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Gallatin County and the city of Bozeman plan to participate later this month in a court-ordered mediation on a long-running lawsuit over road improvements in west Bozeman.

The mediation, which will take place at City Hall, will be closed to the public and the media.

Although the mediation is private, any settlement that materializes would have to be approved by the city and county commissions at a public meeting, said Gallatin County Attorney Marty Lambert. The two commissions each plan to discuss the settlement within two weeks of the mediation.

Lambert, deputy county attorney Erin Arnold, county commissioner Don Seifert and county administrator Jim Doar will be representing the county at the mediation. City attorney Greg Sullivan, assistant city attorney Karen Stambaugh, city manager Jeff Mihelich and the attorney hired by the city for the case, Peter Scott, will be representing the city. Dennis Lind, a Missoula lawyer, will serve as the mediator.

“This is the extent to which we can inform the public because the mediation process is largely confidential,” Lambert said.

However, Mike Meloy, a Helena lawyer who is an expert on Montana’s open meetings and open records laws, said a mediation between two government agencies — such as Gallatin County and the city of Bozeman — should be open to the public.

“Because both these entities’ decisions will affect taxpayers, the public has the right to know how the results of the mediation were achieved, and the only way to know that is to watch the mediation,” Meloy said.

The dispute between the city and county dates back to 2016 when the city decided to upgrade and expand roads near the county-owned Regional Park.

In April 2017, the city created a special improvement district — a designation that allows the city to collect taxes from landowners within a certain area — to pay for road upgrades and improvements on and around North Ferguson Avenue and West Oak Street. At the time, the city estimated the county — a major landowner in the area — would need to contribute $1.1 million to the $2.5 million project.

In August 2017, the county sued the city over the project.

The county alleged the city had mishandled the road improvements by failing to solicit bids for the project as required by state law. The county also argued that because the city didn’t ask for bids, the project’s taxes were assessed incorrectly.

The city has claimed it acted lawfully and has said taxing the county for the work is fair.

A judge dismissed the county’s lawsuit in February 2018, saying the county had to pay the project’s taxes before it could sue.

The project ended up costing less than the city had estimated, so the city dissolved the special improvement district and created a new district in April 2019 based on the project’s actual cost.

The county commission protested the new tax district’s formation and told the city it would sue if it received a bill for the project.

The city then sent the county a bill for $152,798 — the first installment for the $903,425 in taxes owned.

After paying the bill, the county filed a lawsuit in January against the city in district court.

The county made a second payment to the city in May totaling $156,186.

Last month, a judge ordered the city and county to resolve the dispute through mediation.

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Perrin Stein can be reached at pstein@dailychronicle.com or at 582-2648.

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