20060908Kastera to staff 1-2.pdf

RECEIVED
2006 SEP -8 AM 8:
5 TM IDAHO pum 1('UTILITIES COM,IA/SSION
September 6, 2006
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
o. Box 83720
Boise, Idaho 83720-0074
RE: CASE NO. UWI-06-
Dear Mr. Woodbury:
Included in this letter is Kastera LLC's response to your request, dated August 28, 2006
for information as it relates to CASE NO. UWI-06-
REQUEST NO.
Holladay Enlrlneerin2 Co.. PO Box 211. Payette. Idaho 83661
Kastera met with Holladay Engineering Co., the city engineer for the City of Eagle.
Holladay Engineering Co. stated that the City of Eagle water system has not been master
planned to extend water service north of the Homer Road alignment; which is also the
Area of City Impact Boundary. Holladay Engineering Co. stated that the City of Eagle
would need time to get their master planning completed and make system improvements.
When Kastera asked Holladay Engineering Co. how long it would take for the City of
Eagle to provide water service to Trailhead, the answer was two (2) years.
United Water Idaho. PO Box 190420. Boise. Idaho 83719-0420
United Water Idaho was consulted after meeting with the City of Eagle city engineer
Holladay Engineering Co. United Water Idaho confirmed and verified that the
statements made by Holladay Engineering Co. were factually correct. United Water
Idaho also confirmed that no one knew the City of Eagle water system better than United
Water Idaho because they were the operators of the city s system. United Water Idaho
further confirmed to Kastera that the City of Eagle did not have system capacity to serve
Trailhead within our desired timeline. United Water Idaho also confirmed to Kastera
that United Water Idaho, did in fact, have system capacity to provide immediate water
service to Trailhead.
372 S. Eagle Road, Suite 375 , Eagle, Idaho 83616 Tel: [phone] Fax: [phone] www.Kastera.com
Facility En2ineerin2 Solutions. 55-479 Naniloa Loop. Laie. Hawaii 96762
Facility Engineering Solutions was consulted after meeting with United Water Idaho and
Holladay Engineering Co. Facility Engineering Solutions confirmed to Kastera that it
was reasonable to expect a two-year waiting period for the City of Eagle to update their
water facility master plan; obtain regulatory approval; seek regulatory permits; seek and
obtain water rights; construct water storage facilities; construct booster facilities; drill
wells and install service mains north of Homer Road to serve Trailhead.
REQUEST NO.
Because we have not received a written response from the City of Eagle, to our
September 1 , 2006, letter to the city; Kastera LLC is not able to definitively state whether
or not we plan to seek annexation of the proposed Trailhead Community development
into the City of Eagle.
In a letter to Kastera LLC, dated August 25, 2006, Bruce Smith, attorney for the City of
Eagle, provided a response to Kastera s proposed Memorandum Of Understanding
(MOU) as it related to the potential annexation of Kastera s Trailhead development (see
Attachment #1). Because the proposed Eagle MOU did not contain sufficient
information for Kastera to make a decision, Kastera submitted a letter to the Mayor of
Eagle for further clarification, dated September 2006, from Thomas Fassino of Kastera
LLC (see Attachment #2).
At this time Kastera LLC, has not received sufficient information from the City of Eagle.
Therefore, we area still seeking water service from United Water Idaho.
Enclosures:
Attachment #
Attachment #2
~~~* -- 1.
MOORE SMITH BUXTON & TURCKE, CHARTERED
ATTORNEYS AND COUNSELORS AT LAW
950 W. BANNOCK STREET, SUITE 520
BOISE, ID 83702
TELEPHONE: [phone] FAX: [phone]
STEPHANIEJ. BONNEY
SUSAN E. BUXTON*
MICHAEL C. MOORE!
PAuLl. FITZER
BRUCE M. SMITH
PAULA. TURCKEo
TAMMY A. ZOKAN
JOHN J. McFADDEN
Of Counsel
* Also admitted in Oregon
! ALSO ADMITTED IN WASHINGTON0 Also admitted in South Dakota
+ ALSO ADMITTED IN NEW MEXICO
August 25 , 2006
Thomas Fassino
Kastera Homes
372 S. Eagle Road, Suite 375
Eagle, ill 83616
RE: Annexation of Kastera Trailhead Property
Dear Thomas:
According to information provided by Wayne Forrey, you are the designated representative of
Kastera for the purposes of planning for annexation of the Trailhead Property. The City of Eagle
welcomes you to this effort and looks forward to working with you.
Based on previous meetings between the City of Eagle and other Kastera representatives , the
City has taken steps to identify and secure an annexation pathway for the Kastera Property. As
part of the annexation, the Kastera Property will be served by the City water system. Based on
the information provided to date, the City has also begun planning for provision of that service as
required by City ordinance.
Kastera provided a draft Memorandum of Understanding (MOU) regarding the framework for
planning and development of Trailhead Property to the City for consideration. The City has
reviewed that document and found that some provisions in the draft raised significant issues
regarding what the parties could legally commit to at this stage in the process of annexation of
the Trailhead Property. Some of the problems relate to authority and some to a lack of available
information at this time. To help make Kastera s annexation process more efficient and
expeditious, the City is providing a revised MOU that is responsive to Kastera s request for
annexation and better reflects the planning stage of development that we are currently in for the
Trailhead Property. The MOU also accommodates Kastera s intent in identifying other
annexation opportunities.
August 25, 2006
As you will see, the revised MOU seeks to move forward in a reasonable timeframe, much of
which is dependent upon the City s receiving information from Kastera. The City of Eagle has
executed the MOU, so all we need to move this forward is to get Exhibits A & B to attach.
Exhibit A is the legal description of the Trailhead property. Exhibit B is the list of affiliate
companies and other lands that Kastera may want to annex. Once we get the Exhibits, I will
forward you the executed copy for signing by Kastera. The City looks forward to working with
you to get that information as soon as possible. I would suggest we schedule some meetings to
identify this information so the Trailhead annexation moves as quickly and smoothly as possible.
Sincerely yours
MOORE, SMITH, BUXTON &
TURCKE, CHARTERED
Bruce M. Smith
Attorney for City of Eagle
BMS/dls
Enclosure
EAGLE, IDAHO
MEMORANDUM OF UNDERSTANDING
Between
THE CITY OF EAGLE, IDAHO
And
KASTERA, LLC
1. PURPOSE: The purpose of this Memorandum of Understanding (MOU) is to establish
a framework and process for planning and development of Kastera LLC's (Kastera) Trailhead
Property as identified in Exhibit A and, consistent with the terms of this MOU, other Kastera
properties which are located in the Eagle Foothills in close proximity to the City of Eagle
the City ), Idaho.
2. AUTHORITY AND OWNERSHIP OF LAND: Both the City of Eagle and Kastera
have the authority to enter into certain pre-annexation agreements, development agreements
contracts and MOUs. Kastera has several affiliated companies that own and control land
holdings within the area north of Eagle, Idaho as identified in Exhibit B (identify companies
and land). Kastera represents that it has the authority to execute and commit to this MOU and
other related documents on behalf of itself and these affiliated companies.
3. MUTUAL BENEFIT: Kastera and the City agree that it is to their mutual interest and
benefit to work cooperatively on planning and development of the Trailhead Property and
other Kastera properties identified in Exhibit B. All parties also agree it is to their mutual
benefit to work cooperatively to further plan and develop, consistent with Idaho law and City
ordinances and policies, the municipal water system to serve the Trailhead Property and other
Kastera properties.
FRAMEWORK AND PROCESS FOR TRAILHEAD PROPERTY
ANNEXATION AND DEVELOPMENT PLANNING:
A. The City of Eagle and Kastera agree that annexation of Kaster a s Trailhead
Property into the City of Eagle provides mutual benefits to both parties. The execution ofthis
MOU shall be evidence of the intent of Kastera and the City of Eagle to undertake such action
as may be necessary to initiate the process for annexation.
B. In order to proceed with annexation planning, Kastera agrees to prepare and
submit to the City of Eagle such documents as are appropriate and necessary for the City to
begin the annexation process. Kastera agrees to submit such documentation by a date to be
agreed upon by Kastera and the City of Eagle.
C. Consistent with the execution of this MOU and the submission of
documentation for annexation as set forth in paragraph B, the City of Eagle will continue
steps to develop and improve its municipal water system, consistent with Idaho law and City
ordinances. In order to make such efforts by the City feasible to serve the Trailhead property,
MEMORANDUM OF UNDERSTANDING - 1
Kastera agrees to provide such information as the City determines is necessary and
appropriate to plan for design and construction of any needed facilities.
D. To facilitate planning and development of the Trailhead Property, Kastera and
the City of Eagle each agree to designate a lead representative for each party. The designated
representative shall coordinate and communicate such information as is necessary to ensure
an efficient and expeditious planning and development process, including steps necessary to
allow annexation of the Trailhead Property. Each party agrees to provide information
consistent with Idaho statutes, as may be necessary to accomplish the intent of this MOD.
E. The City acknowledges that Kastera has or may acquire properties other than the
Trailhead Property that could be appropriate for annexation into the City of Eagle. Upon
identification of such additional properties by Kastera to the City, the City agrees to consider
annexation of these additional properties as requested by Kastera.
F. Because it is the intent of the parties and this MOU to identify a process that
ensures to the maximum extent practicable an orderly and defined process for planning and
developing the Trailhead Property, Kastera and the City agree to amend, as appropriate, this
MOU to further that intent.
G. Nothing herein shall be deemed as a commitment by Kastera LLC or its
affiliates to take any action that exceeds the authority of either party.
IN WITNESS hereby the parties have executed MOU on the date written below,
Nancy C. Merrill, Mayor Var Reeve, Manager
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ATTEST:
Sharon K. Bergmann
City Clerk
Wayne S. Forrey, Manager
Date:
MEMORANDUM OF UNDERSTANDING - 2
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September 1, 2006
Honorable Mayor Nancy Merrill
and Eagle City Council Members
City of Eagle
660 E. Civic Lane
Eagle, Idaho 83616
Dear Mayor Merrill and Eagle City Council Members:
Thank you for directing your staff to provide a written response to our request for a
MEMORANDUM OF UNDERSTANDING (MOU) which was provided to the City of Eagle
on July 13, 2006. I have read the City's proposed follow-up MOU and I noted that it
does not provide enough meat and potatoes for us to understand the benefits of
annexation as called for in item #4A.
Before I can ask Var Reeve and Wayne Forrey to sign a MOU with the City of Eagle, we
need to have a framework of anticipated development density. I do not feel that a
request for anticipated development density is unrealistic. By giving us a bland MOU, it
shows us that you re not willing to use your Idaho Code granted powers to present the
mutual benefits to both parties." (See #4A)
Kastera has an interest in lands within the proposed Legacy development area.
Consequently, we are aware that Legacy received anticipated development density
information from the City of Eagle early in the process and well before annexation
public hearings. The Idaho Statesman Newspaper has also reported that M3 Company
has received development density information from the City of Eagle well in advance of
annexation proceedings. Also, Mr. Cullen Connolly has indicated to us that he has
talked with the City of Eagle and has been informed of anticipated development
densities if he chooses annexation. We want to work with you in the same procedures
as Legacy development and M3 Company and the other property owners you have
attracted into Eagle.
Idaho code allows cities to work with developers to prepare pre-annexation agreements
and development agreements to define future development that is needful for the
uses or purposes of the city; and exercise all powers and perform all functions of
local self-government in city affairs as are not specifically prohibited by or in conflict
372 S. Eagle Road, Suite 375, Eagle, Idaho 83616 Tel: [phone] Fax: [phone] www.Kastera.com
with the grE:JfiJrE:JIJal/ laws OIJ the constitution of the state (pf Jldaho,(Idaho code 50 -
301).
Also, Wayne Forrey tells me that he has negotiated pre-annexation agreements and
development agreements both as a local and state government official and as a
developer; well in advance of the annexation process. We know this can be done, so
please reconsider your draft MOU approach and give us reasonable density information
so we can understand the economic benefits of Eagle annexation. For more
information, also refer to the following Idaho Code sections pertaining to your powers
and function of agreements: 50 - 220; 50 - 222 (4); 67 - 6525; 67 - 6515A (4 & 8A);
67 - 6511A; 67 - 8203 (12); and 67 - 8214 (2).
On another matterj during the IPUC meeting on August 10, 2006, City staff indicated
that the City would have an annexation path to our Trailhead property within two
weeks. Has this been accomplished? Does trailhead now touch the City Eagle?
We know the cultural attributes of residing within the City of Eagle because several of
our owners and staff live in Eagle...and they are happy residents. Because of your
city's cultural amenities, we are naturally interested in exploring annexation of our
Trailhead property into the City. However, we must also understand the economic
attributes of annexation into Eagle. Without having a reasonable assurance of
anticipated development densities, we cannot complete a financial pro-forma to make a
responsible fiduciary-based decision.
If you can give us reasonable assurance of anticipated development densities, (like you
have with other property owners), then we can complete our financial pro-forma and
exercise fiduciary responsibility.
Mayor, the landowners of Trailhead and other Kastera properties are looking to me for
a recommendation on whether or not to request annexation into the City of Eagle. I
need to understand the anticipated development density from the City's perspective so
I can make an informed recommendation and move this process forward.
Once again, thank you Mayor Merrill for responding to our draft MOU. Hopefully, you
can expand your MOU into a pre-annexation agreement to help structure a "consent to
annexation at the outset of the annexation process , as called for in Idaho Code.
~17
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Project Manager