Anticipating the effect an upcoming city ballot referendum could have on control of Whitefish’s two-mile planning “doughnut,” the Flathead County commissioners on Wednesday began the process of scrapping the 2010 revised interlocal agreement.

The commissioners unanimously adopted a resolution giving a one-year termination notice to the city of Whitefish for the interlocal agreement that had been a compromise for both sides.

At issue are the commissioners’ concerns over the outcome of the ballot referendum aimed at tossing out the revised agreement.

“This puts everyone in a quandary,” Commissioner Jim Dupont said prior to Wednesday’s vote. “If the voters pass the referendum, at least we’ll have a six-month jump start” in voiding the revised agreement.

“We’ll dump it, pull out and we’ll take over” control of the doughnut, Dupont said.

The county rescinded the original 2005 interlocal agreement largely because doughnut residents have no representation since they can’t vote in city elections.

Dupont is unhappy that doughnut residents won’t get to vote on the November referendum. Because it’s a city vote, only voters who live within the city limits of Whitefish will be able to vote.

Referendum supporters, however, believe there’s overwhelming public opposition to the revised agreement and argue the agreement “has crippled the city’s ability to govern itself effectively” because Whitefish City Council members are unsure how the county will react to city legislation that spills into the doughnut area.

Dupont said the doughnut battle essentially is having a negative effect on doughnut property owners.

“The majority of the doughnut residents don’t know what their property values are,” Dupont said. And, he said, they are reluctant to make improvements because of jurisdictional questions.

Dupont, who helped forge the compromise last year, was referring to city legislation such as the critical areas ordinance that put restrictions on building in drainage-sensitive areas in the doughnut area.

The battle for control of the two-mile zone, plus the city’s lawsuit against the county over doughnut control, has left a pall of uncertainty that has affected real estate transactions and development.

“I consider this a failure,” Dupont said of the interlocal agreement and the doughnut process. “There were too many groups, too many people arguing and too much litigation and too many lawyers.”

Whitefish doughnut resident Lyle Phillips reiterated Dupont’s concerns as he read a prepared statement prior to Wednesday’s vote.

“I agreed with the [revised] settlement, not because it gave the doughnut residents everything they thought should be in it, but I understood it was a compromise and ended the current litigation,” Phillips said. “It brought the county and city together. It promised certainty and stability for the doughnut, which we desperately need in this current real estate market.”

Phillips contended the referendum, if approved, will guarantee more litigation. There will be litigation about the effect of the referendum and whether it’s legal, and there will be legal wrangling over whether the 2005 interlocal agreement still is in effect, he said.

Ironically, a stipulation of the revised agreement was to authorize city officials to ask Flathead District Court to dismiss the city’s lawsuit against the county. However, intervenors to the lawsuit said they wouldn’t support the compromise because language in the revised interlocal agreement that dealt specifically with providing representation to residents of the doughnut was removed as the two sides compromised.

Intervenors want the representation issue adequately addressed, and the court hasn’t yet ruled on the issue.

Another layer of complexity to the doughnut saga was added in February when Phillips and Diane Smith, two members of the committee that drafted the revised agreement, filed a two part motion in District Court, asking the court to grant a joint city-county motion to dismiss the lawsuit and deny proposed intervenors the opportunity to be part of the lawsuit.

Commissioner Dale Lauman reminded the 15 or so people at Wednesday’s meeting that it’s important for community leaders to look at Flathead County as “a total county.

“Until we can become a cohesive group of people ... we’re working against each other,” Lauman said. “It bothers me that we’re going down that road.”

Commissioner Pam Holmquist was hopeful that the termination of the interlocal agreement would “give the people of the doughnut some representation that they deserve.”

Reporter Shelley Ridenour contributed to this report.