Deal called for APF to provide police force

August memorandum made public after Gazette went to court
2009-10-09T00:15:00Z Deal called for APF to provide police forceED KEMMICK Of The Gazette Staff The Billings Gazette
October 09, 2009 12:15 am  • 

A memorandum of understanding between Hardin's economic development agency and American Police Force, released by the agency on Thursday, laid out a proposal under which APF would provide a police force for the city of Hardin.

The memorandum was signed Aug. 18, nearly three weeks before it was announced that a contract had been signed between APF and Two Rivers Authority, the tax-funded economic development group. The memorandum was signed by Greg Smith, the former director of the TRA, and Michael Hilton, the man who founded APF last March.

TRA had previously refused to release the memorandum and had released only the first 11 pages of the 13-page contract.

Billings attorney Martha Sheehy, representing The Billings Gazette, filed a motion in Big Horn County District Court last Friday, asking Judge W. Blair Jones to order TRA to release the full contract and memorandum of understanding.

Gary Arneson, manager of the Hardin Generating Station and president of the Two Rivers board of directors, told Sheehy he decided to release the documents without waiting to hear from the judge. He hand-delivered the documents to The Gazette on Thursday afternoon.

APF, which had proposed leasing the empty Hardin jail for 10 years, caused an uproar in mid-September when Hilton and several associates showed up in Hardin in three Mercedes SUVs that bore detachable decals identifying them as belonging the Hardin Police Department.

Hardin has not had its own police force since 1976, when a consolidation agreement with Big Horn County resulted in the sheriff's department providing all law enforcement in the city and county. The two governments have just begun the process of deconsolidating, calling for Hardin to have its own police department again by July 1, 2011.

It was with those plans in mind that the memorandum of understanding addressed the issue of local police services. The key paragraph read:

"American (Police Force) will submit to Two Rivers a written proposal for American to provide a police force and all necessary equipment for the operation of the police force in accordance with Montana Statutes for the City of Hardin. The proposal will be provided to Two Rivers within ten days of the date of this agreement. The parties acknowledge that the City of Hardin will have to agree to any proposal before it can become effective. However, American agrees that it will be ready and able to perform in accordance with any proposal within sixty days of notification of approval by the City of Hardin. The City of Hardin will pay the sum of $250,000 to American for the police force."

Becky Convery, Hardin's former city attorney, said last week that it was Smith who first suggested the possibility of APF providing local law enforcement. She said the TRA had "no authority to enter into those discussions," and on Tuesday she and Hardin Mayor Ron Adams assured the Big Horn County Commission that the city had no intention of involving APF in local policing.

By the time a formal contract was signed on Sept. 4, during a trip to California by Smith, Convery and TRA Vice President Al Peterson, there was no specific mention of APF providing law enforcement services in Hardin.

The contract said only that APF "shall have the option" to "provide additional law enforcement services to the TRA and/or the City of Hardin."

That contract was signed by Hilton, Smith and Peterson. The last page of the contract includes a blank space for the signature of Lawrence J. Bell, identified as the trustee for holders of the bonds that were sold to finance construction of the prison.

The city issued $27 million in revenue bonds to build the jail, which has sat empty since it was completed in 2007. The bonds went into default last year.

Bell is identified in the contract as vice president of U.S. National Bank Association's Corporate Trust Services in Portland, Ore. He could not be reached for comment Thursday.

The TRA board was working on a new contract when it decided on Monday to suspend further negotiations until it had hired a new attorney. Convery, who had been working on a contract basis for the agency, resigned last week. Smith resigned as director of the agency on Monday.

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