Kroc Liability? Questions ... and Answers

The City's Pulse Issue #13 May 30, 2007 by Mary Souza
Kroc Liability? Questions ... and Answers The dirt movers are gone, the dump trucks are nearly finished and some respite of calm is returning to our neighborhood. As the final filling and grading of the Kroc Center pit concludes, some key questions have been lingering in my mind. So I asked. And my questions were answered. Here's the scoop: "A buildable site." Mayor Bloem has repeatedly announced that the city of Coeur d'Alene committed to provide the Salvation Army with a buildable site for the future Kroc Community Center. But we all know the 12 acre property was a basically a huge, deep pit; the hole that the City Council gave $3 million of our tax dollars to fill. So what about the liability of the city, or more accurately the taxpayers, for the future stability of this "buildable" site? What if the dirt settles in 5 years, causing a shift in the building and a creating a crack in one of the many pools? Who will be responsible? Will the taxpayers be on the hook to pay for the fix? Troy Tymeson, Finance Director for the city of Coeur d'Alene, sent a quick reply to my questions and provided the corroborating documents that I requested as well. Thank you, Troy. The contract between the Coeur d'Alene Parks Foundation (the group that ended up holding both the piece of land and the $3 million from the city) and the Salvation Army does seem to contain some protections. It states the Salvation Army is exclusively responsible for choosing the contractor and managing the work of filling the pit. But it also says the CdA Parks Foundation will pay for all the site work. In return, the Salvation Army indemnifies and holds harmless the CdA Parks Foundation from "all claims, losses, damages and expenses" arising from the work of leveling the site. Now I'm no lawyer and have no expertise in contracts, other than those I've encountered owning a business for 20 years. But as I read this agreement, the city of Coeur d'Alene is not listed as being "held harmless". Yes, I realize the contract is not with the city, per se. Yet Mayor Bloem is the person who promised the "buildable" site. And, surprisingly, Mayor Bloem's notarized signature appears on this contract. The lines of separation are muddled but I will continue to hope that we, the taxpayers, are protected. My second question to our City's Finance Director was about the operating expenses for the Kroc Center. This proposed community center is large. It has every bell and whistle the organizing committee could think up -- that's the description from committee members. With each amenity comes an increase in overhead expenses, so the operating budget for this well-equipped center will be sizeable. I know there's a large endowment that will allow about $1 ½ million per year of interest income to be used for operating expenses. And the membership fees are substantial as well. But my question remains: Could there ever be a time when the taxpayers of Coeur d'Alene might have to pick up the slack for any operating shortfalls? No, said Mr. Tymeson, our city "has not made any annual financial commitments to this project." So there you have it. Questions asked and answered. Pretty much. We can file away those pesky little question marks and look forward to the fun and beauty of the Kroc Center. It will be a noisy summer in our neighborhood, but the transformation will be inspiring.

Kroc Liability? Questions ... and Answers

The dirt movers are gone, the dump trucks are nearly finished and some respite of calm is returning to our neighborhood. As the final filling and grading of the Kroc Center pit concludes, some key questions have been lingering in my mind. So I asked. And my questions were answered. Here's the scoop:

"A buildable site." Mayor Bloem has repeatedly announced that the city of Coeur d'Alene committed to provide the Salvation Army with a buildable site for the future Kroc Community Center. But we all know the 12 acre property was a basically a huge, deep pit; the hole that the City Council gave $3 million of our tax dollars to fill. So what about the liability of the city, or more accurately the taxpayers, for the future stability of this "buildable" site? What if the dirt settles in 5 years, causing a shift in the building and a creating a crack in one of the many pools? Who will be responsible? Will the taxpayers be on the hook to pay for the fix?

Troy Tymeson, Finance Director for the city of Coeur d'Alene, sent a quick reply to my questions and provided the corroborating documents that I requested as well. Thank you, Troy. The contract between the Coeur d'Alene Parks Foundation (the group that ended up holding both the piece of land and the $3 million from the city) and the Salvation Army does seem to contain some protections. It states the Salvation Army is exclusively responsible for choosing the contractor and managing the work of filling the pit. But it also says the CdA Parks Foundation will pay for all the site work. In return, the Salvation Army indemnifies and holds harmless the CdA Parks Foundation from "all claims, losses, damages and expenses" arising from the work of leveling the site.

Now I'm no lawyer and have no expertise in contracts, other than those I've encountered owning a business for 20 years. But as I read this agreement, the city of Coeur d'Alene is not listed as being "held harmless". Yes, I realize the contract is not with the city, per se. Yet Mayor Bloem is the person who promised the "buildable" site. And, surprisingly, Mayor Bloem's notarized signature appears on this contract. The lines of separation are muddled but I will continue to hope that we, the taxpayers, are protected.

My second question to our City's Finance Director was about the operating expenses for the Kroc Center. This proposed community center is large. It has every bell and whistle the organizing committee could think up -- that's the description from committee members. With each amenity comes an increase in overhead expenses, so the operating budget for this well-equipped center will be sizeable. I know there's a large endowment that will allow about $1 ½ million per year of interest income to be used for operating expenses. And the membership fees are substantial as well. But my question remains: Could there ever be a time when the taxpayers of Coeur d'Alene might have to pick up the slack for any operating shortfalls? No, said Mr. Tymeson, our city "has not made any annual financial commitments to this project."

So there you have it. Questions asked and answered. Pretty much. We can file away those pesky little question marks and look forward to the fun and beauty of the Kroc Center. It will be a noisy summer in our neighborhood, but the transformation will be inspiring.