Annexation denied

A settlement agreement from the 90’s resurfaces

Annexation of the American Bank or Grizzly Flats building and the adjoining lot into Big Sky County Water and Sewer District (BSCWSD) was voted down by a majority at the recent board meeting, with board member Brian Wheeler as the only outlier.The BSCWSD board explained that until upgrades are made to the existing sewer treatment plant and additional means of disposal for treated wastewater are secured, the district does not currently have enough treatment/disposal capacity to meet the existing obligation to serve all of the undeveloped properties within the district. The district has taken a staunch position that it would be remiss in its duties to annex any new properties into the district until capacity and disposal issues are addressed. “Sewer treatment and disposal capacity is commonly added in incremental steps as growth occurs in any community,” BSCWSD water superintendent Jim Muscat said. “The rapid growth rate in Big Sky makes it especially challenging to keep pace.”  Both the board and Jerry Pape, Jr. principal at Triple Creek Realty – who is acting as American Bank’s real estate agent – had legal representation present. Attorney Susan Swimley is representing BSCWSD and attorney Kim Beatty is representing American Bank. Swimley outlined board options: No action, decline it, accept it, accept with conditions, or negotiate it. The interaction began cordially, but within half an hour, threats of lawsuits as well as Gallatin County and Montana Department of Environmental Quality (MT DEQ) involvement surfaced. “A full investigation will be messy and expensive, and I don’t think anybody is going to like the final result,” Beatty said. Beatty eventually requested that she be briefly excused so she could consult with Pape regarding a compromise discussed by a few BSCWSD board members – annexation of the Grizzly Flats building after the plant upgrade and expansion was completed – or in approximately three years. Again, concerns for dwindling capacity in the current plant surfaced – which was cause for the proposal of delayed annexation. Pape rejected the compromise and said it would be quicker to go through county and state channels and get the property condemned. There is some unique history with the Grizzly Flats property – specifically a settlement agreement drafted in 1996. At the crux of the argument was the 1995 moratorium placed on Big Sky after the sewer ponds, in close proximity to the American Bank property, were found to be leaking and impacting the Westfork of the Gallatin River. The Grizzly Flats property is outside the BSCWSD boundary, but is also between BSCWSD sewer ponds and the Westfork of the Gallatin River. The initial owners put in their own septic system and drilled a well. That well was found to have e coli present. It was neither proven nor disproven that the Grizzly Flats well issue was due to impact by the leaking sewer ponds, but a settlement agreement was reached. That agreement allowed the contaminated well to be replaced by a single water service from the Meadow water system, which at that time was operated by Lone Mountain Springs. Per the settlement agreement: “The District will allow the existing structure known as the ‘Grizzly Flats Center’ located on the subject real property to connect to the District’s wastewater collection and disposal system if the State of Montana or Gallatin County condemns the structure’s septic system if it is clearly shown that the reason for condemnation is contamination from the District’s wastewater storage ponds.” Meanwhile, the larger scale environmental issue of leaking ponds prompted the creation of BSCWSD and set in motion MT DEQ criteria that had to be met. “The veiled threat that we have caused harm to that land is a stretch,” BSCWSD board member Mike DuCuennois said and questioned if the forceful effort for annexation was simply an attempt to maximize the value of the bank property. Board member William Shropshire moved to deny the petition for annexation, DuCuennois seconded and the board denied it. The situation was fully addressed in 1996, with $5.5 million invested in completely lining the formerly unlined sewer ponds, BSCWSD general manager Ron Edwards said. Pape argued that what transpired back in the 1990s continues to negatively impact the value of the property. At the meeting, he insisted that the district should be responsible for hooking-up the existing building to sewer and also the adjoining property to both water and sewer and if not done, he threatened additional scrutiny from outside agencies in a “can of worms issue,” potential litigation and “the force of state law.”   “My next action is now to consult with the state,” Pape said after the board decision. “We’ve been before you three times now for this. I sincerely hope that we are not about to open a giant can of worms.”  Board members remained unflinching: if there is pollution, they want to know about it and if it is the district’s responsibility, they want to fix it. It remains unknown what will be done with the property. American Bank engaged in lengthy negotiations with Big Sky Community Housing Trust from which a “substantial offer, but one that did not meet market value,” surfaced, Pape said. Interested parties have to present how this property is going to benefit them and also how it is going to benefit the community, he said, further noting that he will be instrumental in that decision.

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