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Commission Memorandum
REPORT TO: Honorable Mayor and Commission Members
FROM: Chris Kukulski, City Manager
Greg Sullivan, City Attorney
SUBJECT: Agreement with NorthWestern Energy to Use Blast Loan Funds for
Impact Fee Mitigation.
MEETING DATE: November 16, 2009.
AGENDA TYPE: Consent.
RECOMMENDATION: Authorize City Manager to Terminate Original Agreement with
NorthWestern Energy for Use of Blast Clean Up Funds and Enter into New Agreement
with NorthWestern Energy for the Downtown Bozeman Blast Impact Fee Mitigation Fund.
BACKGROUND: The City of Bozeman entered into an agreement with NorthWestern Energy
(NWE) in May 2009 wherein NWE agreed under certain terms and conditions to provide $50,000 to
the Bozeman Downtown Recovery Fund to assist in the recovery of businesses affected by the
explosion and fire that occurred in downtown Bozeman on March 5, 2009. Now the parties desire to
terminate the May 2009 agreement and enter into a new agreement regarding the use of any
remaining funds from the original $50,000 to provide grants for mitigation of payments of the City of
Bozeman impact fees for the affected property owners.
This Agreement before the Commission will do two things. First, it will terminate the Agreement
entered into in May, 2009 for use of $50,000 to assist property owners in debris removal. Those
monies were never used by the affected property owners. Second, this Agreement will create a new
fund to be known as the Impact Fee Mitigation Fund. The original $50,000 will be transferred to this
new fund and monies used to offset impact fees owed by those desiring to rebuild.
Important in this process is the clause in the Agreement that grants the City exclusive authority to
determine how to use this money and that NorthWestern Energy will not be reimbursed: “The City
may grant all or part of the Impact Fee Mitigation Fund to Affected Owners or an entity agreeing to
process the funds on behalf of the Affected Owners as determined exclusively by the City. The
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parties agree that money will not be returned to the fund and the granted monies are not considered a
loan to any Affected Owner.”
FISCAL EFFECTS: None at this time. The City may have limited administrative expenses
related to allocating the funds to affected owners.
ALTERNATIVES: As suggested by the City Commission.
ATTACHMENTS:
1. Bozeman Downtown Recovery Fund Impact Fee Mitigation Agreement
Report compiled on: November 9, 2009
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BOZEMAN DOWNTOWN RECOVERY FUND
IMPACT FEE MITIGATION FUND AGREEMENT
The City of Bozeman, Montana (the “City”) entered into an agreement with
NorthWestern Corporation d/b/a Northwestern Energy (NWE) in May 2009 wherein NWE
agreed under certain terms and conditions to provide $50,000 to the Bozeman Downtown
Recovery Fund (the “Original Fund”) to assist in the recovery of businesses affected by the explosion and fire that occurred in downtown Bozeman on March 5, 2009. Now the parties
desire to terminate the May 2009 agreement and enter into a new agreement regarding the use of
any remaining funds from the original $50,000 to provide grants for mitigation of payments of
the City of Bozeman impact fees for the affected property owners (the “Affected Owners”).
NWE hereby specifically agrees that any funds remaining from the $50,000 it contributed in May 2009 which were allocated to the Original Fund (the “remaining Funding Amount”) may
be reallocated to the City of Bozeman Downtown Impact Fee Mitigation Fund (the “Impact Fee
Mitigation Fund”).
The City may grant all or part of the Impact Fee Mitigation Fund to Affected Owners or
an entity agreeing to process the funds on behalf of the Affected Owners as determined exclusively by the City. The parties agree that money will not be returned to the fund and the
granted monies are not considered a loan to any Affected Owner.
NWE may treat the grant as a donation to the Impact Fee Mitigation Fund or otherwise as
NWE may deem appropriate, provided, however, that NWE will not have any further recourse
against the Impact Fee Mitigation Fund or the City with respect to the original $50,000 contribution if the City otherwise complies with its obligations under this Impact Fee Mitigation
Fund Agreement.
NWE is agreeing to the reallocation of funds from the Original Fund to the Impact Fee
Mitigation Fund as a gesture of good will to assist the City in its efforts to address concerns in
the Bozeman downtown district in regard to recovery from the effects of the March 5, 2009, events. Entering into this Impact Fee Mitigation Fund Agreement, providing any Funding
Amount, agreeing to any reallocation of the remaining balance of the Funding Amount, or
otherwise taking any actions in regard thereto is not and shall not be deemed an admission of any
fault or liability on the part of the Funding Participant with respect to the March 5, 2009, events
or otherwise, which fault and liability are expressly denied by the Funding Participant.
The City and NWE agree to terminate the May 2009 agreement relating to the Original
Fund.
This Impact Fee Mitigation Fund Agreement is entered into by the City and NWE as of
the date set forth below.
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1360026.2 Impact Fee Mitigation Fund Agreement Page | 2
City:
CITY OF BOZEMAN, MONTANA
By: _______________________________
Chris Kukulski, City Manager
APPROVED AS TO FORM:
_______________________________
Greg Sullivan, City Attorney
NORTHWESTERN CORPORATION d/b/a
NORTHWESTERN ENERGY
By: _______________________________
Name: _______________________________
Title: _______________________________
Reallocation Amount: $_____________
Date: _______________________________
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