Supreme Court denies city's motion

Court's action gives county a free hand to plan and zone in the 'doughnut' area

By RICHARD HANNERS / Whitefish Pilot

The Montana Supreme Court last week denied Whitefish's motion for an injunction pending appeal in its lawsuit against Flathead County over its two-mile planning jurisdiction.

This marks the third time a court has denied the city's efforts to retain planning and zoning authority over the so-called "doughnut" area.

Citing county residents' criticism of the city's growth policy and critical areas ordinance, the county commissioners adopted a resolution on March 13 unilaterally terminating the 2005 interlocal agreement between the city and county that created the planning and zoning jurisdiction.

Soon afterwards, the city filed a lawsuit in district court claiming the interlocal agreement could not be unilaterally terminated. The city also sought a preliminary injunction pending resolution of the lawsuit.

Flathead County District Court Judge Katherine Curtis agreed to a temporary restraining order to preserve the status quo, but in her May 1 order, she denied the city's petition for a preliminary injunction and dissolved the temporary restraining order.

This set off a litany of appeals by the city. The city's goal has been to retain planning and zoning authority over the "doughnut" area until the case is fully resolved.

Whitefish filed with the district court for an injunction pending appeal and, on May 15, filed a notice of appeal with the Montana Supreme Court.

Curtis denied the city's motion for an injunction pending appeal on June 20, so the city went ahead and filed for an injunction pending appeal with the high court on July 1. That motion was denied July 29.

A final ruling on the lawsuit might be two to three years away if the case goes back to the Montana Supreme Court again after Curtis rules on the issues. Until then, the county has been given a free hand by the courts to go ahead and take over planning and zoning authority in the "doughnut" area.

If either Curtis or the Montana Supreme Court rules in favor of the city, then planning and zoning decisions made by the county in the interim would need to be reviewed and possibly changed.

For some developers, the situation has created a lot of uncertainty. Dan Graves, Winter Sports Inc. president and CEO, for example, said the company spent $1.5 million on planning for the ski resort on Big Mountain while it was under the city's jurisdiction. It's unclear what the status of all that planning work will be if the ski resort falls under the county.

Several city councilors questioned city attorney John Phelps about the city's litigation strategy during Monday's city council meeting. The discussion was open to the public because the lawsuit is between two public agencies.

Councilor Turner Askew expressed concern that the council was not receiving sufficient information from Phelps to make a good decision, and that past council decisions were made too quickly. The Columbia Falls City Council spent 1 1/2 hours discussing whether to join Whitefish in the suit against the county, he pointed out.

Phelps said he serves the council, and if they need more information, he would provide it.

Askew was also concerned about continuing to appeal. It might be better to ask for a declaratory judgment, he said.

"The voters who elected us will be in turmoil for how long?" he asked. "When will be able to resolve this?"

Phelps said he needed to file an appellant's opening brief to the high court by Friday. He said the council authorized him to appeal Curtis' ruling, and it would be "a big turnaround" for the council to change direction.

Mayor Mike Jenson compared the situation to conflict resolution and urged the city to continue its appeal.

"Everyone thinks this is a fist fight, and it's not," Jenson said, noting that the outcome of the lawsuit will affect state planning law for a long time.

Phelps elaborated on that point.

"When we signed the interlocal agreement, we thought it was lawful, and so did the county attorney and the commissioners," he said. "We could reach an accommodation with the county in a new interlocal agreement, but would it be invalid, too?"

The possibility of reaching an accommodation improved after Jenson, Askew and councilors Nancy Woodruff and John Muhlfeld met last week with commissioner Gary Hall and two county planners.

Jenson said there were some agreements, but the outcome of the Supreme Court ruling was not known at the time. The bottom line was that the county wanted to keep talking, he said, noting that the county didn't have the staff to take on all the planning work in the "doughnut" area.

Muhlfeld said the county's concerns fall into five areas — infill requirements of the city's growth policy, all of the city's critical areas ordinance, providing representation for "doughnut" residents, addressing some zoning designations and planning for highway corridors.

The council agreed to appoint Jenson, Askew, Muhlfeld and a person from the community to a committee that will work with the county on trying to reach an accommodation.