City Hall delays putting 1% local option tax on the ballot until Nov. election

Proposal would have put money toward sewer plant, roads, but more info needed

By Zach Hagadone
Reader Staff

The proposal to float a 1% local option sales tax past Sandpoint voters in the May 19 election has been delayed until November, following a unanimous vote by the Sandpoint City Council at its Feb. 18 meeting.

Sandpoint Mayor Jeremy Grimm fronted the possibility of an LOT at the Feb. 4 council meeting, noting that the timeline for getting it on the ballot was limited. Approved ballot language would have needed to be filed with Bonner County Elections by mid-March for inclusion in the May election, and councilors agreed that didn’t leave enough opportunity for public engagement.

“I don’t feel like we’ve done enough outreach, we haven’t done surveys in the community to figure out what the preferences are,” said Council President Deb Ruehle. “I don’t feel like there’s transparency in this language. I don’t see specific projects being mentioned.”

In proposed ballot language presented to the council on Feb. 18, Grimm suggested the 1% tax on sales would run for 20 years with 40% of the revenues earmarked for reducing the cost of the wastewater treatment plant upgrade and 60% devoted to street infrastructure.

Grimm noted “big spikes” for LOT revenues in the summer months, attributed to the influx of tourists and other visitors during the season and suggesting that the tax wouldn’t fall entirely on residents.

“We don’t have a crystal ball to know exactly what it’s going to take to get a supermajority on this,” Grimm said, highlighting the wastewater plant and roads as targets for funding that would most likely gain voters’ favor.

“To some degree, the more [projects] you put in, the more you’re going to alienate some people,” he added.

Ruehle said it was still too early to know how much the treatment plant is going to cost and therefore the potential impacts on sewer rates. She also said that voters would be more likely to support “things they can touch, feel and see.”

For instance, she added, the last time a LOT earned a supermajority was for the Memorial Field reconstruction project, where, “the public knew what they were getting for their money.”

Councilor Kyle Schreiber questioned what could happen if 40% of LOT revenues were dedicated to the wastewater plant, but additional funding came in from another source at some point during the 20-year life of the tax. In that case, under the proposed ballot language, that 40% of obligated revenue would go to a project that might not need it.

In that scenario, it was suggested that unneeded funds could be diverted to other projects, though finance staff warned that those dollars can’t be put toward the general fund. Meanwhile, the wastewater plant has its own enterprise fund in the budget, and City Attorney Fonda Jovick said it’s unclear under Idaho Code whether it’s even legal to use an LOT as a revenue source for an enterprise fund. 

“If we’re going out for a 20-year local option tax we have to think on a 20-year timeline, not what’s happened in the last six months, what the latest headline is,” Schreiber said.

Ruehle agreed, reiterating that, “There’s not enough information here. 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. You know, we are asking for 20 years of a tax on our residents. … If we put this out there without doing that outreach, I think it’s going to fail.”

While Councilor Joel Aispuro said dedicating LOT funding to streets is a “no-brainer,” he also worried about the lack of clarity on whether that funding was legally allowed to go toward the wastewater plant.

At the same time, Grimm emphasized the “extreme” sewer rate increases that Sandpoint residents may face if outside funding sources can’t be identified to support the treatment plant rebuild, which voters supported at the polls in 2025 by approving $130 million in bonding authority to pay for the project. However, that support was predicated on the pledge by City Hall to seek as much state and federal funding as possible to avoid ratepayers shouldering the cost burden. That funding has not been forthcoming.

“As the figures look right now, $200 a month [in sewer rates] is about 5% of our average household income. That’s a lot just for sewer, which is so far out of the spectrum of what other communities pay for sewer,” Grimm said. “It frightens me if our residents are going to have to pay that much of a sewer bill.”

“And they’re frightened of it, too,” Councilor Pam Duquette said.

Ruehle made the motion to delay consideration of the LOT until the fall, giving time to go to the public to assess their needs, get legal questions answered and collect data. Duquette seconded.

Aispuro said that a successful ballot measure will come down to explaining the short- and long-term implications of the tax.

“If you could convince me and others that spending X amount of dollars per month on groceries is actually going to lower your sewer bill, I think that’d be a no-brainer,” he said.