoption of an amendment resolution by the City Commission.

Commissioner Jovick-Kuntz moved, seconded by Commissioners Beecher and Rosenbaum that the City Commission adopt Resolution 9529.

Motion carried 5-0.

Commissioner Jovick-Kuntz moved, seconded by Commissioners Beecher and Rosenbaum, that the City Commission adopt Resolution 9530.

Motion carried 5-0.

Resolution 9532 would lend support to a combined Great Falls/Helena grassroots effort to acquire and protect the 95-mile Great Falls to Helena rail corridor. There was interest to possibly convert the corridor into a non-motorized trail, as a means of creating new and exciting recreational, tourism and economic development opportunities. The proposed trail has been informally dubbed the "Corridor of Discovery Trail."

The rail line has been owned and operated by several companies during the past 120 years, with the current operator being the Burlington Northern & Santa Fe Railway. In 2000, a portion of the rail line near Ulm was taken out of service because the rail bed and riverbank became unstable and slid into the Missouri River. The line remains severed and un-repaired.

For many years, community leaders, grain producers, rail shippers and other interested parties have expressed concern with the lack of rail competition in Montana. They advocate that statewide competitive railroad operations, by more than one rail provider, was a means of securing competitive shipping rates. As such, these individuals and groups continued to urge the reestablishment of the Great Falls to Helena rail line as a means of strengthening the marketability of products produced in this area.

The combined Great Falls/Helena grassroots group interested in acquiring and protecting the 95-mile rail corridor have been sincere in stating that their foremost interest and preference was for the rail line to be reestablished as an active, useful and productive carrier of commerce. However, they also wondered whether any other entity was interested in acquiring, repairing and operating the rail line, and if there was, whether BNSF would be interested in relinquishing its ownership to a competing railroad. Additionally, they feared that if BNSF formally abandoned the rail line and no other legitimate entity acquired it, the rail corridor could likely be fragmented into many ownerships, making it difficult if not impossible, to reassemble the corridor into a functioning railroad, if future economic conditions warranted. Thus, the group was interested in protecting the corridor in its entirety, possibly through a process called rail banking.

The group also recognized that adjoining landowners may have concerns with the possible conversion of the rail line to a public trail. The concerns focused on the possible spread of noxious weeds, the provision and availability of law enforcement, and safety of trail users and interference with the use of their property. The group intended to work with landowners, appropriate state and local governmental agencies and elected officials to avoid, address and mitigate identified impacts and concerns.

Commissioner Hinz moved, seconded by Commissioner Jovick-Kuntz, that the City Commission adopt Resolution 9532.

Lochiel Edwards, representative of the Montana Grain Growers, expressed concern with the resolution because it could negatively impact the grain grower's attempts at getting the rail corridor repaired. He stated that if BNSF knew there was a group wanting to develop a recreational trail, they may opt to do that rather than reinstate the rail line which provided service for grain growers in the golden triangle area.

Doug Wicks, Recreational Trails, Inc., reminded the Commission that the first priority for the rail corridor was to reestablish train service. However, if BNSF was not willing to do that, then the next priority was to keep the corridor in tact.

Mike Whitsoe stated that the rights of the property owners needed to be considered.

Bruce Pollington, 3217 8th Avenue South, and Gary Trescott, 820 2nd Avenue SW, spoke in support of the resolution.

Commissioner Beecher stated that the rights of the property owners needed to be protected.

Mayor Gray stated that the priorities were quite clear in the resolution that the first priority was to re-establish rail service on that corridor.

Motion carried 5-0.

Commissioner Beecher moved, seconded by Commissioners Hinz and Jovick-Kuntz, that the City Commission approve the Consent Agenda as printed.

Motion carried 5-0

Terms for three Great Falls Planning Advisory Board members expire December 31, 2005. Staff recommended reappointment of all three members.

Commissioner Jovick-Kuntz moved, seconded by Commissioner Beecher, that the City Commission reappoint Bill Bronson, Greg Madson and Art Bundtrock to the Great Falls Planning Advisory Board for three-year terms through December 31, 2008.

Motion carried 5-0.

On October 15, 2002, Kathleen Jensen was appointed the Board of Adjustment/Appeals for a three-year term through September 30, 2005. She was eligible for and interested in serving another three-year term. The term of Edward Venetz also expired on September 30, 2005. Mr. Venetz served two three-year terms and, therefore, was not eligible for reappointment. It was necessary to appoint one new member to fill this position.

Commissioner Hinz stated the International Building Code and the International Mechanical Code required the Board of Adjustment to include a registered design professional with structural engineering or architectural experience and only one of the applicants met this requirement. Therefore, Commissioner Hinz moved, seconded by Commissioners Jovick-Kuntz and Rosenbaum, that the City Commission reappoint Kathleen Jensen and appoint Anthony D. Houtz to the Board of Adjustment/Appeals for three-year terms expiring September 30, 2008.

Motion carried 5-0