20070824Petition for Reconsideration.pdf

Bruce Smith, ISB No. 3425
Susan Buxton, ISB No. 4041
Paul Fitzer, ISB No. 5675
MOORE SMITH BUXTON & TURCKE, CHARTERED
950 W. Bannock Street, Suite 520
Boise, ID 83702
Telephone No.: [phone]
Facsimile No: [phone]
bms~msbt1aw .com
Attorneys for Intervenor
City of Eagle
RECEIVED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION'
IN THE MATTER OF THE
APPLICATION OF UNITED WATER
INC., TO AMEND AND REVISE
CERTIFICATE OF CONVENIENCE AND
NECESSITY NO. 143
Case No. UWI-06-
CITY OF EAGLE'S PETITION
TO RECONSIDER
COMES NOW the City of Eagle and pursuant to IDAPA 31.01.01.330 efseq and ~61-
626, Idaho Code submits its Petition for Reconsideration respectfully requesting that the Idaho
Public Utilities Commission ("Commission ) reconsider its August 3rd, 2007 Order, No. 30367
approving United Water s Application to amend its certificated area of service authorizing it to
provide water service to the Trailhead Community ("Trailhead"). The City s Petition to
Reconsider is premised, in part, upon the Commission s failure to base its decision on the issue
before the Commission i., whether United Water s certificate should be amended to serve a
development which has provided no detail or information on the scope or extent of needed
services. Instead of answering the question of whether United Water has the capability of
CITY OF EAGLE'S MOTION TO RECONSIDER-
servicing some undefined need and whether its certificate should be amended, the Commission
based its decision on matters outside the scope ofthe Commission s enumerated powers and
authority as provided in Idaho Code, Title 61 , i.e., whether a municipality has the authority to
provide services outside its municipal boundaries. Further, the Commission s focus on the issue
of a municipality s authority presents an issue of statewide relevance and significance likely
needing resolution by the Idaho Supreme Court.
Statement of the Case.
On April 26, 2006, United Water Idaho Inc. ("United Water ), filed an Application with
the Public Utilities Commission for Authority to Amend and Revise its Certificate of Public
Convenience and Necessity No. 143 authorizing it to serve an area known as the Trailhead
Community. Trailhead is a proposed development located north of the City of Eagle in Ada
County with one-hundred forty acres within the City s area of impact. On or about May 10
2006 the City objected to United Water s Application requesting the Commission deny the
application. The City objected to United Water s assertion that there are "no known public
entities, persons or corporations with whom the expansion is likely to compete . The City
contended that it was capable of servicing the proposed area and had planned and intended to do
so. Thus, the only question presented before the Commission, pursuant to Idaho Code ~61-526
was whether United Water s certificate should be amended, not issues regarding the plenary
powers of a municipality over which the Commission has no jurisdiction. The City believes the
case before the Commission was whether United Water s certificate should be amended, not
whether the City could not serve due to the Commission s perspective on municipal authority.
CITY OF EAGLE'S PETITION TO RECONSIDER - 2
Resolving the question of whether United Water could serve Trailhead requires clearly
defined needs provided by the developer, and a demonstration by United Water that it has the
capacity and the resources to satisfy that need. The Commission failed to properly consider the
issue before it.
II.Issues
1. Did the Commission err in prematurely amending the certificate of United Water in light
ofthe absence of any information about the needs ofthe development and United Water
capacity and resources to satisfy that unidentified need?
2. Did the Commission exceed its statutorily enumerated powers in ruling that a
municipality cannot serve an area partially within and partially outside its area of impact?
III.Argument
The Commission is a governmental entity of limited, enumerated powers codified in Title
, Idaho Code. The Commission does not have the statutory authority to determine the
jurisdiction and authority of a municipality. In this instance, the Commission is limited to
determining whether a regulated water service company possesses the capability 'to provide
service to a specific development in a specific area. The Commission did not analyze the
capability of the regulated entity, United Water, to serve clearly defined needs of the
development, but rather opined as to its view of the powers of a municipality based solely on
Title 50, Chapter 3 Idaho Code. Further, the Commission acted prematurely as Trailhead, at the
time of filing of the application, had not provided any evidence upon which United Water could
CITY OF EAGLE'S PETITION TO RECONSIDER - 3
demonstrate that it had the capacity and resources to satisfy Trailhead's needs in a cost effective
manner.
Providing water services outside the corporate limits of a city through the municipality
contractual powers is frequently done depending upon the circumstances of a given case. Such
contractual powers are judicially recognized throughout Idaho and the United States to such an
extent that the Supreme Court has even compelled cities to provide water service outside of city
boundaries. See Albee v. Judy, 136 Idaho 226 31 P.3d 248 (2001) (Supreme Court held that a
city resolution which prohibited water service outside city limits except for properties abutting or
adjoining mains installed under the city s water extension contract required the city to extend
water service outside city limits). Further, the City would submit that the scope of municipal
powers is an issue for the judiciary to determine, not the Commission.
A. The Commission exceeded the scope of its authority in opining on the contractual
power and authority of a municipality.
In its order, the Commission stated that:
We make no determination regarding the City s physical capability to provide
service nor the related costs of providing such service. Our decision regarding the
City s ability to provide water service is based on the City s area of municipal
authority.
Besides the error of not focusing on the City s authority and not United Water s capability to
provide service, the Commission incorrectly opined as to a municipality s authority to provide
water service outside its municipal boundaries. The Commission does not have the authority
pursuant to Title 61 to rule on the jurisdictional powers of another governmental entity. The
scope of municipal power lies squarely in the purview ofthe legislature as interpreted by the
judiciary, not the Commission. The Commission, as an administrative agency, is a creature of
legislation without inherent or common law powers. Neil v. Public Utils. Commission, 32 Idaho
CITY OF EAGLE'S PETITION TO RECONSIDER - 4
, 178 P. 271 (1919). As such, any power it exercises is limited to those powers expressly
conferred by statute or by necessary implication. US. v. Utah Power & Light Co , 98 Idaho 665
570 P.2d 1353 (1977); Codd v. McGoldrick Lumber Co, P.I. Case F606 , Order 1083
UR. 1928A, 545. Such powers are to be construed narrowly. Gardner v. Ewing, 88 F. Supp.
315 (S.D. Ohio 1950), judgment affd, 185 F.2d 781 (6th Cir. 1950), judgment rev d in part on
other grounds, 341 U.S. 321 , 71 S. Ct. 684, 95 L. Ed. 968 (1951). Idaho Mut. Ben. Ass n v.
Robison, 65 Idaho 793, 154 P.2d 156 (1944).
The Commission derives its powers from Idaho Code Title 61 , Chapter 5. Idaho Code
61-526 enables the Commission to make determinations as to which regulated entity has the
capability to provide service to a particular area through issuance of a Certificate' of Convenience
and Necessity. This enabling statute in no way enables the Commission to limit, expand, or
determine a municipality s contractual powers, but rather addresses the capability and approval
of service by regulated entities.
A municipality may provide services beyond its corporate boundary and area
of impact.
Municipalities throughout the state frequently extend services to areas outside their
corporate boundaries and areas of impact through their general powers to contract. This is
typically done based on the unique circumstances of a given case. Pursuant to Idaho Code 50-
323, it is undisputed that municipalities have the power to provide services within city limits.
See also Alpert v. Boise Water Corp,118 Idaho 136, 795 P.2d 298. However, throughout the
United States, such services routinely are extended outside city limits. Albee v. Judy, 136 Idaho
226 31 P.3d 248 (2001); Omaha Water Co. v. City of Omaha 162 F. 225 (c.C.A. 8th Cir.
1908), affd, 218 U.S. 180 30 S. Ct. 615, 54 L. Ed. 991 (1910). The majority of the case law in
CITY OF EAGLE'S PETITION TO RECONSIDER - 5
this arena generally concerns whether a city can be compelled to provide service outside the city
limits. Courts generally find that a municipality may be required to extend its services to areas
outside its boundaries if it has agreed to do so by contract. Allen s Creek Properties, Inc. v. City
of Clearwater, 679 So. 2d 1172 (Fla. 1996). The very fact that courts consider the obligation to
extend services outside city boundaries shows that the authority to serve exists. Generally,
courts are reluctant to interfere with the terms of a contract freely entered into by a municipality
and an extraterritorial user. Fairway Manor, Inc. v. Board of Com rs of Summit County, 36 Ohio
St. 3d 85 , 521 N.2d 818 (1988).
Idaho Code 50-222 specifically provides that in regard to residents located outside the
municipal boundaries "( c )onsent shall be implied for the area of all lands connected to a water or
wastewater collection system operated by the city. .. ." This demonstrates that the legislature
envisions that a municipality s ability to "contract and be contracted with" pursuant to Idaho
Code ~50-301 extends to providing services outside the city, which is logical given the need for
the orderly planning and development of future municipal services to a growing area.
The Commission also failed to consider the implication of having two water systems
within the same development. It is uncontroverted that one-hundred forty acres ofthe Trailhead
Community is currently located within the established City area of impact. See Direct
Testimony of Thomas Fassino, P.L.19; Direct Testimony ofNichoel Baird Spencer, P.2 L.6-
The City s comprehensive plan applies within the City s area of impact which includes the City
Urban Service Planning Area Boundary Map. . Ada County Code 9-3(A) provides that Ada
County shall require that the City s comprehensive plan shall apply within the City s area of
impact. Affidavit Bruce M. Smith, Exhibit A & B filed concurrently herewith. Thus , Ada
County has acknowledged the applicability of the City s comprehensive plan within its
CITY OF EAGLE'S PETITION TO RECONSIDER - 6
jurisdiction. The City s comprehensive plan, chapter 4, paragraph 4.6 clearly states that the
City s objective is to "(d)evelop an interconnected water system owned and operated by the
City" and "( e )nsure that all development within the Western Planning Area connects to
municipal services . at Exhibit B. Pursuant to the Local Land Use Planning Act, it is clear
that cities must plan and provide for municipal services expansion. Idaho Code ~67-6508(h).
By necessity, this requires that a municipality have the authority to contract for services with
developers located outside municipal boundaries.
IV.Conclusion
The Commission has the jurisdiction to determine whether United Water s certificate
should be amended by the procedures provided in Idaho Code ~61-526. This determination
requires the Commission to consider whether United Water has the current capability to provide
cost-effective water service to Trailhead.The Commission, however, failed to undertake this
analysis in that there was no information before the Commission addressing the needs of
Trailhead. The Commission acted prematurely as United Water could not possibly address its
ability to satisfy the needs of Trailhead in a cost-effective manner without information on the
development's needs. Instead, the Commission exceeded its limited enumerated powers by
opining on a non-regulated municipality s power to provide services outside its municipal
boundaries.
The City submits that the application filed by United Water requested a ruling on whether
United Water could serve and should serve Trailhead based upon its capability and resources
balanced against the demands of the development which, as noted, have never been defined.
The Commission erred by failing to properly focus on the amendment of United Water
CITY OF EAGLE'S PETITION TO RECONSIDER - 7
certificate and instead based its ruling on the Commission s opinion of municipal contractual
authority. The City of Eagle respectfully suggests that this is incorrect as a matter oflaw. The
City of Eagle respectfully requests that the Commission reconsider its ruling and, if necessary,
hold an evidentiary hearing on the issue of whether United Water could serve Trailhead based on
the needs and demands of Trailhead.
Dated this day of August, 2007 MOORE SMITH BUXTON & TURCKE
CHAR TERE
CITY OF EAGLE'PETITION TO RECONSIDER - 8
CERTIFICATE OF SERVICE
. 1,.-1I hereby certIfy that on thIS day of August, 2007 I served a true and correct copy of the
foregoing document via the method indicated below to:
Dean 1. Miller, Esq.
McDevitt & Miller LLP
420 West Bannock Street
PO Box 2564
Boise, ID 83701
Gregory P. Wyatt
United Water Idaho, Inc.
PO Box 190420
Boise, ID 83719
Tom C. Morris
Kastera LLC
15711 Highway 55
Boise, ID 83714
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise, ID 83720-0074
Scott Woodbury
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise, ID 83720-0074
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