Polson agrees to settlement in wastewater project lawsuit

The city of Polson on Monday night agreed to a settlement in a lawsuit filed against the city by the primary contractor in its wastewater treatment system project.

Following a brief closed session, commissioners voted unanimously to accept a mediated settlement in which the city agrees to pay $375,000 to contractor Swank Enterprises of Kalispell. Most of that sum — $345,000 — is money that already was owed to Swank Enterprises but had been withheld by the city after project deadlines were not met.

Swank Enterprises had sought $1.54 million from the city and the project’s engineering firm, DOWL Engineering, which agreed to pay Swank $125,000 as part of the settlement.

City Manager Ed Meece, who assumed his role with the city in October, told commissioners Monday night that even with the settlement factored in the project still came in $146,000 under budget.

Polson secured two state loans totaling more than $14 million in 2017 to modernize its wastewater treatment system and improve water quality. The city’s original wastewater treatment system was constructed in 1981, and there had been no major improvements since 2001. The original target date for the project’s completion was late 2018.

The agreement was reached during a Dec. 9 mediated settlement meeting, with Meece and attorney Nathan Bilyeu representing the city.

“The advantage of this deal is it puts the matter behind us so we can move on to the next phase,” Meece said after Monday’s meeting. “We still came in under budget. Overall it’s a good place for the city to be.”

The lawsuit was filed over Phase 2 of the project, which is located along Kerr Dam Road in Southwest Polson. The new system went live in 2019, though there remains a final phase to the project. Meece said Monday that Phase 3 goes to bid this spring and work is expected to begin in the summer.

In other business, the city rejected a citizen request to withdraw its resort tax proposal, intended to fund citywide street repairs, and cancel the Feb. 2 special election on the proposal.

Prior to the meeting, Polson resident Murat Kalinyaprak requested and was granted time to address the commission on the matter. Kalinyaprak, a computer systems analyst and former commission candidate, gave a 50-minute presentation Monday during which he presented several documents he says prove that Polson does not qualify as a resort town under state law and therefore is not eligible to present the option to voters.

“Polson is not a resort community by any estimation,” he said.

“Just because there is more activity in the summer, it doesn’t mean Polson is overrun by tourists. It’s just that local people have come out of their hibernation.”

Kalinyaprak argued that the state Department of Commerce in 2008 notified the city that it did not qualify, but later reversed course. He said there’s no basis for that reversal, and a Commerce representative admitted to him that it was a mistake but that there’s no process for review.

“Knowing these facts, it is illegal for the city to put this in front of the voters,” he said.

The documents Kalinyaprak presented are part of the commission’s Jan. 4 agenda, and are available online at tinyurl.com/y3mye2su.

City Manager Meece said Monday that when the idea of a resort tax began to gain steam in 2015, the city reached out to the state for assurances that Polson qualifies as a resort town and was given the green light.

Following Kalinyaprak’s presentation, Commissioner Carolyn Pardini made a motion to put the action to a vote. Commissioner Patricia Corrigan-Ekness seconded, and then commissioners voted unanimously to reject the action, maintaining the Feb. 2 special election.

City staff have held a series of informational public forums on the issue. The final forum is scheduled for 7 p.m. Tuesday, Jan. 19. It will be conducted remotely via Zoom, and details regarding attendance are available at the city’s website, cityofpolson.com. The homepage features a resort tax initiative tab with all relevant links.

Also Monday, the commission received an update from members of the Polson Skatepark Association, who are seeking to expand the city’s existing skatepark.

Jesse Vargas and Loni Havlovick said their group has raised $85,000 so far for the expansion, which they estimate will cost $240,000.

They said they’re considering establishing the association as a 501(c)(3) nonprofit or working with other local nonprofits to help raise the total funding.

They suggested the city could help by developing a process for submitting grant proposals through the city and by finalizing a contract with Oregon-based Dreamland Skateparks for the project.

The existing skatepark accommodates primarily intermediate and advanced skaters, they said, and the expansion is intended to benefit beginners and young skaters.