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HomeMy WebLinkAboutMinutes - March 5, 2026 1 (208) 359-3020 35 North 1st East Rexburg, ID 83440 Rexburg.org | Engage.Rexburg.org Local Improvement District (LID) Advisory Committee Minutes - March 5, 2026 Committee Members: Kristi Thompson Tracy Wynn Nathan Blumenberg Glen Crawford Bart Stevens City Staff: Keith Davidson – Public Works Director Joel Gray – City Engineer Faron Young – Asset Management Matt Nielson – Finance Officer Noah Phethean – Staff Accountant Marianna Gonzalez – Deputy City Clerk 5:00 P.M. City Hall Roll Call of Council Liaison: Council Member Johnson and Council Member Tietjen Absent: Council Member Riggins Roll Call of Committee Members: Tracy Wynn, Nathan Blumenberg, and Glen Crawford 1. Introductions and LID Discussion: Public Works Director Davidson explained that in the previous meeting the committee discussed why the city uses Local Improvement Districts (LIDs) and had asked participants to consider alternative ways to fund infrastructure improvements. An LID is a method where property owners pay for improvements. He noted that current City Council policy stated that the city covered the cost of curbs, gutters, and streets, while property owners are responsible for sidewalks. If sidewalks needed to be brought up to current standards or did not exist, the property owners would pay for those improvements. Public Works Director Davidson said the purpose of the meeting is to brainstorm ideas and discuss possible alternative approaches. He offered to share some initial ideas to help stimulate discussion and invited others to contribute their thoughts so city staff could begin writing them down. Public Works Director Davidson explained the city could put to vote a levy override of its current levy rates and increase taxes for everyone in the city. He said a specific amount would be set and if they were pursuing a permanent levy override, they would need a supermajority. That meant two-thirds of the voters who turned out would have to agree to a permanent levy override. Committee Member asked for clarification between a bond and a levy. Finance Officer Nielson responded that a bond is typically issued for a set period. He gave examples such as a school bond or the current police bond, noting that the police bond is requesting a 15-year bond. He explained that with a bond, the city would borrow a specific amount of money upfront and then determine how much needed to be repaid each year. For example, if the repayment amount was $1.5 million annually, that amount would be added to the city’s budget and collected each year for 15 years until the bond is paid off. After that, it would go away. He then explained that a levy override worked differently. Instead of borrowing money upfront, it established a budget amount. For example, if the city needed $750,000 per year for LIDs, that amount would be set through the levy override. Each year, that 2 amount could increase by up to 3%. He noted that this increase would continue annually, effectively compounding over time. Unlike a bond, a levy override would continue indefinitely unless it is voted to stop. Another participant asked whether the city received funds upfront with a bond. The speaker confirmed that the city borrowed the money in that case. He contrasted this with a levy, where the funds came in gradually through taxes collected each year. • Bonds vs. Levies: Bonds are used to fund large, upfront projects and require repayment with interest, while levies provide ongoing funding for smaller, recurring needs without interest. • Levies and Taxes: Levies are part of the property tax system and determined how funds are collected across different taxing entities. • How Levies Work: Levy rates are recalculated annually based on assessed property values and budget needs, making them adjustable rather than fixed. • Property Value Impact: Rising property values (especially since COVID) shifted more of the tax burden onto residential properties due to slower commercial growth. • Taxing Districts: Different districts (city, library, cemetery, etc.) have their own levy rates, and taxpayers only paid into the districts where they lived. Public Works Director Davidson explained that some of the other ideas they had discussed included narrowing roads. He said that narrowing roads would reduce the amount of asphalt the city had to maintain over the long term. He noted that in the western United States, people preferred wider roads and often parked on them, but that preference came with added costs. He clarified that narrowing roads was not a quick way to generate money but rather a long-term strategy for reducing maintenance expenses. He added that while some roads could not be narrowed due to high traffic, subdivision roads could potentially be reduced in width during reconstruction to create long-term savings. Public Works Director Davidson reviewed some of the other funding options. • Grants: Grants are considered but are not reliable or sustainable for long-term funding. • Local Option Sales Tax: A state-approved local tax could fund infrastructure, but it is difficult to implement and requires legislative approval. • Fuel Tax: Increasing the state fuel tax could provide more road funding, but it is unlikely due to statewide approval requirements and public resistance. • State Approval Limits: Local tax options require state approval and are currently limited (e.g., mainly available to resort cities, not university towns). • Additional Ideas: Other options include modifying road design standards to extend lifespan and considering levy overrides or gas tax increases. • Tax-Exempt Property Challenge: A large portion of city property is tax-exempt, creating funding challenges like a resort community with many users but fewer taxpayers. • Impact Fees Limitation: Impact fees only support new development and expansion, not long-term maintenance. • University Contribution: The university contributes funding (about $800,000 annually) for city operations, but additional support for infrastructure would need to be requested. • Overall Approach: The group aimed to gather ideas first and later evaluate the pros and cons of each funding option. Finance Officer Nielson explained that the impact fees were established and then adjusted proportionally between police and fire services as costs increased. He noted that while the contributions might have seemed significant, the overall budgets for police and fire operations are much larger, with police at around $8 million annually and fire exceeding $10 million. He added that as both the student population and the city have grown, the cost of providing services has also increased. Discussion regarding funding challenges and changes to the LID Policy. • Funding Challenge: The city aimed to reduce the burden on property owners and avoid major tax increases, but funding still needed to be sourced. • LID Policy Change: The city shifted responsibility for curb and gutter to itself (previous year) without adding new funding, increasing city costs. 3 • Cost Tradeoff: Property owners now paid less than before (previously it could have been about double), but the city absorbed more expenses. • Policy Evolution: Since 2020, the city moved from partial sidewalk funding (e.g., 30%) to fully covering curb and gutter to simplify cost-sharing. • Rising Costs: LID costs increased significantly, with some bills reaching ~$23,000 compared to ~$6,000 in earlier years. • Resident Impact: Higher costs created financial strain and concerns for individual property owners. • No Funding for New Installations: The city did not contribute to new sidewalks, curbs, or gutters where none previously existed. • Lot Size Factor: Larger, formerly county properties faced higher costs when required to meet city standards. • City Cost Burden: Covering 100% of curb and gutter did not reduce city expenses and, in fact, increased them. • Additional Infrastructure Costs: Sewer line replacements during road projects added further costs (around $3,500 per line). • Overall Issue: Increasing infrastructure costs made long-term funding difficult, prompting the need to explore new solutions. Public Works Director Davidson explained that, as a city, they consider what options are available and what actions can be taken. He said that everything ultimately came down to costs and what could be accomplished with the available funds. He stated that this is the reason they had formed the committee—to gather input from the community and hear their thoughts on possible solutions by brainstorming ideas together and exploring different approaches. Committee Member asked regarding a property on 12th West, noting that there was no sidewalk, curb, or gutter in front of their property. They asked if, under an LID, the city would pay for the curb and gutter while the homeowner would only pay for the sidewalk. Public Works Director Davidson responded that, at that point, if those features are not already in place, they would all be included as part of the LID costs. He acknowledged that this could be a significant expense, especially for properties with larger frontage, and recognized that this created a challenge. Public Works Director Davidson added that in new subdivisions, developers typically installed sidewalks, curbs, gutters, and streets upfront, and those costs were built into the purchase price of the property. However, in existing areas, these improvements are added after the fact, which made the costs feel more burdensome to current residents. He noted that this difference is a concern for the City Council. Committee Member asked whether homeowners could install the sidewalk themselves if it was their responsibility. Public Works Director Davidson confirmed that the property owner could; however, he noted that it was often cheaper for homeowners to do so compared to having the city’s contractor complete the work. Committee Member asked why it cost more when contractors hired by the city performed the work. Public Works Director Davidson explained that city projects included additional requirements that increased costs. These included payment and performance bonds, which ensured that the city would be protected if a contractor failed to complete the project. He clarified that while a homeowner who hired a contractor privately would have to pursue legal action if something went wrong, the city required these bonds to guarantee project completion. He noted that these bonds could cost tens of thousands of dollars, depending on the size of the project, which contributed to the higher overall costs. He added that these costs were built into the total project cost. He encouraged residents to seek more cost-effective options when possible and said that if homeowners could find someone to complete the work for less, they were welcome to do so. However, he acknowledged that many residents might not know contractors or know who to contact. Public Works Director Davidson said sometimes it is easiest to “push the easy button” and let the city take care of it. However, there are also situations where people said they could do the concrete work themselves, and the results turned out poorly. They want to avoid cases where a bad concrete job must be torn out and redone after it set, since that created ongoing issues. Because of that, the city has established certain standards that require the work to be built correctly. Public Works Director Davidson reviewed some of the cost responsibilities. 4 • Cost Responsibility: There is an ongoing challenge in deciding who should bear costs; some improvements are required by property owners by the city. • Right-of-Way Ownership: Sidewalks are in city right-of-way land, meaning the city owned them in trust, but adjacent property owners were responsible for maintenance. • Student Contribution: Students contributed indirectly through rent, which property owners used to pay property taxes. • Rising Housing Costs: Housing costs increased faster than property values and allowable rent, creating concerns. • Housing Policy Changes: Many complexes moved away from BYU-Idaho–approved housing requirements to allow more flexibility and manage costs. • Market Influence: Rental prices were driven by the market, not controlled or capped by the city or university. • Unique Housing System: Rexburg’s semester-based and three-track system created different rental dynamics compared to year-round contracts in other cities. • Vacancy Challenges: Certain semesters (especially spring) were harder to fill, leading to gaps in occupancy and financial strain for property owners. • Potential Cost Solution: The city could reduce the number of improvement projects and contribute a higher percentage toward costs, but this would result in fewer overall projects. • Trade-offs: Any solution involved compromises, and there were no simple fixes to the issue. Discussions about the pros and cons of different approaches to infrastructure funding. Public Works Director Davidson suggested that reviewing results from other cities might be helpful, since some have implemented different funding variations. Only a few cities of similar size in Idaho have such programs, and some cities have reached out to learn how Rexburg implemented LIDs. He recognized that infrastructure, such as roads, sidewalks, and sewer systems, are a fundamental need for any city. Some committee members felt that these basic needs should be prioritized before spending money on less essential projects. However, there were differing opinions on what counted as a priority versus something less essential. Committee Member noted that Rexburg had a relatively young population, with a large percentage of residents under the age of 30. This created additional demand for infrastructure, even though many of these residents, particularly students, did not directly contribute to property taxes. While students contributed indirectly through rent, there were still concerns about how infrastructure costs should be distributed more broadly. Discussion about the city’s general fund and how it is allocated. Committee Members suggested that the City Council should carefully review all general fund expenditures and reassess priorities, especially during the budgeting process. Council members acknowledged that balancing the budget and meeting community expectations is challenging, as not all needs could be funded. Concerns were raised about the timing and planning of certain infrastructure projects. For example, some felt that improvements on 7th South may have been premature given potential future developments, such as an overpass and increased growth in the area. There was agreement that the city should avoid completing projects that might need to be redone in the near future. Overall, it was emphasized that better long-term planning, prioritization, and community awareness—such as access to the city’s capital improvement plan —were important in making informed decisions about infrastructure investments There were concerns that the city website is difficult to navigate, making it hard for residents to find important information such as sidewalk replacement requirements, public hearing notices, and related documents. It was suggested that the website should be more user-friendly and better organized so citizens could easily access all relevant information in one place. Discussion that in many cities, property owners are responsible for sidewalks, curb, and gutter maintenance. Some cities handled road projects differently by focusing only on the street and addressing sidewalks only, when necessary, such as for drainage issues or ADA compliance. Public Works Director Davidson reviewed the different approaches from other cities. Twin Falls used local improvement districts with some city participation, while Caldwell set aside a fixed annual budget (about 5 $150,000) specifically for sidewalk improvements. This allowed them to address sidewalks incrementally until the budget was used each year. Discussion about the costs associated with sidewalk replacement. In Rexburg, both the city and property owners shared costs, with significant portions often falling on property owners. Costs could vary depending on the condition and age of neighborhoods, with older areas typically requiring more repairs. Questions were raised about policies in other cities, such as whether new homeowners are required to install sidewalks and who paid for curb and gutter during reconstruction. It was noted that developers typically covered these costs in new developments. Discussion regarding potential options for Rexburg moving forward, including setting aside a fixed annual budget for sidewalk replacement. Committee Members emphasized the importance of clearly communicating any proposed changes to residents so they could make informed decisions, especially if funding mechanisms like levies were considered. The discussion focused on evaluating a potential levy override and its implications. One option considered is a larger levy to help fund broader street reconstruction, while another smaller, more targeted levy focused only on sidewalk, curb, and gutter replacement. A smaller levy was seen as more likely to gain public approval. If the city covered most infrastructure costs through a levy, residents would likely still be responsible for certain elements, such as sewer line replacements and possibly driveway approaches. However, expanding city responsibility raised concerns about increased liability, particularly if injuries occurred on sidewalks maintained by the city. While such cases are rare locally, other cities have experienced legal challenges. Different approaches from other cities, such as Ammon, were discussed. Ammon used a compliance-based system where sidewalks are inspected and repaired based on need rather than replacing entire neighborhoods at once. This approach is seen as potentially more equitable, though it could be more complex to manage. Concerns were also raised about fairness and perception. If the city funded all improvements, residents might feel frustrated if their neighborhoods are not prioritized, leading to perceptions of unequal treatment. A need -based approach could help address this but might complicate project coordination. Overall, the group agreed on the importance of developing clear pros and cons for each option and continuing the discussion in a future meeting. Adjournment: 6:05 P.M.