Aug. 12--The Libby City Council passed a resolution Monday that serves as documentation to legally determine who owns seven cranes purchased in 2009 for infrastructure development on Lincoln County Port Authority property.
Mayor Doug Roll said the resolution was meant to clarify the city's role in an ongoing suit between the Port Authority and Stinger Welding, a now-bankrupt company that shuttered the doors of its Libby branch in 2013.
The two parties had signed a contract to build a bridge beam-building facility that was finished in 2011, but the financial and ownership conflicts developed primarily after Stinger CEO Carl Douglas died and the company went bankrupt.
The conflict peaked when employees of Steel Girder Inc., a company that bought the assets from Stinger after it dissolved from bankruptcy, removed one of the 25-ton overhead cranes from Port Authority property and took the load to Coolidge, Ariz. in October 2013.
Roll said the resolution asserts that the city has no ownership over the cranes even though it was a "co-sponsor," or an administrative pass-through agent for the Community Development Block Grant, a grant distributed by the Montana Department of Commerce.
Port Authority attorney Allan Payne said the purpose of the resolution, in conjunction with a similar county resolution, is to contest Stinger's new argument that if neither the Port Authority nor Stinger own the cranes, the city or the county must own them.
"Stringer isn't arguing for their ownership, which is strange," Payne said. "Instead of going defensive and saying that they own the cranes, they are crafting this argument that says 'If you don't own it, these other people might.'"
This Stinger argument is in a response to the Port Authority's file for summary judgment in the Port Authority's favor, and the city resolution will become a clarification document in the legal proceedings.
The Montana Department of Commerce requires a local government agency to sponsor funds given to economically challenged areas, and the city and county acted as these agents for both the CDBG grant and another grant, the Big Sky Economic Development Trust Fund. The city is not a sponsor of the Big Sky fund, only the CDBG. The total of both grants was $1.4 million.
However, Roll said the resolution asserts that despite the city's pass-through role in the CDBG grant, it claims no ownership over the cranes and therefore is inconsistent with Stinger's argument that either the city or the county could own the cranes.
Both Stinger Montana and the Port Authority have previously claimed to own the cranes.
Payne said the Port Authority asserts ownership of the cranes because the cranes and their work were funded by the public grants, but Stinger Montana claims ownership because it is listed as an "assisted business" in the agreement and therefore has claim over the cranes.
Payne said government money paid for the cranes, and he said a private company such as Stinger has no right to own property that was paid for by the government.
Moreover, the confusion lies in the fact that there are two Stinger entities that have been involved in the conflict: Stinger Arizona, the mother company, and Stinger Montana, the branch. Payne said in the fund agreement that Stinger claims is the proof of their "assisted business" ownership, the tax ID number 86-0914948 is the ID number for Stinger Arizona, not Stinger Montana, the company involved in the suit. Searches on this tax ID number are connected to 4248 N. Hwy. 87, address for the Stinger Arizona office in Coolidge, Ariz. This tax ID confuses Stinger's "assisted business" argument to claim ownership, Payne said.
Payne said the resolutions from the city and the county along with the "assisted business" documents nullify Stinger's argument.
County Commissioner Tony Berget said the county resolution is similar to the city's and is a clarification that waters down Stinger's argument for ownership.
"This ownership does not lie with (Stinger) at all," Berget said. "They're trying to say they own the cranes but it's just not possible. Stinger doesn't own these cranes. That's a fact."
During the meeting, Libby resident D.C. Orr raised questions about resolution 1852. He complained that the city risks losing its duty to the public in its relationship with the Port Authority, and that the conflict about the cranes has the potential to distract the city from its aims.
"It's messy," Orr said during public comment at the meeting. "You have to keep focused on the city's interest, and no one else's."
Payne said the most recent filing in the case is a response from Stinger to the Port Authority's filing for summary judgment. However, Stinger filed for an extension of time to gather more evidence for their case, which the court granted. The extension's deadline for Stinger is Aug. 22.
The next Libby City Council meeting will be held at 7 p.m. on Aug. 18 at City Hall.
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