Whitefish approves 'doughnut' deal

At midnight on Monday, the Whitefish City Council found closure — just barely — to the long-running “doughnut” dispute over planning control of the two-mile area outside city limits.

In a 3-2 vote, the council approved a revised interlocal agreement for the doughnut area. And in a related 3-2 vote, the council agreed to settle the city’s lawsuit against Flathead County over the doughnut and authorize city officials to ask District Court to dismiss the lawsuit.

Council members John Muhlfeld and Ryan Friel voted against the doughnut deal. Council member Bill Kahle was absent; he’s still recovering from injuries sustained in a vehicle accident. Mayor Mike Jenson also was absent because he’s in Italy.

It remains to be seen how the claims made by intervenors to the lawsuit will play out.

Whitefish attorney Sean Frampton said his clients — intervenors Heiko and Elizabeth Arndt and Westridge Investments — can’t support a compromise to remove language from the interlocal agreement that dealt specifically with providing representation to residents of the doughnut.

Frampton said recently the intervenors will not agree to dismiss the lawsuit if the interlocal agreement doesn’t adequately address the representation issue.

Both the city and county have yet to work out the final details of a memorandum of understanding that will accompany the interlocal agreement, spelling out how both parties will work with each other over land use and planning decisions in the doughnut area.

The unfinished business bothered some people who testified during the public hearing.

“I’m worried about what that collaboration will look like,” Dru Jackman said.

The audience was filled with downtown Whitefish supporters who had testified earlier during a hearing about expanded retail use on U.S. 93 South. Many of them said they want the lawsuit to play out.

“I have grave reservations that three county commissioners can service us appropriately,” Bob Blickenstaff said, noting that a vote of just two commissioners could overturn important city legislation in the doughnut area. “I urge you to let the lawsuit proceed and put in an elected community council” for the doughnut.

Ben Cavin wondered if the revised agreement provides representation for doughnut residents.

“I request an up-or-down vote on some self-representation for us doughnut people,” Cavin said.

The idea of a community council or land-use advisory committee for the doughnut area has been batted around but is still up in the air.

Dan Weinberg said representation still is a key issue. He recounted his experience with the county commissioners when he was at the helm of getting The Wave fitness center built in Whitefish.

“The reception from the county commissioners was blank stares,” Weinberg said. “I came before the City Council and they got it. If anyone thinks the commissioners will adequately represent the doughnut, they’re badly mistaken.

Frank Sweeney, a Whitefish attorney, cautioned the council about approving the interlocal agreement without the memorandum of understanding.

“If we think we’re buying our peace, we’re not,” Sweeney said. “The intervenors have no intention of going away.”

But Diane Smith, another local attorney, told the council “it’s tough to litigate yourself to success.”

She contended it was Whitefish that didn’t listen to the county commissioners in the first place, when then-Commissioner Gary Hall attended a council meeting and warned the city the county would pull out of the interlocal agreement if the city proceeded with the critical areas ordinance in the doughnut where residents have no city representation.

The county did just that, rescinding the interlocal agreement two years ago.

“At the end of the day, if Whitefish loses the lawsuit — and I know lots of lawyers who say Whitefish will lose — you’ll have bet the farm on an outcome you can’t control,” Smith warned.

Later, during council discussion, council member Turner Askew agreed with Smith’s rationale.

“You never know with a lawsuit if you’re going to win,” Askew said. “If we lose, what have we done to people in the doughnut? Settling the lawsuit and working with them [the county commissioners] is in the best interest of the doughnut residents.”

Council member Phil Mitchell said he believes the city can work with the county, and reminded the audience that the city once thought it could win the Walton lawsuit over slope construction that ultimately cost the city $400,000 when it lost the case.

“I have a hard time solving things with lawsuits,” Mitchell said.

Council member John Muhlfeld said he believes the city has made good progress in working with the county, but he’s still troubled by a clause in the agreement that allows the county to pull out of the deal with a one-year termination notice.

But council member Chris Hyatt pointed out that the one-year notice does give either party time to fix the alleged problem and work toward resolution.

There are about four to six past city decisions affecting land use in the doughnut — passed while the original interlocal agreement was in place — that the commissioners want to review.

The county commissioners are expected to vote on the revised interlocal agreement early next week and will schedule a public meeting in Whitefish, Commissioner Joe Brenneman said.

“We were waiting to see” what happened Monday night, he said. “Assuming they passed what we thought they were going to pass, we should be good to go.”

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com