Citizens to decide wastewater issue

City Council votes to put funding question on May 21 ballot

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Coeur d'Alene City Attorney Mike Gridley explains the legal situation regarding a wastewater treatment plant funding situation Thursday during a city council meeting.

COEUR d'ALENE - It's going to a vote.

The Coeur d'Alene City Council agreed Thursday to ask voters for the authority to borrow up to $36.3 million for federally mandated upgrades to its wastewater treatment plant.

The City Council begrudgingly voted 4 to 1 to put the up or down question on a ballot for the May 21 election as a way to prevent one councilman from handcuffing the city's options by tying the issue up in court.

It means the city all but will abandon its preferred route - judicial confirmation - which would be the less expensive option.

But the council said an election is the best route to take to prevent the project from possibly stalling.

"This is ridiculous. We shouldn't be here," said Mike Kennedy, councilman. "Steve put us all in a very bad position over an ideological matter that I think is a misunderstanding of Idaho state law."

The city explored going to a vote after councilman Steve Adams said he would appeal a judge's decision on the confirmation if the judge ruled in favor of the city. Adams, who originally voted in favor of judicial confirmation, changed his mind last month and spoke out against it in court, saying he preferred to go to election, as the state constitution outlines.

A judicial confirmation is when a judge orders a project is "ordinary and necessary," and therefore voter approval isn't necessary for a municipality to take on debt to fund it as it normally is because the project must happen. It's the route the city has taken in the past to pay for upgrades to the plant.

But an appeal could take a year in court. Too long, the rest of the council said, so it better cover its bases and prepare for an election.

"This situation should have never happened," Councilman Ron Edinger said, the lone councilman to vote against going to a vote, but the same councilman who supported a public vote on the McEuen Field redevelopment project, along with Adams. "This is a little different than, say, like McEuen. This is something we have to have. McEuen, we didn't."

Also at issue was the cost of judicial confirmation versus an election.

It will be more expensive to secure a bond on the open market compared to IDEQ loans the city had originally pinpointed to pay for at least a portion of the project, City Finance Director Troy Tymesen said.

The city had been ready to secure a $7.7 million IDEQ loan at a 2 percent interest rate to pay for the first phase of upgrades to the plant. The interest rate on the proposed bond issue, according to the bond ordinance, is estimated at 3.24 percent.

It's not to say the election rate is $3 million more than judicial confirmation, which was around $33 million, Tymesen said, but higher issuance rates, interest rates, and bond reserve rates factor in to the increased amount compared to IDEQ's figures.

City Councilman Dan Gookin, who often votes with Adams on issues, said the city would be better off getting the better rates than going to a vote.

"I love ya, Steve," Gookin said, asking for Adams to withdraw his appeal pledge. "But I think there has to be balance here."

Adams didn't withdraw his pledge, and said after the meeting - where several comments were directed at him - that he was pleased the issue was going to a vote.

"Tensions were high," he said, after the meeting. "They're not happy with me."

But he added: "I have to stick to my guns. I'm not going to compromise the integrity of the Constitution for interest points. I can't do it, in principle."

Now, it should be up to the voters, regardless of which way 1st District Judge John Luster rules on the confirmation, a ruling that is expected to come this week.

The timeline for everything is pinched because federal, state and other municipalities are on the verge of agreeing to new discharge requirements for several wastewater plants, including Coeur d'Alene, after several years of haggling. New discharge permits could be issued this summer, which means the compliance schedule - and possible penalties for not reaching benchmarks - would start for dischargers like Coeur d'Alene that discharge into the Spokane River.

If the election fails in Coeur d'Alene, and the permits for dischargers are issued anyway, another option to pay for the required upgrades would be to raise rates about 23 percent a year over the next five years.

Then, residential monthly bills would increase from around $24 to $70, and commercial rates would go from roughly $7 to $20 per thousand gallons.

That would hammer business, Mayor Sandi Bloem said. Businesses looking to locate here would choose Post Falls and Hayden over Coeur d'Alene precisely because of those rates. Post Falls and Hayden, which also discharge into the Spokane River, are landing their money for plant upgrades through judicial confirmations.

"And then people who ran on jobs and job creation - there will not be jobs. We won't keep the jobs we have," she said, looking at Adams.

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