Street light fees questioned

SANDPOINT — When is a municipal fee really a tax in disguise? According to one North Idaho resident, when it’s not charged to an individual person for a specific service.

According to Kootenai County resident Larry Spencer, executive director of the non-partisan Idaho Property Owners Association, Sandpoint and four other cities —  Coeur d’Alene, Post Falls, Rathdrum, and Spirit Lake — are charging fees for street lights on utility bills that should be coming out of general fund taxes.

In an email sent to Sandpoint officials last week, Spencer cited both Idaho and U.S. Supreme court cases that determined a fee can only be charged to a specific person for a specific service, “a benefit not shared by other members of society.”

And street lighting is enjoyed by everyone, Spencer argues, and thus cannot be charged as a fee.

“In other words, a fee is only legitimate if the person paying the fee is the only one receiving a benefit from it,” Spencer told the Coeur d’Alene Press. “When you pay your water bill fee, it is related to your water use. The public at large does not receive any benefit from it.”

The Idaho Supreme Court considered a similar issue in 1998 in the case of Brewster vs. the city of Pocatello, after Pocatello tried to charge a fee for both street repair and lighting, The court ruled against the city.

“The privilege of having the usage of city streets which abuts one’s property is in no respect different from the privilege shared by the general public in the usage of public streets,” the court decision reads. “We agree with appellants that municipalities at times provide sewer, water and electrical services to its residents. However, those services, in one way or another, are based on user’s consumption of the particular commodity, as are fees imposed for public services such as the recording of wills or filing legal actions.

“In a general sense, a fee is a charge for a direct public service rendered to the particular consumer, while a tax is a forced contribution by the public at large to meet public needs.”

Coeur d’Alene charges $2.58, Post Falls $3.85, and Spirit Lake a $1 fee for street lighting.

Rathdrum’s $2.35 per month fee pays for all but $5,000 of the city’s lighting costs. The remainder is paid out of its general fund.

According to Spencer, switching payment for public lighting from a fee to the general fund would be more transparent, and make cities more accountable.

“It would be a huge benefit to the public and government to make sure everyone has a clear understanding of this — even if it means taking foregone taxes (to pay for the lights),” he said.

Sandpoint officials were noncommittal on the issue.

City Attorney Scot Campbell said the city was looking into it, noting he planned to take the issue up with other municipal attorneys at a statewide meeting next week. He had yet to look into the issues merits, he said.

“It’s been done forever,” Campbell said of the fee, adding that Spencer may be correct in his interpretation. “We’re just going to have to look and see if we need to change the way that we pay for lights.”

Sandpoint collects about $160,000 from the lighting fee annually, according to Treasurer Shannon Syth.

The city spends about $122,000 for electricity, street lights, traffic signals and residential neighborhood lighting each year, including maintenance.

The fee also pays for billing services. The city nets about between $6,000 and $7,000 annually on the fee. That excess is placing into a fund used to purchase new street lights, such as the decorative lights downtown.

If the fee were dropped, that $160,000 will need to be gleaned from somewhere in Sandpoint’s general fund.

City officials are currently wrestling with next years city budget.

“We will be reviewing it during the budget process,” Syth said.

“If he’s correct, we’ll just change it and it will come off your bill and we’ll have to figure it out and pay it out of general property taxes and the general fund,” Campbell said. “It’s just one of those things.”

• Hagadone News Network reporter Brain Walker contributed to this story.