HomeMy Public PortalAboutMinutes_CCSpecialMeeting_04032017 0111/ CITY COUNCIL SPECIAL MEETING
APRIL 3,2017—6:00 P.M.
IONA COMMUNITY CENTER
PRESENT: Mayor Brad Andersen, Council President Dan Gubler, Council Member Rob Geray,
Council Member Dan Garren, Council Member Kathy McNamara, Attorney Dale Storer, Chief
of Police Karl Bowcutt, and Treasurer Amy Sullivan.
ABSENT: City Clerk Shara Roberts and Public Works Director Zech Prouse.
VISITORS: Ted Hendricks and Paul Scoresby.
Discussion of Water Connection Fee: Attorney Storer discussed some of the many ways in
which a city can fund maintenance of water system improvements, and some of the benefits and
challenges of each. He discussed the pros and cons of using federal and state grants, judicial
review, and bond elections for such purposes.
Alternatively, a city can use water connection fees to fund system maintenance. If the City
desires to expand existing system capacity, it could also consider adopting an impact fee which is
allowable under Idaho Law. He explained one of the challenges with funding system
maintenance or expansion via water connection fees or impact fees is that the funds are gathered
gradually which often takes a long period of time to accumulate enough to meaningfully be able
to perform any type of large system expansion, and the amounts collected can fluctuate with the
economy. In contrast, a bond election provides a fixed dollar amount in one lump sum which
"loan" is then retired over a lengthy period of time.
Attorney Storer referenced and discussed a memorandum he prepared at the request of the
Mayor, and was distributed to the Council for review. He discussed two very recent lawsuits
involving governmental entities who adopted a water/sewer connection fee ordinance and who
were ultimately challenged in court. In these instances, the cities were ordered to refund any fees
they had collected, and they were further required to pay attorney fees to the plaintiffs.
He explained the Idaho Supreme Court has approved the equity buy-in method for calculating
water connection fees. However, you first have to come up with the gross replacement value of
your water system. This can be calculated by looking at the original costs and applying an index
to arrive at current replacement value. From the gross replacement value, you deduct deprecation
and any outstanding bond principal which gives you a net system value. From the net system
value, you divide it by the number of users the system can service and the resulting figure
produces the dollar value which you can charge as a water connection fee. The Idaho Supreme
Court has made it very clear that you cannot include projected or future expansion into that
calculation.
In regards to including the value of existing water rights, the Idaho Supreme Court has not
(11110 historically addressed the legality of including this component in the methodology. However,
when a user connects to a city's water system he or she receives the benefit of that water right.
Attorney Storer pointed out that water rights are very valuable assets which do not depreciate
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and he believes the Supreme Court would uphold its inclusion in the methodology even if
historically they have not addressed it.
In closing, Attorney Storer recommended the Council hire a professional engineer to provide a
detailed study using the equity buy-in method, and include the value of the existing water rights
to justify the City's water connection fee. Additionally, he recommended the Council amend
their city code to include a provision which outlines periodic review of the water connection fee
every 5 years.
Engineer Paul Scoresby expressed his support for inclusion of the City's existing water rights in
the methodology used to calculate the fee, and he further discussed the details of what would be
included in the study. He indicated the approximate cost for the study would be $5,000.
Mayor Andersen entertained a motion. Council President Gubler moved to approve Engineer
Paul Scoresby to conduct a water connection fee study and to not exceed $5,000. Council
Member Geray seconded the motion. Approval was taken by a roll call vote:
Council Member Geray: Yes Council Member Gubler: Yes
Council Member Garren: Yes Council Member McNamara: Yes
Review of City Wide Survey Questions: Council Member Garren stated that he believed some
of the questions in the survey needed to be reworded and that more information needed to be
provided to the public. He felt the questions should be designed to gather as much feedback from
the public as possible and that the questions need to elicit more than a basic yes or no answer. He
provided a handout of his proposed revisions for the Council's review.
The Council discussed the suggested revisions provided by Council Member Garren, and
provided feedback to Mr. Hendricks on how they would like to see the questions designed.
Overall, the Council liked the revisions, but encouraged simplicity and would like to see as many
yes or no questions as possible.
Mr. Hendricks will work with Mayor Andersen and Clerk Roberts on the revisions and provide
an updated version for the Council's review.
Meeting adjourned 7:28 p.m.
COUNCIL APPROVED: April 18th , 2017 ,1 0-4h 1A
Brad Andersen, Mayor
AT ST:
Shara Roberts, City Clerk
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the gross replacement value, you deduct deprecation
and any outstanding bond principal which gives you a net system value. From the net system
value, you divide it by the number of users the system can service and the resulting figure
produces the dollar value which you can charge as a water connection fee. The Idaho Supreme
Court has made it very clear that you cannot include projected or future expansion into that
calculation.
In regards to including the value of existing water rights, the Idaho Supreme Court has not
(11110 historically addressed the legality of including this component in the methodology. However,
when a user connects to a city's water system he or she receives the benefit of that water right.
Attorney Storer pointed out that water rights are very valuable assets which do not depreciate
1