Post Falls residents can't dim light tax

POST FALLS — Lights out on paying for street lights as a fee in Post Falls.

Despite heavy public opposition on changing the method of paying for street lights as fees on residents' monthly utility bills to a tax, the City Council on Tuesday night approved the fiscal 2017 budget that moves ahead with the switch.

Currently, every homeowner pays a flat $3.85 fee for street lights on their monthly bill. That fee will be eliminated on Oct. 1 when residents will pay for lights through taxes.

To make the change — and to collect the $565,484 needed yearly to pay for lights — the council is taking $282,742 in foregone property taxes (unspent taxing authority from previous years) and the same amount with a 3 percent property tax increase. Each year, cities are allowed to increase taxes up to 3 percent. What isn't used goes into the books as the foregone balance that can accumulate year after year.

Several residents, many who live in the Highlands neighborhood, spoke in opposition to the street light change because the cost will become based on home values instead of a flat rate. Therefore, residents with higher-valued homes will pay more for lights.

"It's unequal taxation for equal benefit," resident Bob Cvancare said.

As a result of the change, the owner of a $200,000 home will see a $12.14 decrease per year on street lights. But the owner of a $250,000 home will see an increase of $4.04 and the owner of a $500,000 home an increase of $125.

Council members Joe Malloy, Linda Wilhelm, Lynn Borders, Alan Wolfe and Kerri Thoreson voted in favor of the budget as presented by staff reflecting the street light change. Council member Betty Ann Henderson was the lone dissenting vote.

After resident Marcia Saunders spoke, she drew claps from several of the roughly 65 people in attendance in what was one of the most-attended Post Falls council meetings in recent memory.

"You need to take into consideration the issue of fairness to your constituents," she said. "If this passes, Bernie Sanders will be proud of you because socialism will be alive and well in Post Falls, Idaho."

Mayor Ron Jacobson had to squelch the clapping by tapping his gavel and added, "This is not a gymnasium."

Jacobson said he and the council also believe the change isn't fair, but they also need to heed the advice of city attorney Warren Wilson who said the city has been threatened with a lawsuit if it doesn't change.

"What is legal and what is fair unfortunately don't line up," Jacobson said.

Wilson said the city would also likely lose the suit based on cases that determined street lights are a tax because they benefit everybody like streets and not a fee that is based on usage. Wilson said defending suits can cost taxpayers in the "upper six digits."

Resident Rico Rodriguez posed the question if the change will lead to a slippery slope every time a lawsuit is mentioned.

"When do we stop?" he said. "The reason I like living in North Idaho is that, in this state, we've got guts. What if the next person says the garbage fee is illegal?"

Wilhelm said she related to residents' concerns, but she also believes the lawsuit threat is real and Wilson's legal position should be taken seriously.

"I'm not afraid of people making threats, but when our legal counsel advises us to switch from a fee to a tax, I'm of the mind we should follow his advice," she said. "I don't think that's cowardly, but smart. When that lawsuit comes to court, will all of you be there to support the city? Our insurance with the city will not cover the lawsuit if we lose."

The guidance of attorneys varies by city on the tax-fee debate. Coeur d'Alene is sticking to street lights as a fee, while many other cities, including Rathdrum, are making the switch. Hayden already pays for lights through taxes.

Borders said he supported the budget as presented because, without the tax-fee change, it was developed with no tax increase.

"We haven't had an increase in five years and staff has done a great job of keeping (the budget) down," he said.

Resident Barry Rubin suggested more cuts, including $8,500 for hanging baskets, could be made to the budget so there's no tax increase again.

"I do not see the justification for raising taxes when you're spending money on hanging plants," he said.

But the idea to make more cuts didn't catch momentum from the council during the meeting.

The $22.86 million budget includes merit raises for employees of up to 3 percent, plus a cost of living allowance of 1 percent.

If all of the city's 154 General Fund employees were to receive the maximum 3 percent pay increase based on their annual evaluations — administrators estimate 90 percent do — and with the 1 percent COLA, the total amount for the hikes is $413,011.

Personnel requests in the budget included: reclassifying a detective to detective sergeant, $4,418; one police officer, $75,345 (includes salary and all benefits); a senior parks and recreation worker, $57,168; recreation assistant, $26,811; and an engineering technician, $64,454.

Other large budget items included: $180,000 for replacement marked police vehicles; $100,000 for four unmarked replacement police vehicles; $110,000 for a compaction asphalt roller; $100,000 to connect sidewalks to the Centennial Trail; $46,000 for traffic signal upgrades at Cecil Road and Mullan Avenue; $15,000 for police body cameras; $63,000 for community development software upgrades; and $124,000 for street reconstruction on Spokane Street from Poleline to Grange.

• In other business, the council approved a 9 percent wastewater fee hike to pay for treatment plant upgrades mandated by the U.S. Environmental Protection Agency to further clean wastewater discharged to the Spokane River. To the average residential user, the change will mean a $3.83 hike per month. Water rates will increase 3 percent — 20 cents per month for the average homeowner.