Mayor Jordan Hess We can move on to our two public hearings. State law and our own Council rule set guidelines for inviting community comment in a formal way on certain issues. We'll have a staff report on each item and then we'll invite community comment. Both of these items, we typically hold our, our public hearings open for a week, but both of these have timing constraints and so these will be taken care of tonight. Our first public hearing is a resolution regarding proposed creation of a Missoula local government building special district and I'll turn it over to Mr. Adams for a staff report.
John Adams Thank you very much. My name is John Adams. I’m City Strategic Projects Administrator and also on the line today, I believe, is Ryan Sudbury the Senior Deputy City Attorney. He has quite a bit of knowledge about this process as well. I'm going to share my screen. So, to recap where we are in the Federal Building. I'm hoping you're seeing a cover slide.
Mayor Jordan Hess Yes, we are.
John Adams The City of Missoula and Missoula County have been working together for several years to jointly obtain the Federal Building located at 200 East Broadway. We will receive the building from the federal government at no cost and in return, we will be bound to preserve the historic character of the building in perpetuity. After acquisition, the City and County will rehabilitate the building and make it into the administrative and public services hub of the two entities. The U.S General Services Administration, GSA, interprets the statute establishing the historic Surplus property program under which we'll receive the building to require that a transfer ownership of the building to a single local government entity. So, we intend to create a joint special district under Montana Code Title 7, Chapter 11, Part 10. So, Special Districts created under this authority are discrete legal expressions of local government that depending on the authority delegated to them can implement programs, administer budgets, employee personnel, purchase property, etc. So, typically we see them deployed for a single particular need such as rehabilitation of the fairgrounds or for a discrete geographic, something that's a, it's a discrete geographic need like a local park, but instead, we're going to use it to create an ownership mechanism. The Missoula local government building special district, sorry it's such a mouthful, won't encompass any properties other than the 200 East Broadway property itself and won't be able to levy assessments on any property owners except itself. It's really just a way to create a single government entity that can catch the building. State law sets out a very specific process for creating a special district, which includes over the course of about three months, public hearing on creation of the special district, approval of a resolution of intention to create the special district, a second public hearing, approval of entering a local agreement between the entities creating the district that establishes how it will be governed, and approval of a resolution establishing the district. So, what Council has before today are to hold the first public hearing on the proposed district and to consider a resolution stating the city's intention to create the special district and to direct staff to take the necessary steps to notify landowners within the proposed special district, which is just the federal government and to otherwise promulgate the intended action through publication. The Board of County Commissioners will address the same matter tomorrow and if all goes well, both Council and board will hold another public hearing and make a final choice on the special district in December. I want to say a little bit more about the proposed interlocal agreement between the City and County which is included as an exhibit to the proposed resolution. The interlocal is basically a contract between City and County articulating how we'll make decisions about the special district. So, here are some highlights. The interlocal creates an administrative body consisting of the chief administrative officers of the City and the County barring a choice to do something different by either the board or the Council and, and the administrative body will make general decisions about the building such as approve contracts for operation or improvement of the building. The interlocal requires that the administrative body annually propose a building budget to submit to Council and the Board of County Commissioners for their respective consideration. Interlocal establishes that the city and county will pay ongoing costs for operating the building based on the square feet each entity is utilizing in the building with a default starting point of 50/50. The interlocal Lays out the process by which either the City or County could withdraw from the special district. The idea here is that the withdrawing party would be compensated for the value of improvements that it's contributed to the building, appropriately depreciated, but would not receive any compensation for the value of the building itself and that's partly because we're not paying anything for the building and partly because we wanted to provide a disincentive to withdraw while accepting the reality that a divorce could, could happen. The interlocal provides that if the City and the County are at loggerheads on something with respect to the building that neither the administrative body nor subsequently the Council and Board can resolve that the dispute would go to binding mediation. And the interlocal establishes the County as the Fiscal Agent for the special district with such costs, as that may incur, being included in the budget for the district annually. So, the Missoula local government building special district will own the Federal Building and the City and County will jointly manage the special district according to the inner local between them. The interlocal could be amended or improved from time to time with the agreement of both City Council and Board of County Commissioners, and that's, that's the story. I'm available for questions.
Mayor Jordan Hess Okay. Thank you Mr. Adams. We can, at this point, I'll open the public hearing. Would anyone like to comment on this item? Seeing none, I'll close the public hearing. Any, any questions from Council members? Ms. Becerra.
Alderperson Becerra Thank you. Joh, would dissolving the agreement for whatever reason require public a public process also?
John Adams What would be a decision and so for either entity to initiate dissolution would require an act by the governing body, so Board or City Council. So, it would require that public process. It would not require, I, my recollection of code, it would have to dissolve according to the Montana Code that establishes the…. well let's ask, if you don't mind, we might turn to Ryan and see if he recalls whether there is a special process for dissolution above and beyond a simple declaration by the governing body in Montana Code?
Ryan Sudbury Yeah thank you. I don't remember but I am going to venture to pull it up right now to make sure there is a provision in Part 10 of Chapter 11, Title 7 that talks about dissolution. I don't recall there being a public hearing requirement, but there is, the governing body does have to pass a resolution of intention to dissolve the special district. So, there is, there's sort of that happens and then there's notice of that. I mean, it's, this is, the process traditionally has and affects private property owners, so you want to give them notice of what's going to happen, how it's going to affect their private property, and there are, there is an opportunity to register protests and then there's a section on how to resolve debts and things like that but for the most part, it's, it's just an action, notice to action by the governing body through the resolution. It's kind of the opposite of this process, so we have to have a resolution that we're going to dissolve it, we post a notice of that, take in any protests that are registered, and then have a final decision after the protests are considered and then if dissolution moves forward then it initiates the process laid out in the interlocal agreement, which has some accounting elements involved to value the…. sort of take it take stock of the investments that were made, depreciate those appropriately in line with accounting principles, and then value the, the amount of money that the dissolving party, the withdrawing party, will need to be paid out and then there's a mechanism in the interlocal to pay that out over a term of years.
Mayor Jordan Hess Followup? Go ahead.
Alderperson Becerra Thanks for that. I, I guess what I'm trying to get at is that the public via this public hearing and, and previous meetings has had access to knowing about this. So, I, I would like to make sure that if for some reason the agreement has to be dissolved that there's enough public process for the public to be informed that that has come to a termination. And additionally, I think it would be important to know that if say for some reason the agreement is dissolved, as you mentioned, there's several clauses in there including you know the, the party that departs the, the agreement would be at a financial loss in essence because they would get a depreciated cost of investments and, and whatnot, but that to me implies that whoever is remaining takes over the entire…..you know is responsible for the entire building renewal, remodel, whatever and, and that requires public process. So, I know I'm trying, I'm trying to come up with many potential scenarios, but I just would hate for us to be in a situation where say the County steps out and then the City is holding the proverbial bag and you know the, the, I think that the community has a needs to have a chance to participate.
Mayor Jordan Hess Mr. Subury.
Ryan Sudbury Yeah I mean just to follow up with that right…. We did consider that in these discussions both, from both sides, the City and the County staff that were involved and so we, we tried to provide like John said a disincentive for this to occur. In the event that, let's say, in your example the County is decided to withdraw or dissolve this special district and the City would be looking at the possibility of holding the bag in the building, the City could make the decision to just itself also withdraw and then both parties would simply turn the building back over to the GSA. We could just kind of give it back. We may not want to do that if we've invested a significant amount of money, but in the event, in an example or a scenario where the City and the County took the building did you know a significant amount of investigation and engineering and architectural analysis, and decided it, it was going to just cost just an ungodly amount of money to rehab the building to make it usable for our purposes. We, we could all just decide to you know step back and give the building back to the GSA, dissolve that special district, and kind of be done with it. So, that, that possibility is out there as well.
Alderperson Becerra Thank you.
Mayor Jordan Hess Thank you. Ms. Vasecka.
Alderperson Vasecka Thanks. I had two questions. The first one is there was a concern from a constituent about the employee parking issue where all the employees are going to be parking because downtown parking is a kind of crowded at the moment. So, there's that question and then the other one is, is there a possibility to expand the special district to include adjacent or nearby property owners in the future without Council allowing it?
John Adams The, the answer to the second question is straightforward. Montana code sets out a process for expanding a district and it's essentially identical to the process for establishing a special district. So, if, if, if there were….. I mean it's hard for me to imagine what that reason would be to expand the district, but, but if you wanted to, you'd have to go through a process exactly like this in order to make that happen and both entities would have to sign on to that of course. With regard to the first question, we're going to have to do some planning around the streetscape to ensure that there's adequate, for example, handicapped parking and so on and so forth quick access parking to the Federal Building, but in general, we expect that like that we expect that just as we don't require downtown businesses to provide parking that we won't be providing parking for employees, that's counter to what we would hope for out of the downtown master plan and additionally, you know, we have a system right now where all the employees that would be moving to the Federal Building are required to park themselves or transit or walk or bike to the buildings that are only two blocks away. And so, there are inevitably going to be changes and concerns but in general our belief is that the situation works reasonably well now and worked reasonably well when there were 400 Forest Service employees there who also weren't provided parking and that it will work well again.
Alderperson Vasecka Thank you.
Mayor Jordan Hess Thank you. Jim Nugent, would you like to add anything? Jim, I see your hand is up I just wanted to see if you wanted to add anything.
Jim Nugent Sorry, I thought you had called off Stacie Anderson right away. I just wanted to note for some of the earlier questions that there is a state statute about dissolution of the special district and if someone was going to try and withdraw perhaps that could be utilized as a mechanism for someone withdrawing and then there'll only be one party to the special district. And that dissolution statute requires that there be a resolution of intention adopted by the governing body and then publish notice of the resolution of intention to dissolve. So, it might be easy to just follow that dissolution statute and provide the public the information that there was concern that they receive.
Mayor Jordan Hess Thank you. Any additional questions or comments? Okay seeing none, we can, we've had a public hearing, we can have a roll call vote.
Marty Rehbein We don’t have a motion yet.
Mayor Jordan Hess So Ms. Anderson I’ll go to you for a motion.
Alderperson Anderson One moment please, I’m popping between screens and of course it shut down at that exact moment. So, I would like to move that we adopt a resolution Adopt the resolution relating to the creation of a Missoula Local Government Building Special District and declaring it to be the intention of the City Council to create a special district to provide for the acquisition, ownership, improvement, maintenance, operation and administration of the Federal Building located at 200 East Broadway.
Mayor Jordan Hess Thank you. That motion is in order, and I'll go back for comment. I think I skipped over that a bit. Any, any Council discussion? Ms. Vasecka.
Alderperson Vasecka I’ve been really torn about this, oh gosh ever since it first came across our table because yes we do need the additional space, but we, yeah we're gonna acquire it with no additional cost to us, but it's going to cost over 40 million dollars to remodel. And at this time, I think that a lot of, a lot of Missoulians are really struggling and I don't think that we should spend our hard-earned tax dollars on this at the moment. Yes that means that we might lose it and we might have to find another property at the time, but I do think that we needed to postpone this project and I haven't had a lot of constituents reach out to me about this and don't really agree with it. And since I'm, I'm so torn about it, I'm going to, I'm going to err on the constituent sides that have reached out to me. So, I'm not going to be supporting this.
Mayor Jordan Hess Thank you. Anyone else care to comment tonight? Mr. Nugent.
Alderperson Mike Nugent Thank you Mr. Mayor. I will be supporting this. I think that if you just kind of compare it to a normal real estate acquisition, we're still very early in the process and there's a lot of due diligence and things like that and it sounds like there are allowable exits if, if those concerns or costs become too burdensome in the next few months. So, I agree with you that there's still a lot that we need to know and learn, but I think that we still have outs and I think we need to continue with the process of investigating it.
Mayor Jordan Hess Ms. West. Okay. Anyone else? Ms. Vasecka.
Alderperson Vasecka I wanted to thank you Mr. Nugent for saying that there are a lot of outs and I do agree with you that, that does make me feel a lot better about this because I'm assuming that it's gonna pass tonight. I just, I still personally can't support it, but I'm, I'm, I'm happy that we have some options in the future. So, thank you for pointing that out.
Mayor Jordan Hess Yeah it’s a great point and, and we have an asset in the form of our current city hall that has tremendous value of being a full block in downtown, which could provide some opportunities throughout this process and I think one of the things that's been compelling to me throughout this process is that the customer innovate the Federal Building and, and preserve a historic asset but also renovate it for our current needs is likely a lot cheaper than, than the alternatives. So, on balance, I think this is really a, a very exciting opportunity to preserve a piece of history and make a space for local government that is, that, that meets our needs and that there's lots of opportunities through things like our current city hall to provide us a little bit of flexibility and how that that process goes down. Anyone else tonight? Okay, we can have a roll call vote. Ms. Rehbein.
Mayor Jordan Hess Great thank you Ms. Rehbein, the motion passes.