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2019 Spring District WorkshopsAssociation of Idaho Cities
Thanks to Our Title Sponsors!
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Thanks to Our Platinum Sponsors!
City Achievement Awards• Presented at AIC Annual Conference
Awards Banquet June 20 in Boise
• Receive recognition for projects or programs that have made a difference in your community
• For more information, see AIC website:
https://idahocities.org/page/CAA
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Upcoming AIC Annual Conference JUNE 19‐21 IN BOISE
AIC StaffJess Harrison, Executive Director – [email protected]
Justin Ruen, Senior Policy Analyst – [email protected]
Johanna Bell, Environmental Policy Analyst – [email protected]
Dara Von Lossberg, Financial Services Coordinator – [email protected]
Sheila Christensen, Events Coordinator – [email protected]
Payton Grover, Administrative Assistant – [email protected]
Jerry Mason, Legal Counsel – [email protected]
Nancy Stricklin, Legal Counsel ‐ [email protected]
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AIC Contact Information
3100 S. Vista Ave. Suite 201
Boise, ID 83705
Ph: (800) 344‐8594 or (208) 344‐8594
Fax: (208) 344‐8677
www.idahocities.org
AIC Board of DirectorsOfficers
President: Elaine Clegg—Council President Pro Tem, Boise
1st VP: Suzanne Hawkins—Councilor, Twin Falls
2nd VP: Tom Jenkins—Council President, Malad
3rd VP: Kevin England—Mayor, Chubbuck
Past Presidents
Imm. Past Pres. Jeri DeLange—Councilor, Hayden
Past Pres. (16‐17): Brian Blad—Mayor, Pocatello
Past Pres. (15‐16): Greg Lanting—Councilor, Twin Falls
Past Pres. (14‐15): Tammy de Weerd—Mayor, Meridian
Past Pres. (12‐13): John Evans—Mayor, Garden City
Past Pres. (08‐09): Mac Pooler—Mayor, Kellogg
Past Pres. (05‐06): Mitch Hart—Council Pres., Soda Springs
Past Pres. (03‐04): Garret Nancolas—Mayor, Caldwell
District DirectorsDist. 1: Shelby Rognstad—Mayor, Sandpoint
Ron Jacobson—Mayor, Post Falls
Dist. 2: Bob Blakey—Councilor, Lewiston
Bill Lambert—Mayor, Moscow
Dist. 3: Darin Taylor—Mayor, Middleton
Kenny Everhart—Councilor, Idaho City
Dist. 3A: Lauren McLean—Council President, Boise
Genesis Milam—Councilor, Meridian
Dist. 4: Casey Andersen—Councilor, Burley
Bruce Hossfeld—Mayor, Paul
Dist. 5: Terry Larson—Councilor, Preston
Rick Cheatum—Councilor, Pocatello
Dist. 6: Robert “BJ” Berlin—Mayor, Roberts
Rebecca Casper—Mayor, Idaho Falls
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Today’s Agenda
• 2019 Legislative Session Update
• Basics of City Budgeting & Revenue Sources
• Lunch & District Caucus for Selection of District Director for AIC Board
• Planning & Zoning, Area of City Impact & Annexation
2019 Legislative Update
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FIRST OFF…
THANK YOU!
We couldn’t have been successful
in our legislative efforts without you.
Second ‐ ResourcesIdaho Legislature’s Website
https://legislature.idaho.gov
AIC’s Bill Tracker and Summaries
http://idahocities.org/?page=Tracker
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What I’ll Cover
The Landscape
The Good – What AIC supported
The Neutral – “AKA” Picking your battles
The Bad – What AIC opposed
The Ugly – What we expect to see next session
The 2019 Session LandscapeSession began with state revenue shortfalls of approximately $100 million.
The Legislature had four major issues to tackle:
◦ Medicaid expansion
◦ The public school funding formula rewrite
◦ Setting the budget with the revenue shortfalls
◦ Prison overcrowding
They pushed off until next year most of these decisions and spent lots of time on an ultimately vetoed initiatives bill.
Very tense and acrimonious between the House and Senate.
Hostile environment for local governments.
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AIC SUPPORTED LEGISLATION THAT PASSED
THE
PurchasingHB160 – Sole Source Purchases◦ Clarifies that an emergency declaration is not required as long as the purchase meets the requirements outlined in statute.
SB1047 – Cooperative Purchasing◦ Repeals an outdated code section.
◦ Replaces it with language that allows for purchasing through agreements with a variety of entities:
◦ The State of Idaho
◦ Other Idaho political subdivisions
◦ Other government entities or associations thereof
◦ Programs established by any association that offers its goods or services as a result of competitive solicitation processes.
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AdministrationHB108 – Building Officials Certification◦ Provides a 6 month grace period for newly hired building inspectors or plan examiners to obtain certification.
HB193 – Tax Commission Boundary Review◦ Limits their authority to reviewing proposed legal descriptions and boundary areas to ensure accuracy.
◦ Prevents legality determinations.
◦ Provides notice to the taxing entity of errors and time to correct.
Miscellaneous
HB76 – E‐Bikes◦ Establishes classification of electronic bikes with 3 industry standard categories.
◦ Preserves local control over regulations.
HB134 – Alcohol Permits◦ Adds the word “plaza” to the list of places where liquor‐by‐the‐drink may be sold.
◦ Treats plazas similar to baseball parks, sports arenas, convention centers, etc. where minors may lawfully be present when alcohol is served.
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TransportationHB168 – Overweight Trucks◦ Establishes the process and fees for designating routes and issuing permits for vehicles with gross weights between 105,501 and 129,000.
◦ Creates a grant fund for road engineering evaluations.
SB1201 – Road Funding◦ Phases out the Idaho State Police funding from the Highway Distribution Account beginning in FY 2021 and concluding in FY 2025.
◦ Provides an additional approximately $18 million in revenue after full phase‐out to be split between the Idaho Transportation Department and locals.
What We Supported that Didn’t PassSB1040 and SB1160 – Liquor License Reform
◦ Substantial changes to the current system.
◦ First bill allowed cities to grant and administer licenses for restaurants and hotels.
◦ Second bill kept the state administration, but still allowed the city to authorize licenses for restaurants and hotels.
SB1063 and SB1126 – Surplus Eliminator Reauthorization
◦ First bill was a straight 5 year extension.
◦ Second bill was radiator capped and created a new transportation endowment fund that would generate revenue to fund grant program similar to the surplus eliminator.
◦ The funding for this fiscal year was authorized in HB66.
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THE NEUTRAL
Ballots & Public RecordsHB103 – Levy Ballot Language◦ Requires ballot measures for levies to include the language:◦ ”A tax of $ per $100,000 of taxable assessed market value, per year, based on current conditions”
◦ The county clerk will make the calculation and include the financial information on the disclosure statement on the ballot.
HB15 – Public Records◦ Clarifies that public records charges are exempt from sales tax.
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Campaign Finance
SB1113 – Campaign Finance Reform◦ Eliminates 5,000 population threshold for Sunshine Law reporting in city elections.
◦ Adds a new reporting requirement for any candidate in a city of any size that raises or spends at least $500 in an election cycle ($1,000 threshold for reporting by political committees).
◦ Provides for reporting on the Secretary of State’s portal for all offices.◦ Moves City Clerk’s campaign finance administration responsibilities over to the County Clerk, including oversight and prosecution of violations.
◦ Provides a $50/day penalty for late filings.◦ Goes into effect on January 1, 2020 at AIC request.
MiscellaneousHB137 – Dangerous Dogs◦ Makes several changes to the law passed in 2016:◦ Permits misdemeanor citations for harboring a dangerous dog
◦ Revises the definition of injury
◦ Provides that dangerous dogs must be identified by color photographs maintained by the court and local law enforcement
◦ Allows impoundment, medical and property repair costs to be charged
HB42 – Open Negotiations◦ Removes the sunset clause on the law requiring collective bargaining to occur in open meetings.
◦ Extends the requirements to meetings with arbitrators, fact finders, mediators or other facilitators when meeting with both parties at the same time.
◦ Can still hold an executive session to deliberate on a labor contract offer or formulate a counteroffer.
SB1028 – PTSI Workers Comp◦ Adds workers compensation coverage for Post‐Traumatic Stress Injury when a first responder demonstrates that the injury was caused by events arising out of or in the course of the first responder’s employment.
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Miscellaneous Cont. SB1073 – Underground Damage Prevention◦ Requires cities to locate and mark water, sewer and stormwater service laterals in public rights of way or utility easements when there is a request for marking underground facilities on a property.
◦ Indemnifies cities against liability claims for marking such service laterals.
HB25 – Annexation of Ag Lands◦ Prohibits land 5 acres or greater, actively devoted to agriculture from being annexed without the express written permission of the owner.
HB208 – Railroad Signage◦ Eliminates language in code requiring stop signs to be installed at at‐grade railroad crossings where electric or mechanical warning signals do not exist.
◦ Allows jurisdictions to follow the Manual on Uniform Traffic Control Devices.
THE BAD
LEGISLATION AIC OPPOSED
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The Good in the Bad –We Killed all but 2 bills we opposed and both of those were amended.
WE WERE ABLE TO STOP
LEGISLATION HARMFUL TO CITIES
We Killed ItHB41– Severance Payments◦ Would have prohibited local governments and public agencies from making severance payments to any employee upon termination.
HB77 – Cellphone Ban Preemption ◦ Would have preempted city ordinances that prohibit talking on a cell phone while driving.
HB127 – Planning and Zoning◦ Would have allowed counties to opt out of local land use planning.
HB131 – Media Recordings◦ Would have defined and provided minimum retention periods for municipal and law enforcement media recordings.
SB1038 – Binding Fact Finding◦ Would have required binding arbitration rather than an advisory fact‐finding panel.
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The Zombies: Dead, but Will Come Back
HB154 – Revenue Sharing◦ Created a new base for FY2019.
◦ Brought back the complicated averaging from last year for all new revenue.
HB128 and HB130 – Annexation◦ Alters city annexation authority.
The Wounded: Passed, But AmendedHB259 – Online Sales Tax Collection and Distribution◦ AIC supported the portions of the bill that established implementation of the U.S. Supreme Court decision in South Dakota v. Wayfair. ◦ Provides for collection and remittance of sales tax by online marketplace facilitators.
◦ We opposed the portion that diverts this revenue into an unspecified tax relief fund. ◦ We were able to get a five year sunset added to the diversion.
HB217 – Urban Renewal◦ Original bill would have required:
◦ $1 of TIF used in the construction of certain public buildings to be approved by the voters
◦ Added multipurpose sports stadium complex
◦ Greatly expanded definition of municipal building
◦ Included an emergency clause
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Amended Urban Renewal BillHB217 – Urban Renewal◦ The amended version of the bill includes:◦ No emergency clause, goes into effect July 1st
◦ Complicated three‐part test for when voter approval is required:
◦ Revenue allocation funds or revenue allocation funds aggregated with any other “public funds” contribute 51% or more of the total “project cost”; AND
◦ the project is for construction of a “municipal building,” or a “multipurpose sports stadium complex,” or a remodel of either; AND
◦ the total project cost exceeds $1M
◦ Voter approval (if triggered) is 60% of the participating qualified electors residing within the borders of the qualified municipality.
◦ Certain infrastructure improvements are exempted from these provisions.
◦ The bill was poorly drafted originally and then poorly rushed through a redraft on the amending order.
◦ There are many unanswered questions that will likely have to be resolved by the courts.
The Ugly
WHAT WE EXPECT NEXT SESSION
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FundingBusiness Personal Property Tax Exemption◦ IACI is not going to stop pushing for this.
◦ It will be a perpetual battle likely fought over replacement funding.
Grocery Tax Repeal◦ Will depend on the state revenue picture.
◦ Significant impacts on local revenue sharing and another battle over replacement funding.
Revenue Sharing Formula Revisions◦ As previously mentioned, this will not go away.
Transportation◦ Also depends on state revenues.
◦ Will likely be a version of the radiator capped SB1126 creating an endowment.
Other IssuesMedicaid Expansion Funding◦ Unlikely to impact cities, but will need to keep an eye on the proposed sources of revenue.
Annexation◦ Some version will come back.
◦ AIC will be reviewing possible law changes over the interim.
Highway District Consolidation◦ HB292 printed at the end of session for consideration over the interim.
◦ Creates county‐wide highway districts similar to ACHD.
◦ All existing property and levy authority moves to the county‐wide district.
Administrative Rules◦ Battle between the House and Senate caused the end of session bill on rules to fail.
◦ Governor has until July 1st to go through all existing rules and either extend or let them expire.
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QUESTIONS?
The Basics of City Budgeting
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Basics of the Budget Process
City Fiscal Year runs October 1 through September 30.
Each year the city prepares and adopts a budget for the upcoming Fiscal Year.
In conjunction with the budget process the city sets its property tax levy to fund tax‐supported services like streets, police, fire protection, parks, libraries, etc.
Cities also typically review their utility rates and other fees as part of the budgeting process.
The Council’s Role in the Budgeting Process• Setting the city’s property tax levy, utility rates and other fees to support the budget.
• What new services should the city provide and how should these services be funded?
• What levels of service should the city provide?
• How can the budget support the city’s future growth and development?
• What policy priorities should be fulfilled in the budget process?
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April 30, 2019: Notice to County Clerk of Budget Hearing
Deadline for the city to notify the county clerk of the date, time and location of the city’s budget hearing for the upcoming fiscal year.
Failure to do so will prevent the city from increasing the property tax portion of its budget.
Developing the Budget• Every Spring, the city begins the budgeting process, providing a calendar of
deadlines and meetings, as well as forms for city departments to make their budget requests.
• Department budget requests are checked for mathematical accuracy and compiled into a draft budget.
• City staff make projections for revenue sharing, highway distribution account, state liquor fund revenues, fine revenues, and other city revenues.
• Elected officials review the draft budget and make suggestions to bring it into balance and implement their policy priorities, often at budget workshop council meetings.
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Publishing the Budget & Notice of Budget HearingOnce the budget has been balanced and refined to the satisfaction of the elected officials, then:
1. the council provides its tentative approval,
2. the budget is reflected in the council meeting minutes, and
3. the budget and notice of public hearing are published twice in the official city newspaper at least 7 days apart.
The budget establishes a ceiling on the total level of spending and the city’s property tax levy that cannot be exceeded, for that reason it’s wise to set both on the high side.
Elements of the Budget
• Actual revenues & expenses for prior FY.
• Budgeted revenues & expenses for current FY.
• Projected revenues & expenses for upcoming FY.
• Spending is classified by department, fund or service.
• The city’s property tax levy in dollars for the upcoming fiscal year.
• Revenues are classified by source.
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Sept. 4, 2019: Last Day for Budget Hearing
• At the hearing citizens can testify concerning the
proposed budget.
• Effective July 1, 2016, cities that wish to use forgone
levying authority must also adopt a resolution of their
intent to do so, provide notice, and hold a public
hearing (more on this later).
Sept. 5, 2019: Deadline to Certify Property Tax Levy
The city’s property tax levy is certified to the county commissioners by filing the L‐2 form, along with a certified copy of the city budget.
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Sept. 30, 2019: Deadline to Adopt & Publish Appropriations Ordinance
• The appropriations ordinance sets the legal spending authority for city funds or departments.
• It must be passed by the council and published within 30 days after passage as a legal notice in the official newspaper by Sept. 30, 2019.
• A copy of the ordinance must be sent to the Idaho Secretary of State’s office.
Amending the Appropriations Ordinance
◦ The appropriations ordinance may be amended during the fiscal year to reflect additional revenue from grants, fees, or other nonproperty tax revenues.
◦ The process for amending is the same as for original adoption: two published legal notices, public hearing, passage of the ordinance by the council and publication of the ordinance.
◦ The council must approve the appropriations ordinance amendment before the money is spent.
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Evaluating Competing Budgetary PrioritiesIs it Mandated?
Will Productivity Increase?
Will this Reduce Liability Exposure?
What are the Priorities of the Elected Officials?
Workload Increases Resulting in Overtime.
Difficulty of Accurately Pinning Down Expenses.
Difficulty of Accurately Predicting Revenues.
Can a Program Offset its Costs?
Don’t Use One‐Time Money for Ongoing Expenses.
Don’t Spend it All—Build Up Reserves.
Budgeting Training & Resources
• AIC Budget Manual
• State Tax Commission Regional Budget & Levy Trainings in May
• AIC Annual Conference in June
• ICCTFOA Institute in September
• AIC Online Training Videos
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Understanding Property Taxes
Property Taxes: The Basics
• Property tax revenues are a city’s most significant general fund revenue source.
• Property taxes have funded local government since territorial days.
• Local governments have operated under budget freezes and property tax caps since the passage of the 1% Initiative in 1978.
• Your city’s current budget capacity largely reflects the population and budget capacity of your city from the late 1970s.
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The 3% Cap
• Increases in total property tax budgets are limited to 3% over the highest dollar levy of the past 3 years.
• Growth factors like new construction and annexation fall outside the 3% Cap.
• Tax increases forgone in previous years can be recovered and are outside the 3% Cap.
• The 3% Cap does not apply to bonds or override levies.
• The 3% Cap works alongside levy limits for specific funds.
Property Tax Override Alternatives
• Cities with a total levy under .004 may increase levy to .004 with 60% voter approval.
• Temporary overrides may be approved for up to 2 years in duration upon a simple majority vote.
• Permanent overrides may be approved by a 2/3 majority vote.
• It is critical to garner public support prior to placing an override levy measure on the ballot.
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Understanding Property Tax LeviesCities may levy taxes for general fund purposes of up to .009 on the taxable market value within the city.
Cities may also make special levies for specific purposes, including:
Airport .0004 or .0006 (city only)
Cemetery .0004
Library .001
Capital Imp. Fund .0004
Streets No Limit
Recreation .0006
Growth Factors for New Construction & Annexation
• The 3% Cap has growth factors for new construction and annexation allowing cities to levy to help offset the costs associated with growth.
• This doesn’t mean that the owner of a newly built building gets a new construction tax bill.
• This is levying authority that is applied against the city’s entire tax base.
• The maximum levying authority is determined by multiplying the prior year’s levy rate by the taxable assessed market value of the new construction or annexed area.
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New Construction Roll
Prepared by the county assessor no later than the 1st Monday in June and includes taxable assessed market value increases from:
◦ Construction of new structures
◦ Additions or alterations of existing nonresidential structures
◦ Installation of new or used manufactured housing
◦ Changes in land use classification
Make sure to review the new construction roll annually, comparing it to building permits issued for the previous year. Let assessor know of any discrepancies.
Understanding Forgone Revenues
• When a city fails to budget the maximum amount allowed by the 3% Cap, the forgone revenues accumulate and can be included in future budgets.
• The purpose is to ensure that local officials aren’t forced to take the maximum tax increase every year to protect their levying authority in future years.
• This has resulted in over $100 million in tax relief for property taxpayers over the past 20 years.
• Forgone revenues are exempt from the 3% Cap.
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Process for Levying Forgone The city must do the following before budgeting or levying forgone:
1. Adopt a resolution stating:
◦ The intent to budget forgone property tax revenues,
◦ The amount of forgone revenues to be budgeted, and
◦ The purposes for which the forgone revenues are being budgeted.
2. The city must notice the meeting and hold a public hearing pursuant to the Idaho Open Meeting Law.
3. The notice and hearing may be done in conjunction with your annual budget hearing.
Budgeting Non‐Property Tax Revenues
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Fees
Fees must be reasonably related
to, and cannot exceed, the cost of
providing the service.
FeesUtility Fees
Recreation Fees
Parks Fees
Cemetery Fees
Community Development Fees
Development Impact Fees
Administrative Fees
Records & Copy Fees
Building Permit Fees
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FeesNew fees or fees increasing more
than 5% require legal notice
(published twice) and public hearing.
LEGAL NOTICE OF PUBLIC HEARING
Notice is hereby given, in accordance with Idaho Code 63‐1311A, by the City of River City, Idaho, that the City Council will meet Monday, May 13, 2019 at 7 pm at the River City Community Center, 169 Halfway Street, River City, Idaho, to consider public comment regarding the institution of new or increased water and wastewater fees, traffic school fees, planning and zoning fees, building fees, and engineering fees. Information about the proposed rates and changes may be obtained at City Hall during regular business hours.
John Wayne, City Clerk/TreasurerCity of River City
Sales Tax Revenue Sharing
Local governments receive $200 million annually from
the state revenue sharing program.
Allocates 11.5% of sales tax revenue to cities, counties
and non‐school special districts.
This is general fund revenue unless the city chooses to
dedicate it for a specific purpose.
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Revenue Sharing Formulas
Two formulas have developed over the years:
◦ The County Distribution
◦ The State Distribution
County Distribution
43.6% of revenue sharing funds allocated through the County
Distribution.
Cities receive a base, the amount received in the 4th quarter of
1999 plus 5%. Excess above 5% is distributed on per capita basis.
Total revenue received by cities annually from County Distribution:
$36 million.
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Revenue Sharing, County DistributionRevenues to Cities FY99 – 20 (proj.)
State Distribution
56.4% of revenue sharing funds allocated through the State
Distribution, split equally between cities and counties.
Cities’ portion of the State Distribution allocated based on market
value (50%) & population (50%).
Total revenue received annually by cities from State Distribution:
$60 million.
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Revenue Sharing, State DistributionRevenues to Cities FY99 – 20 (proj).
Revenue Sharing ProjectionsAIC Projection Actual
FY 2011 +2.5% +2.3%
FY 2012 +3% +5.7%
FY 2013 +3.5% +8.2%
FY 2014 +5% +4.9%
FY 2015 +5% +6.4%
FY 2016 +5% +7.1%
FY 2017 +5% +6%
FY 2018 +4.5% +8.7%
FY 2019 +4.6%
FY 2020 +5%
NOTE: Revenue sharing projections are based on the state fiscal year, which runs July 1 to June 30.
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Highway Distribution Account
Distributes revenue from state fuel tax, vehicle registration, fines &
fees.
Local highway jurisdictions receive 38% of the revenue, of which
cities receive 30%, which is distributed based on population.
Revenue must be used for development, construction or
maintenance of highways & bridges.
House Bill 312 (2015)
Increased revenue for state and local transportation needs by $95 million annually.
Annual vehicle registration fee increase of $21 for passenger vehicles, $10 for motorcycles and $25 for trucks.
New annual registration fees for electric vehicles ($140) and hybrid vehicles ($75).
7 cent per gallon fuel tax increase took effect July 1, 2015.
Cities received an additional $13 million annually for street and bridge maintenance, an increase of 30.5%.
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Highway Distribution Account Revenues to Cities FY 99 – 20 (proj.)
Highway Distribution Account ProjectionsAIC Projection Actual
FY 2011 +1.1% +1.9%
FY 2012 0% ‐.5%
FY 2013 +1% +1.3%
FY 2014 +1% +.26%
FY 2015 +1% +4.8%
FY 2016 +30% +32.7%
FY 2017 +1% +5.5%
FY 2018 +1% +3.3%
FY 2019 +.8%
FY 2020 +2.5%
NOTE: Projections are based on the state fiscal year, which runs July 1 through June 30.
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State Liquor Account
Distributes profits of state liquor stores to the state, cities and
counties.
Profits are split equally between the state and cities/counties.
The local share is allocated 55.6% to cities, 38.4% to counties
and 6% to magistrate court funding.
State Liquor Account
The cities’ portion is allocated:
◦ 90% to cities with liquor store(s) on point of sale basis
◦ 10% to cities without liquor stores on population basis
Each city is entitled to receive the amount distributed during FY
1981 (hold harmless).
This is general fund revenue unless the city chooses to dedicate it
for a specific purpose.
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State Liquor Account Revenues to Cities FY99 – 18
Impact to State Liquor Fund of HB 643• Passed to provide sustainable long‐term funding for magistrate courts and
get cities out of having to provide court facilities, staffing and equipment.
• Workgroup including Mayors, County Commissioners and court administrators decided to dedicate a portion of State Liquor Account revenues.
• Beginning in FY 2019, 2.2% of cities’ liquor revenue will be dedicated to court funding each fiscal year for the next five fiscal years, for a total of 11% in FY 2023.
• This comes off the top of the cities’ distribution and will impact cities differently depending on their recent liquor revenue growth trends.
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Impact to State Liquor Fund of HB 643• If your city experienced rapid growth in State Liquor Account revenue prior to FY 2019 then it would be prudent to plan for no increase or a very small increase for the next five fiscal years.
• If your city’s State Liquor Account revenues were flat prior to FY 2019, it would be prudent to budget for a small decrease.
• If your city was losing revenue prior to FY 2019, then it would be prudent to plan for a somewhat larger decline over the next five fiscal years.
Other City Revenue Sources
Fine Revenue: Cities receive 90% of fine revenue (exclusive
of court costs) when city ordinances are violated or when
citations are made by city officers (Idaho Code 19‐4705).
Licenses & Permits.
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Other City Revenue Sources
Franchise Fees: Fees charged to power, natural gas and water
utilities, and cable television providers, for use of public rights‐of‐
way.
Resort City Local Option Taxes: Resort cities under 10,000
population may enact alcohol by the drink, hotel/motel occupancy,
and/or general sales taxes with 60% voter approval.
Let’s Break for Lunch
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District Caucus
Foundational Elements of Community Development
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Local Land Use Planning Act (LLUPA)Governs all planning and zoning actions – Idaho Code chapter 65, title 67
Successor to Standard Planning & Zoning Enabling Act – pre‐Depression
Enacted in 1975 – modeled after American Law Institute (ABA) prototype –Idaho Code chapter 65, title 67
Change in 1980 – Cooper v. Ada County – quasi‐judicial hearings for site‐specific matters
Blaha v. Board of Ada County Commissioners (2000) – Exclusive jurisdiction outside city rests with board of county commissioners
Key Elements Required by LLUPATasks to be accomplished or periodically updated
◦ Adopt Comprehensive Plan by resolution (policies)
◦ Implement Comprehensive Plan by Zoning Ordinance
◦ Enact Subdivision Ordinance to require development of subdivisions
◦ Adopt ordinance to establish development standards
◦ Due Process procedures for site‐specific permits or requests
◦ Extensive public hearing requirements
Not required by LLUPA
◦ Establishment of P&Z commission
◦ Mapping multiple zoning districts
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Basic Planning & Zoning DutiesP&Z (if you have one)◦ Source of ideas/suggested policies
◦Mandated to conduct hearings
◦ Advisor to Mayor & Council
◦ Can make decisions that don’t require ordinance to implement (plus subs)
◦ Informed sounding board
City Council◦ Establish city policy
◦ Implement policy through lawmaking
◦ Decide appeals
◦ Respond to P&Z ideas
Mayor◦ Appoints P&Z members
◦ Breaks ties/veto ordinance
Changes by 2019 Idaho LegislatureH 25 – Prohibits annexing parcels 5 acres or more if in bona fide agricultural use without owner’s express permission
H 193 – Requires responses from State Tax Commission on any request for boundary change (i.e. annexation or exclusion)
H 108 – Allows building inspectors / plans examiners to inspect or examine for up to 6 months w/o certification so long as supervised by one who is.
Failed Legislation
◦ H 93 (failed) – Same rules as ag for forest land
◦ H 130 (failed) – would have been a significant downsizing of the annexation process for cities
◦ H 127 (failed) – would have made county planning optional
◦ H 128 (did not advance) – would have been radical changes to municipal annexation statute.
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Area of City Impact: Life on the Edge
Area of City Impact (ACI)Mandatory procedure (shall adopt) — §67‐6526
Map identifying area — both city and county ordinance
Separate ordinance applying plans and ordinances for ACI — both city and county
Implementation requires total of four separate ordinances
◦ County and city ordinances (one by each) describing boundaries of ACI
◦ County and city ordinances (one by each) setting requirements
Cannot carry out Category B or C annexation unless in ACI — I.C. §50‐222
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Authorized Options (3) to Implement ACI1. Application of city plan and ordinances
2. Application of county plan and ordinances
3. Application of mutually agreed upon plan and ordinances
Apply Blaha decision – Cities have no authority outside corporate limits
Only second and third options remain – third option must be implemented by county
Excerpt From Blaha Decision (Blaha v. Ada County)Article XII, § 2 of the Idaho Constitution provides that any county or incorporated city or townmay make and enforce, within its limits, all such local police, sanitary and other regulations as are not in conflict with its charter or with the general laws. …. Therefore, any reading of the implementing ordinances granting the City the power to restrict development in the impact area by denying approval of a subdivision application made to the County would be an extraterritorial exercise of jurisdiction by the City and an infringement on the constitutional right of the County.
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Failure to Agree — ACI NegotiationsEither City or County “may demand compliance” by written notice —start in 30 days.
To all — Beware starting the dispute resolution procedures
Why? — Agreements need to be true agreements
Begins “committee of nine” process
◦ 3 county commissioners
◦ 3 elected city officials appointed by mayor / confirmed by council
◦ Together – choose 3 more
Committee of Nine —Dispute “Resolution”Develop recommendation in 180 days
Refer to respective governing boards
Governing boards have 60 days to act
If either fails to implement — other can seek declaratory judgment identifying area and establishing requirements
Factors: (1) trade area; (2) geographic factors and (3) reasonable expectation of annexation
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ACI DetailsOverlapping ACI — agree to adjustments or election
ACI remains until renegotiated — if cannot agree, resort to judicial review
Renegotiation starts within thirty (30) days of request by either party —then follow original negotiation procedures
P&Z must review before process moves forward — negotiation or renegotiation
Some thoughts about negotiation (staff, chairman and mayor, see if agreement is possible)
Further Details
Review status every ten (10) years
Growth not precluded in areas outside ACI
Representation from ACI on city P&Z required if city regulations apply in ACI — question if possible in light of Blaha decision
Allows expansion of P&Z to accommodate
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Practical Considerations
Keep the politics in mind — county officials don’t have
authority in cities; city officials don’t have authority outside
Keep administration simple
Personalities can make a difference — try to steer around
hostility
Not a one‐and‐done process; communication must be constant
Patience — some decisions may be adverse
Annexation:How Cities Grow
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Adding New Lands by AnnexationCounties are everywhere — boundaries set by state legislature
Cities have historically been established where urbanization is
occurring — boundaries set at time of creation
Thereafter, only lands that qualify by law are eligible — in the
discretion of the city council
Procedures set by state law
Appeals allowed in city ‐ initiated annexations
Why Annexation?
◦ Owners often seek access to city‐owned utilities
◦ Predictability of system extension
◦ Protection against inconsistent standards for transportation, etc.
◦ Avoid de facto build‐up of unserved urban development — residents use, but don’t pay
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Consequences of Not Annexing
◦ Gaps in basic systems
◦ Inadequate dedication and fee collection for future urban needs
◦ Remedial costs may be unaffordable
◦ Inequitable sharing of common costs
◦ Pressure on county budgets — paid by city taxpayers
Key Message — Prepare Up Front!Have the city council decide if a proposal is worthy — before starting
Inaccurate legal description can waste your efforts — independent review is wise
Confirm procedures with City Attorney before starting
Check compliance when preparing annexation ordinance
Check legal description with State Tax Commission — before publishing
Confirm publication — extra notice if Category B — publish all on web
Record ordinance at county
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Procedures to Annex — I.C. §50‐222Owner ‐ Requested — Category A
◦ Similar to zone change – requires two (2) public hearings
◦ Completed by adopting ordinance –must be contiguous
Residential enclave — Category A
◦ Same procedures as owner ‐requested annexation
◦ Surrounded by city
City ‐ initiated / not all owners consent — Category B
◦ Basic procedures plus...
◦ Area of city impact
◦ Annexation plan
◦ Findings required by statute
◦ Subject to judicial review
Owner ‐ Requested Annexation / EnclaveMust be contiguous — touching, even at a point
Must have an ACCURATE legal description from the start — do not wait until drafting ordinance
Should make sense from an orderly development standpoint —consider alternative of not annexing
Best practice — annex undeveloped land
Annexation agreements
Always consider how services would be delivered
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Requested Annexation — Category ALands adjacent / contiguous
Often seeking utility access — policy implications of denial
Apply initial zoning
◦ Public hearing
◦ Zoning recommendation from P&Z
Annexation recommendation from P&Z (unless no P&Z)
Considerations For Owner ‐ Requested Annexation
Can you provide services efficiently – orderly –adequate capacity?
What if you say no? Consequences?
Intervening lands
Contiguity
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City ‐ Initiated Annexation — Category BTwo primary types
◦ Bridging a gap to allow new development — often started by proposed development
◦ Including a substantially developed area — often with utilities
Not everyone consents
Implied consent if using utilities (pre‐2008)
Now must get executed agreement if provide utilities
Annexation Plan — Required ComponentsManner of providing tax ‐ supported services
Changes in taxation — newly annexed would begin to pay city taxes
Means of providing fee ‐ supported municipal services
Analysis of effects of annexation on other units of government
Proposed future land use and zoning
Publish initial notice at least 28 days in advance — notify of plan
Notify where plan is available without charge
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Required Findings by Governing Board —Categories B & CMust find compliance with requirements of §50‐222 and not subject to any conditional exceptions
Must find that the proposed annexation would be consistent with the public purposes set forth in the annexation plan
Must find that the annexation is reasonably necessary for the orderly development of the city
Must be in motion by council and set forth in council minutes
Category C — Seek Professional Help
Don’t try Category C annexation without thorough consideration by advisers
You start Category C behind the curve
High potential for broad controversy
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General ConsiderationsAnnex before development
Don’t extend utilities outside your city limits — once you enable
development — owners will try to avoid paying public costs
When you hold public hearings, listen; don’t rush through
annexation
Work with counties to build an understanding of the reasons for
unified systems
Public Hearings:Procedures that Meet Constitutional Standards
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Notice of HearingsPublishing in legal ads is usually least effective. Must also publish on web or social media and mail notice (sometimes).
Failure of notice means no legal authority
Go beyond legal requirements
◦ Explain process — step – by – step
◦ Focus on decision criteria — Idaho Code §67‐6535 — must be clear and objective
◦ Foster understanding in public through direct communication
Hearing Procedures ResolutionRequired by I.C. §67‐6534 (sample available from AIC)
Everyone should know what to expect — from the time of first notice to conclusion
Should reference in every notice
Should be available at meetings — great to have it online for ready reference
Should be a reference point for all you do
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Key Components of HearingsPublic Notice
Rules for Testimony
Establishment of order of hearing procedures
Standards for written testimony
Exhibits
Record‐keeping
Legislative hearings
Educating the Applicant / PublicBurden of persuasion lies with applicant
Avoid picking favorites
Work to explain the process in a way that makes sense
Stay on track — remind participants about the goals to be achieved
Maintain order through strong meeting chairman — legal support needed
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Public Hearing Steps in Order1. Applicant presentation
2. Staff presentation
3. Written correspondence (limited)
4. Testimony by supporters
5. Comments by neutrals
6. Opponents speak
7. Rebuttal by ApplicantAddress only points raised by objectors.
No new evidence should be submitted.
If new evidence is presented, hearing should be reopened for limited response to rebut the new evidence.
All comment should be directed through the chairperson.
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Quasi ‐ Judicial Decision RequirementsIdaho Code §67‐6535
Decisions must be based on express standards and objective criteria in comprehensive plan and ordinances.
Decision must be in writing accompanied by a written statement that explains criteria and standards, facts relied upon and rationale.
Legislature directs courts to be practical in their review of decisions emphasizing fundamental fairness and remedying only actual harms, not the mere possibility of harm.
Thank You!
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