The Idaho Supreme Court, on November 1, 2016, issued a decision in the case of City of Sandpoint v. Independent Highway District.

The Court held that a 2003 “perpetual” agreement entered into between the City and IHD violated the Joint Powers Act. This closely follows the Greater Boise Auditorium District decision which reaffirmed that multi-year agreements violate Idaho’s Constitution if they fail to include an “opt-out” clause.

History

This is the fourth time these two agencies have been before the Idaho Supreme Court. For most of its history, IHD boundaries were the same as Sandpoint’s and IHD maintained City streets. Sandpoint repeatedly sued IHD to acquire City jurisdiction over City streets. The Supreme Court twice held that IHD had primary jurisdiction over Sandpoint streets.

In 2003, the City and IHD entered into an agreement transferring jurisdiction over Sandpoint streets to the City. The parties also agreed that IHD would transfer all IHD property taxes collected from City properties to the City, including IHD’s statutory 50%, under I.C. §40-801. IHD had annexed areas outside of Sandpoint such that IHD would maintain streets outside Sandpoint and operate on tax revenue collected outside of Sandpoint.

By 2013, none of the IHD Commissioners who signed the 2003 agreement were in office. The new Commissioners repeatedly attempted to renegotiate the agreement with the City. The City declined to modify the agreement based on the language that the agreement was “perpetual”. When IHD threatened to terminate the agreement, the City sued IHD. The district court upheld the agreement. The Supreme Court reversed the lower court and held the agreement to be void in violation of Idaho law.

Lesson Learned

Multi-year agreements cannot tie the hands of future elected officials, but must include an opt-out clause to allow termination or renegotiation of the agreement. Any purportedly “perpetual” agreement will likely not be upheld by Idaho Courts based on both Idaho statutes and Idaho’s Constitution. When entering into Joint Powers Act agreements, the Act must be strictly followed.

David E. Wynkoop has actively practiced as an Idaho attorney for 37 years. He represents approximately 40 Idaho highway agencies as well as the Local Highway Technical Assistance Council. Mr. Wynkoop previously served as General Counsel and Commissioner of the Ada County Highway District and Chairman of the Government Attorneys Section of the Idaho State Bar. He is a partner in the firm of SHERER & WYNKOOP, LLP, 730 N. Main St., Meridian, Idaho 83642, phone 208-887-4800.