The Evergreen Water and Sewer District is asking the city of Kalispell for a land swap to provide additional sewer service around Evergreen, a move that seemed to take the Kalispell City Council by surprise on Monday.

Jack Fallon, board president of the Evergreen Water and Sewer District, explained there is currently a property in the sewer district that consists of more than 100 acres, located near the Stillwater River north of Reserve Drive, where the district does not provide service.

The district is interested in swapping that land for another piece of land — not yet identified — to expand its sewer service.

The district’s agreement with the city of Kalispell prohibits the district from extending the service area or increasing capacity.

“We’re asking the city for some more flexibility, not to change the agreement, but to have more areas to be able to serve,” Evergreen Water and Sewer General Manager Cindy Murray told the Daily Inter Lake.

When the land-swap proposal came up during the public comment period of the meeting, City Manager Doug Russell expressed disappointment with the short notice the city was given on the proposal, stating it was submitted to him only five minutes prior to the council meeting. He said he would like to issue an official memorandum about the proposal, explaining, “There is a whole other side to the story.”

During the council’s first in-person public meeting following the pandemic, about 10 members of the public were in attendance in the council chambers.

The public joined members of the council and city staff to discuss budgeting and finances for Old School Station.

The council unanimously approved a resolution to restructure the debt on Old School Station Lot 6, which was sold to Haig House Investments, LLC, in 2019. It was the first sale inked by the city to fill the property behind Fun Beverage in South Kalispell.

Originally, the buyer paid $75,000 down and agreed to pay interest-only payments at 5% for 36 months. However, Haig is now looking to build on its lot. To do so, its lender, Three Rivers Bank, requires a debt restructuring.

The council also heard from representatives of three city departments about their budget proposals for fiscal year 2021-2022.

The Kalispell Business Improvement District proposed a budget of $166,259 for the upcoming fiscal year. That figure includes continuation of a bike rack public art project, facade improvement grants and developing historic standards for the downtown area.

The Tourism Business Improvement District asked for a $625,000 budget; $100,000 is left over from the previous fiscal year, but the organization’s revenue reportedly dropped 13% in 2020.

Finally, the Flathead City-County Health Department requested $8,409,982 for the coming year. Major factors in the Health Department’s proposed budget include separating from the Flathead Health Clinic, and ongoing measures related to the COVID-19 pandemic, such as $35,000 budgeted for supplies specific to the coronavirus.

The city took no action on the three budget presentations Monday. It will likely approve the final total budget, preliminarily set at $104 million, in August when the city receives property valuations from the state.

Also during the meeting, the city held a public hearing on a proposal to allocate $525,000 in Community Development Block Grant funds for the Kalispell Parkline Trail.

Two public commenters spoke in favor of the grant reallocation, and Russell predicted the city will come back with an official resolution to make the transfer.

Toward the end of the meeting, council member Kyle Waterman announced he will not seek reelection to his seat for Ward 3. Waterman ran unsuccessfully for a Montana State Senate seat last fall.

Reporter Bret Anne Serbin may be reached at 406-758-4459 or bserbin@dailyinterlake.com.