Developer Has Illegal Water Company

Ada County developer Greg Johnson has been operating an illegal water system without approval of the Idaho Public Utilities Commission according to 4th District Judge Michael McLoughlin.

The judge ruled in favor of homeowners who became ensnared in a property owner nightmare when they hooked up to a community well owned and operated by Johnson.

The homeowner association allows one vote per parcel of land and the 50 or so residents found themselves totally out voted by the developer who decided to set fees without oversight of the PUC or the homeowners. Johnson owns the water and sewer companies and collects the fees from the howmeowner whom he out votes.

Homeowners in the Arrowrock Ranch subdivision at Kuna Road and South Cloverdale sued the developer after he started charging them monthly fees of $100 for water, $100 for sewer, and $100 for association dues.

One resident told the GUARDIAN he had become a confirmed “growthophobe” after he got hijacked by the developer. “We couldn’t afford the extra $300 a month on top of a mortgage and we couldn’t get out because no one would buy our place with such a steep set of illegal fees,” he said.

In a nutshell this is a good example of why a proposal before the legislature to allow developers to form taxing districts to finance development is a bad move. Boise City’s Team Dave is opposed to the bill and we are with them on this one. The net effect is to make it cheaper and easier for developers to shift costs away from investors. It burdens future owners.

The sales prices remain comparatively low, but the buyers are obligated for up to 30 years of payments on the systems. Boise Mayor Dave rightly points out the marketplace provides the regulation of development. When the developer has to roll the cost of infrastructure into the sales price, it may be too high–hence slowing development.

Under current law developers have to provide infrastructure like roads, sewer, water etc. up front…the rest of us still pay for the schools, police, fire, roads which are needed despite new tax revenue.

Comments & Discussion

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  1. “Under current law developers have to provide infrastructure like roads, sewer, water etc. up front…”

    Really Guardian…they do? So over the past 5 years of explosive small/medium subdivision growth in Meridian and Star, those developers have paid for needed improvements to major public infrastruture ie arterials like Eagle Road and Hwy 44 and others? I don’t think so. What I do think is that before you spout off about the current proposed bill you ought to read it. It limits the bonds to paying for exactly those sort of public infrastructure improvements that are so desperately needed. The bonds in fact can’t be used for “on site” infrastructure. Read it again and tell me where I’m wrong.

  2. Rod in SE Boise
    Mar 13, 2008, 8:32 pm

    I suspect that the requirement that:

    “developers have to provide infrastructure like roads, sewer, water etc. up front…”

    refers to infrastructure within the subdivision and does not refer to arterial roads and other stuff outside the subdivision. Those kinds of improvements should be covered by impact fees paid by the new homeowner (or the developer) as a part of the cost of the house or lot, like lumber (however I suspect that the existence of impact fees is as likely as the existence of the Easter Bunny). People talk about them but nobody has ever proved to my satisfaction that they exist.

  3. Impact fees are like extra- terresterials…everyone has heard of them but nobody has actually ever seen them..

  4. Antiphobe, It can be used on infrastructure within the development or outside the development. In the State of Purpose….” Those bonds can be
    utilized to fund and construct regional community infrastructure, inside and
    outside the district.”

    If they could limit this to improvements such as paying for sewer line extensions, highway improvements, and police-fire-school expansions, I think this would be worthwhile. But as worded, a developer could throw in the developments sewer and roads into the CID. Upfront and high impact fees to cover improvements outside the development would be best.

  5. brianthedog
    Mar 14, 2008, 6:58 am

    $300 a month for fees? Just to be able to live in that subdivision? Ouch!! I love it when the developer is able to make the new home owners pay for all his new developments. $100/Mo for water, and $100/Mo for sewer? Sounds like the water is coming from an ancient glacier with special healing powers. That developer should be cruising a used car lot looking for his next “mark” instead of building new homes.

  6. Contrary to Antiphobe’s comment, I think the Guardian has this one exactly right. The proposed bill works fine in robust housing markets like we had back in 2003 -2005. However, in current markets, it is a way for the developer to shirk even more responsibility than usual.

    With the proposed bill, If the development does not build out in a relatively short period of time, as is now happening all over the valley, the initial home buyers are screwed. And, when they are unable or unwilling to cover the inevitable infrastructure repairs, other county tax payers will be forced to bail the them out.

    If a developer is unwilling to shoulder the risk of their own projects, they should get into a different line of work. This bill and its proponents need to go away.

  7. I agree with the editorial. This is theiving plain and simple. Does the water provider have a legal lein on the property if the owners refuse to pay. It seems to me the opportunity would be ripe for someone to drill another well, with state approval, and provide the service the greedy developer is providing.

  8. “(however I suspect that the existence of impact fees is as likely as the existence of the Easter Bunny). ”

    What, do you mean there’s no Easter Bunny? :'(

  9. Clippityclop
    Mar 14, 2008, 5:56 pm

    Very well done editorial, Dave. While we all support the idea of growth paying for itself, the CID now currently before the House has problems and I agree with Mayor Bieter’s concerns. I also agree with Clancy and Brianthedog. Wild!

  10. Rod in SE Boise
    Mar 14, 2008, 7:19 pm

    Fiscal 101, you described (in your second paragraph) a pyramid scheme, which it is.

    BB, sorry about bursting your bubble about the bunny, I hope you aren’t one of those who believe Hillary is a Democrat (oops, I did it again).

  11. Blazing Saddle
    Mar 14, 2008, 7:34 pm

    Why are these buckeroos bothering with passing a bill? Why don’t they jus set up a phony tax plan and start bilking their customers? Who is going to head em off?

    Boise City won’t. Those mangy rascals routinely run illegal multi year slush funds so that they can make large capital purchases without getting voter approval.

    Ada County won’t. Sweet jumpin jack rabbits, they spend zilliions of dollars funding things like Compass and comp plan revisions and then blithely ignore their own ordinances when the sprawl-o-holic PC developers come a callin.

    The State won’t. When was the last time Wasden enforced anything? Most county’s routinely ignore the provisions of the State’s Land Use Planning Act by approving subdivisions miles from urban areas. And when they approve PCs in the foothills, the commissioners treat Fish and Game’s charter like downer steers (In the truck and off to slaughter). The AG has yet to defend the State’s spread.

    If the State were to get mad at the developers for anything, it would be for beating them to the punch. The state, of course, would want to tax the manure out of the very same citizens so they can subsidize the out migration of more large, high paying, Idaho employers so they can bring in more low paying phone banks.

    Like I say, bill or no bill, I don’t see anything standing in the way of the big developers.

    Go get’em Boyz! Shaft your clients. Dump the costs on the county. Take the money and ride off into the sunset.


  12. costaprettypenny
    Mar 14, 2008, 9:37 pm

    Seems like there was article in the paper a month or so ago about all of the torn up streets and open manholes in some of the abandoned subdivisions in Star. What if there had been a lien from a development bond attached, adding up interest monthly, those torn-up vacant fields would be just that and more, torn-up vacant and weed infested fields for ever.

  13. Have no fear, even though this SUBDIVISION is barely within arty range of the village water tower, Kuna’s omnipotent little demigods are doing their damndest to annex that area too. Then instead of a crooked developer the house buyers can deal with a whole covey of elected professional robber barons.

    Anyone who would buy in a subdivision that far from town and “think” that they are living in the country probably deserves a good reaming anyway. At least a couple of the residents drive publicly provided single occupant vehicles, gas and insurance to commute with. Surely THEY can cheerfully afford the developer’s extortion.

  14. Wow! A subdivider/developer doing something illegal and ripping off the buyers? Now there’s a shock!

    To Rod in SE Boise: Yep, you blew it on outing the bunny and Hillary, but for God’s sake don’t keep going and say that George W. is neither a Republican nor a compassionate conservative.
    Now, I know not many of the R’s read this blog, but if any did and found out that W.’s idea of conservative is to run the nation billions of dollars into debt, and that his compassion consists of sending thousands of Americans overseas to be killed, maimed, and damaged physically, mentally and emotionally, as well as imprisoning and torturing people who are merely *suspected* of doing bad things, why, the R’s might just choose somebody with a brain next time (in 2012?), and that would really hurt the D’s chances at the big white home.

    So just keep the lid on that one, OK?
    (And the Guardian just keeps blowing the cover of subdividers, politicians etc. Damn, can there be no secrets anymore?)

  15. Someone has to pay for Johnson’s planned community/golf course in an area that no one will ever want to live, at least they can “walk” to the Boise Stage Shop.

  16. John Mitchell
    Mar 20, 2008, 11:45 am

    Boise Guardian should do a short investigative piece on Calloway Ranch (Beacon Light Rd)out in Eagle, Million dollar properties on one acre (about 60 homes) with BIG sewer problems due to their faulty “community septic system”—but then they can afford another $3500 to hook up to Eagle Sewer—which is what should have happened in the first place……Who approves these systems ????

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