Hayden adopts sewer fee changes
HAYDEN — The Hayden City Council held a special meeting Friday to bring its sewer capitalization fees into compliance with state law.
An Idaho district court judge ruled against Hayden last week in a lawsuit challenging the legality of the city’s sewer capitalization fees. In that ruling the judge said the city has the right to collect the fee, but used an illegal method to calculate and collect more than $7 million in sewer fees.
On Friday, city council members voted unanimously to use a formula that calculates the fee based on the value of the wastewater facility, rather than the estimated cost of future expansion of the plant.
The formula is called a “pure equity buy-in formula.”
Mayor Steve Griffitts told the council the new calculation will, unfortunately, increase the sewer fees.
Griffitts said members of the North Idaho Building Contractors Association, which originated the lawsuit, told him the intent of the lawsuit was to have the the city reduce the sewer fees.
“It appears that the unintended consequence of this endeavor is resulting in the city of Hayden using a new court-directed formula that actually shows the fee should be higher, not lower,” Griffitts said. “This appears to be a loss for everyone. We hope, as a council and mayor, to be given greater clarity in the near future.”
The previous fee was set at $2,200. The new fee will increase the sewer fees to $2,350, which is roughly a 3 percent increase.
The city’s attorney John Cafferty told the council he had to use the wastewater facility's 2007 value in order to comply with the court’s directive, because that is the last time the facility was appraised.
“Time is of the essence,” he said. “So we calculated this fee based on 2007 numbers.”
However, Cafferty said, the city has commissioned another study that will show the present value of the facility, which is due in the very near future. He said once that is complete the city council could revisit the sewer capitalization fees and raise them accordingly.
Both Cafferty and Griffitts said that has the potential to dramatically increase the fee using the court-directed formula.
Cafferty told the council if it plans to increase the fee more than 5 percent, it will have to hold a public hearing in order to do so. He said the lawsuit is still active, but he recommended setting the new fee as soon as possible to show the court the city is willing to comply with last week’s ruling.
Until the lawsuit is resolved, Griffitts said, the city has very little flexibility in how it sets the fees.
“Once it is resolved, we will know what flexibility the city does have in setting the fee,” he said, adding there are several significant issues that need to be resolved.
Shelly Donovan, executive coordinator for NIBCA, was unaware of Friday’s meeting. She was working at the Home and Garden show at the fairgrounds when she heard the news and declined to immediately comment on the action.