1981 06-29
June 29, 1981
Special meeting called to order by h1ayor Joseph L. Glaisyer at 5:40 P.h1. for Public
Meeting on the "Notice of Filing of and hearing on Petitions for Organization of a
Sewer District, In the Matter of the Organization of Meridian Sewer & Water District,
Ada County, Idaho", to be held July 2, 1981, 3:00 P.M., Fourth District Court.
Councilmen Present: Richard 4lilliams; Grant Kingsford; Bill Brewer; Rick Orton Jr.
Others Attending: Gary D. Smith; Jim Johnson; Jim Potter; Gordon Harris; Douglas bJ.
6urnell; Norman fuller; H.G. Scott; Dale Ownby; Ray Sotero;
Steve Gratton; Coenraad Abas; Wayne Crookston Jr.
Mayor Glaisyer: "The reason for this special meeting is for the City Council to give
approval or denial for such request and to make appearance at the Public Hearing the
2nd of July. Prior to opening it up for discussion with the City Council, I have
told Jim Potter that he could have ten minutes to make any type of statements he so
wishes."
Jim Potter, Potter & Associates, Inc: "I have a statement that I would like to present
on behalf of the Organizing Committee: "The intent in the establishment of the Meridian
Sewer and Water District is one of single purpose; to effect a vehicle for extending
public water and sewer services to the south of Interstate 84 in the most economical
manner and with the most equitable distribution of costs. The area intended for service
includes those lands that have been considered by major industry in recent preliminary
site selection surveys. Most of these site surveys, identifying associated lands and
proposed developers, have been shared with the City. The proposed district includes,
insofar as possible, all lands under consideration. The exceptions to this are lands owned
by individuals who feel that they cannot afford the proposed district assessments.
Following this criteria, only those lands were included whose owners were willing to sign
a consent for said inclusion. The application of this philosophy results in a somewhat
irregular boundary. These irregularities will, in time, resolve themselves. Most of the
excluded properties have been subject to acquisition options by the major developers con-
sidering this area. As acquisition occurs, and development of a tech/industrial complex
commences, new owners will have the financial capability to share in project associated
costs. At such time the district could annex these lands, thereby providing community
water and sewer services. The magnitude of the district. as currently nro~osPd, is
dees~ed essential to address the concepts and renuirements as outlined on the followinn
reaeon~: I. All of the proposed develones of a "Meridian Technical Park", have stated
that. the gross land area in a major Treasure Valley technical park must be sufficient tn:
A. Insure adequate lands for the siting of mayor tenants as well as supnortinn firms
such as manufactures of component parts, marketing, warehousing, and freight forewarding
and brokering; B. Insure the availability of land for the development of a technological
educational facility; C. Provide adjacent service commercial uses for the benefit of the
technical park employees; D. Provide visibility from, and excellent access to, I-84
at both the present and future interchange points, with ingress/egress points on as
many existing roads as possible. The purpose being to mitigate potential peak hour
traffic congestion. E. To insure adequate land use buffering between the more intensive
land use of a technological/industrial park and surrounding agricultural and low density
residential uses. II. harketing studies indicate that adequate land must be included
to insure alternate sites for major tenants. The failure to provide sufficient land for
alternative sitings will result in overinflated land prices, which could well turn away
prospective tenants. This could result in the demise of the Meridian Technological Park
concept. III. Preliminary engineering studies indicate that the project costs for the
initial freeway crossings will result in a tax assessment approaching one-half percent
(.05%). The reduction of the district's size would significantly increase the
assessment on the residual area, and would, no doubt, result in the district's bond
issue failure. This event would defeat the use of the district vehicle to fund these
much needed public improvements." "The area encompassed within the proposed district
would contain approximately fifteen percent (15%) of the land area in the City's
service area. A fifteen percent (15%) allocation of wastewater treatment capacity -
based on the plants' current rating of 21,000 population equivalency - could give the
district the capacity equivalent to 3,150 persons. There is, however, a wide disparity
between industrial and residential use loadings. National statistics indicate that
industrial and technological park wastewater loads per employee are in the range of
one-third (1/3) to one-fourth(1/4) that of a single resident. These statistics indicate
the district - if developed fully as industrial/technological and commercial - would
support between 9,500 to 12,600 employees. The analysis indicates several potential
effects the district might have on the city of Meridian. These effects are as follows:
Peridian Citv Hall - Saecial Meeting .2.
Potter:I A broader and increased tax base. This would result in decreased residential taxation
during the remainder of the current revenue and expenditure freeze affecting the City;
and would result in increased revenue to the City following the termination of said
freeze. II. Technological/Industrial and commercial development within the district
will mean the creation of jobs - both short term during construction, and long term in
new industries and businesses. This will result in a more stable and sound economic base
for the community and will directly benefit every existing business in the community.
III. The allocation of treatment capacity to the development of technological/industrial
and commercial uses will result in a much more beneficial use of this capacity than if
used for expanded residential growth. Meridian's residential density is already dispro-
portionately high when compared to the City's technological/industrial development base.
IV. As the distrift lands develop and create jobs, there will be an associated demand
for additional housing. These combined developments will require future expansion of the
present treatment facility. The strengthened economic base, increased City tax revenues
(following termination of current freeze), and the district's ability to share in project
costs, will make this required expansion possible. As the district develops and expands,
so will the City, and as the City expands its treatment facility the districts capacity
will proportionantly expand. This interaction will insure both the city and the district
the capacity for full development."
"The districts organizing committee, major interested developers and prospective tenants,
all concur in the concept that the technological/industrial park and adjacent proposed
commercial uses should ultimately - with associated buffering land uses - become a micro-
community within the city of Meridian. The interface between these developments and the
proposed Regional Shopping P1a11 (at whichever site is developed) is significant.
Development of the Eagle Road Interchange will be as important to the technological park
for the efficient travel of workers and transport of goods as it will be to the Mall
for the access of shoppers. The organizing committee recognizes this interface and will
support the City in its efforts to effect selection of the I-84 Eagle Road Interchange."
"In summary, it is the committee's opinion that the most pressing need within the City
of t+leridian is a sound employment and economic base. The desire of the City - as expressed
in the comprehensive plan - is to encourage the development of a technological/industrial
employment base. This will require adequate land to accomodate the uses addressed above,
and this requirement has motivated the City to propose the land south of I-84 for this
use. Land in that sector of the City is available in adeouate amounts, and can meet
the other expressed needs of principle and secondary technological uses. There is,
however, one material drawback to that siting; the lack of public water and sewer facilities.
The proposed Meridian Sewer and Water District can solve this dilemma by providing the
economic vehicle for these utlity extensions. At the same time, the City can avoid
subrogation of its authority to the district, and maintain integrity of its planning and
development control process. There are at present, no lands within the district appro-
priately zoned for technological/industrial use. Any such development will require
zoning - and in some cases annexation. Through the City's own planning and zoning process,
and the City's interface with the County's Commissioners, the City can control and direct
growth within the district as effectively as if the City were to provide such services.
themselves."
Potter: "I have some maps and we have had some revisions. This is a copy of`the current
status of the district. the red or exclusions - one, because of time-the consent was not
received and the others because of the lack of ability to carry .their financial interest
in the project. The other two, the yellow, are subsequently inclusions." (Potter
displays maps)..`Refinement of Comprehensive Plan Policy Diagram and Technical Park in
how it might relate in the future to buffering between it and the agricultural and
low density residential. Potter explains maps at this time,including layout of the
drainage basin as far as wastewater collection is concerned.
Tape on file:
There was much discussion concerning properties - exclusions., inclusions.
There is approximately 950 acres in proposed sewer district. Aprx. 600 acres already
in the City. There is no requirement that the properties in the district be contiguous.
Potter stated that they would be asking for approximately 16% of the City's sewer
capacity.(600 lbs. BOD). They expect to hook onto the City's water also.
Potter: "The project five, water system, includes an additional well, storage reservoir
and intertie with the rest of the district lines. In every way we have tried to
incorporate the City's long range plans into this."
t9ayor: "There over approximately 60% of this already within the City limits. They were
annexed into the City knowing full well that they were going to have to front the City
water and sewer across the Freeway - what's the change of opinion?"
Meridian City Hall - Special tieeting .3. June 29, 1981
Potter: "I think probably the change has been in the economic situation - the increase
in cost of construction and the slowdown of development. Individual development is
almost beyond reality."
Mayor: "If you put these developments in -it's all going to change?"
Potter: "No, the landowners in this district look at this as a vehicle for distribution
of cost. When there is a definite plan for .construction, the district would then
execute it's vehicle. You could service across there in a timely manner."
P1ayor: The City has definite plans since 1977 to get City water and sewer over there."
Potter: "Right, I'm talking about definite development p1ans."
P~1ayor: "They had definite development plans and their still not over there - they came
to the City in good faith representing what their project was going to be, and in good
faith we annexed them, both parties knowing full well what the priorities were."
Potter: "I recognize the re hasbeen a lot of water uu~der the bridge in that regard and I
thinkithat all of them come in good faith and that the economic condition and the
marketing studies they did at that time indicated that they could do it. We know that
those factors have changed dramatically."
P9ayor: "I don't see any benefit in a sewer district - I think it's harmful to the City,
I don't see why you think putting those improvements in there will be beneficial to the
City. Boise City has two suits going right now with the West Sewer District and the
Bench Sewer District."
Potter: "I think that history does more to vindicate districts rthan it does to criticize
them. The City of Boise was the motivator behind the original legislation to get the
districts on the state legislature books. That was when they wanted to sewer the bench
and it was a very useful tool for the City. The City had taken the position to use
utilities rather than zoning to control growth and they had a great deal of land out there
that was zoned with the anticipation it was no problem to zone it, because there were
no utilities available. When a vehicle became available to put utilities out there it
backfired on them - in fact, if they had used zoning as the real vehicle of control
they would not have been caught in the problem." "I can't say that we have that problem
here because there is no land out there that is zoned for the principle use as identified
in the Comprehensive Plan:' "The City of Meridian would be able to look to the people
for self taxation for funding it, and yet being able to maintain your own oolicies
of development, improvements, zoning, planning - I think it's an entirely different
situation."
Mayor: "Do you have someone out there right now that is going to use this facility?"
Potter: "I don't have anybody, no."
Mayor: "You represent a group - is there somebody that has a concrete user?"
Potter: "I know several of the owners are in discussions with some major developers
and proposed tenants."
Gary Smith,'. City Engineer: "Jim, is h1arMon or Southgate, included in this sewer district?"
Potter: "MarMon and the Winston Moore group have both elected, at the present, that if
a district is selected and workable they would prefer it because of it's equitable
solution to distribute costs. But, they both wish to keep their options open until they
see what happens in that area."
Smith: "It is my understanding in talking to one of the representatives from MarMon,
they anticipate breaking ground September 1st."
Potter: "We have been unable to contact them."
Brewer: "We were told, since the first of the year, that they were going to take the
lines under the Freeway themselves by Fall - if it didn't make it by other means."
Orton: "Have you got a tentative schedule on when you will go to bond?"
Potter: "Tentative schedule is looking at Nine Mile Crossing this year. Construction
along Overland Road, next year, Nine R1ile Crossing at these three various locations
to fill out the upper area here, in 1984 - the Five Mile intertie, 1985 and Industrial
Pretreatment facility in 1985." "For Water our preliminary time schedule, Ten Mile
Crossing this year; Overland, from Linder Rd. to Locust Grove next year; Locust Grove,
Overland south three quarters of a mile in 83; Overland and Eagle Road, Overland and
Locust Grove to Eagle, and Locust Grove, Overland to Victory, 1984; the Well storage
and Overland Road intertie, 1985; and the Eagle Road intertie 1986. That is all subject
to the recovery of the market."
Orton: "Those exclusions of the areas right next to the interchange first appeared to
me to be disastrous to the district -without them you tend to lose the people that would
Meridian City Hall - Special Meeting .4. June 29, 1981
benefit the most and the people who would have a large tax base earlier - if it goes.
But in thinking about it, the district would own the lines from the point of construction
through their property and if they ever wanted to hook on I suppose you would have to
reach some agreement to serve them."
Potter: "Yes, there would be provision for annexation. The district would still be
limited by whatever capacity granted - they wouldn't go out and willy-Hilly annex
because it would be damaging to itself." "We have prepared a draft for a proposed
treatment agreement."
Mayor: "How are you going to pay back the bonds?"
Potter: "General Obligation Bonds."
Mayor: "Vou have sewer and water hookups to pay back the bonds?"
Potter: "There will be a sewer and water hookup fee to recover the costs for such
hookups - the proposal we drafted obviously have a General Obligation Bond for debt
retirement. The hookup charges for covering the cost of. hookups, the user fee for
operation and maintenance plus sufficient to pay the City for costs for treatment
of that capacity. We have also left flexible,in the proposed draft, such things as
the incorporation of city standards as far as construction is concerned, the incorpor-
ation of whether the district maintains the system or whether it's the City's election
to, by contract, operate and maintain the system.- we tried to leave as many of those
things flexible as we could."
Mayor: "On your contract then, do you have anything in there that you will pay the
City for hookup fees?"
Potter: "As far as the proportion that's allocated to treatment, yes."
Mayor: "That is against our bonding ordinance, is it not?" "Like our hookup fees
go to retire our dept and not to operation and maintenance?"
Potter: "I don't quite catch where that would be in violation to your bonding ordinance."
Mayor: "You have some 600 acres, and you've got yourself a facility -you are competing
with the City of Meridian for water and sewer - are you, or are you not?"
Potter: "It's a collection facility"
Mayor: "But if they are going to move out there, they are going to pay you a water
hookup - they are not going to pay the City of Meridian."
Potter: All the districts looking at as far as it's portion of the hookup fee is the
physical cost of the hookups, such as inspections, etc."
Williams: "My question then is that our present City Ordinance requires that anyone
within the City limit of Meridian, pays the City of Meridian a hookup fee of $830.00
-- if they are outside the City limits of the City of Peridian they pay double that.
Now, would we as a City - let's say one house hook up out here - would they pay the
City of Meridian $830.00?" "Yes, or No?"
Potter: "It's not answered as easy as that - those are negotiable"
Williams: "P1r. Mayor, my point is that we would be charging anyone else in the City
Limits that $830.00 - they would be required to hookup to City water and sewer. If it's
a development, whether it would be next to the sewage treatment facility on the east
side of town - if a developer comes in that through our ordinances and through established
policies, they would be required to sewer or water completely through their property.
They would put their lines in and it seems incongruous that we would allow someone
outside the City or in another area to pay a lessor fee."
Potter: "I think we are getting into items negotiable between the City and a legal
entity. Sitting here talking of these things is redundant because we have no legal
entity that can hear those type of negotiations at this time."
Attorney Crookston: "One question that I have, when Rick asked you as to when you were
going to go to Bond, you gave him some point of construction - are those the same
times you are going to Bond?"
Potter: Obviously the Bond issue has to be passed first"
Attorney: "That's what I thought his question was - when are you going to go to Bond?"
Potter: "The Bond issue would have to precoup the schedule for construction -"
Kingsford: "So you are talking about several Bond issues?"
Potter: "Yes, very definitely"
Kingsford: "Basically for each of these phases?"
Potter: "Yes"
Orton: The General Obligations Bond basically you can use revenues to pay that,
Meridian City Hall - Special Meeting .5. June 29, 1981
but basically the tax assessment would be at the end of the year is used to pay that -
now, are G.O. Bonds beyond the 1% initiative - or are they going to effect our limit
on the 1%?"
Potter: "They are entirely outside of the 1% - this is a self taxing group - it's voted
on by two-thirds of the majority so it's outside of the 1%."
Williams: "Wayne, would this district as it is now formed outside of our urban service
planning area effect us material with future grants, or with the existing grant?"
Attorney: "Your grants are based upon the urban service planning area, and particularly
the property that is inside the City limits. I haven't read the grants - it's hard to say
it would effect the project. bonding itself which is an interval part of those grants
of, repayment of those bonds, it effects the grant as much as the Bond, the hookup fees
would have to be enforced uniformly througout the City. You would have a conflict in
having one fee for the same type of industry in one part of the City and a different fee
in another part of the City."
Potter: "This is certainly negotiable. We thought those hookup fees were distributed
as far as supplies, water versus distribution, as far as sewage versus collection -
I'm not that familiar with the way the ordinances read."
Brewer: "Are our hookup fees presently so that they have to go toward retiring our bond -
our monthly user fees 9o toward maintenance and running of the plant. I Find it hard to
understand how we can go out and do a thing like this - it's like another separate entity
installing a complete collectors system, which has to also be paid for by hookup fees,
you're planning on building this from hookup fees?"
Potter: "No, we are not relying on hookup fees for construction - what I'm saying is
the actual physical cost when the district says hookup fees." "The district is looking at
passing through whatever hookup fees are negotiated with the City."
Attorney: "The initial cost of construction come from the bonding?"
Potter: "The cost of construction will come from the General Obligation Bonds."
Attorney: "How are you going to repay the Bonds?"
Potter: "On advalorem tax basis."
Brewer: "Can you explain that a little bit clearer?"
Potter: "Certainly"
Kingsford: "Isn't that goiny to deter the first guy that built? They are going to be hit
with an extreme disproportionate share of a long haul."
Potter: "We recognize that, we have discussed this with a number of real perspective
tenants over there and all of them feel that the risk is well within reason to take that
the first, two, three or even five years of tax assessments is substantial less than what
they would incur by self improvement." "It's spread over 30 years - let's say you have
30 units, each one has a tax assessment on it. If thefacilities were installed today
that cost would be uniformly spread on a pro rata basis, depending on assessments, so that
it gives us time to coincide with the first developer so that the assessment and the
valuation of our improvement come along the same tax year. Yes, that first developer
that first year is going to pay a significant portion of the district assessment. Again,
he's payiny a 30 year recovery basis. It's advalorem tax based on all improvements.
The disaproportionate cost is going to be higher the first yearsuntil the second user
builds and then those two will share."
Brewer: "A commitment somewhat like the one the City made with Mr. Paul Quong, whereby he
does have the ability to bring in the people, to make it financially worthwhile for he and
the City to invest together in the whole process - you can't deem that same thing working
out here, whereby these people could get some extremely serious industrial commitments, then
we could all sit down and put the thing together? Could they not survive on a similar
commitment like we made with ^1r. Quong?"
Potter: "We haven't been able to in the past." "These people are looking fora vehicle
to insure the potential user he can expect utilities."
Kingsford: "At one point you commented in your construction schedule on wells, water
storage and so forth, the district would own those. So in reality those people wouldn't
be using City water but using your water?"
Potter: "That's not the intent of the district."
Kingsford: "You would own those wells, right?"
Potter: "At the same time you would intertie those systems for the benefit of both -
for fire and safety."
Kingsford: "How could we ever meter that water usage?"
Potter: "You can meter it both ways - that's not a problem." "I don't think it is in the
best interest to have independent systems without an intertie."
Meridian City Hall - Special Meeting 6. June 29 1981
Kingsford: "About Flookup fees - the fiasco in Boise, Garden City - splitting up the hook-
I~p fees for Boise, two or three of them and then rebated the rest r to the developers,
is there any legal ability to avoid that?"
Potter: "I think you have all the ability in the world in how that treatment agreement,
water supply and intertie agreement is worded. Both parties can sit down and negotiate
those." "Problems arise when they didn't get it down in writing."
Crookston: "Jim, have you done any kind of investigation as to what your Bond ratings are
going to be?"
Potter: "General Obligation Bonds are the most suitable there are. As long as the
assessed evaluation of the district is sufficient to carry the bond repayments."
Crookston: "The fees for construction as outlined in your agreement is for collection
system only?"
Potter: "There is two sections in there, one is on water and one on sewer"
Crookston: "Let's say the district is formed but an agreement is never reached between
the City and the district as to the treatment of the effluent - you don't have an effective
water/sewer treatm~Ftt district?"
Potter: "I think it would be a sad case for all concerned." "If that would happen I'm
sure the people would invite to disband the district."
Kingsford: "But they would have the potential to create their own treatment facility
if they could licensed to do so?"
Potter: "Yes, if the district has that potential."
Brewer: "If the bonds are that salable might it not be best to start all over on the
south side of the freeway - with the treatment plant and the whole thing?"
Potter: "It is very difficult to get approval fora treatment facility. The City has a
facility that is designed to handle, at the present time, 21,000 and can quadruple.?"
Engineer Smith: "There's land available to double it's size." "If the correlation
between the cost of treatment of the sewage and the districts Board of Directors
as the City increases, or the costs to the City increase- operation maintenance of the
plant- the costs that are set up in the sewer treatment ordinance at this time will
have to be changed. Is there a capability between the sewer district and the City to
agree on that change of treatment costs or does it become an impasse."
Potter: "Yes, I think a treatment .agreement would avoid this."
Smith: "Looking down the road -in a gravity system, the buck stops down there and all of
this is on the uphill side. It really puts the ball in the s ewer districts court."
Potter: "These lands, as they develop, are in the City or obviously going to be annexed."
(Potter explains why this will give the City an increased potential to take care of its
need) Tape on file.
Mayor: "We have hundreds of acres of Industrial/Commercial ground already annexed
why haven't they - because of the economy?"
Potter: "Some of them because of the economy, Some of them not a suitable piece of land -
not a large enough lot to enable appropriate marketing" etc.
Earl Ward: "Where do we stand with the industrial users in the pretreatment agreements-
the jurisdiction, I believe, would be over the potential industrial users?"
Potter: "The intent to pass through the same pre-treatment requirements."
Ward: "I'm looking down the road at potential users and our cost recovery, not our
industrial cost recovery as it is not required anymore, the administration."
Smith: "If we're selling our City services now to treat sewage $1.10 per thousand gallons
and the sewer district is formed - is the City going to be able to, or is the sewer district
going to charge the people within that district boundary $1.10 per thousantl' gallons?"
For treatment? You have incurred overhead now, maintenance of your lines, overhead in
administration of your district."
Potter: "At this point of time the formation committee is willing to look at either
alternatives - either pass through or contract to the City on a broad, flexible program."
Orton: "I understood we would deal with the district basically through our industrial
cost recovery agreement, or ordinance - not industrial cost but industrial user and
that stipulates a formula that is flexible from year to year. Under that ordinance
inflation would automatically be taken of. About pre-treatment - we would deal with them,
as one entity I would think, and they will have to contract for their pre-treatment program
and tailored after our ordinance. (To Potter) Is that how you anticipate to do this?"
Potter: "That is correct."
Hall - Special Meeti
7.
[~
June 29, 1981
Brewer: "If the industrial market should fail what would keep the whole thing going
residential?"
Potter: "I guess your control over approving developments."
There was more discussion concerning developing this area.
Orton: "I move that we support the concept of the district."
Mayor Glaisyer: "Is there a second?" No response.
"If not, the f4otion dies for a lack of a second."
Williams: "I move that the City go on record as against the formation of the Meridian
Water and Sewer District as the formation is not in the best economic interest of the
City of Meridian, as would create another level of bureaucracy and that by Resolution
inform the Fourth District Court of the City's determination of denial for Organization
of a Sewer District."
Kingsford: "Second"
Mayor Glaisye~! calls out Motion to public. !;
hlayor: "All those in favor?"
Williams, yea; Kingsford, yea; Brewer, yea;
Mayor: "Opposed?"
Orton: "yea"
Mayor: "Motions carries"
hlayor instructed Attorney Crookston to draft the resolution.
Meeting adjourned at 6:50 P.M.
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MAY, R JOS H' GLAISYER
ATTEST
LaWana L. Niemann, City Clerk