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Judge rules in favor of the city over IDD tax hike

By NATHAN BRUTTELL
Today's News-Herald
Published Friday, November 20, 2009 7:07 AM MST

YUMA — An outside judge ruled Thursday that the Irrigation Drainage District could provide domestic water legitimately.


Yuma Superior Court Judge John Paul Plante denied several claims made by plaintiffs Sam Scarmardo and Harvey Jackson and their lawsuit against the city. Plante said the City Council acted legally as a Board of Trustees when it agreed to an increase in the IDD property tax instead of a 29 percent increase in water tax during the next three years. During the July 7 meeting, the council approved a 9 percent increase in water rates, as part of the overall plan to assist the city with its water and wastewater systems.

“I have ruled that the providing of the water to the city is a legitimate function of an IDD and I am dismissing the complaint,” Plante said, adding that because Scarmardo did not yet pay property tax, the complaint did not follow the process. “Of course this order must state that it was brought to the wrong place at the wrong time.”

Scarmardo said he plans to file property taxes immediately upon arrival, which would allow him to bring the complaint against the city again.

“(Plante) pretty much pointedly said that if I pay my tax bill when it arrives that I can file a new complaint,” Scarmardo said. “I’m going to pay it early and we’ll see where to go from here.”

City Attorney Paul Lenkowsky was pleased with the ruling.

“The city was very encouraged by the court’s ruling,” he said. “Although Mr. Scarmardo is free to pursue the narrow tax aspect in tax court, it seems the court was very clear on several of the plaintiff’s claims. Many claims (the plaintiffs) were submitting the court found had no basis.”

Defense Attorney Harvey Jackson said he was prepared for the ruling and was not entirely surprised.

“Going into this we felt it would be decided by the court of appeals or the Arizona Supreme Court,” Jackson said. “There are cases saying the IDD cannot do these things and there were other statutes enacted that are in conflict with that ruling. There really isn’t a precedent that controls it.”

Plante did not rule on the Singer Initiative or Prop. 200. The Singer Initiative states no new taxes or increase in existing taxes could be imposed, and no sale of, or commitments of revenue to repay Municipal Property Corporation bonds could occur without approval by more than two-thirds vote at a special election called for the specific purpose.

“The court is not deciding on the merits of the issue as it is not necessary,” Plante said.

Jackson said he and Scarmardo would further review the Prop. 200 issue and reconsider strategy.

“We’ll have to decide whether to appeal it,” Jackson said. “I imagine that a decision on Prop. 200 would be resolved after our appeal because if we win our appeal, it’s a much different case.”

Lenkowsky said the plaintiffs will have a more difficult time with the appeal.

“Well, the burden will be on the plaintiff now that the complaint has been dismissed to show how the court made a legal error,” he said. “I’m not sure the basis of the appeal so I can’t comment further.”

Scarmardo said he was disappointed with the court’s decision.

“I think it’s shameful that the City Council goes to such extents that they spend tens of thousands of dollars to fly in the face of the citizens,” he said. “Citizens spoke out on Prop. 200 on a four-fifths vote, which basically said ‘We don’t trust you to control our purse strings.’”

You can contact the reporter at nbruttell@havasunews.com

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Comments (20 comment(s))

    tomgarven wrote on Nov 27, 2009 6:27 PM:

    " Laura: Hope you are still monitoring this story. I have not received your e-mail or the links. Please send to:

    tomgarven@hotmail.com

    Please put LAURA in Caps on the subject line so it doesn't get mixed in with all the other junk mail I get. You know the mail that says I have won $20,000,000 from someone in India just send all your private personal data or open the attachment LOL

    Tom G.

    "laura s wrote on Nov 24, 2009 4:56 PM:
    I will send you an email detailing some of the specifics based on the research I have done. Laura Smith " "

    WATCHING HAVASU DIE wrote on Nov 27, 2009 1:01 PM:

    " Just watch the city is gonna go BANKRUPT "

    Roco wrote on Nov 25, 2009 4:47 PM:

    " Laura S: could you also email that information about the IDD tax? I would like to understand what's really going on so that if I had to write a congressman or such, I would have some valid facts. Thanks very much. My email is

    roco1957@frontiernet.net "

    laura s wrote on Nov 24, 2009 4:56 PM:

    " Tom, you asked a lot of valid questions and I believe you are probably accurate in saying most are not aware of the specifics involved. I will send you an email detailing some of the specifics based on the research I have done. The issue is far too complex to adequately summarize and I feel it would be too long of a response to post here. In addition in an email I can provide you with links that offer more information that you can review if you so desire.

    Laura Smith "

    laura s wrote on Nov 24, 2009 4:51 PM:

    " Sam, thanks for your comments but more importantly for standing up and taking this issue to court. It is unfortunate that the City has chosen to fight you instead of doing what is right. Since the City Council approved having the bed tax issue on the ballot this could have easily been added without any additional costs incurred and the lawsuit would have been avoided as you offered several times to hault the suit after it was filed if they would bring it to a vote.

    Good luck to you, and please let me know when the next hearing is scheduled.

    Take Care,

    Laura Smith "

    mogas wrote on Nov 24, 2009 11:45 AM:

    " Sam; Thank you for your time and effort.. Anything anyone can do to lower or stop high taxes is welcomed.. I am sorry I could not attend to lend moral support but a broken Air conditioner took priority that day..Thank you Laura for attending and Thank you Jackson for your expertise and time also....George Kelley "

    tomgarven wrote on Nov 24, 2009 9:42 AM:

    " Sam:
    It also bugs the heck out of me that people do not use their real e-mail addresses on these public forms. It doesn't have to be their frontier address just an e-mail address like a hotmail, google, yahoo or anything else, just some way to contact them. Many people do have some very good ideas worth pursuing. Those individuals always get an e-mail back from me when they write. You know; the type of people who want to work together to make things better.

    I normally either start or end my post with my e-mail address, but sometimes I do forget. In some of my posts I have done the same thing you have and challenged people to start using valid e-mail addresses. As a result of this challenge, I have received about 4 or 5 e-mails from other citizens who believe in working together to make things better.

    So if you ask, and your request is something they also happen to believe in, you WILL get some responses.

    Now back to something you are interested in. I did do a Google search for IDD's and many cities have them. I believe Lake Havasu (Mohave County) started theirs in 1963 and it became a legal entity at that time. But that is about the extent of my knowledge about IDD's and this also might be true of many other citizens.

    So here is my very simple understand of how things work. I turn on my faucet and three [3] things happen.

    1. I get the water I want.
    2. My water bill goes up;
    3. And my sewer bill goes up.

    Now somewhere in this process, someone has to pay for finding, pumping and treating the water. Someone has to pay for the distribution of the water and the repairs needed to the system. And as time passes, like everything else in our society, it will become more expensive over time.

    That Sam is the extent of my understanding of how the system works. Could you please take the time to educate all of us what is really happening?

    tomgarven@hotmail.com "

    Sameo Sameo wrote on Nov 23, 2009 10:54 PM:

    " I wish the folks that post on this subject could get it through their thick sculls that the IDD and the Sewer are TWO different entities. The IDD deals with potable water and the Sewer is for waste water. The IDD which has been in existence forever was just a convenient tool for the Council to use to extort money from us to help lower monthly sewer charges. It has all the looks of an illegal diversion of funds but who cares about minor boo boos like that? The voters in this town are so easily led around by the Developers, Construction and Realtor Cartel that runs this town its amazing anyone even noticed the slight of hand trick the Council pulled off. "

    oldone wrote on Nov 23, 2009 10:48 PM:

    " If this old brain recalls right, some money in the IDD does go to the sewer as that came up when the Council was saying every one should put money into the sewer even if they were not going to be on it. Look at 09 10 bugget report. "

    sam scarmardo wrote on Nov 23, 2009 10:09 PM:

    " In support of Laura, she was not a part of the recall group at all, and as for the "recall costing millions" that is a lot of bunk, it cost about $80,000, about 1/5 of what the City Council spends in an average day on CONSULTANTS. You got one balanced budget out of the Jackson council before staff co-opted the weaker of the council members which is better than I can say has happened since. As to the BS from the grandstands about us losing the suit and being assessed legal fees, the city is on far too weak a footing to invoke rule 11, the fact is the only thing the judge decided was that the IDD can sell water to the city. Well woo-hoo, big deal, he wouldn't touch Prop 200 with a ten foot pole and he flatly ruled out any time limits to the claim. How about one of you closet critics growing a pair and publish your real name before attacking people who work to improve the city and take a stand against taxes, it is always easier (and dare I say more cowardly) to hide behind some 'Valiant' nom de guerre and cast stones. Another thing, BTW, Prop 200 was overwhelmingly voted for by about 4/5 of the voters, if you don't like it ARLISS, pull a packet and run for council yourself or maybe, start an initiative and reverse Prop 200 if it is such a "travesty". The only recall candidate on the council is Margaret Nyberg but you can't go after her can you, she was endorsed the the Fireman's Union. You got a weak council, run by the unions and you got Obama, put up or shut up! Sam Scarmardo "

    ! wrote on Nov 23, 2009 5:18 PM:

    " The IDD increase was due to water rates not sewer. If you want to use excessive amounts of water why should someone else have to subsidize your water usage and for that matter sewer. Unless you believe in redistribution of wealth like Obama. "

    Roco wrote on Nov 23, 2009 1:11 PM:

    " To tomgarven: I agree with you about others who have or will in the future benefit from the "clean water" should have an obligation to partial pay for these systems. One way would be to have all water agencies that draw water from the river have fees imposed per gallon or square acre or whatever form of measurement that is used and that monies be placed in a fund to help these cities forced into these types of federal mandates. I am also for having property taxes increased to help pay for this because that is a fair way of distributing the burden of debt. I feel this is just a pattern of the federal government over the past two decades of placing unfunded mandates of cities and states. I sure it is too late to help LHC, but any help would ease the burden. "

    tomgarven wrote on Nov 23, 2009 10:34 AM:

    " I am going to start by saying that law suites rarely if ever turn out as a win-win situation or even a draw.

    Reading the comments here leads me to believe that almost any individual, organization and/or government agency could be blamed. We could blame the judge. We of course can blame the City. We can certainly blame those who brought the law suite in the first place. But are we blaming the right people?

    As a Quality Engineer by profession, finding the cause of an event is something we call the 'root cause' or most fundamental reason why something happened. There are of course lots of Contributing Factors (CF) but usually only one CAUSE of the entire problem. But to use this 'root cause' technique requires some knowledge and mapping of the event which I am sad to say I have not done because I don't have access to all the information.

    But my gut does tell me that this goes much deeper than the fairness of some IDD tax. About 10 years ago we had a septic system like everyone else. Then the Arizona Department of Environmental Quality [ADEQ] decided that Bullhead, Lake Havasu and other cities along the river had the potential to contaminate it [a Contributing Factor/CF]. Then it was determined that heavy metals were leaking from a gas pumping plant near Interstate 40 [another CF]. If I remember correctly this was about 4 - 6 years ago. ADEQ then decided that in order for Havasu to grow any further, a sewer system SHOULD be required or no further building would be allowed [Another CF]. This I think was our first mistake. We allowed a State agency to MANDATE a SHOULD requirement on our city by threatening to withhold permits [Another CF].

    So what went wrong? Did we move too quickly without fully understanding the financial ramification[$] of such a project and how to pay for it [Another CF]? I am not saying the sewer was not a good investment for our city but rather how we decided to pay for it was maybe not to well thought out [CF?].

    Whenever a Federal or State government mandates something on a city or county that ALSO benefits OTHERS then they also share responsibility for at least part of the cost [Another CF]. This was especially true in our case where our septic system will preserve the water quality for the millions of people who live downstream from Lake Havasu, Bullhead and others. The closest comparison I can think of is the Medicaid program which is paid in part by the Federal Government.

    At about the same time our community was in a building boom [CF]. We were also concerned about our tourism industry,[CF] our water supply [CF] and our future growth [CF] than the cost of a sewer system [all CF's]. We believed that the cost was manageable.

    So I would look back and see how we got here. Certainly the who, what, where, when and why the ADEQ got the authority to mandate a sewer system on the city [CF]. We might want to start looking at the State and Federal levels for some answers as to WHY our city was forced into spending 400+ million on a sewer system without cost sharing by using threatening means [CF].

    It is now up to all of us in Lake Havasu, Bullhead and other cities along the Colorado River to find ways to PAY for these systems which in theory at least, protects the water quality of everyone downstream which have not shared in our costs. This is why the State and Federal governments needed to share the cost.

    That's my opinion, what's yours. "

    laura s wrote on Nov 23, 2009 12:56 AM:

    " Tiredofbunk,
    You need to get your facts straight! I was NOT part of the recall in any way. I didn't even know any of those running nor did I vote for all of them.

    The sewer was pushed on those who live here and we were not provided all the facts. Maybe you can explain to everyone exactly how the sewer benefits the entire City. The IDD tax has nothing to do with the sewer rates as it deals strictly with the water.

    You bet I don't favor what was done with the IDD; it should have been dissolved and the trustee's should be following State Statutes.

    By the way, I mentioned an idea of having those on septic systems pay a few to help offset the costs to the sewer as I don't agree with taxes being the answer to everything.

    Laura "

    Sameo Sameo wrote on Nov 22, 2009 10:52 AM:

    " This decision was no surprise. Once a TAX is in effect even God Almighty can't get it canceled. Our only recourse is to Vote ALL current Council members OUT and try to elect a new Council that LISTENS to the will of the electorate. What is it about the words NO NEW TAXES OUR CURRENT MAYOR AND COUNCIL DON'T UNDERSTAND? "

    tiredofbunk wrote on Nov 22, 2009 9:34 AM:

    " The sewer system benefits the entire city. People like Laura cost the city millions with the recall, now they dont want their property taxes to go up to help pay for the sewer because they live in an area that will never be sewered. Everyone paying a sewer bill should get strongly behind the city increasing property taxes so the debt is shared by all properties. "

    Arliss wrote on Nov 20, 2009 1:56 PM:

    " The whole of sewer fees should be part of the tax base.
    Prop 200 is a travesty that ties the hands of government and prevents progress, this city is going to continue to stagnate because of it. "

    tiredofbunk wrote on Nov 20, 2009 11:44 AM:

    " I hope the city seeks all legal costs from Sam and Harvey. Singer hasn't lived here for years. Hopefully everyone will see the damage that was done by the re-call group and the damage they continue to cause. Its time to get rid of the rest of the recall group from the council. "

    laura wrote on Nov 20, 2009 11:10 AM:

    " I found it ironic that the City used title 48 of the State Statutes as a defense. Prior to the City Council vote I asked why the City Council did NOT follow Title 48 of the State Statutes as it was specific to Irrigation and Drainage Districts. I did not receive an answer. Based on title 48, although the City Council CAN increase the tax, they are LIMITED in the amounts they can increase it by, the amount of the increase clearly should have gone to a vote of the public based on the wording of the Statutes.

    I attended the hearing in Yuma. The only reference by either side to Title 48 was by the City and it was only in relation to the chapter in regards to allowing the IDD to provide domestic water to various entities. Now that the City and courts have supported that Title 48 IS applicable it will be interesting to see how a future lawsuit is handled. In addition, the City had argued that the fee was not an increase as the City was only returning the fee to previous amounts; the judge disagreed and stated it was an “increase”. This is important because Prop 200 specifically mentions that the City cannot increase taxes but are required to send it to a vote. Since the judge did not rule on prop 200 the issue in the future would be whether or not the IDD is subject to prop 200 or not. Based on the wording of prop 200 the courts could rule either way, imo.

    The defense for the City also asked the judge if his ruling would include the use of funds for any purpose, the judge said it would not. I do believe there are many questions regarding how the funds received by the IDD are being used and still believe the City should do the right thing and use the funds to pay off the original debt of around $90 thousand since they were bringing in $2 million per year which will increase to $5 million. The only reason the IDD has not been dissolved as voted on by the public is because of the outstanding debt. With the amounts we are being taxed this debt should have been paid off years ago so both the district and tax could be retired!!! Keeping the District in place has provided an additional revenue stream that the City does not want to lose.

    This is far from over.

    Laura "

    LakeLizard wrote on Nov 20, 2009 10:55 AM:

    " I will be very disappointed if anybody votes any of our incumbents back in!!! "

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