Oak and Ferguson intersection

A truck passes through the intersection at Oak and Ferguson Tuesday, Jan. 7, 2020, in Bozeman.

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Gallatin County has sued Bozeman for a second time over road improvements on the city’s northwest side.

In a lawsuit filed Tuesday in Gallatin County District Court, the county argued the city had wrongfully assessed taxes on the county for the construction project. The county is seeking $152,798 in reimbursement from the city for the taxes it has paid to date and wants the court to bar the city from continuing to bill the county for the project.

The county contends that the city mishandled improvements to Ferguson Avenue, West Oak Street and Davis Lane near the county-owned Regional Park by neglecting to solicit bids for the project as required by state law, according to court documents.

“The city of Bozeman broke the law and needs to be held accountable,” county attorney Marty Lambert said.

The city has said taxing the county for the project is fair. City officials declined to comment on the lawsuit on Tuesday, saying they had not yet reviewed it.

The conflict between the city and county over the improvements dates to 2016 when the city decided to extend Ferguson Avenue, expand Flanders Mill Road near the Regional Park, widen Oak Street and upgrade intersections.

In March 2017, the city hired Flanders Mills LLC for the project.

The city then created a special improvement district — a mechanism for collecting taxes from landowners in a specific area to pay for infrastructure — to raise the money needed to pay for the work. At the time, the city estimated the project would cost $2.5 million and the county would need to contribute $1.1 million of that.

In August 2017, the county sued the city over the creation of the special improvement district. A judge dismissed the lawsuit, saying the county had to pay for the project before it could object in court.

The city ultimately dissolved the special improvement district because the project cost less than anticipated.

In April, the city approved a new special improvement district based on the project’s actual cost.

The city estimated the county would have to pay $903,424 for the project.

At that time, the county commissioners submitted a letter to the city protesting the district and calling it illegal. Lambert said the county planned to sue the city if it received a bill for the project.

The city then sent the county a bill for $152,798. The county paid the bill by the Nov. 30 deadline.

The county is now hoping a judge will compel Bozeman to repay that money and cease sending bills to the county, which are scheduled every six months for the next few years.

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

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