Trial date set in city's suit

SANDPOINT — A March trial date has been set in the city’s lawsuit to force the Independent Highway District to honor an agreement to turn over the tax revenue it collects within the city limits.

The proceeding in 1st District Court is forecasted to last several days, although the case could come to an abrupt prior to March depending on the outcome of the highway district’s motion to dismiss the case.

Meanwhile, the city is warning residents to brace for reduced winter maintenance operations as the litigation wears on.

“Primarily due to the ongoing legal battle for revenue from the Independent Highway District, the city currently lacks funds for additional operators and overtime funding, which will result in slower snow removal services this winter season,” the city said in a statement posted to its website.

Plow operators’ priority will be emergency snow routes, especially during snow storms. Residential streets might not be cleared the same day and downtown may not see full snow removal if snowstorms arrive frequently, the statement added.

The city sued the district earlier this year after it declined to turn over $140,000 in tax revenue in keeping with a 10-year-old agreement. The district countered that the agreement was unconstitutional and neither party should have entered into it when it was drawn up in 2003.

The district, which had been turning over 100 percent of the revenue to the city, offered to restore the funding if they agreed to split it 50-50, according to court documents. The city rejected the offer and filed suit in August to enforce the agreement.

The district later moved to dismiss the case, contending the agreement is unenforceable because it runs counter to a constitutional provision which prohibits a political entity from incurring indebtedness beyond a single fiscal year.

The district’s counsel during a hearing on the motion to dismiss, Susan Weeks, said the city was cloaking the agreement in euphemisms to avoid admitting that it amounted to an ongoing liability on the district.

“They’re trying very much to dance on the head of a pin and call this thing other than what it is,” Weeks said during the Nov. 13 hearing.

The city contends the constitutional analysis is a smokescreen the district is using to conveniently slip out of the agreement.

“What’s involved here is a mandatory obligation,” C. Matthew Andersen, the city’s counsel, said during the hearing.

Judge John T. Mitchell took the agreement under advisement and a ruling is pending.