[November 25, 2008]

Judge to rule if T.F. can enter into $33 million debt for water projects

(Times-News (Twin Falls, ID) Via Acquire Media NewsEdge) Nov. 25--The Twin Falls City Council unanimously agreed Monday to allow the city to seek judicial confirmation on incurring debt to help pay for $33.3 million in water projects to meet federal arsenic standards and increase its water supply.

The 6-0 council decision allows the city to seek permission from a judge to use debt to fund a package designed to meet regulations the Environmental Protection Agency tightened in 2001. The city pledged $10 million as part of a $26 million deal in April with groundwater pumpers and the state to purchase the 400-acre Pristine Springs ranch and fish farms. It estimates $20 million is needed to transport and blend water.

"This is exactly what judicial confirmation is designed for," said Councilman Greg Lanting. "Why spend the money and suffer the heartburn of an election if it's something you're going to have to be doing anyway?"

About $3 million of the total will go to a separate project for water mains to ensure water can reach growing areas.

To fund the projects, the city plans to make long-term loan agreements with state agencies. Idaho's Constitution limits the debt cities can take on, and the city hopes a judge will approve the loans as an "ordinary and necessary" expense.

The city's other option is to hold a city vote, and hope for two-thirds approval. At Monday's meeting, officials said a special election could cost about $20,000, but asking a judge could cost just a few thousand dollars.

City officials said Monday judicial confirmation is the best approach because holding a vote conveys to voters there's a "choice" in meeting EPA standards. The deadline is 2011. Officials said time is of the essence, as the process of bringing a new facility online could bump against the needed completion date.

"The strongest point to me is if we put it out to a vote to the public, we're giving the indication to the public they can say no to it," said Councilman Don Hall. "We have to do it. I don't know a better route to take than this resolution."

During Monday's meeting, city officials said they could not recall another Idaho city seeking judicial confirmation to meet the arsenic standards. Voters in Buhl and Castleford both successfully passed measures for arsenic improvements.

That led Councilman Will Kezele to describe the city as a "guinea pig" and promise to colorfully criticize the federal government if the request is rejected.

If the judge denies the request, the city would likely have to hold a vote, city officials said. Likewise, if the city had gone to the voters and been unsuccessful, they'd be in the current position to seek a judge's approval.

City Manager Tom Courtney, however, said after the meeting that the project could actually cost less than $33 million because the current economic crisis has generally caused bids for public projects to decrease.

One person testified at a public hearing held Nov. 10. But state law requires a 14-day waiting period before voting -- a provision City Attorney Fritz Wonderlich told a surprised council at the Nov. 10 meeting.

In related news, the council voted in favor of the a contingency budgeting plan from Courtney that includes new policies to limit staffing and review planned capital improvements as officials adjust to a projected shortfall in general revenue of as much as $300,000, or 1 percent of the city's budget.

Due to the downturn in the economy, officials are projecting as much as $50,000 in state sales tax revenue filtered to the city and a drop in residential building permits that could reach $300,000. While some revenue sources could soften the blow, Courtney said the city still projects a shortfall of $200,000 to $300,000.

"These are precautionary steps," he said. "At this point we project that our revenues may fall short by about 1 percent. If they do fall short of 1 percent or less I don't anticipate any problems."

Jared S. Hopkins may be reached at 208-735-3204 or jhopkins@magicvalley.com.

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