The Daily inter Lake

The city of Kalispell appears to lean toward borrowing from itself to pay for setting up a new City Hall in the old Wells Fargo building.

Four council members preferred that option during a Monday workshop session, at which no vote was legally allowed.

"Why borrow money when we have money in our own coffers?" asked council member Jim Atkinson.

Atkinson, Bob Hafferman, Bob Herron and Tim Kluesner solidly supported borrowing money from the $1.216 million that Kalispell received from last summer's sale of the old Montana National Guard armory site to a hotel-and-convention-center developer.

Their reasoning is that one city fund can borrow from another city fund at no interest or at a lower interest rate than Kalispell could obtain from the state or federal governments, or from the private sector.

Mayor Pam Kennedy and council members Duane Larson and Randy Kenyon did not give unqualified support nor opposition to borrowing from the armory sales money. Council members Hank Olson and Kari Gabriel were absent.

The armory sales money tentatively has been earmarked to help build a community center, if the city decides to construct one. A citizens committee is studying whether such a center should be built, with the timetable up in the air on when that group will make its recommendation.

Kennedy, Larson and Atkinson said if the Wells Fargo project borrows from the armory sales money, then measures should be taken to guarantee that money is returned to that fund.

In 2005, the city bought the 19,662-square-foot Wells Fargo building, 201 First Ave. E., for $1.1 million.

On Dec. 4, the council awarded a $1.294 million contract to Oswood Construction Co. of Great Falls to remodel the old Wells Fargo building during the next six months. The remodeling is scheduled to begin next week.

Most of the city's offices will move to the new City Hall from the current 26,229-square-foot City Hall and other leased space. The Police and Fire departments, and municipal court are supposed to expand to fill up the current City Hall.

Overall, city officials expect the total cost of remodeling and moving to be roughly $1.5 million.

The city has set aside $300,000 for the project, leaving $1.2 million to be raised. That amount could increase to $2.3 million, if the council decides to refinance the $1.1 million in purchase money and add that to the overall borrowing package.