Loading...
HomeMy WebLinkAbout6.30.26 Ltr to City Council re Basic American Foods Annexation(153442281 153442281.3 0060174-00043 Rachel S. Aramburu 101 S. Capitol Boulevard, Suite 1900 Boise, ID 83702 D. 208.387.4233 Rachel.Aramburu@stoel.com June 30, 2026 Mayor Jerry Merrill and Members of the City Council Attn: Deborah Lovejoy, City Clerk City of Rexburg 35 North 1st East Rexburg, ID 83440 Re: File No. 26-00321 – Written Objection of Basic American Foods, Inc. to Proposed Annexation (Public Hearing, July 1, 2026) Dear Mayor Merrill and Members of the Council: This office represents Basic American Foods, Inc. (“Basic American”) with respect to the proposed annexation of three parcels located at approximately 80 East 7th North, Rexburg, Idaho (the “Property”). Basic American respectfully opposes the proposed annexation and requests that the City Council deny File No. 26-00321. Consistent with the legislative purposes underlying Idaho Code Section 50-222, including providing affected landowners a meaningful voice in decisions affecting their governance and reducing conflict between municipalities and citizens, Basic American submits this letter for inclusion in the record before the City Council’s July 1, 2026 public hearing. This letter also responds to certain statements made by City staff and the City Attorney during the Planning and Zoning Commission (“P&Z Commission”) hearing on June 18, 2026. As a longstanding employer, taxpayer, and economic contributor in Rexburg, Basic American submits these comments not only to protect its legal rights, but also to preserve the cooperative and transparent relationship it has worked to maintain with the City over many years. I. Basic American Has Not Consented to Annexation, and the City Expressly Acknowledged as Much in 2024. A baseline legal requirement for any annexation is that the affected landowner consent to the annexation. See Idaho Code § 50-222. As a matter of state law, cities cannot annex landowners against their will—at least without fulfilling rigorous statutory requirements that the City has not satisfied here. Unfortunately, that is exactly what staff and the P&Z Commission are recommending the Council do here. Idaho Code § 50-222 defines “consent” as a written, recorded document in which the landowner “explicitly” agrees to be annexed. No such document exists for the Property. To the contrary, on June 7, 2024, Basic American and the City negotiated a Utility Easement Agreement (the “2024 Easement Agreement”) under which Basic American granted the City a June 30, 2026 Page 2 153442281.3 0060174-00043 permanent 30-foot sewer easement and a temporary construction easement across the Property. That agreement provides: “The City further agrees that it will not annex any additional property of Basic American Inc or its affiliates until at least January 1, 2026. Nothing herein is intended to constitute a consent to annexation at any time.” That language was bargained for. It confirms both that Basic American has not consented to the proposed annexation and that the City previously expressly agreed not to treat prior negotiations with Basic American as consent at any time. Staff’s and the P&Z Commission’s annexation proposal reneges on this promise, which Basic American has relied on in good faith. A. Basic American has not provided implied consent to the proposed annexation. At the P&Z Commission hearing, the City Attorney took the position that Basic American has provided “implied consent” to the proposed annexation under Idaho Code § 50-222(2)(c). The “implied consent” provision provides: “[V]alid consent to annex is implied for the area of all lands connected to a water or wastewater collection system owned and operated in its entirety by the city if the connection was requested in writing by the owner or the owner’s authorized agent prior to July 1, 2024, or if the connection was completed before July 1, 2008.” Idaho Code § 50-222(2)(c) (emphasis added). As emphasized above, consent can only be implied for specific “lands” “connected to” a municipal water or wastewater system. The City Attorney took the position that Basic American has provided implied consent based on work orders dated 1999 and 2007, which the City Attorney contended evidence connections to the City’s sewer and fire-suppression water systems completed prior to July 1, 2008. The record from the P&Z hearing misrepresents the resources Basic American is using from the City. The only existing tie from the Property to the municipal water system is for sanitary sewer and an emergency backup line used for fire suppression and emergency shutdown, and it is only utilized at the facility, located on only one of the parcels proposed for annexation (Parcel RP06N40E190011). This parcel is only connected to the municipal water system as an emergency backup supply. The other two parcels (Parcels RP06N40E185233 and RP06N40E187665) are not connected to either a water or wastewater collection system owned and operated by the City. The facility’s industrial water needs are met entirely by Basic American’s own wells, a fact the Planning and Zoning Administrator confirmed on the record at the P&Z hearing. Treating an emergency standby connection and sanitary sewer use as implied consent is not reasonable and directly contradicts the City’s promise not to treat prior utility negotiations as implied consent in 2024. Accordingly, the City cannot reasonably rely on implied consent to annex any of the three parcels: two parcels have no connection to City utilities whatsoever, and the third is served only by a rarely used emergency backup line and sanitary June 30, 2026 Page 3 153442281.3 0060174-00043 sewer connection, which, particularly in light of the City’s 2024 commitment regarding utility negotiations, does not support a finding of implied consent. II. The City’s Notice Is Deficient Under Idaho Code §§ 50-222(3) and (4). Where the City has not secured the required landowner consent, the City must meet certain state- law requirements before proceeding with any annexation. See Idaho Code § 50-222(3). The City has not satisfied these basic requirements intended to protect landowners. There are three independent defects. A. The property description in the City’s public notice is internally inconsistent. A valid annexation notice must accurately identify the property proposed for annexation. The legal description in the notice dated June 15, 2026, places the Property in Township 06 North, Range 39 East. The map in the same notice places it in Range 40 East, abutting the current city boundary. Both cannot be correct. If the description on the first page of the notice controls, the property identified for annexation sits west of the City’s existing boundary and is not the land that Basic American owns. An accurate property description in the hearing notice is the foundation of a valid annexation notice, and this inconsistency alone requires the City Council to deny the annexation. B. The hearing notice omits multiple disclosures required by Idaho Code § 50-222(3)(b). State statute requires the hearing notice to identify, in plain terms, (i) how a landowner may give or withhold consent, (ii) where consent or objection is to be filed, (iii) the deadline by which it must be filed, and (iv) where the full annexation record may be reviewed. Idaho Code § 50- 222(3)(b). The notice issued in File No. 26-00321 contains none of these required disclosures. Those omissions are not technical; they are how the statute ensures meaningful landowner participation. Therefore, the notice deprived affected landowners of information the Legislature deemed necessary to participate meaningfully in the annexation process, rendering the notice legally deficient and requiring denial of the annexation request. C. The City has not produced the written annexation plan required by Idaho Code §§ 50- 222(3)(d) and (4). State statute also requires the City to provide a written annexation plan identifying: a) “The manner of providing tax-supported municipal services to the subject land;” b) “The changes in taxation and other costs that would result if the subject land were to be annexed;” c) “The means of providing fee-supported municipal services, if any, to the subject land;” June 30, 2026 Page 4 153442281.3 0060174-00043 d) “An analysis of the potential effects of annexation on other units of local government that currently provide tax-supported or fee-supported services to the subject land;” e) “The proposed future land use plan and zoning designation or designations, subject to public hearing, for the subject land; and” f) “A statement of the public purposes that would benefit from annexation.” Idaho Code § 50-222(4); see also Idaho Code § 50-222(3)(b). A major purpose of this requirement is to ensure that the City is not recklessly annexing properties to which the City cannot effectively or affordably provide municipal services. Unfortunately, the absence of an annexation plan leaves the Council without the information necessary to determine whether municipal services can be provided to the Property in a reasonable and cost-effective manner. That omission is especially significant here because Basic American supplies its industrial water needs through private wells, and the record reflects only limited or nonexistent utility connections across the parcels proposed for annexation. No annexation plan appears in the record before the Council and, therefore, the Council must deny the proposed application. D. Even assuming Basic American provided “implied consent” for one parcel, compliance with Sections 50-222(3) and (4) is still required for the other two parcels. At the P&Z hearing, the City Attorney suggested that, because the proposed annexation purportedly satisfied the implied consent provision of state law, the City is not required to comply with the other requirements of the statute noted above. That advice was incorrect. As discussed above, only one of the three parcels proposed for annexation has sanitary sewer and an emergency hookup to City water. Basic American maintains that implied consent should not be presumed based on an emergency water connection that is rarely used and serves only a limited purpose at the facility. However, even assuming the City Council disagrees with this interpretation, at most, Basic American has provided implied consent for a single parcel. The other requirements of the statute still apply to the other two parcels, and the City has not met them here. Idaho Code § 50-222(6)(a) provides that, “[i]n the case of a prospective annexation where all landowners of the subject property have requested annexation or where consent has been given by the landowner or landowners of a contiguous parcel or parcels or where implied consent has been given, the provisions of subsections (3) and (4) of this section [outlined above] shall not apply.” (Emphasis added.) The statute expressly extends actual consent to “a contiguous parcel or parcels,” but does not similarly extend implied consent to contiguous parcels. The Legislature’s inclusion of contiguous parcels in the actual-consent clause, and omission of any reference to contiguous parcels in the implied-consent clause, indicates that implied consent applies, at most, only to the parcel connected to municipal water service. Implied consent cannot be imputed to the two adjacent parcels proposed for annexation under any reading of the law. Accordingly, the statute does not support applying implied consent to all three parcels at issue or June 30, 2026 Page 5 153442281.3 0060174-00043 excuse the City from the requirements of Idaho Code §§ 50-222(3) and (4) for at least two of the three parcels proposed for annexation. Because the City has not established implied consent for all three parcels and has failed to comply with the independent notice, hearing, and annexation-plan requirements of Idaho Code §§ 50-222(3) and (4), the proposed annexation does not satisfy state law and must be denied. III. The Vast Majority of the Acreage Proposed for Annexation Is Agricultural Land That Cannot Be Annexed Without Basic American’s Written Permission. Idaho Code § 50-222(12)(a) provides that land of five acres or greater and “actively devoted to agriculture,” as defined in Idaho Code § 63-604(1), cannot be annexed without the landowner’s express written permission. Importantly, this requirement applies even if the City could otherwise rely on the implied consent exception that staff, the City Attorney, and the P&Z Commission have relied on here. See Idaho Code § 50-222(5)(a) (exempting requirements of Idaho Code §§ 50-222(3) and (4) under implied consent pathway but not exempting Idaho Code § 50-222(12) requirements). Idaho Code § 63-604(1)(a)(i) provides that land is “actively devoted to agriculture” if, among other things, “it is used to produce field crops including, but not limited to, grains, feed crops, fruits and vegetables.” That definition applies directly to the vast majority of the proposed annexation area. The proposed annexation area covers approximately 300 acres of Basic American’s property. Approximately 250 of those acres are used to grow hay for local feedlot use. Thus, those approximately 250 acres qualify as land “actively devoted to agriculture” under Idaho Code § 63-604(1) and legally cannot be annexed without Basic American’s express consent. Roughly five-sixths of the noticed acreage is therefore protected from annexation without Basic American’s express written consent, which has not been given. The City must, at minimum, carve out any lands “actively devoted to agriculture” before any annexation proposal moves forward. IV. The City Cannot Deliver the Municipal Services That Would Justify Annexation. A core consideration for any annexation is whether the City can actually deliver municipal services to the property. See, e.g., Idaho Code § 50-222(4). Here, the City simply cannot deliver the necessary municipal services to Basic American’s property. Basic American’s process water and fire-suppression demands exceed what the City’s municipal water system can reliably supply, which is why Basic American maintains its own water infrastructure and connects to the City’s water system only through an emergency backup line. The City’s wastewater treatment plant is not built to handle Basic American’s industrial wastewater without significant pretreatment and added capacity, and the 2024 Easement Agreement contemplates only a sanitary sewer line along one parcel’s edge. The annexation notice does not identify what police, fire, stormwater, transportation, or solid waste services June 30, 2026 Page 6 153442281.3 0060174-00043 would be extended, what they would cost, when they would arrive, or how they would be financed, despite the fact that Idaho Code § 50-222(4) requires a written plan answering those questions. And, even if the Council were to annex the Property over Basic American’s objection, Idaho Code § 50-222(5) provides that Basic American cannot be required to use the City’s water or wastewater services and may retain its existing systems. Annexation would therefore deliver no actual City service to the facility. For those reasons, not only is the proposed annexation unlawful, it is also unreasonable. At the P&Z hearing, City staff explained that the principal motivation for annexation is to allow the City to collect property tax revenue, and the City Attorney suggested that any future capacity concerns could be addressed through impact and capacity fees. Hoping to expand the City’s tax base is not a valid legal basis to force an annexation against a landowner’s consent. And, practically speaking, the City is asking Basic American to pay City taxes for services that Basic American has no expectation to receive. V. Conclusion For the reasons stated above, Basic American respectfully requests that the City Council deny the proposed annexation in File No. 26-00321. The proposed annexation is not only unlawful; it is contrary to the basic good-faith business dealings that Basic American has come to expect from the City of Rexburg. Basic American has been a longstanding economic partner in this community, providing jobs, investment, and revenue that benefit the residents of Rexburg. Businesses should be able to rely on the City’s representations and expect that annexation decisions will be made in accordance with both the letter and spirit of Idaho law. To approve this application despite the defects identified above and the City’s prior commitments to Basic American would send the opposite message. The Council should deny the application and ensure that any future annexation proposal is pursued through a lawful and transparent process. Representatives of Basic American and this office plan to appear at the July 1, 2026 hearing. Please do not hesitate to reach out if we can provide additional information to support the Council’s review. Respectfully submitted, Rachel S. Aramburu