HomeMy WebLinkAbout2020-01-31 Answer, Counterclaims & Affirmative Defenses Peter G. Scott
PETER G. SCOTT,LAW OFFICES,PLLC l�1RT
682 S. Ferguson Ave., Suite 4
Bozeman, MT 59718-6491 �C E�VETO!
Ph. (406) 585-3295 -I L-
Fx. (406) 585-3321 BAN 3 0 2020
Pena a,�voou law.00m GALLATIN
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Attorneys for The City ofBozeman
MONTANA EIGHTEENTH JUDICIAL DISTRICT COURT,GALLATIN COUNTY
GALLATIN COUNTY, MONTANA, Cause No.: DV-20-IOB
Plaintiff, ANSWER, COUNTERCLAIMS, AND
AFFIRMATIVE DEFENSES
V.
THE CITY OF BOZEMAN,
Defendant.
Defendant, The City of Bozeman (City), appearing by and through undersigned counsel,
provides this Answer, Counterclaims, and Affirmative Defenses.
ANSWER
Each numbered paragraph in the Answer corresponds to numbered allegations in Plaintiff's
Complaint. Any allegation in Plaintiff s Complaint that is not expressly admitted is denied. Rule
8(b)(3) M.R.Civ.P. See Grimsley v. Estate of Spencer (1983), 206 Mont. 184, 199, 670 P.2d 85,
93 (general denial has the effect of putting every material allegation in dispute). Any defense that
may be designated as a counterclaim, or any counterclaim as a defense, is incorporated as such by
this reference. Rule 8(c)(2) M.R.Civ.P.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES I I
NATURE OF ACTION
1. The City admits that Gallatin County ("County") owns the benefitted property within Special
Improvement District ("SID") 745 (the "Regional Park"). The City states affirmatively that
other property owners abutting the improvements financed by SID 745, or otherwise
benefitting therefrom,have paid a fair share of the costs of improving Oak Street and Ferguson
Avenue. The City admits that the County protested formation of SID 745. The City admits
the County's protest was found insufficient to bar creation of SID 745 based on the recorded
waiver of the County's right to protest creation of SID ("Waiver").
2. The City admits the allegations.
3. The City admits the allegations.
4. The City lacks information regarding the County's motivation or intent in suing the City and
therefore denies the allegations.
JURISDICTION AND VENUE
5. The City admits this court has jurisdiction to hear the County's complaint and the City's
counterclaims set forth below.
6. The City admits venue is proper in this court.
PARTIES
7. The City admits the allegations.
8. The City admits the allegations.
FACTS COMMON TO ALL CLAIMS
9. The City admits the allegations and states affirmatively that the Regional Park is located within
Gallatin County.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 12
10. The allegations are too vague for the City to answer and are therefore denied. The City states
affirmatively that the need for street improvements to support development of the Regional
Park were first identified by the City in the Baxter Meadows Annexation Agreement dated
October 19, 2001 (Annexation Agreement), which is recorded against title to the Regional
Park. The Annexation Agreement and Waiver require the County to pay a fair share of costs
for stated improvements either by SIDs or alternate financing methods. Improvements to
Ferguson Avenue were substantially completed on July 20,2017. Improvements to Oak Street
and Davis Road were substantially complete soon thereafter.
11. The City denies that SID 740 was the City's first attempt to obtain payment for the County's
share of improvements called for in the Annexation Agreement. The City denies the County's
remaining allegations to the extent they attempt to interpret or characterize referenced
documents, which speak for themselves. The City states affirmatively that City Commission
Resolution Nos. 4771 or 4772 do not identify and are not material to the County's assessed
share of costs for improvements determined in SID 745 to benefit the Regional Park.
12. The City denies the County's allegations to the extent they interpret or characterize referenced
documents, which speak for themselves. The City further denies the County's legal
conclusions based on uncited statutory requirements. The City admits that it did not solicit
bids for improvements it intended to finance under SID 740. The City states affirmatively,
that no such bids were required, and that SID 740 was dissolved and is not relied upon by the
City to assess the County its share of costs for improvements determined in SID 745 to benefit
the Regional Park. The City further states that the creation of SID 740, or any possible
assessments related to the creation of SID 740, are immaterial and not properly before the
court.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 13
13. The City admits that the County protested the creation of SID 740. The City states
affirmatively that said protest was in breach the Annexation Agreement and Waiver. The City
further admits that the County's protest of SID 740 was found invalid. The City states
affirmatively the County waived its right to protest the creation of SIDs used to finance
improvements described in the Annexation Agreement.
14. The City admits the County's suit against the City for creating SID 740 was dismissed. The
City states affirmatively that SID 740 was dissolved and denies that the allegations state
ultimate facts upon which relief prayed for in the County's complaint may be granted.
CLAIMS FOR RELIEF
COUNT 1: DECLARATORY RELIEF (Failure to seek bids)
15. The City's answers to allegations set forth in¶¶ 1-14 are fully incorporated by this reference.
16. It is unclear that any answer is required. To the extent any answer is required the allegations
are denied.
17. The City admits the allegations.
18. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
19. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 14
20. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
21. The City admits that it did not solicit bids to finance improvements to be financed by SID 745.
The City states affirmatively that SID 745 provides for construction or materials needed for
construction of any improvements. The City further states that advertising for bids was not
required for creation SID 745. § 7-12-4153, MCA.
22. The City denies the allegations. The City states affirmatively that its actions are consistent
with statute and the City's powers of self-government.
23. The City denies the allegations.The City states affirmatively that its actions are consistent with
statute and the City's powers of self-government.
24. The City denies the allegations. The City states affirmatively that its actions are consistent
with statute and the City's powers of self-government.
COUNT II: DECLARATORY RELIEF (Failure to provide
the County the opportunity to make the improvements at a reduced cost)
25. The City's answers to allegations set forth in¶¶ 1-24 are fully incorporated by this reference.
26. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 15
27. The City denies the allegations. The City states affirmatively that advertising for bids was not
required for creation of SID 745. § 7-12-4153, MCA. The City further states that its actions
are consistent with statute and the City's powers of self-government.
28. The City admits that SID 740 was dissolved. The City denies the remaining allegations. The
City states affirmatively that the creation of SID 740, or any possible assessments related to
the creation of SID 740, are immaterial and not properly before the court.
29. The City denies the allegations. The City states affirmatively the County cannot rely on § 7-
12-4147, MCA, because in a letter dated March 5, 2015, the County Administrator
affirmatively disavowed responsibility to make or pay for any of the improvements called for
in the Annexation Agreement. The City further states that the City has statutory authority to
make any corrections after the County challenged the validity of assessment authorized in SID
740. § 7-12-4186, MCA.
30. The City denies the allegations.
31. The City denies the allegations.
32. The City denies the allegations. The City states affirmatively that its actions are consistent
with statute and the City's powers of self-government.
COUNT III: DECLARATORY RELIEF
(Unlawful basis for creation of SID 745)
33. The City's answers to allegations set forth in¶¶ 1-32 are fully incorporated by this reference.
34. Pleadings cited in the County's complaint speak for themselves. The City denies that the
County's legal conclusions, or statements and interpretations of law constitute ultimate facts
upon which relief prayed for in the County's complaint may be granted. The City states
affirmatively that the County is a property owner and taxpayer and is obligated to pay SID 745
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 16
assessments based on the benefit of improvements to the County's real property,just like all
other property owners and taxpayers in the City.
35. The City admits that SID 740 was dissolved. The City denies the remaining allegations. The
City states affirmatively that the County is obligated to pay SID 745 assessments as a property
owner and taxpayer based on the benefit of improvements to the County's real property. The
City further states that the creation of SID 740, or any possible assessments related to the
creation of SID 740 are immaterial and not properly before the court.
36. The City denies the allegations.
37. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
38. The City denies the allegations.
39. The City denies the allegations.
40. The Citydenies
a the allegations.
COUNT IV
Payment under protest—Sec. 7-12-4185, MCA
41. The City's answers to allegations set forth in¶¶ 1-40 are fully incorporated by this reference.
42. Cited authorities speak for themselves. The City denies that the County's legal conclusions,
or statements and interpretations of law constitute ultimate facts upon which relief prayed for
in the County's complaint may be granted. To the extent any answer is required the allegations
are denied.
43. The City denies the allegations.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 17
44. The City denies the allegations.
45. The City denies the allegations.
COUNT V: PERMANTENT INJUNCTIVE RELIEF
46. The City's answers to allegations set forth in¶¶ 1-45 are fully incorporated by this reference.
47. The City admits the allegations.
48. The City denies the allegations.
49. The City denies the County is entitled to the requested injunctive relief
50. The City denies the County is entitled to the requested injunctive relief.
COUNTERCLAIMS
(Summary Allegations)
51. The County purchased the Regional Park after being advised by legal counsel that the recorded
Annexation Agreement and Waiver (Exhibit "V) would obligate the County to pay
approximately $750,000 to $800,000 (in 2002 dollars) to improve one-half(1/2) mile each of
Ferguson Road and Oak Street. In a failed effort to avoid that obligation,the County negotiated
an indemnification agreement with the Seller, which was attached as an addendum (the
"Addendum")to the purchase agreement for the Regional Park. The City was not party to the
purchase agreement.
52. The Seller sued the County for violating the purchase agreement, unrelated to improvements.
The County counterclaimed, seeking judgment declaring the County does not have to pay for
any improvements made necessary by development of the Regional Park. The County's
counterclaim was unsuccessful.
53. In support of its counterclaim against the Seller,the County requested an invoice from the City
for improvement costs. The City invoiced the County $326,367 for the County's fair share of
the estimated $1.01 million cost to improve Ferguson Avenue ("Ferguson Invoice"). The
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 18
County did not object to the Ferguson Invoice, and did not challenge the scope of the
improvements, the estimated construction costs, or the method/formula used by the City to
calculate the County's fair share of those costs. Instead,the County generated its own invoice
to the Seller in the same amount, then moved the court for summary judgment based on the
Seller's agreement to indemnify the County's obligation to the City. In doing so, the County
acknowledged its obligation to pay the City based on the alternate financing method in
Annexation Agreement and Waiver. The County also ratified the City's cost allocation
formula.
54. At the same time the County was suing the Seller to indemnify the County's acknowledged
debt to the City,the County sent a letter to the City disavowing any obligation to pay the City's
invoice. The County settled its lawsuit with the Seller under terms that have not been publicly
disclosed. All claims were released, and the case was dismissed with prejudice. The County
has waived any defense against use of the alternate financing method for determining the
County's fair share of costs. The County has now defaulted on paying those costs in breach
of the Annexation Agreement and Waiver.
55. The following year, 2016, the City and County began discussing creation of a SID to make
improvements provided for in the Annexation Agreement and Waiver. In connection with
those plans, the County agreed to sell the City a right-of-way along the south side of the
Regional Park for improvements to Oak Street. Unbeknownst to the City, the County was
preparing a lawsuit to block the City from assessing the County for the cost of the intended
improvements. During one County work session, a County Commissioner directed County
legal staff not to file the SID lawsuit until the County received the City's payment for the Oak
Street right-of-way.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 19
56. The County protested creation of the SID in breach of the Waiver, but then took no action to
prevent the improvements from being completed. After accepting the City's money for a right-
of-way and the benefit of the constructed improvements, the County sued the City to avoid
paying any share of the cost in breach of its promise to do so. As with the County's action
against the original owner, that case also was dismissed.
57. SID 745 was created to recover public funds used to construct improvements that benefit the
County's property. SID 745 reduced the County's financed share by more than$100,000 from
the original estimate. The County once again breached the Waiver by protesting creation of
SID 745. The County once again sued the City to avoid paying any fair share of costs that the
County promised to be responsible for when it purchased the Regional Park.
(Allegations Common to All Counterclaims)
58. On or about October 19,2001,WBC,LP(hereafter"WBC"),the former owner of real property
that included the future Gallatin County Regional Park (Regional Park), executed the Baxter
Meadows Annexation Agreement(Annexation Agreement).
a. Paragraph 12 of the Annexation Agreement provides, as partial
consideration for annexation, "a Waiver of the Right-to-Protest Creation of
Special Improvement District for street improvements" that included
improvements to Davis Lane, Ferguson Road, and Oak Street" (the
"Waiver").
b. Paragraph 18 of the Annexation Agreement states, "[i]n the event it
becomes necessary for either party to this Agreement to retain an attorney
to enforce any of the terms of conditions of this Agreement, then the
prevailing party shall be entitled to reasonable attorney's fees and costs, to
include the salary and costs of in-house counsel including the City
Attorney."
c. Paragraph 23 of the Annexation Agreement states, `[t]his Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, successors and assigns."
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 110
59. The Annexation Agreement and Waiver are recorded in title for the Regional Park. Gallatin
County Record No. 2053095 (November 14, 2001).
60. The executed and recorded Waiver, provides:
In consideration of receiving approval for annexation of the subject property
from the City of Bozeman, along with accompanying rights and privileges and for
other and valuable consideration,the receipt of which is hereby acknowledged,and
in recognition of the impacts to streets, city water, and city sewer; specifically , to
Baxter Lane, Davis Lane,/Fowler Road, Deadman's Gulch Road, Ferguson Road
and Oak Street which will be caused by the development of the above-described
property,the owner has waived and does hereby waive for itself, its successors and
assigns, the right to protest the creation of one or more special improvement
districts for street improvements including paving, curb/gutter, signals, sidewalk,
and storm drainage facilities to Baxter Lane,Davis Lane,/Fowler Road,Deadman's
Gulch Road, Ferguson Road and Oak Street; trunk water mains and appurtenances
to serve the property; trunk sewer mains and sewage lift stations to serve the
property; or to make any written protest against the size of area of creation of the
district to be assessed in response to a duly passed resolution of intention to create
one or more special improvement districts which would include the above-
described property.
In the event Special Improvement Districts are not utilized for the
completion of these projects, we agree to participate in an alternate financing
method for completion of said improvements on a fair share,proportionate basis as
determined by square footage of the property, linear front footage of the property„
taxable valuation of the property, or a combination thereof.
This waiver shall be a covenant running with the land and shall not expire.
The terms, covenants and provisions of the Waiver shall extend to, be
binding upon the successors-in-interest and assigns of the parties hereto.
61. In 2002, after the Annexation Agreement and Waiver were recorded in the records of Gallatin
County Clerk and Recorder, the County negotiated with WBC to purchase land with the
intention of creating the Regional Park. On September 6, 2002,the Bozeman Daily Chronicle
reported that the County's proposed purchase of land for the Regional Park was in jeopardy
because the County's outside legal counsel found the County would be responsible "to pay to
install sidewalks,curbs and gutters,and pave a'/2 mile each of Ferguson Rd and Oak St." The
County's attorney stated, "Those improvements would probably cost$750,000 to $800,000 0
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES I I I
in today's dollars." According to the County's lawyer "If it were done five years down the
road it would have to be adjusted accordingly."
62. The County and WBC's successor, Baxter Meadows Development, LP ("Baxter" or"Seller")
negotiated an Addendum to Agreement to Sell and Purchase in which"SELLERS additionally
agree to indemnify, hold harmless and defend BUYERS from any charges, claims, suits and
fees by the City of Bozeman based on, in whole or in part, Paragraph 12 of the Annexation
Agreement and the Waiver." The purchase agreement and addendum were executed by the
County on September 20, 2002.
63. On March 27, 2008, Baxter filed a complaint against the County in district court, alleging
various counts in connection with the County decision to convey a portion of the land
purchased from Baxter. See Baxter Meadows Development, LC v. Gallatin County,
Eighteenth Judicial District Cause No. DV 08-272A.
64. Cause No. DV 08-272A lingered for several years without going to trial. On June 26, 2013,
the County was granted leave to file its second amended counterclaims, which included a
request for declaration regarding plaintiff's "obligation to satisfy Paragraph 12 of the
Annexation Agreement with the City of Bozeman or to indemnify County therefore."
65. On September 6,2013, a certified public accountant engaged by the county, stated Baxter was
not damaged by the disputed conveyance because once the land was zoned Public
Lands/Institutions ("PLI"), it became"essentially worthless."
66. On February 12, 2015, in response to a request from the County, the City delivered Invoice
#39215 in the amount of $326,367 for "County share of Ferguson Avenue Improvement
Project." The amount invoiced was allocated using the formulae provided for in the Waiver.
The city invoice was accompanied by bid documents and a tabulation prepared by the City
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 112
showing how the overall project cost was allocated between public and private entities.
Payment of Invoice#39215 was due upon receipt.
67. On February 19, 2015, the County delivered an invoice it created, Invoice 1700 Reg Prk, to
Baxter Meadows Development LP, plaintiff in Cause No. DV 08-272A, and demanded
payment of$326,368—the amount the City had previously invoiced the County. The County
invoice to Baxter states, "Gallatin County has received a statement from the City of Bozeman
showing the county's obligation for the extension of Ferguson as follows." It then sets forth
costs presented in the allocated costs that accompanied City Invoice #39215 and demands
payment within 30 days.
68. On March 2, 2015, the County filed a Motion for Summary Judgment on Gallatin County's
Counterclaims supported by a brief with affidavits. In it,the County wrote that it entered into
the Addendum to Agreement to Sell and Purchase as"an additional inducement to the bargain,"
and to insulate the County from responsibility for the improvements since the County was
"tak[ing] title to the Property subject to the terms of the Annexation Agreement." According
to the County, the Annexation Agreement and the Addendum established Baxter's obligation
"to participate in an alternative financing method for completion of said improvements on a
fair share,proportionate basis." The County specifically requested from the court a declaration
that Baxter "is responsible for paying these costs and must remit payment pursuant to the
County's invoice" based on the Baxter's agreement to indemnify the County "from any
charges, claims, suits and fees, by the City" in connection with "all obligations of Paragraph
12 of the Annexation Agreement and Waiver." As evidence of these obligations,the County
attached sworn statements from the County's Finance Director and the Recording Supervisor
for the County Clerk and Recorder's Office with exhibits of the relevant documents.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 113
69. On March 5, 2015, three days after providing sworn statements and arguing in district court
that the plaintiff in Cause No. DV 08-272A was legally obligated to pay the County's invoice
in satisfaction of plaintiff's agreement to indemnify the County for costs invoiced by the City
to improve Ferguson Avenue,the County sent a letter to the City disavowing any obligation to
remit payment for improvements to Ferguson Avenue.
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70. On May 13,2015,the County sent Baxter a Notice of Default and Demand for Payment,which
states "[t]he payment is due and owing to the City of Bozeman by Baxter based on the
requirement for participation `in an alternate financing method for completion of said
improvements' to Ferguson Road." On the same day, the County sent a letter providing
assurance that any payment obtained from Baxter for Invoice 39212 (sic)would be remitted to
the City.
71. On September 22, 2015, Cause No. DV 08-272A was dismissed with prejudice based on a
settlement agreement between Baxter and the County and their mutual release of all claims,
including the County's claim for indemnification"from any charges, claims, suits and fees,by
the City" in connection with "all obligations of Paragraph 12 of the Annexation Agreement
and Waiver."
72. In 2016, the City began developing plans for improving Oak Street to remove what was
referred to as the "chicane" at the intersection of Oak Street and Davis Lane and widen Oak
Street to the standard called for in the City's Transportation Plan. The plans required the City
to acquire additional right-of-way along the southern portion of the County's Regional Park
adjacent to Oak Street. On November 15, 2016, the City Administrator emailed the County
Administrator re plans for the Oak Street right-of-way.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 114
73. The County refused to contribute a fair share of the cost for constructing improvements so the
City began developing plans to create a SID so the County could be assessed those costs. On
January 23, 2017, during a work session between the County and City staff, a copy of City
plans for Oak Street improvements, including the Regional Park right-of-way,were passed out
and discussed in connection with City plans for creation of SIDs. City staff met with County
staff in April of 2017, to discuss City purchase of the right-of-way.
74. The City passed a resolution of intention on March 20, 2017, to create SID 740 to finance
improvements to Oak Street and Ferguson Avenue. On April 10, 2017, the County sent the
City a letter protesting creation of SID 740.
75. On April 17,2017,the City Commission passed Resolution No.4772 creating SID 740 for the
purpose of financing construction of improvements that benefit the Regional Park.
76. During a work session conducted on May 8, 2017, a County "Commissioner requested
proceeding with the SID lawsuit after payment for the easement is received." On May 9,2017,
the County Commission approved sale of the Oak Street right-of-way for $161,606. On May
22, 2017, the City Commission approved the right-of-way purchase.
77. The County took no action to prevent construction of improvements benefitting the Regional
Park. On August 1, 2017, when those improvements were substantially completed, the
Gallatin County Attorney, presumably on behalf of Gallatin County, provided the City with a
draft complaint seeking to enjoin the City from assessing the County to recover any cost of
improvements conclusively determined to benefit the Regional Park. On August 29,2017,the
County filed its complaint,which was later served on the City.
78. The City moved for dismissal of the County's complaint. On February 12, 2018, the City's
motion was granted.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 115
79. Section 7-12-4186(1), MCA, provides:
Whenever, by reason of any alleged nonconformity to any law or ordinance or
by reason of any omission or irregularity, any special tax or assessment is either
invalid or its validity is questioned, the council may make all necessary orders
and ordinances and may take all necessary steps to correct the same and to
reassess and relevy the same,including the ordering of work,with the same force
and effect as if made at the time provided by law, ordinance, or resolution
relating thereto. The council may reassess and relevy the same with the same
force and effect as an original levy.
80. On June 18,2018,the City Commission passed Resolution 4908,dissolving SID 740 to address
alleged shortcomings in the creation of the SID and because actual costs of construction were
substantially lower than the estimated costs of construction included in the Resolution of Intent
to create SID 740.
81. The County protested creation of SID 745 despite the recorded Annexation Agreement and
Waiver of Right to Protest Creation of Special Improvement Districts.
82. On April 22, 2019, after yet another failed attempt to negotiate with Gallatin County officials
regarding the County's obligations to assist in the costs of constructing Oak Street and
Ferguson Avenue, the City Commission passed Resolution 4893, creating SID 745.
83. On September 16, 2019, after several months of efforts by the City to discuss with the County
its obligation to participate in the costs of the Oak Street and Ferguson Avenue construction,
the City Commission passed Resolution 5044,confirming and ratifying an interfund agreement
and related sale of warrants to purchase existing improvements originally paid for with Arterial
and Collector District funds. On the same date, the City Commission passed Resolution No.
4894, levying a Special Assessment on Property in SID 745.
84. On November 26, 2019,the County paid the levied assessment under protest in the amount of
$152,798.41 —representing the first half of the first of three years of assessments.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 116
85. On January 17,2020,the City made written demand for payment in full of$903,424.65,which
is the County's fair share of costs for improvements benefitting the Regional Park and is now
due and owing under the alternate financing method ratified by the County in Cause No. DV
08-272A.
COUNTERCLAIM I—BREACH OF CONTRACT
(Alternate Financing Method)
86. The City incorporates the allegations in¶¶ 51-85 as being fully set forth herein.
87. The County is contractually obligated to contribute to the cost of improvements specified in
Paragraph 12 of the Annexation Agreement and in the Waiver.
88. The County acquired the Regional Park with knowledge of the County's contractual obligation
to pay a fair and proportional share for specified improvements that included improvements to
Davis Road, Ferguson Avenue and Oak Street.
89. The Annexation Agreement states its terms are covenants running with the land and shall not
expire upon transfer of ownership of the property. The Annexation Agreement also states it
shall be binding upon, inure to the benefit of and be enforceable by and against the parties'
respective heirs, successors and assigns.
90. The County alleges SID 745 is not valid and cannot be used to finance the cost of required
improvements. The Waiver provides that when SIDs are not used for the stated improvements,
the County must participate in an alternate financing method on a fair share proportionate basis
using any or a combination of listed methods for allocating costs.
91. In 2015, before any SID was formed, the County filed sworn statements and made arguments
in Cause No. DV 08-272A for third party indemnification of the County's contractual
obligation to pay its proportionate share of costs for improvements. In so doing, the County
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 117
acknowledged, ratified, and judicially admitted its contractual obligation to pay for
improvements to Ferguson Avenue and Oak Street using the alternate financing method
employed by the City to allocate improvements costs.
92. Paragraph 18 of the Annexation Agreement provides for recovery of attorney fees, including
salary and costs of in-house counsel, if necessary, to enforce terms of the Annexation
Agreement.
93. The City has demanded payment from the County for its fair share of improvement costs in
the amount of$903,424.65. The County's complaint does not allege that the amount allocated
to the County and which was included in SID 745 as the County's share of the costs of
improvements is excessive,unfair, or disproportionate. While the County paid the first half of
the first of three years of assessments under protest, in relation to its obligations under the
Annexation Agreement and Waiver, the County has made no payment or arranged to make
payment in breach of the Annexation Agreement and Waiver.
94. The City is entitled to an award of damages in the amount of $903,424.65, plus statutory
interest, plus reasonable attorney fees and costs, and such other remedies in law or equity as
the court may find appropriate.
COUNTERCLAIM II—BREACH OF CONTRACT
(Protest Creation of SID 745)
95. The City incorporates the allegations in¶¶ 51-94 as being fully set forth herein.
96. Material to the County's promise to pay a fair and proportional share of the stated
improvements was the County's promise not to protest creation of special improvement
districts (SIDs).
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 118
97. Waiver of the County's right to protest creation of SIDs does not prohibit the County's right
to comment on,protest,and/or appeal any assessment formula which is considered inequitable.
98. The County judicially admitted its obligation to a and ratified the formula
8 pay, used by the City
to calculate the County's fair share, improvement costs by seeking judgment against a third
party for indemnification of the County's obligation to pay the City a proportionate share of
the improvement costs.
99. The County protested creation of SIDs in breach of its promise not to do so.
100. The County's suit against the City protests the creation of SID 745 in breach of the
County's promises to pay a fair share of improvement costs and not to protest any SID created
for that purpose.
101. The County's suit against the City does not allege error in the formula used to assess the
County's fair and proportional share of improvement costs.
102. The County paid its first assessment under protest and seeks to permanently enjoin the City
from assessing the County based on SID 745 and has thus breached the Annexation Agreement
and Waiver.
103. The City is entitled to an award of damages in the amount of$903,424.65, plus statutory
interest, plus reasonable attorney fees and costs, and such other remedies in law or equity as
the court may find appropriate.
COUNTERCLAIM III—BREACH OF CONTRACT
(Implied Covenant of Good Faith and Fair Dealing)
104. The City incorporates the allegations in¶¶51-103 as being fully set forth herein.
105. "[E]very contract, regardless of type, contains an implied covenant of good faith and fair
dealing." Story v. Bozeman, 791 P.2d 767, 775 (Mont. 1990), overruled on other grounds by
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 119
Arrowhead Sch. Dist. No. 75 v. Klyap, 79 P.3d 250 (Mont. 2003). A covenant of good faith
and fair dealing requires "honesty in fact and the observance of reasonable commercial
standards of fair dealing in the trade." Mont. Code Ann. § 28-1-211. "The covenant is a
mutual promise implied in every contract that the parties will deal with each other in good faith
and not attempt to deprive the other party of the benefits of the contract through dishonesty or
abuse of discretion in performance. Knucklehead Land Co., Inc. v. Accutitle, Inc., 172 P.3d
116, 121 (Mont. 2007).
106. Nearly 20 years after Baxter, the County's predecessor in interest, first contracted with the
City, the County is the only property owner subject to the Baxter Meadows Annexation
Agreement that has not contributed a fair share for such improvements benefitting their
property.
107. Having acknowledged and accepted the benefits of annexation,including use of City streets
used to access the Regional Park, and having acknowledged that development of the Regional
Park impacts City facilities and services, including streets, and having promised to pay a fair
and proportional share of improvements needed to address those impacts, and having
developed the Regional Park,the County breached its contractual obligations to pay a fair share
of costs.
108. The County repudiated its obligation to pay for improvements as required in the
Annexation Agreement in a letter dated March 5, 2015, despite sworn statements presented in
district court (Cause No. DV 08-272A) three days earlier acknowledging and ratifying the
County's obligation to pay the City for the same improvements. In a letter dated May 13,
2015,the County notified the City of the summary judgment motion for declaratory judgment
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 120
for indemnification of its obligation to pay the City. The County settled Cause No. DV 08-
272A. No notice was given the City. The terms of settlement are presently unknown.
109. On May 8, 2017, a County Commissioner instructed County legal staff not to file the
County's lawsuit against the City over the planned SID until the City paid more than$161,000
for a right-of-way identified as necessary in the City's plans to improve Oak Street.
110. The County then chose to accept the benefit of improvements, waiting until they were
substantially complete, before suing the City to avoid the contractual obligation to pay a fair
and proportional share for those improvements.
111. Now, the County has once again sued the City to avoid its contractual obligation to pay a
fair and proportional share for improvements. The County seeks to avoid paying any costs
after accepting and enjoying the benefits of improvements it agreed to help pay for.
112. Each of the foregoing actions by the County occurred while the County was under contract
with the City not to protest creation of a SID and to pay a fair and proportionate share for
improvements that benefit the County's Regional Park.
113. The County has not been honest in fact in its dealings with the City and has failed to observe
reasonable standards of fair dealing. The County breached the implied covenant of good faith
and fair dealing.
114. The City has demanded payment from the County for its fair share of improvement costs
in the amount of $903,424.65. The County's Complaint does not allege that the amount
demanded by the City is excessive, unfair, or disproportionate. The County has made no
payment or arranged to make payment in breach of the Annexation Agreement and Waiver.
ANSWER,COUNTERCLArMS AND AFFIRMATIVE DEFENSES 121
115. The City is entitled to an award of damages in the amount of$903,424.65, plus statutory
interest, plus reasonable attorney fees and costs, and such other remedies in law or equity as
the court may find appropriate.
COUNTERCLAIM IV—DECLARATORY JUDGMENT
(SID 745 Properly Created and Correctly Assessed)
116. The City incorporates the allegations in IT 51-115 as being fully set forth herein.
117. The City of Bozeman formed SID 745 pursuant to Title 12, Ch. 7, parts 41 and 42.
118. The formation of SID 745 establishes the City's right and authority to proceed with the
sale of warrants to purchase existing improvements in accordance with the SID statutes and
Resolution 4893.
119. The County's actions interfere with the City's ability to exercise its contractual and
statutory rights and its obligation to repay warrants sold pursuant to SID 745.
120. Under Section 27-8-202 of the Uniform Declaratory Judgments Act, the City is entitled to
judgment declaring the City's rights, status and other legal relations under the SID statutes,
resolutions, and the Annexation Agreement and Waiver, and to other relief including
supplemental relief, as provided for in code.
121. The City is entitled to a declaration that under the terms of the Annexation Agreement the
County accepted and agreed that improvements the City proposed to purchase using SID 745
as a financing mechanism are necessary and will directly and specially benefit the County's
property.
122. The City is entitled to a declaration that the City substantially complied with the
requirements for creating SID 745 and that the City's determination that the Regional Park will
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 122
be directly and specially benefitted by the improvements authorized for purchase under SID
745 is conclusive as a matter of law.
123. The City is entitled to a declaration that the method used to levy assessments against the
County's real property is legally correct, and that the assessment is both proportional and
equitable.
124. The City is entitled to a declaration that assessment of taxes in the amount of$903,424.65
levied against the Regional Park in Resolution No.4894 is correct and that the County is legally
required to pay the assessments levied consistent with said resolution.
125. The equities of this case support, and the City is therefore entitled to, supplemental relief
under Section 27-8-313, MCA, including but not necessarily limited to, its attorney fees and
costs, including the salary of in-house counsel and the City Attorney, necessary to obtain
judgment so that the City may be made whole in repayment of warrants sold to purchase
improvements and other costs incidental to formation of SID 745. Trustees of Indiana Univ.
v. Buxbaum, 315 Mont. 210, 228, 69 P.3d 663, 674 (2003).
COUNTERCLAIM V—DECLARATORY JUDGMENT
(Alternate Financing Method)
126. The City incorporates the allegations in¶¶ 51-125 as being fully set forth herein.
127. In consideration for the acknowledged benefits of annexation, the recorded Waiver,which
is a covenant that runs with the Regional Park land, obligates the County, "to participate in an
alternate financing method for completion of said improvements on a fair share,proportionate
basis as determined by square footage of the property, linear front footage of the property,
taxable valuation of the property or a combination thereof' in the event SIDs are not used.
ANSWER,COUNTERCLAIMS AND AFFIRMATWE DEFENSES 123
128. Under Section 27-8-202 of the Uniform Declaratory Judgments Act, the City is entitled to
judgment declaring the City's rights, status and other legal relations under the Annexation
Agreement and Waiver, and to other relief including supplemental relief, as provided for in
code.
129. The City is entitled to a declaration that improvements to Oak Street and Ferguson Avenue
are among those the County is obligated to pay a fair share for completion under the alternate
financing method agreed to in Annexation Agreement and Waiver.
130. The City is entitled to a declaration that the City properly determined that $903,424.65 is
fair and proportional share of cost for improvements needed to address impacts of developing
the Regional Park.
131. The City is entitled to a declaration that the County is in default of its obligation to pay
$903,424.65 for its fair and proportional share of improvements benefitting the Regional Park.
132. The equities of this case support, and the City is therefore entitled to, supplemental relief
under Section 27-8-313, including but not necessarily limited to, its attorney fees and costs,
including the salary of in-house counsel and the City Attorney, necessary to obtain judgment
so that the City may be made whole in repayment of warrants sold to purchase improvements
and other costs incidental to formation of SID 745. Trustees of Indiana Univ. v. Buxbaum,315
Mont. 210, 228, 69 P.3d 663, 674 (2003).
AFFIRMATIVE DEFENSES
1. The City incorporates the allegations in¶¶ 51-132 as if fully set forth herein
2. The County's Complaint is barred in whole or in part because SID 745 was created in
substantial compliance with Title 7, Chapter 12, Parts 41 and 42.
3. The County's Complaint is barred in whole or in part by reason of equitable estoppel.
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 124
4. The County's Complaint is barred in whole or in art b
ty p p y reason of waiver.
5. The County's Complaint is barred in whole or in part by reason of the County's failure to state
a claim for which relief may be granted.
6. The County's Complaint is barred in whole or in part for lack of justiciability.
7. The County's Complaint is barred in whole or in part based upon undue enrichment.
8. The County's Complaint is barred in whole or in part by reason of unclean hands. Plaintiff
cannot take advantage of its own wrong. To the extent Plaintiff is attempting to take advantage
of its own wrong, its claims are barred by MCA § 1-3-208.
9. The County's Complaint is barred in whole or in part by acquiescence or consent.
10. The County's Complaint is barred in whole or in part as the City's actions in establishing SID
745 or in requiring the County to participate in a cost share pursuant to the Waiver are
supported by and rely upon its powers pursuant to its Charter, and the Constitution and laws
of the State of Montana related to self-government powers.
To the extent that facts discovered through further investigation or discovery indicate that one or
more of the stated defenses are unsupported, they will be withdrawn. The City reserves the right,
with leave of the court, to add additional affirmative defenses not known to be available at this
time should facts disclosed through further investigation and discovery indicate the viability of
additional affirmative defenses.
PRAYER FOR RELIEF
WHEREFORE,the City respectfully requests and order granting the following relief.
1. Dismissal of each and all of the County's various claims, and denial the County's
Prayer for Relief entirely.
2. Judgment that the County is liable in damages for breach of contract in:
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 125
a. Failing to pay a fair and proportionate share of improvements benefitting the
Regional Park;
b. Protesting creation of SID 745; and
c. Failing to exercise honesty in fact or to deal fairly with the City in
performance of the County's obligations under the Baxter Meadows
Annexation Agreement and Waiver of Right to Protest Creation of Special
Improvement Districts.
3. Judgment declaring:
a. that improvements authorized for purchase under SID 745 are necessary and
will directly and specially benefit the County's property;
b. that the City substantially complied with the requirements for creating SID
745;
c. that the method used in SID 745 to levy assessments against the County's real
property is legally correct, proportional, and equitable;
d. that the County is legally obligated to pay assessments authorized by the
creation of SID 745; and.
e. that the City is entitled to supplemental relief in the form of reasonable
attorney fees and costs.
4. Judgment declaring:
a. that the County is obligated to pay a fair and proportional share for
improvements to Oak Street and Ferguson Avenue;
b. that the City properly determined $903,424.65 is fair and proportional share of
cost for improvements to Oak Street and Ferguson Avenue;
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 126
c. that the County is in default of its obligation to pay $903,424.65 for its fair
and proportional share of improvements; and
d. that the City is entitled to supplemental relief in the form of reasonable
attorney fees and costs.
5. Judgment awarding the City:
a. damages in the amount of$903,424.65;
b. interest at the maximum rate permitted by law;
c. reasonable attorney fees and costs; and
d. All and any such relief available at law or in equity to which the court finds
the City is reasonably entitled.
DATED this 31 st day of January, 2020.
PETER G. SCOTT,LAW OFFICES,PLLC
i
[' r
eter G. o rney 41
City of Bozeman
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 127
CERTIFICATE OF SERVICE
On this 31 st dayof January,
uary, 2020, the undersigned caused a true and correct copy of the
foregoing document to be famished to the following via Hand Delivery:
Marty Lambert
Gallatin County Attorney
1709 West College Street
Suite 200
Bozeman, MT 59715
v
Attorney for Plaintiff
SPIIAUU,
Scott I Law
ANSWER,COUNTERCLAIMS AND AFFIRMATIVE DEFENSES 28
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c
BAXTER MEADOWS
ANNEXATION AGREEMENT
THIS AGREEMENT is made and entered into this i9th day of October 2001, by
and between the CITY OF BOZEMAN,a municipal corporation andpolitical subdivision of the State
of Montana,with offices at411 East Main Street,Bozeman,Montana59771-0640,hereinafterrefetred
to as "City", and WBC, LP, 1035 Cerise Road, Billings, MT 5910I, hereinafter referred to as
"Landowner".
WiITNF.SSETD:
WHEREAS, the Landowner is owner in fee of a tract of certain real property, hereinafter
referred to as the BAXTER MEADOWS ANNEXATION,situated in Gallatin County,Montana,and
more particularly described as follows:
Tracts 1,2,3,and 4 of Certificate of Survey No.2202,which is on file and of record in the
office of the Clerk and Recorder of Gallatin County,Montana; being shown as a portion of
the Southwest Quarter and all of the Southeast Quarter of Section 34, Townshipl South,
Range 5 East of P.M.M.;and the Northeast Quaver of Section 3,Township 2 South,Range 5
East of P.M.M., Gallatin County,Montana; all described as follows:
Beginning at the Northeast Corner of said Section 3,
thence southerly 181 degrees 33'57",assumed azimuth from north,2660.08 feet
along the east line of the Northeast Quarter of said Section 3;
thence westerly 270 degrees,07' I I"azimuth 2636.21 feet along the south line of
said Northeast Quarter-,
thence northerly 001 degree 12' 19"azimuth 2640.28 feet along the wc-q line of
said Northeast Quarter;
thence westerly 269 degrees 51' 01"azimuth 1983.12 feet along the south line of
the Southwest quarter of said Section 34;
thence northerly 353 degrees 01'04"azimuth 249.09 feet;
thence westerly 269 degrees 45'45"azimuth 63256 feet;
thence northerly 000 degrec 24'41"azimuth 1750.20 feet along the west line of
said Southwest Quarter of said Section 34;
thence easterly 089 degras 52' IT'azimuth 1322.67 Feet along the south line of
Certificate of Survey No.233;
thence northerly 000 degree_22' 38"azimuth 665.37 feet along the east line of said
Certificate of Survey No.233;
thence easterly 089 degrees 53' 19"azimuth 3971.29 feet along the north line of
the Southwest Quarter and the north line of the Southeast Quartcr of said Section
34:
thence southerly 180 de-roes 15'01"azimuth 265 1.80 feet along the east line of
the Southeast Quarter of said Section 34,to the point of beginning.
I
EXHIBIT
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Said property contains 460.2971 acres, more or less, and is subject to
al l easements of fact and record.
WHEREAS, the Landowner has petitioned the City for annexation of the contiguous tract; and
WHEREAS.the BAXTER MEADOWS ANNEXATION is not within the corporate limits of the
City or other municipality but is contiguous to the City and may therefore be annexed to the City in
accordance with the provisions of this Agreement and M.C.A. Title 7, Chapter 2, Part 43.
WHEREAS, all parties recognize that the annexation of the BAXTER MEADOWS
ANNEXATION pursuant to Section 7-2-4301,et seq.,M.C.A., will entitle the said property to City
services, including municipal water and sewer service, upon their availability; and
WHEREAS, M.C.A. Section 7-2-4305 provides that a municipality and landownercan agree to
the provision of services to the area to be annexed; and
WHEREAS,the City's present water distribution and sewer collection systems are insufficient to
enable it to supply reasonably adequate water and sewer service to the subject property; and
WHEREAS, the Landowner wishes to convey to the City certain water rights or take some
equivalent action to provide water and sewer service to the BAXTER MEADOWS.A.NNEXATION;
and
WHEREAS, all parties recognize that the development of the BAXTER MEADOWS
ANNEXATION will impact Baxter Lane,Davis Lane/Fowler Road,Harper Puckett Road,Deadman's
Gulch Road, Ferguson Road and Oak Street; and will require additional public street improvements
for traffic circulation: and
WHEREAS,the Landowner finds that this Agreement will provide for the most satisfactory and
dependable water supply or service available to furnish venter and wastewater collection,and provide
traffic circulation for development near and within the BAXTER MEADOWS ANNEXATION,and
WHEREAS, the making and performance of this Agreement is desirable to promote the
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development of the most adequate water supply and traffic circulation pattern for the City as it now
exists and as it is reasonably expected to enlarge;and
WHEREAS,the securing of an adequate water supply and traffic system by the City is necessary
and of mutual advantage to the parties hereto;and
WHEREAS, the parties have determined that it is in the best interests of the City and the
Landowner,and in furtherance of the public health,safety and welfare of the community to enter into
and implement this Agreement.
WITNESSETH:
TN CONSIDERATION of the mutual covenants and agreements herein contained, the parties
hereto agree as follows:
1. Recitals.
The above recitals are true and correct.
2. Annexation.
The Landowner filed ar. application for annexation of the BAXTER MEADOWS
ANNEXATION with the City. The City,on June 25,2001,adopted a Resolution of Intent to Annex
the BAXTER MEADOWS ANNEXATION. By execution of this Agreement,the City has manifested
its intention to annex the BAXTER MEADOWS ANNEXATION tract pursuant to the terms and
conditions of this Agreement_ Subject to the provisions of Title 7,Chapter 2,part 43,the City shall,
upon execution of this Agreement, adopt a Resolution of Annexation of the BAXTER MEADOWS
ANNEXATION to the City. Further,upon the execution of this Agreement,the Landowner shall do
all things necessary and proper to aid and assist the City in carrying out the terms, conditions and
provisions of this Agreement and effectuate the annexation of the BAXTER MEADOWS
ANNEXATION to the City.
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3. Services Provided. snetiav Vance-Ga:Iatln Co hr ntsc =.00
The City will,upon annexation, make available only existing City services to the extent currently
available, including municipal water service, municipal sewer service, police protection, and fire
protection, to the BAXTER MEADOWS ANNEXATION, as provided in this Agreement.
4. Municipal Water Service Defined.
The term "municipal water service" as is used in this Agreement shall be the service which is
supplied by the City in accordance with Chapter 13.12, Bozeman Municipal Code, or as may be
amended,as well as any other terms and conditions which apply to the City's provision of this service.
The term does not contemplate the extension of lines or construction of necessary improvements at
any cost to the City for delivery of water to and within the BAXTER MEADOWS ANNEXATION.
Nothing in this Agreement shall obligate the City to pay for right-of-way acquisition,engineering,
construction, and other costs for the delivery of water to or within the BAXTER MEADOWS
ANNEXATION to include,but not limited to,any impact fees,hook-up,connection,or development
charges which may be established by the City.
5, Municipal Sewer Service Defined.
The term "municipal sewer service" as is used in this Agreement shall be the service which is
supplied by the City in accordance with Chapter 13.24, Bozeman Municipal Code, or as may be
amended,as well as any otherterms and conditions which apply to the City's provision of this service.
The term does not contemplate the extension of lines or construction of necessary improvements at
any cost to the City for collection of sewage at and within the BAXTER MEADOWS
ANNEXATION. Nothing in this Agreement shall obligate the City to pay for right-of-way
acquisition, engineering, construction, and other costs for the collection of sewage services to or
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within the BAXTER MEADOWS ANNEXATION to include, but not limited to, any impact fees,
hookup,connection, or development charges which may be established by the City.
6. Water Rights.
The parties acknowledge the following City policy:
Prior to annexation of property, it shall be the policy of the City of Bozeman to
acquire usable water rights, or an appropriate fee in lieu thereof, equal to the
anticipated average annual consumption of water by residents and/or users of the
property when fully developed. The fee may be used to acquire water rights or for
improvements to the water system, which would create additional water supply
capacity. Except,however, that for any annexation in excess of ten (10) acres,this
policy shall be carried out prior to final plat approval of each development phase.
Section 2,No.5,Commission Resolution 3137,Adopted August 19. 1996
The Landowner understands and agrees that it must provide sufficient water rights in
accordance with the City's policy according to the following schedule:
BAXTER MEADOWS ANNEXATION,consisting of a total of 460.2971 acres, prior to
filing of any final subdivision plat, final site plan approval, or the issuance of any building
permit,whichever occurs first.
The Landowner shall provide sufficient water rights or cash-in-lieu as calculated by the City
in accordance with its policy at time of calculation.The Landowner further understands that the
City will calculate the average annual diversion requirement necessary to provide water to this
annexation tract on the basis of the zoning designation and/or City-approved development for.the
property at the time such calculation is made.
The Landowner agrees to provide sufficient water rights or cash-in-lieu of water rights prior to
filing of any Final Subdivision Plat,Final Site Plan approval, or the issuance of any building
permit, whichever occurs first.
7. Comprehensive Water and Wastewater Utilities DesigLi Report
Prior to future development of the property, the Landowner may be required to have prepared
by a Professional Engineer, at Landowner's expense, a comprehensive design report evaluating
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existing capacity of sewer and water utilities in the area. The report must include hydraulic
evaluations of each utility for both existing and post-development demands, and the report
findings must demonstrate adequate capacity to serve the full development of the land. If adequate
infrastructure capacity is not available for full development, the report must identify necessary
system improvements required for full development. The Landowner agrees to complete at
Landowners expense, the necessary system improvements to serve the full development.
8. Future Development
Landowner understands and agrees that municipal services are not currently available to much of
the area proposed for annexation,and that there is not right,either granted or implied by the City, for
the Landowner to develop any of the BAXTER MEADOWS ANNEXATION until it is verified by the
City that necessary municipal services, including but not limited to police and fire protection, are
available to all or a portion of the BAXTER MEADOWS ANNEXATION.
The City recognizes the intention of the Landowner to build an equestrian center in phase 1
and parts of future phases of development. The Landowner understands and agrees that such use is
contingent upon and subject to proper zoning approval.
9. Impact Fees
The Landowners hereby acknowledge that annexation and development of their property will
impact the City's existing street, water and sewer infrastructure, and fire service requirements.
There is an existing pole barn on the subject property. At the time new structures apply to the
City's Water and Sewer facilities, the Landowners shall pay all Water and Sewer Impact Fees,
which are due.The Landowners and any successors shall pay al I Fire, Street, Water and Sewer
Impact Fees required by Chapter 3.24,Bozeman Municipal Code, or as amended, at the time of
application for any permit listed in Section 3.24.050A, 3.24.060.A, 3.24.070.A, or 3.24.080.A.
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respectively. If impact fees currently imposed pursuant to Chapter 3.24 of the Bozeman Municipal
Code are subsequently voided or declared invalid by a court of competent jurisdiction, the
Landowners agree to pay the City fees or assessments established by the City for impact on City
services in accordance with a new or revised Chapter of the Bozeman Municipal Code lawfully
enacted as a result of such court decision after the date of the court decision. If, prior to enactment
of such revised Chapter, the Landowner applies for any permit, which actuates or would have
actuated impact fees pursuant to the current Chapter 3.24 of the Bozeman Municipal Code, the
Landowner further agrees to pay at that time,the amount calculated for such fees based upon the
rates established at the date of this agreement.
If the Court above declares Chapter 3.24 of the Bozeman ?Municipal Code invalid, and if
landowner would have been entitled to a refund under the court's decision but were it not for the
sole fact of the landowner paying impact fees because of this agreement, then all such fees paid
prior to the court's decision shall be held in escrow until a revised Chapter of the Code is enacted
after the Court's decision.
At the time the revised code is enacted,then all such fees held in escrow shall be released to
the city and the balance, if any, returned to the landowner. All accumulated interest on the sum
held in escrow shall be released to the City or landowner on the same percentage as the money
released to either party bears to the total sum held in escrow.
Landowner further understands and agrees that any improvements, either on- or off-site,
necessary to provide connection of BAXTER MEADOWS ANNEXATION to municipal services
which are wholly attributable to the property are"project related improvements" as defined in
Chapter 3.24, Bozeman Municipal Code, or as amended, and as such, are not eligible for impact
fee credits.
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If the Landowners default on this condition at the time such is to be performed, and should
default not be remedied or corrected within thirty(30)days after written notice•by City to the
Landowner of such default, City may at their option:
A) Declare the amounts owing for impact fees immediately due and payable and City shall
have the right and privilege to take legal action against Landowner for the collection of
such sum,including the entry of any judgment. In addition,the City may, at its option,
enforce payment of such amount by Ievying an assessment on the premises.
B) Elect any other remedy available to City under the laws of the State of Montana.
C) Any waiver by City of any default shall not be construed as a waiver of any Subsequent
default.
D) It is agreed that it shall be no defense to the enforcement of this provision by City that
impact fees imposed pursuant to Chapter 3.24 of the Bozeman Municipal Code are
subsequently voided or declared invalid by a court of competent jurisdiction. It is the
express intention of the parties not to be bound by such a declaration or judgment and,
therefore,notwithstanding any judgment either limiting impact fee payments under
annexation agreements to specified amounts, or prohibiting any such payment,landowner
will pay such amount as specified above.
10. Affordable Housing
The Landowner hereby acknowledges that annexation and development of the subject
property will have an impact on the cost and availability of housing stock in the Bozeman Area. The
Landowner has prepared and submitted a written letter evidencing its intent to develop and offer
housing units which will be within Single Family Affordability Limits,as that term has been defined
under HUD guidelines, which letter by reference is made a part of this agreement and incorporated
herein.
11. Payback Agreement(s)
The parties recognize that development of the subject property will involve completion of
infrastructure improvements that are capable of servicing a greater area than that proposed for
annexation. Subject to review and approval by the City Commission, Landowners may seek
reimbursement for that portion of development costs not wholly attributable to the property proposed
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for annexation,from property owners who are specifically benefitted from such improvements. This
acknowledgment on the part of the City of Landowner's intent to seek an agreement for
reimbursement shall not bind the Commission, or any future Commission, to approve such an
agreement.
12.Waiver of Right-to-Protest Special Improvement Districts
The Landowner has executed a Waiver of Right-to-Protest Creation of Special Improvement
District for street improvements,including paving,curb/gutter, sidewalk, boulevard and storm
drainage appurtenances to Baxter Lane,Davis LanefFowler Road,Deadman's Gulch Road,
Ferguson Road and Oak Street; water main improvements for trunk water lines to serve the
property, trunk sewer mains and lift stations to serve the property; and maintenance of any
parks within the annexed area and/or of a City-wide Park Maintenance District. Said Waivers are
attached hereto as Exhibits A and B.
13.. Additional Terms of Waivers
The parties recognize that these documents shall be executed and returned to the Bozeman
Planning and Community Development Department within one year of preliminary approval of the
annexation request by the Bozeman City Commission. The parties also recognize that these
documents shall be filed and of record with the Gallatin County Clerk and Recorder prior to the
sale or transfer of ownership of any land within the BAXTER MEADOWS ANNF—XATION. The
parties further agree that the City may file these documents at any time.
14. Public Street and Utility Easements
The Landowners understands and agrees that utility easements, a minimum of thirty(30) feet in
width,will be necessary for the installation and maintenance of water and utility services to the
annexed property.The Landowner shall provide public street and utility easements for the adjacent
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and collector and arterial streets as follows: sh011•r Van**-Gallatin co trr nrse M.00
i. Principal Arterials- 120 feet future full width as follows:
I. Harper Puckett-60 feet half width on west property boundary north
of
Baxter Lane.
2. Oak Street- 60 feet half width on south property boundary.
ii. Minor Arterials- 105 feet future full width as follows:
1. Baxter Lane- 105 feet full width between Davis Lane and future
Ferguson Road,and 52.5 feet half width from future Ferguson Road
to west property boundary.
iii. Collectors- 90 feet future full width as follows:
1. Deadman's Gulch-45 feet half width on north property boundary.
2. Ferguson Road-90 feet full width through property north of Baxter
Lane and 45 feet half width along west property boundary south of
Baxter Lane.
The l,andowncr shall create any such other easements in Iocations agreeable to the City
during the appropriate development procedure, but in no event later than the filing of any final plat
or site plan or issuance of a building permit on the subject property.
15.North 19`h AveJBaxter Lane Intersection Signalization
The Landowner agrees to provide the City with a payback of$ 15,000 per the payback
schedule dated May 10, 2001; for the North 19`s/Baxter bane signalization. Of this total payback,
the Landowner agrees to pay$2,072 to the City prior to final plat approval for Phase I of the
development.
16. Public Service/Fire Station Complex
The Landowner agrees to offer to sell to the City of Bozeman up to five (5)acres within the
annexed area for use as a public safety complex.This provision,if not negotiated and closed
between the parties, shall expire on December 31,2006.
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17. Governing Law and Venue elvllav vano.-CAI14t in co HT ntse 120.00
This Agreement shall be construed under and governed by the laws of the state of Montana. in
the event of litigation concerning this Agreement, venue is in the Eighteenth Judicial District
Court,Gallatin County, State of Montana_
18. Attorney's fees
In the event it becomes necessary for either party to this Agreement to retain an attorney to
enforce any of the terms or conditions of this Agreement,then the prevailing party shall be entitled
to reasonable attorney's fees and costs,to include the salary and costs of in-house counsel
including City Attorney.
19. Waiver
No waiver by either party of any breach of any term,covenant or agreement shall be deemed a
waiver-of the same or any subsequent breach of this same or any other term,covenant or
agreement. No covenant,term or agreement shall be deemed waived by either party unless waived
in writing.
20. Invalid Provision
The invalidity or unenforceability of any provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
21. Modifications or Alterations
No modification or amendment of this Agreement shall be valid unless evidenced by a writing
signed by the parties hereto.
22. No Assignment
It is expressly agreed that the Landowner shall not assign this Agreement in whole or in part
11
without prior written consent of the City. 2053095
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23. Successors Shollay Ymce Gallatin Co MT MISC 120.00
This Agreement shall be binding upon,inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, successors and assigns.
24. Covenants to Run with the Land
The parties intend that the terms of this Agreement shall be covenants running with the land
and shall not expire at their deaths or upon transfer of ownership of the property.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the
day and year first above written.
LANDOWNER:
WBC,LP
By:�1� Ado
its 1Ji 2 e C.` c) k
STATE OF MONTANA )
:ss
County of Gallatin }
On this lq""'
npday of ,2001,before me, a Notary Public for the State of
Montana,personally appeared Jerry Williams,as a director of WBC,LP,known to me to be the
person whose name is subscribed to the above instrument and acknowledged to me that he
executed the same for and on behalf of WBC,LP.
IN WITNESS WHEREOF,I have hereunto set my hand and set my Notarial Seal the day and
year first written above.
i
No ublic for the State of Montana
(St'eal) • ' Residing: PJD?'P/3�liN
j ,• Commission Expires: /o'/9 Z�L
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shaliaY Vutos-Qaltatln Co HT MISC 120.00
CITY OF BOZEMAN-
By: Clark Johnson,City Manager
ATTEST:
By:Robin L. Sullivan, Clerk of the City Commission
STATE OF MONTANA)
:ss
County of Gallatin )
`f, �9
On thce'V day of � �� , 2001,before me, a Notary Public for the State of Montana,
personally appeared CLARK JOHNSON AND ROBIN L.SULLIVAN, known to me to be the City
Manager and Clerk of the City Commission respectively,of the City of Bozeman, whose names are
subscribed to the within instrument and acknowledged to me that they executed the same for and on
behalf of said City.
IN WITNESS W HEREO ,T have hereunto set my hand and affixed my Notarial Seal on the day
and-.yea;first written above
in
rotary Public for the State of Montana
(Seat) Residing at Bozeman, Montana
Commission Expires: 67
Saaln Meadows unncialicm ugmemem 101001.doc
13
2053095
o. ra 1 za
BhWay Vanms.aal[atin co nr nisc !?c emr1rrar2ea aa;as?
EXHIBIT A
WAIVER OF RIGHT TO PROTEST
CREATION OF SPECIAL IMPROVEMENT DISTRICTS
STREET,WATER SEWER
BAXTER MEADOWS ANNEXATION
The undersigned owner of the real property situated in the City of Bozeman, County of
Gallatin, State of Montana, and more particularly described as follows:
Tracts 1,2,3, and 4 of Certificate of Survey No.2242,which is
on file and of record in the office of the Clerk and Recorder of
Gallatin County,Montana; being shown as a portion of the
Southwest Quarter and all of the Southeast Quarter of Section
34, Township 1 South,Range 5 East,and the Northeast
Quarter of Section 3,Township 2 South,Range 5 East,
P.M.M., Gallatin County,Montana; all described as follows:
Beginning at the Northeast Corner of said Section 3;
thence southerly I81 degrees 33'57",assumed azimuth from north,
2660.08 feet along the east line of the Northeast Quarter of said
Section 3;
thence westerly 270 degrees,07'11"azimuth 2636.21 feet along the
south line of said Northeast Quarter,
thence northerly 001 degree 12'19"azimuth 2640.28 feet along the
west line of said Northeast Quarter,
thence westerly 269 degrees 51'01"azimuth 1983.12 feet along the
south fine of the Southwest quarter of said Section 34;
thence northerly 353 degrees 01'04"azimuth 249.09 feet;
thence westerly 269 degrees 45'45"azimuth 632.56 feet;
thence northerly 000 degree 24'41"azimuth 1750.20 feet along the
west Line of said Southwest Quarter of Section 34;
thence easterly 089 degrees 52' 17"azimuth 1322,67 feet along the
south Iine of Certificate of Survey No.233;
thence northerly 000 degree 22'38"azimuth 66537 feet along the
east line of said Certificate of Survey No.233;
thence easterly 089 degrees 53'19"azimuth 3971.29 feet along the
north line of the Southwest Quarter and the north line of the
Southeast Quarter of said Section 34;
thence southerly 180 degrees 15'01"azimuth 2651.80 feet along the
east line of the Southeast Quarter of said Section 34,to the point of
beginning.
Said property contains 460.2971 acres,more or less,and is subject to
all easements of fact and record.
The property is more commonly known as lying between West
Oak Street extended,Deadman's Gulch extended,Davis Lane
and Harper Puckett Road.
I
IN CONSIDERATION ofreceivmg approval for annexation ofthe subject property from the
City of Bozeman, along with accompanying rights and privileges and for other and valuable
consideration, the receipt of which is hereby acknowledged, and in recognition of the iinpacts to
streets, city water, and city sewer; specifically, to Baxter Lane, Davis Lane/Fowler Road,
Deadman's Gulch Road,Ferguson Road and Oak Street which will be caused by the development
of the above-desenbed property, the owner has waived and does hereby waive for itself, its
successors and assign the right to protest the creation of one or more special improvement districts
for street improvements including paving, curb/gutter, signals, sidewalk, and storm drainage
facilities to Baxter Lane, Davis Lane/Fowler Road, Deadman's Gulch Road,Ferguson Road
and Oak Street; trunk water mains and appurtenances to serve the property; trunk sewer
mains and sewage lift stations to serve the property;or to make any written protest against the size
or area or creation ofthe district to be assessed in response to a duly passed resolution of intention to
create one or more special improvement districts which would include the above-described property.
In the event Special Improvement Districts are not utilized for the completion of these
projects, we agree to participate in an alternate financing method for completion of said
improvements on a fair share,proportionate basis as determined by square footage of the property,
linear front footage of the property, taxable valuation of the property, or a combination thereof
This waiver shall be a covenant running with the land and shall not expire.
The terms, covenants and provisions of the Waiver shall extend to, be binding upon the
successors-in-interest and assigns of the parties hereto.
DATED this/r day of //i i� •• , 2001.
(I 2053095 2
11/1aiei sa.agp
Shelley Yana.-"llatln cc MT MiSc s20.� 2e
LANDOWNER:
W BC,LP
By:
Its:
STATE OF Apd&&A�E-
:ss
County ofGa-llaz'1iT )
On this / '"day of 2001,before me, a Notary Public for the State of
Montana,personally appeared known to me to be the person whose
name is subscribed to the abo ent and acknowledged to me that they executed the same.
IN WITNESS WHEREOF,I have hereunto set my hand and set my Notarial Seal the day and
year first written above.
G �f�� a� No Public forthe State of
°�;:7L r. - Residing at fAoze/yld-2
N ; S , , My Commission Expires: jo-/2-2002
TF'OF:.�` � CTTY OF BOZEMAN: ;
r�
m
n
By:Clark Johnson,City Manager
� N
m=
ATTEST:
�d
iV
D N+v,
now
Robin L. Sullivan, Clerk of the City Commission e a
On the Z- day of lJ�tu�._ ,2001, before me,a Notary Public for the State of
Montana,personally appeared CLARK JOHNSON AND ROBIN L. SULLIVAN, known to me
to be the City Manager and Clerk of the City Commission respectively, of the City of Bozeman,
whose names are subscribed to the within instrument and acknowledged to me that they executed
the same for and on behalf of said City.
3
2053095
IN1ave412:III loll II p021 s 04 49P
Shelley Vame-Caiia:in Cc RT MISC 120.00
IN WITNESSzNotaty
,I have hereunto set my hand and affixed my Notarial Seal on the day
and year first writt
lic for the State of Montana
(Seal) Residing at Bozeman,Montana
Commission Expires:
Raxdcr Mej6m STD waive 101D01.doo
4
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sholley Varma_Oallatln Co MT MISC 120.00
EXHIBIT B
WAIVER OF RIGHT TO PROTEST
CREATION OF SPECIAL PARKS MAINTENANCE DISTRICTS
BARTER MEADOWS ANNEXATION
The undersigned owner of the real property situated in the County of Gallatin,
State of Montana, and more particularly described as follows:
Tracts 1, 2, 3, and 4 of Certificate of Survey No. 2202, which is on file and of record in the
office of the County Clerk and Recorder of Gallatin County,Montana;being shown as a portion
of the Southwest Quarter and all of the Southeast Quarter of Section 34, Township 1 South,
Range 5 East of P.M.M.; and the Northeast Quarter of Section 3,Township 2 South, Range 5
East of P.M.M.,Gallatin County,Montana;all described as follows:
Beginning at the Northeast Corner of said Section 3;
thence southerly 181 degrees 33'57",assumed azimuth from north,
2660.08 feet along the east line of the Northeast Quarter of said Section
3;
thence westerly 270 degrees,07' 11"azimuth 2636.21 feat along the
south line of said Northeast Quarter;
thence northerly 001 degree 12' 19"azimuth 2640.28 feet along the
.west line of said Northeast Quarter,
thence westerly 269 degrees 51' 01"azimuth 1983.12 feet along the
south line of the Southwest quarter of said Section 34;
thence northerly 353 degrees 0 P 04"azimuth 249.09 feet;
thence westerly 269 degrees 45'45"azimuth 632.56 feet;
thence northerly 000 degree 24'41"azimuth 175020 feet along the
west lime of said Southwest Quarter of said Section 34;
thence easterly 089 degrees 52' 17"azimuth 1322.67 feet along the
south line of Certificate of Survey No.233;
thence northerly 000 degree 22'38"azimuth 665.37 feet along the east
line of said Certificate of Survey No.233;
thence easterly 089 degrees 53' 19"azimuth 3971.29 feet along the
north line of the Southwest Quarter and the north line of the Southeast
Quarter of said Section 34•
thence southerly 180 degrees 15'01"azimuth 2651.80 feet along the
east line of the Southeast Quarter of said Section 34,to the point of
beginning.
Said property contains 460.2971 acres,more or less,and is subject to
all easements of fact and record.
IN CONSIDERATION of receiving approval for annexation of the subject
property from the City of Bozernan,along with accompanying rights and privileges and
for other valuable consideration,the receipt of which is hereby acknowledged, and in
recognition of the impacts if the City's park facilities and the need for the maintenance of
1
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Sha116Y Vanaa-GRIIAUn Co MT MI90 120.e2
municipal park areas to serve City residents,the owners have waived and do hereby
waive for themselves,their successors and assigns,the right to protect the creation of one
or more special parks maintenance or improvement districts for a City-wide Parks
Maintenance District,or to make any written protest against the size of area or creation of
the district to create one or more special parks maintenance or improvement districts.
In the event City-wide Parks Maintenance or Special Improvement Districts are
not utilized for the City-wide park maintenance,we agree to participate in an alternate
financing method for completion of said improvements on a fair share, proportionate
basis as determined by square footage of the property, linear front footage of the
property,taxable valuation of the property, or a combination thereof. This waiver shall be
a covenant running with the land and shall not expire with the dissolution of the limited
liability corporation,provided however this waiver shall apply to the lands herein
described.
The terms, covenants and provisions of the Waiver shall extend to, and be binding
upon the successors in interest and assigns of the parties hereto.
DATED this day of , 2001.
LANDOW'IER:
WBC,LP
By: ki(
Its:
STATE OF
County of
2
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1111114/2091 of
24Oa9P
ShR118Y VA"*—Gallatin Co MT MISC 120.e0
On this l9 day of a4.�e' 2001, before me,a Notary Public for the
State of Montana,personally appeared known to me to be the
person whose named is subscribed to instrument and acknowledged to me that
they executed the same.
IN WITNESS WHEREOFF,I have hereunto set my hand and set my Notarial
Seal the day and year flrst above written.
(Seal)
!" Public for the State of Montana
'w,'A 1-d . : Residing at
: My commission expires:
CITY OF BOZEMAN:
By: Clark Johnson, City Manager
A ST:
Robin L. Sullivan, Clerk of the City Commission
On theme day of /,,"G�r�c. , 2001, before me, a Notary Public for the
State of Montana, personally appeared CLARK JOHNSON AND ROBIN L.
SULLIVAN, known to me to be the City Manager and Clerk of the City Commission
respectively, of the City of Bozeman, whose names are subscribed to the within
instrument and acknowledged to me that they executed the same for and on behalf of said
City.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal on the day and year written above.
' -,Notary Public for the State of Montana
Residing at Bozeman, Montana
Commission Expires:
Baxter M=dom Parks Waives 1011001.dw
3