When Kuna’s former and newly elected Mayor Greg Nelson is sworn into office Tuesday, he’ll be walking into a squabble.
The city said several months ago it discovered that Nelson owes sewer-connection fees for the restaurant and lounge he built about five years ago. In addition, since 2006, Nelson has been paying the residential, not commercial, monthly sewer rate for his restaurant and lounge.
Nelson said the city is wrong. “It will be a cold day in hell before I pay the city $36,000,” he told the Statesman Thursday.
WHAT HAPPENED?
In late 2003, shortly before leaving a 20-year stint as Kuna’s mayor, Nelson and his business partner submitted an application to the city to build a new restaurant and lounge in Kuna.
The city processed the application, and Nelson paid $4,051.40 in August 2004 for the building permit. But he didn’t start construction, and the permit expired after six months. In 2005, Nelson asked the city to honor the expired permit. The city said no, so in November 2005 Nelson paid $4,163.82 for a new building permit.
Nelson tore down two homes on 4th Street and built the Peregrine Steaks and Spirits/Creekside Lounge, which opened in 2006.
WHY DID IT COME UP NOW?
Flash-forward to spring 2011. The city engineer was doing an Idaho Department of Environmental Quality-required review of city sewer capacity. During the audit, the engineer discovered an anomaly: An address with a commercial building permit had a single residential sewer connection. The address belonged to the Peregrine.
WHAT DID THE CITY DO?
The city engineer notified Kuna Planning Director Steve Hasson about the discrepancy. Hasson pored over city records and could find no evidence that sewer and water connection fees had been assessed and paid when Nelson’s building permit was issued.
Typically, those fees are assessed in addition to the building permit fee and can run to thousands of dollars for a business.
Hasson also found the city was billing the restaurant at the residential sewer rate, not the higher rate it would collect for a 200-seat restaurant/lounge.
Peregrine pays $24.65 a month, compared to two other Kuna restaurants and bars, Cowgirls and Fiesta Guadalajara, which pay $73.95 a month each.
Hasson sent a letter to Nelson’s business partner in April and asked him to provide “any records or accounting” that would “correct the records.”
In a series of back-and-forth letters, Nelson said that in 2004 he reached an agreement with the city and paid the fees; it was the city’s responsibility to find the documentation.
Hasson responded on Aug. 24, stating, “I can only conclude (the fees) are still due and payable.”
Based on the fee rates in place when the building permit was issued in November 2005, Nelson owed the city $36,600, Hasson said.
Hasson sent Nelson another letter Aug. 31, saying, “The demand for payment stands.” And that is the last time the city contacted Nelson on the issue.
WHAT DOES NELSON SAY?
Nelson told the Idaho Statesman on Thursday that he thought the city had dropped the issue because he’d heard nothing since Aug. 31.
Nelson said he paid the water and sewer connection fees at the time — although he doesn’t remember how much — and he is not going to dig out the records. “They have to prove it,” he said.
He also said that the city wouldn’t have issued the permit if he owed money.
“Under their own rules,” he said, “they would not have issued our building permit unless all the fees were paid. We have a valid permit.”
WHY CAN’T ANYONE REMEMBER WHAT HAPPENED?
A lot of faces have changed at City Hall since Nelson submitted his building permit application in 2005. The city engineer changed at least twice; the city clerk is dead, as is Nelson’s building contractor. No one who worked for planning and zoning then now works for the city.
Copies of the expired 2004 building permit and the subsequent 2005 building permit do not show any payments under the sewer and water categories.
The only other records the city does have are recordings and minutes of planning and zoning commission and council meetings. Any negotiations over building fees would have to be approved by the City Council. Hasson said he went through them and found no agreement on Nelson’s restaurant.
At a 2004 planning and zoning meeting, the city engineer said the city would need to assess the restaurant its sewer fees, then reassess after 12 months based on actual usage. Hasson, who came to Kuna in 2007, speculates the city failed to follow up on evaluating, assessing and collecting those fees.
SO, IS THAT IT?
Though it has been more than five years since the restaurant opened, the city can re-evaluate the connection, Hasson said.
Under city code, nonresidential sewer connections “shall be re-evaluated following one full year of discharge and the connection fees and monthly user fees adjusted if appropriate.” So the city is within its rights to re-evaluate Nelson’s fees, Hasson said.
BUT CAN THE CITY BILL FOR A 7-YEAR-OLD PERMIT FEE?
The city has a right to fix an error, Hasson said.
“If we make an error — clerical or judgment or some kind of assessment error — that doesn’t exonerate whatever the requirements are according to code, ordinance or resolution,” he said.
“The resolutions, ordinances and codes always take a first priority over any error,” Hasson said.
WHAT’S NEXT?
If a bill is due and payable, the city has an obligation to collect it, regardless of who owes the city money, Hasson said.
“We would do this to any other Joe in the city. We do not play favorites. This has nothing to do with Mr. Nelson,” he said.
But the issue could have something to do with Hasson keeping his job.
DIDN’T NELSON SAY HE WANTS TO GET RID OF HASSON?
Yes, several times before the election and since. He told the Statesman twice this month that Hasson’s department is not friendly to businesses and that he wants Hasson to go.
DID THE BILLING ISSUE PROMPT THAT?
“Well, that didn’t help his cause with me,” Nelson said. “I have got a whole big file on him. There are lots and lots of people and businesses who have had problems with him.”
The flap over the sewer bill was part of the reason he ran for mayor, Nelson said. “This is a good example of how (the city) is treating businesses poorly,” Nelson said.
WHY WASN’T IT DISCUSSED IN THE CAMPAIGN?
Hasson, Mayor Scott Dowdy — whom Nelson defeated — and City Councilman Doug Hoiland all said the city and council did not want to give the appearance that the bill was a campaign issue or that Nelson was being targeted for challenging Dowdy.
Hoiland said he would like to see a record of the restaurant’s usage to see whether the city’s $36,600 assessment is correct.
“I do think that Mr. Nelson has a valid point that the city waited too long,” Hoiland said, “but that doesn’t mean we sweep it under the rug.”
Cynthia Sewell: 377-6428
