Highway district seeks dismissal of city's lawsuit

SANDPOINT — The Independent Highway District is moving to dismiss a lawsuit filed by the city in a feud over tax revenue.

The city sued the highway district last month, contending that the district is in breach of an agreement that requires it to turn over 100 percent of the tax revenue it collects for street maintenance.

The agreement had been in place for the past 10 years, but the district had its legal counsel review the accord this year. Meridian attorney David Wynkoop, the district’s counsel, concluded that the agreement is contrary to the Idaho Constitution and state law.

Wynkoop filed a motion in 1st District Court earlier this month to dismiss the city’s lawsuit. Wynkoop argues that the city failed to state a cause of action upon which relief can be granted.

Wynkoop further argued that contract the city seeks to enforce is void under the state constitution and various provisions under Idaho law.

Briefings in support of the district’s argument are pending and the district’s co-counsel, Coeur d’Alene attorney Susan Weeks, is seeking additional time to complete them due to the complexity of the issue, court records indicate.

A district court judge is scheduled to take up the highway district’s motion to dismiss on Nov. 13. The district’s motion to broaden the time frame for filing its supporting briefs is set to be heard on Oct. 23.

Both hearings are slated to be held at the Kootenai County Courthouse in Coeur d’Alene.

The district’s refusal to follow through with the agreement and the ensuing lawsuit ended a decade of relative harmony between the two entities. The district, originally known as the Sandpoint Independent Highway District, and the city of Sandpoint used to have the same exact boundaries, although the district has since expanded into other jurisdictions.

The dispute between the city and the district over tax revenue and jurisdiction has gone to the Idaho Supreme Court on three occasions.

The two entities reached an accord in 2003 which sought to resolve outstanding legal issues. Under the agreement, the district retained jurisdiction over the streets and agreed to turn over 100 percent of the tax revenue to the city, which would maintain the streets. In return, the city would no longer seek dissolution the district or oppose its annexation efforts.

The district holds that state law requires it to evenly split tax revenue collected from within the city. The district has offered to forego seeking “several million dollars” in missed tax revenue if the city adheres to the 50-50 split outlined in Idaho Code.