Saundra McDavid

I was recently sent documentation which indicated the City of Eagle has been spending countless dollars in legal fees over the last two years to force a developer in the foothills, who is not in the city limits, to use the Eagle Municipal water system. The plan would have been for Eagle to pump the water out of its Brookwood well to the Kastera Trailhead development along Willow Creek Road and Highway 55 in the foothills. This well is located within the controversial Local Improvement District (LID). These people are being forced to purchase a water company at the same time the City is attempting to pump out their water to a foothills development? A development in the foothills which should be providing its own water! Didn’t we all just sit through countless M3 testimony proclaiming there is “ample water in the foothills to support the M3 development?” All the while, elected Eagle officials were already making plans to pump our water up the hill?

Why would the elected City Officials (Merrill, Bastian, Bandy and Guerber) authorize the expenditure of tens of thousands of dollars in legal fees trying to force a developer to use Eagle City’s Municipal water system? Why would the city go so far as to threaten to withhold annexation if the developer used United Water, and then threaten forced annexation and litigation? What possible benefit is it to the City if this Kastera development, which is in the County, uses the Eagle Municipal Water System, taking water out of our LID?

Here is the background:

In 2002, Eagle, via its Mayor, Nancy Merrill, entered into a twenty year Franchise Agreement with United Water, which gave United Water the right to service certain sections of the City of Eagle, as depicted in the Public Utilities Commission Service Area. In exchange Eagle receives 1% of the gross revenues. The city can raise the franchise fee up to 3% if it can convince voters to approve the increase. Under the agreement the City is prohibited from providing water service to customers that fall within the boundaries of United Water.

In April 2006, United Water System applied with the Public Utilities Commissions (PUC) for an expansion of its area of service into Ada County, north of Eagle. The city of Eagle filed an objection in May. In April, Kastera homes had requested a work session to discuss possible annexation into the City of Eagle. Kastera had also requested United Water to service its water for the property that lies outside the Eagle’s area of impact.

Representatives of Kastera claimed that Eagle staffers had admitted it would be two years before it could provide service to the foothills, thus the application with United Water. However a PUC Staff Comment in May claimed the City of Eagle stated that it could immediately service 1300 additional homes in the foothills north of Eagle, with no additional wells or storage facilities. The City stated in a May 31^st letter that it could not reach the developer for clarification on whether Kastera intended to use United Water or Eagle Municipal Water, but that it would be able to accommodate the foothills area as soon as three new wells were built. (A different response than what was told to the PUC staff.)

Kastera representatives in written testimony on May 4, 2007 claimed that Eagle City Councilman and State Senator Stan Bastian contacted them after they applied with United Water and told them that the city’s engineer “had been mistaken in his previous assessments of the water situation and that in fact the City could provide water service to Trailhead within one year.” According to the Kastera Representative Bastian also stated “that annexation into the City of Eagle would not be possible unless we committed to obtain water from the City.” He also testified “At a meeting on August 10, 2006 with the Commission staff, United Water, Mayor Merrill Councilman Bastian, and City of Eagle attorneys, the City again confirmed that it would not allow annexation if United Water provided water service to the property. At that time the City further informed all parties that the City would pursue legal action to prevent Trailhead from receiving water from United Water even if Kastera did not seek annexation. I felt like the City had put a gun to our head! Wanting to avoid litigation Kastera determined that it would be prudent to further pursue annexation with the City.”

On September 8, 2006 the City filed a Motion to Intervene claiming that the Kastera development was being annexed into the City of Eagle (Even though no annexation path had been secured.) Kastera subsequently filed an annexation application with Ada County, yet the City didn’t give up the fight. Nancy Merrill’s written testimony on May 4, 2007 stated that Eagle would most likely request that Ada County force Kastera to annex in to Eagle. She stated “The City believes that new developments should provide their own water in order not to impose burdens and costs on existing customers. Since the City does not seek to generate profits from its water system, the City believes it can provide water to its citizens less expensively than a for-profit entity such as United Water. We believe water customers would appreciate that.” (I’m sure the people in the LID would not be happy to hear their elected leader was so willing to pump out their water to a development which “should provide their own water not to impose burdens and costs on existing customers.”)

The PUC issued an order in August of 2007 allowing United Water to amend its service area to include the Trailhead area. The city of Eagle filed a motion to reconsider, which was also denied.

All documentation can be found at http://www.puc.state.id.us/internet/cases/summary/UWIW0604.html

The question is still out there - what were they thinking? Is the Kastera development the annexation path to “bigger and better” things - like Avimor and M3? Does having a water system readily available make it easier to annex land, or force annexations? Is Eagle going to lose out on the 1% franchise fee it currently receives from United Water? Isn’t it more profitable for the City to earn a 1% franchise fee from United Water than to force a $1,000 tax on its residents to purchase Eagle Water Company, and then not make any profit off of the water service? I think it’s time for some answers!