Post Falls making the switch on street lights

POST FALLS — The Post Falls City Council on Tuesday night took another step toward changing residents' street light costs to be based on home values and as a tax.

Currently, every homeowner pays a flat $3.85 fee on their monthly bill.

To eliminate that fee and to help pay for the lights with property taxes through the city's General Fund instead, the council unanimously approved taking $282,742 in foregone property taxes for the proposed fiscal 2017 budget to pay for half of the street light expense. The other half, under the budget proposal, will be paid for with a 3 percent property tax increase.

As a result of street lights coming off utility bills as a fee, the owner of a $200,000 home will see a $12.14 decrease per year on street lights. The owner of a $250,000 home will see an increase of $4.04 per year, and for the owner of a $500,000 home the increase will be $125 per year.

Resident Jackie Valez, who lives in The Meadows subdivision, said that's a tough pill to swallow because she's on a fixed income.

"This will be difficult for seniors because we haven't received a cost of living increase in our pensions," she said. "My fear is that you could tax us out of our homes. We have worked hard and saved hard and got lucky with some investments to afford a nicer home and now we're being penalized."

But council members said threats of a lawsuit if the city doesn't make the street light change forced them to make a difficult decision. They said they are heeding the advice of city attorney Warren Wilson to make the switch.

"Frankly, I think it's only a matter of time before somebody (sues)," Wilson said, adding the cost to defend a lawsuit could cost taxpayers more in the long run.

The U.S. Supreme Court in 1974 distinguished fees from taxes in that fees are based on usage by individual homeowners, while services funded by taxes benefit the general public. When the debate came before the council last year, Post Falls decided to keep street lights as a fee, pending an Association of Idaho Cities review. However, when the organization didn't take a position, the topic came up again this budget season.

Some cities, including Hayden, are already charging for lights as a tax and some have made the change in recent years based on previous cases. Others, such as Coeur d'Alene, are planning to continue charging for lights as a fee.

Mayor Ron Jacobson said, with the exception of the council's desire to change the street light charge format which is a revenue-neutral shift, the proposed budget was built without a property tax increase.

"There would be no tax increase if there was not a change (in the street light charge format)," he said.

City Administrator Shelly Enderud said the total street light cost, which is now $565,484, would become part of the city's baseline General Fund budget in future years. The change from a fee to a tax would become effective Oct. 1.

If taxing districts don't increase taxes by the full amount of 3 percent per year as allowed under law, the remaining taxing authority stays on government spreadsheets as "foregone" amounts that accumulate without end. Foregone isn't actual funds but an accounting of the money the entity could have received from property owners.

The last time Post Falls took any foregone taxes for its budget was more than 10 years ago. The city has taken one property tax increase — 2 percent in 2012 — since 2009.

The council will hold second public hearings on its fiscal 2017 budget and proposed fee increases on Aug. 16 at 6 p.m. The largest proposed fee increase is sewer — 9 percent — due to treatment plant upgrades needed to comply with more stringent requirements to discharge to the Spokane River. For the average homeowner, the increase will be $3.83 per month from $42.56 to $46.39.

• In other business, the council, on a 5-1 vote, approved the Expo zone change request of Watson Associates for 115 acres north of Interstate 90 between Pleasantview and Beck. The approval will change the industrial zoning of the site to 70 acres of commercial and 45 acres of single-family homes.

Council members in support of the request said they hope the move creates economic development in an area that has been stagnant. Several people, including some in the real estate and construction industries, were in favor of the proposal.

Rob Elder, a real estate agent and long-time area business owner, said he's thankful it was clarified that urban renewal dollars won't be spent for residential uses at the site. The property is part of an urban renewal district. He also said there's plenty of other industrial property in Post Falls.

Council member Alan Wolfe opposed the zone change request, saying he's reluctant to give up industrial property for more rooftops in Post Falls.

"Post Falls will always end up being a bedroom community and struggle (with higher taxes) because most of the tax base is residential," he said. "That's why I'm against this."