The Daily Inter Lake

The Kalispell City Council unanimously decided Tuesday to borrow internally to pay to remodel the old Wells Fargo building into the new City Hall.

The city likely will borrow almost all of the $1.216 million it took in from the 2006 sale of the old Montana National Guard armory.

This will have a domino effect because the city won't have much money or borrowing wiggle-room for other major projects or to hire significant numbers of people, City Manager Jim Patrick said.

The city needs an extra $1.2 million of the $1.5 million estimated cost of remodeling the building. The city has set aside $300,000 for the remodeling and move.

"If we use the armory money, our interest rate is effectively zero percent," council member Tim Kluesner said.

In 2005, the city bought the 19,662-square-foot Wells Fargo building, 201 First Ave. E., for $1.1 million. It borrowed money through the Montana Board of Investments to buy the building - appraised at $1.7 million - and still has to repay $1.05 million of the principal.

In December, the council awarded a $1.294 million contract to Oswood Construction Co. of Great Falls to remodel the building.

Most of the city's staff will move to the Wells Fargo building from the current 26,229-square-foot City Hall and other leased offices scattered across downtown Kalispell. The Police and Fire departments, plus municipal court, then are expected to fill the current City Hall.

The money from the armory sale tentatively had been earmarked to build a community center, if the city government decides to construct one.

The City Council decided that it would repay $100,000 annually to the account within the city's general fund, in which the armory money is kept.

Each city department that will occupy the Wells Fargo building will contribute a part of its annual budget to make that yearly repayment, Patrick said. Right now, the city's Parks, Planning and Economic Development departments occupy leased offices downtown - at an annual cost of about $68,000. The city will apply that money to the armory account.

Reporter John Stang may be reached at 758-4429 or by e-mail at jstang@dailyinterlake.com