April 16, 1995 in Nation/World

Residents’ Pockets Dredged Kidd Island Bay Homeowners Fight Assessment

By The Spokesman-Review
 

Don Gray didn’t know about it.

Eric Harding thinks it’s unsound. Anne Eubanks says she can’t afford it.

None of them approved it. Yet these three Kidd Island Bay residents and 51 like-minded neighbors must spend thousands on a project to dredge their shallow, mucky inlet for better swimming and boat access.

They will plunk down at least $2,000 and see no change in the muddy bay. In the end, each could chip in $20,000 or more to carve out the lake bottom.

Dredging isn’t required by law. It’s not necessary for lake health.

It’s an amenity half the bay-area homeowners may not even want. Certainly, no proof exists that a majority of landowners ever supported it.

“All this is too much for me and most of my neighbors,” area resident Harding wrote in a March letter to Kootenai County commissioners, urging them to halt the plan.

Detractors and some supporters say the Kidd Island Bay plan illustrates weaknesses in a public financing tool that’s common in North Idaho: Local improvement districts, or LIDs.

The problems include these:

Homeowners can be forced to pay for unneeded neighborhood improvements even if the majority doesn’t want them.

The cost of an improvement can rise unchecked after formation of a district.

Homeowners can pay thousands of dollars for plans and studies only to have a project stopped because it’s too expensive.

Home buyers can move into an area never knowing they someday will be assessed thousands for a pending improvement.

Kidd Island Bay is by all accounts an unusual situation. Most improvement districts are used for needed work, not accessories, and are established at the request of a majority of land owners.

But nothing prevents property owners from being socked in similar ways.

Two years ago the city of Moscow charged a Latah County couple $55,000 to add streetlights and sidewalks and widen a road near their 10-acre farm. The couple didn’t want the improvements.

In 1992, Post Falls charged 39 property owners $500 each to resurface three tar-drenched streets. The city should have paid, residents said, because a city contractor improperly fixed the streets at taxpayer expense a few years before.

Business owners on Lakeside Avenue in Coeur d’Alene still don’t know exactly how much they will pay for a facelift there that started nearly five years ago.

“LIDs can become simply an alternative to taxes,” said bay resident Gray, who wants to halt the dredging and change the law.

Improvement districts allow cities or counties to borrow and loan money for neighborhood upgrades. Affected land owners repay it in a lump sum or over several years as part of their property tax bills.

Improvements can include building streets, sidewalks or curbs, extending utility lines or adding recreational features. The improvement must increase property values within the district.

It’s a popular approach to public construction. Coeur d’Alene has formed 138 districts since 1905.

“It’s a great tool,” said Coeur d’Alene City Treasurer John Austin. “It keeps all city taxpayers from covering expenses that should be covered by a few.”

It’s not perfect, however, said Scott Reed, attorney for those who want Kidd Island Bay dredged.

“They (LIDs) catch the unwary,” he said. “Things slip through the cracks. It frequently is seen as unfair.”

The Kidd Island Bay controversy dates back more than a decade.

In 1984, a group of residents began urging county commissioners to have 1 1/2 feet of silt and mud scooped out of 43 acres of the bay. The bay’s average depth is about 5 feet - too shallow for motorboats.

Since such a project would add to the value of bay-area homes, commissioners didn’t want taxpayers to swallow the costs. Residents were told to form a local improvement district.

Districts are formed in two ways: By petition of 60 percent of property owners within the proposed district or by a vote of the governing board or council, in this case the county commissioners.

In a review of 11 years of county records, several surveys were found, but no petition by a majority of residents. Commissioner Bob Macdonald said it was a “forced LID,” formed by commissioners.

“There was never a clear majority in favor of this,” said attorney Craig Wise, for the opponents.

“There was clear support for the project all along,” said attorney Reed, for the supporters.

“There must have been a petition at some point,” said Boise attorney Mike Moore, for the commissioners.

Records do show support varied dramatically from year to year.

A 1989 survey of the more-than 120 residents who own the 161 bay properties showed 39 supported the project. Forty-one were opposed.

Commissioners rejected forming a district that year because the cost - $1.2 million - seemed high, according to county records. They suggested supporters search for state and federal grants.

In April 1990, commissioners proposed another LID. A legal notice was published and letters were sent to all bay-area land owners.

Twenty-seven responded in support. Seven responded in opposition. Commissioners assumed support from the nearly 100 who didn’t respond, according to records. They unanimously approved the district on May 30, 1990.

Engineers began designing the project, detailing cost estimates and writing grant proposals and permit applications to the U.S. Army Corps of Engineers and the Idaho Department of Lands.

They revised their cost estimates: $1.8 million to $3.2 million. Without grants, that meant homeowners could be charged tens of thousands of dollars apiece.

That angered residents like Anne Eubanks, a 75-year-old absentee owner from Walla Walla.

The project would add to her property value, but that would only be realized if she sold it. In addition to her project assessment, her annual property taxes would rise, too.

“The present plans for dredging the bay will force me to lose my summer home,” she told commissioners. “The sooner this plan is canceled the less it will cost.”

County commissioners in 1993, fearing ballooning opposition, offered a compromise. They proposed spending $290,000 - about $2,000 per household - to complete planning and figure exact costs, then decide whether to proceed.

Residents still urged an immediate halt, according to county records of written responses. Forty-three letterwriters wanted it stopped. Twentyseven wanted it continued.

A district can be dissolved in two ways: A vote of the commissioners or a petition by 60 percent of property owners. Opposition was not strong enough to warrant dissolution, commissioners said.

“You have an opportunity to come and protest,” said Fred Miller, board member for the project. “A lot of people just never showed up” at public hearings.

An unknown number of homeowners live out-of-state most of the year.

Engineers returned to work and the controversy temporarily subsided - until Gray came along.

The 36-year-old mining engineer from Nevada bought a bay cabin in April 1994.

Since the assessment has not yet been levied, the $2,000 tab and the potential greater tab, did not appear during a title search.

The law requires no formal notification. A Realtor would have known, but Gray bought his home in a private sale.

Jeff Jones, city attorney for Coeur d’Alene, called it a “buyer beware issue.”

“I had no idea,” Gray said.

Gray since has presented a petition from 54 residents - nearly half the homeowners - to commissioners asking them again to halt the project.

Last week commissioners told contractor J-U-B Engineers not to perform work beyond the amended $290,000 limit set in 1993.

What happens next is anyone’s guess.

“We’ll know the costs this summer,” Commissioner Macdonald said. “We’ll just see what residents want to do from there.”

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