SANDPOINT — In 2016, the Idaho Supreme Court ruled a joint powers agreement between the city and Independent Highway District to be void and unenforceable.

For 10 years, the JPA allowed the city to assume control of all streets within city limits and required IHD to pay all highway ad valorem taxes collected on property in the city. Since the court ruling, the two entities have worked to come to an agreement in terms of what functions are shared between the city and IHD, and what responsibility belongs to the city.

On Wednesday, City Council members approved a five-year memorandum of understanding with the Independent Highway District.

“We have specifically delineated in order to promote an effective working relationship between the highway district and the city moving forward,” said City Administrator Jennifer Stapleton.

Although it has yet to be officially approved by IHD officials, Stapleton said they have agreed to the MOU and she expects they will hold a meeting prior to an upcoming status hearing with the Idaho Supreme Court judge.

The MOU will continue to give the city responsibility for maintenance of the city streets, Stapleton said, and revenue sharing is addressed in the agreement.

“In the past, the city had been receiving 100 percent of 50 percent of the property tax revenues that were going to the Independent Highway District,” she said. “This particular MOU provides for 90 percent of the 50 percent of property tax revenues. That does address revenues that in the past had not been shared with the city ... past due property taxes that under the prior agreement were not being shared with the city.”

The contract outlines joint responsibilities, which include speed limit changes on city streets, approval of transportation and corridor plans, encroachments and more. There are two elements in terms of joint responsibilities that will require joint hearings between City Council and Independent Highway District — right-of-way vacation and right-of-way acquisition.

The city’s responsibility list includes general street maintenance, new approaches, utility work with the right-of-way, art projects, trees, parking, ADA plans and upgrades and more.

The original joint powers agreement went into effect in 2003 and the city assumed maintenance and control over Independent Highway District routes within the city, and the district turned over half of the tax proceeds it collected within city limits. The district sought unsuccessfully to renegotiate the terms of the agreement in 2013.

The highway district resolved to disregard the agreement in 2013, prompting the city to sue the district for breach of contract. The city prevailed in 1st District Court, but the supreme court issued a ruling which declared the joint powers agreement illegal and therefore invalid.

The high court held that the agreement violated the legislative requirements for maintenance of city streets located within the boundaries of the highway district and that the agreement did not conform to the requirements set out by the Legislature.

Mary Malone can be reached by email at [email protected] and follow her on Twitter @MaryDailyBee.