Friday, April 8, 2005

Ante raised in lawsuit against Peregrine deal

Amendment argues 'loophole' will cost Hailey residents

Express Staff Writer

A lawsuit against Hailey that alleges the City Council violated Idaho's open meetings law when it approved a $4 million deal with a prominent Blaine County developer has been amended in an attempt to strengthen the plaintiffs' accusation that the pact is a raw deal for Hailey residents.

The February council meeting that OK'd the deal committed the city to provide sewer services beyond city limits to the Peregrine Ranch property. Hailey-based attorney Fritz Haemmerle filed the original suit in March on behalf of 15 county and Hailey residents.

Hailey City Attorney Ned Williamson said Wednesday he will file a motion to dismiss the case by Monday, April 11, the deadline for the city to respond to the amended complaint.

Developer Harry Rinker, the owner of the 160-acre property in the county, first approached the city seeking a sewer connection in November 2004. At that time, he shared plans for a 380-unit residential development for property located in the county just north of, but not adjacent to Hailey city limits between Highway 75 and Buttercup Road. Currently, the property is zoned R1, allowing one dwelling per acre.

Rinker is seeking an up-zone of his land to four units per acre. For any chance of achieving greater density, developers are required to provide sewer services, through a private treatment plant or a guarantee for connection to a municipal system.

The Peregrine deal was signed Feb. 7, following a council executive session to discuss the matter. It involved land acquisition as part of a settlement of existing litigation related to 81 acres in south Woodside owned by Judy Castle, who had sued the city pursuant to a dispute over a plan to develop her land. The two items can be legally discussed in executive session, according to Idaho code.

However, on March 14, Williamson said the city would fight the lawsuit. The plaintiffs' amendments were filed March 8 and March 23.

The plaintiffs' point of contention made in the March 8 amendment is that an agreement between Rinker and the city to extend sewer services outside the city was not noticed for public discussion and therefore violated the public meetings law.

At the time Williamson said the negotiations for each component of the agreement were so interrelated and sensitive that the sewer services agreement also needed to be discussed in executive session. Because the city was openly discussing the terms of the sewer services agreement, Williamson said it was his belief that if Castle had known the source of the funds for the litigation settlement she would have sought more money.

As a part of the agreement with the city of Hailey, if and when Rinker pitches his plans for Peregrine to the county, the city has agreed to give up its right to make any comment regarding density. The fact that the number of sewer hook-ups associated with the property is undetermined is part of the plaintiffs' concern about the arrangement allowing an external line into the city sewage treatment plant.

In the latest amendment to the complaint, a litany of allegations includes claims that a clause in the sewer services agreement creates a "loophole" that will protect future residents of the Peregrine Ranch property from additional fees that would be carried by residents of the city.

Williamson said he does not believe the plaintiffs can show specific injury. Fifth District Magistrate Judge Ted Israel will rule on the motion and decide which components of the case are to be heard in court, if any.

"The motion to dismiss is based on lack of standing on the part of the plaintiffs. You have to show that there is a specific palpable injury that you would have to suffer by (a governmental) act," Williamson said. "There is considerable case law in the state of Idaho about this."

Increased costs due to regulatory permitting are to be shared equally by Peregrine Ranch residents and Hailey residents, according to the agreement. However, Haemmerle argues in the amendment that the proposed sewer services deal gives future residents of the development a way out when it comes to paying a share of any future upgrades related to growth, thus causing injury to his clients.

"The sad thing is that you have to show damages to even argue that the city violated the open meeting law," Haemmerle said.

According to Haemmerle's argument, "If future growth mandates the expansion of the city's sewer system, and the expansion is unrelated to upgrades attributable to regulatory permitting or similar requirements, the ratepayers in (Peregrine Ranch) are not required to pay for the expansion of the sewer facility."

"There are a lot of allegations in the complaint that I think are erroneous." Williamson countered.

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