SANDPOINT — In a unanimous decision, the City Council voted to delay any potential local option tax until the November election, citing concerns of a rushed process.

The LOT was introduced to the council by Mayor Jeremy Grimm at its previous February meeting and was relatively well received. Grimm brought back draft ballot language for the Feb. 18 meeting, prompting concerns from the council, particularly Council President Deb Ruehle. 

Ruehle said she felt rushed into the decision, without the data to back up the case for the LOT, and wanted to see some of the language changed to include specific projects. 

“There's not enough background. There's not enough graphs and charts and all those things for me to look at visually to know, are we making the right choice,” Ruehle said. “We need to be really clear and really secure, because if we put this out there without doing that outreach, I think it's going to fail.” 

In the draft language, the LOT would remain in place for 20 years, with 60% of the collected tax allocated to street maintenance and improvements, and the remaining 40% to the city’s sewer fund. Grimm said the idea behind including the sewer fund was to help offset the cost of the city’s new wastewater treatment plant and keep utility rates in check. 

Grimm said while the city continues to search for grants and ways to lower the cost of the plant, he’s disturbed by the lack of meaningful commitment from Idaho or the federal government. In November, voters approved a $130 million bond for the city to use for the plant's construction, but Grimm said the city is exploring ways to reduce costs through alternative treatment methods. 

During deliberation, the city’s Director of Finance, Sarah Lynds, and legal counsel, Fonda Jovick, said they had never heard of a city using LOT money for an enterprise fund, such as the city’s sewer fund. Jovick said she did not have the chance to review the draft language before it was posted to the online agenda, and under Idaho Code, local option taxes can be used only for “general city services.” 

“We have not been asked to evaluate the legal legitimacy of utilizing a local option tax revenue as a source of income and a revenue into an enterprise fund,” Jovick said. “That has significant legal consequences, if not allowable.” 

Multiple councilors said they agreed with using the LOT to fund the sewer fund, if it was legal. Councilor Pam Duquette said she now hears about the wastewater plant’s cost, almost as much as about the streets.  

Councilor Kyle Schrieber said he wanted further clarification on where the LOT revenue would go if the city could secure funding for the wastewater treatment plant. Grimm said that under the draft language, which directs funds to the city’s utility system, the city could use the revenue to offset utility costs. 

However, the lack of clarity in that area was one of the factors cited by councilors who voted to postpone. Grimm said that while he’s heard spring elections are more favorable for LOTs, he wants the council to be unanimous in putting an LOT on the ballot. 

“Whatever we do here, I hope that it's a unanimous vote,” Grimm said. “If Deb is, even with all the information, feeling like this is too much pressure, then I would recommend we defer this until the fall, for whatever that's worth.” 

Under Idaho Code, cities can run LOTs only if their population is under 10,000 according to the latest census. Grimm has said that this only gives Sandpoint until 2030, when the next national census takes place, to adopt one. 

According to data from the U.S. Census Bureau, Sandpoint’s population was over 10,000 in 2024 and under that mark in 2020. The Idaho statute says the city must be under that cap “according to the most recent census within the state of Idaho,” but does not specify if that’s at the time of the LOT or based on the decennial census. 

If adopted, the LOT would remain in place for the entire term, regardless of population size. Moving forward, the city will collect additional public input, gather more detailed data from staff, and address the legality of using LOT revenues for the sewer fund. 

According to a memo prepared by Grimm, the LOT would provide $16.8 million toward the sewer system and approximately $25 million for road repairs. By Grimm's estimation, the tax would add $36 to $72 per year to residents' grocery bills and potentially avoid sewer costs of $200 to $250 per year, if allowed.

People can view the entire meeting on the city’s YouTube channel at youtube.com/@CityofSandpoint. The council’s next scheduled meeting is March 4 at 5:30 p.m. at City Hall.