By JOHN CAMPBELL
The decision by the city of Hailey to continue litigating with Old Cutters is unfortunate—especially for the residents of Hailey, who have seen their city already incur over $273,000 of legal fees fighting losing battles in two different federal courts. Both of these courts were firm in stating Idaho cities can only include certain state-authorized provisions in agreements. Even if both parties agree, including unauthorized provisions is illegal, and makes those parts of the agreement unenforceable. Rather than accept the opinions meticulously detailed by both Judge Papas over a year ago, and Judge Lodge one month ago, city leaders have decided to spend even more taxpayer money appealing again.
The city, however, is not appealing these two decisions because it thinks it will win on appeal. Instead, the city told Cutters it would not appeal if Cutters signed a mutual release from further claims. When Cutters refused, the city claimed that it had no choice but to appeal. That is, the city is willing to spend additional taxpayer money on a case it knows it will not win simply because it was unable to extract a promise from Cutters that it was not entitled to demand.
The question then becomes: Why is Cutters unwilling to sign a release of claims against the city? Cutters is unwilling to do so because it does not believe that the lot owners in Cutters should have to pay for impacts to the city that Old Cutters already paid for through the $1.3 annexation fees it has paid to the city. This unwillingness is not based solely on the theory that it is unfair for the city to charge Cutters lot owners for impacts for which the city has already been compensated, but also because Idaho law does not allow a city to “double-dip.”
To explain further, when Cutters was annexed, Hailey had no development-impact-fee ordinance. Therefore, when someone got a building permit for a project, he or she did not have to pay a development-impact fee. To account for the impact of additional development on city resources, the Cutters annexation fee was calculated, in part, to cover these expenses. After Cutters was annexed, however, the city enacted a development-impact-fee ordinance. Importantly, this ordinance is designed to cover the very same development impacts that were used to calculate the Cutters’ annexation fee. Despite this fact, the city refused to exempt Cutters lot owners from paying the impacts fees required by this statute. Instead, the city is demanding that these property owners pay twice for the same thing.
While Old Cutters is eager to avoid further litigation, it does not want to sign a mutual release with Hailey, and in doing so enable Hailey to defy state law, charging twice for the same item. Cutters is confident, based on the recent judicial opinions, that the courts will similarly condemn Hailey for wanting to charge twice for the same item, in clear violation of Idaho state law. Old Cutters urges Hailey city leaders to recognize that the best interest of Hailey is served by obeying the law, rescinding its recently filed appeal, and putting this unfortunate matter to rest.
John Campbell is the developer of the Old Cutters subdivision in Hailey.