A collection of 15 Hailey and county residents has joined forces to sue the city of Hailey for allegedly violating Idaho's open meetings law when it entered into a sewer services agreement with Peregrine Ranch developer Harry Rinker. Rinker's property is located in the county just north of but not adjacent to Hailey city limits, between Highway 75 and Buttercup Road.
Hailey-based attorney Fritz Haemmerle, who filed the suit in Blaine County Magistrate Court on behalf of the plaintiffs, said Monday if the court decides that the city did violate the open meeting law, its agreement with Rinker would be declared null and void.
A $4 million deal approved in early February by Hailey City Council members includes a $1.35 million settlement of a land-use dispute that was scheduled for a jury trial in federal court last month. But following the city negotiations Rinker paid the settlement and took title to 81 acres in south Woodside formally owned by Judy Castle, the plaintiff in a separate five-year-old lawsuit. Castle was seeking a $2 million claim against the city, which twice denied her development plans on the property adjacent to the Woodside Treatment Plant near Glenbrook Drive.
In addition to the litigation issue, the agreement includes extension of municipal sewer services if and when Rinker chooses to hook into Hailey sewer lines, at which time the city would acquire the 81-acre Woodside property. Rinker is scheduled to convey the former Castle property to the city once sewer services are extended.
Although the city noticed an executive session Feb. 7 to discuss pending litigation and land acquisition, two topics that can be legally discussed outside the public eye, by wrapping the sewer services agreement into land acquisition negotiations with Rinker, the city violated the law, Haemmerle said.
"For pending litigation and land acquisition you can go in executive session," Haemmerle said. "Deliberating on sewer services should have been noticed."
The plaintiffs argue that the biggest gift of annexation is extension of sewer service and Rinker has achieved the benefit of service without having to go through the rigorous public review process being followed by other annexation applicants, like the owners of Quigley Ranch and Cutters Ranch, Haemmerle said. He explained that the plaintiffs in the lawsuit allege that Rinker's interests should have been vetted in public as well. "In the dark of night the city entered into this agreement," he said.
The city has 20 days to answer the complaint. Haemmerle said Hailey City Attorney Ned Williamson would be served with the complaint Tuesday.
Williamson said he was aware of the complaint and planned to bring the issue before the city council in executive session Monday, March 14, to get direction about how to proceed with the matter.
One option is to fight the lawsuit, but the plaintiffs have said that they would prefer that the city simply have an open meeting to explain to the public the basis of their decision, Haemmerle said.
"My personal opinion is they violated the open meeting law," Haemmerle, a former county prosecutor, said. "When I was in public service I was a pretty adamant adherent (to the open meeting law). I always instructed my staff to err on side of openness."
Williamson said he offered to meet with the plaintiffs to run through the city's decision making process, but by Tuesday had not heard back from Haemmerle.
"They have chosen to litigate instead of talk," Williamson said.
Plaintiffs have said they want the city to rescind the offer to Rinker and hold a public meeting to review the question.
Haemmerle said that if the city council is confident about the benefit of extending services outside the city, the governing body should have formally adopted the agreement publicly.
"Why is it that every other developer has to go through some substantial hoops (to receive city sewer services)? That's a huge service that the city provides," Haemmerle said. He added that part of the citizen complaint is that sewer services, paid for by the citizens, were intended for growth of the existing city, which is now leapfrogging into the county without asking for citizen input. "Our point is there're a lot of questions. That's what public meetings are all about. Part of the (open meetings law) is so government officials can sell their program ... (to tell us) why this is a good thing."
