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SPECIAL CITY COUNCIL MEETING
JUNE 17, 2015 — 7:00 P.M.
IONA COMMUNITY CENTER
PRESENT: Mayor Brad Andersen, City Attorney Dale W Storer, Council Member Rob Geray,
Council Member Dan Gubler, and City Clerk Julie Hammond.
ABSENT: Council President Robyn Walker, Council Member Kathy McNamara, Public Works
Director Zech Prouse, Police Chief Matt Lurker, Building Inspector Allen Eldridge, Treasurer
Amy Sullivan, and Animal Control Officer Kayla Key.
VISITORS: Senator Brent Hill, AIC Executive Director Seth Grigg, Rigby City Clerk/
Treasurer Dave Swager, and Jaron Seedall.
Mayor Andersen welcomed everyone and Council Member Geray led with the Pledge of
Allegiance.
Tax Disparity: Disparity in property tax burdens inside and outside of incorporated cities was
discussed with Senator Brent Hill.
AIC Executive Director Seth Grigg would create a working group to address issues related to the
planning/development process within the area of the city impact and the impact of urban
development in the county on city services.
Meeting Adjourned 8:00 p.m.
COUNCIL APPROVED: July 21, 2015
ATTEST:
Jul' ' ammond, ity Clerk
Brad Andersen, Mayor
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CITY OF IONA
3548 N Main
P.O. Box 487
lona, Idaho 83427
October 21, 2014
Senator Brent Hill
District 34, Rexburg
1010 S 2nd East
Rexburg ID 83440
Dear Senator Hill,
Phone: (208) 523-5600
Fax: (208) 535-0087
As the Mayor and Council of the City of Iona, we're writing in regards to what we have found to
be a significant disparity in the tax burden of residents of incorporated cities compared to those
who live outside of city limits.
We recently underwent an experience with the attempted Category `B' Annexation of a
subdivision (Nu'R) in which we learned a great deal and are endeavoring to ensure that we, and
other cities in the Great State of Idaho, never have to experience again. You may have already
heard about our attempted annexation as the residents involved were highly vocal about its
occurrence.
Our actions were completely legal as outlined in Title 50, Chapter 2, specifically 50-222, of the
Idaho Statutes. Although the state calls it a Category `B' Annexation, the process is better
known as "Forced Annexation", "Land Grab", or "Tyranny." This is what we found out from
the affected subdivision residents. Despite the legitimacy and legality of what we were
attempting to do, we were viewed as tyrants and Nazis, among other select names identified in
letters, meeting minutes, and other communications. The process pitted neighbor against
neighbor and ultimately was discontinued by the City, largely because of the perceived hate and
discontent in which it was resulting. Another major factor was the cost -prohibitive legal battle
that was likely to ensue.
The residents had several concerns about the annexation, but the one most consistently cited was
the large increase in property tax they would see "...with nothing to show for it." As a result of
the annexation, they would be subject to the city's property tax levy rate. In the case of the City
of Iona, this meant an increase in property tax for them of about $400 per $100,000 of assessed
property value per year. This is where the problem lies. For additional perspective, consider the
following excerpt from "PROPERTY TAX FOR HOMEOWNERS, An Educational Guide to
Property Tax in the State of Idaho" found on the Idaho State Tax Commission website:
s
In 2011, the average urban property tax rate was 1.526 percent. This compares to 1.441 percent
for 2010. In 2011, the average rural rate was 0.983 percent, which compares to 0.932 percent for
2010.
Additional review of the same website indicates the statewide 2013 averages were 1.646 percent
for urban and 1.070 percent for rural. This implies that city residents typically pay about 50-55%
more in property tax, on average, than their non -city counterparts. This excludes the franchise
fees typically levied against city residents as well for utilities (e.g., the gas company, the cable
company, etc.). The property tax disparity is nearly double in several counties. In all cases, the
city residents pay more than their non -city counterparts in a given county. See Enclosure (1),
which was obtained from the Idaho State Tax Commission website.
Given the advantage of resource availability living in a city, it is appropriate that city taxpayers
would pay more. The question is, how much more? Furthermore, consider the urban sprawl
occurring in many counties that results in the development of seemingly urban areas immediately
adjacent to incorporated cities. These communities would appear to reap the benefits of both
worlds. They have a significantly reduced tax burden, but still have ready access to many of the
benefits that city taxpayers do such as libraries and parks.
Also consider that a city taxpayer pays exactly the same county property tax levy rate as a non -
city taxpayer in the same county, but doesn't necessarily receive the same level of service from
the county as non -city residents do. Examples include:
o Road construction and corresponding maintenance to access remote areas where some people
live.
o Law enforcement by county deputies.
City impact area agreements with counties would appear to address the urban sprawl. In reality,
enforcement of impact area agreements, from the city's perspective, is routinely challenging at
best, and impossible at worst. It requires resources that cities may not typically have due to
budget constraints and the need to focus on providing for the community infrastructure and
desires of existing residents. This is particularly true in counties that may not respect the need
for orderly development of communities.
In essence, the existing tax disparity has largely contributed to:
o Urban sprawl.
o The inability, in many cases, to distinguish city areas from non -city areas due to so much
development occurring immediately adjacent to, or very near, cities.
o Accelerated development of rural/agricultural land as a result of the tax benefit there.
o Undue challenges faced by cities when attempting to annex developed areas.
The issue is statewide and is therefore unlikely to be very easily resolved at the local level where
cities cannot control the actions of counties. The bottom line is this: With the existing tax
disparity, and the availability of services provided by third parties, where is the incentive for
developers and prospective home owners to stay within or grow existing cities as opposed to
developing Idaho's rapidly shrinking rural areas? With the federal government
owning/controlling about two thirds or more of Idaho's land, those rural areas are quickly
becoming a very precious resource indeed.
We would appreciate the opportunity to meet with you in person to discuss other details of this
matter, and possible solutions, at your earliest convenience.
Sincerely,
The Mayor and Council of the City of Iona
Brad Andersen
Mayor, City of Iona
7.);2‘
Robyn Walker
Council President, City of Iona
Dan Gubler
Robert'Geray
Councilmember, City of Iona
Sat Menmov,.i
Kathy McNamara
Councilmember, City of Iona Councilmember, City of lona
Enclosure (1): 2013 Average Property Tax Rates, dated 12/16/13
oti
2013 AVERAGE PROPERTY TAX RATES
12/16/13
COUNTY
AVERAGE
URBAN %
AVERAGE
RURAL %
OVERALL
AVERAGE
PROP. TAX %
ADA
1.683%
1.374%
1.644%
ADAMS
1.783%
0.971%
1.037%
BANNOCK
2.016%
1.078%
1.803%
BEAR LAKE
1.062%
0.670%
0.751%
BENEWAH
1.666%
1.049%
1.182%
BINGHAM
1.830%
1.192%
1.395%
BLAINE
0.840%
0.718%
0.798%
BOISE
1.426%
1.082%
1.113%
BONNER
1.269%
0.773%
0.877%
BONNEVILLE
1.699%
l .071 %
1.503%
BOUNDARY
1.308%
0.957%
1.023%
1.876%
1.215%
1.337%
BU 1'1'E
CAMAS
1.706%
1.030%
1.137%
CANYON
2.383%
1.423%
2.020%
CARIBOU
1.997%
1.054%
1.204%
CASSIA
1.473%
0.861%
1.036%
CLARK
1.325%
0.990%
1.034%
CLEARWATER
1.959%
1.137%
1.337%
CUSTER
0.660%
0.414%
0.457%
ELMORE
2.248%
1.194%
1.614%
FRANKLIN
1.296%
0.940%
1.098%
FREMONT
1.169%
0.812%
0.877%
GEM
1.881 %
1.146%
1.341 %
GOODING
1.815%
1.024%
1.194%
IDAHO
1.125%
0.624%
0.726%
JEFFERSON
2.015%
1.175%
1.311%
JEROME
2.048%
1.228%
1.548%
KOOTENAI
1.527%
1.027%
1.294%
LATAH
1.858%
1.445%
1.694%
LEMHI
1.279%
0.577%
0.733%
LEWIS
1.846%
1.179%
1.399%
LINCOLN
2.038%
1.079%
1.236%
MADISON
1.608%
1.335%
1.503%
MINIDOKA
1.424%
0.882%
1.086%
NEZ PERCE
2.008%
1.074%
1.683%
ONEIDA
1.619%
0.855%
1.031%
OWYHEE
1.516%
1.004%
1.079%
PAYE 1'1'E
2.130%
1.166%
1.534%
POWER
2.357%
1.502%
1.631%
SHOSHONE
1.842%
1.208%
1.458%
TETON
1.266%
1.004%
1.063%
TWIN FALLS
1.969%
1.274%
1.688%
VALLEY
1.372%
0.778%
0.966%
WASHINGTON
1.649%
0.884%
1.095%
Statewide:
1.646%
1.070%
1.399%
EPB00129 01-28-2014
City of Iona
From: Seth Grigg <sgrigg@idahocities.org>
Sent: Thursday, July 23, 2015 2:18 PM
To: City of Iona; bhill@senate.idaho.gov
Subject: RE: SPECIAL MEETING MINUTES "TAX DISPARITY" - JUNE 17, 2015
Hi Julie,
I apologize for my late response, I'm just getting back into the office from vacation were I had limited access to email. I
believe the commitment I made on behalf of AIC was to create a working group to address issues related to the
planning/development process within the area of city impact and the impact of urban development in the county on city
services. The draft minutes reflect that the focal point of the working group will be to address inadequacies in property
tax collections between cities and counties. That is an issue that is too complex to resolve through a city centric working
group. Counties will bristle at losing tax dollars; furthermore, as it stands counties generally do not publically oppose
annexation efforts by cities. If Idaho law were to be amended to reduce county property tax collections upon annexation
counties would unilaterally oppose any city initiated annexation. As a result cities would not only face opposition from
land owners but also counties. The focal point of the working group will be on improving the development process
within the area of city impact including communication between counties, developers, and cities. We hope to convene a
working group sometime in September. Feel free to contact me to discuss this further.
All the best,
Seth
Seth Grigg
Executive Director
Association of Idaho Cities
3100 S Vista Ave, Suite 310
Boise, ID 83705
Office (208) 344-8594
Cell (208) 695-7312
www.idahocities.org
CONFIDENTIALITY NOTICE: This email, and any files transmitted with it, is the property of the Association of Idaho Cities and, unless
indicated otherwise, is intended only for the individual or entity addressed. This email may contain information considered
privileged or confidential and legally exempt from disclosure. If the reader is not the intended recipient, or the recipient's authorized
agent, you are hereby advised that copying or dissemination of this communication is prohibited. If you have received this email in
error, please notify the sender immediately.
From: City of Iona [mailto:iona@cityofiona.org]
"-'`,Sent: Wednesday, July 15, 2015 9:35 AM
To: bhill@senate.idaho.gov; Seth Grigg
Subject: SPECIAL MEETING MINUTES "TAX DISPARITY" -JUNE 17, 2015
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Good Morning,
Attached for your reference are the Special Meeting Minutes (Tax Disparity) from June 17, 2015. If you have any
"additions or corrections, please let me know.
Thank you,
JuCie Hcimmonci City CCerk
City of Iona
PO Box 487
Iona ID 83427
208-523-5600
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