Orders issued in utility dispute

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SANDPOINT — A court order has been issued that seeks to disentangle water and sewer infrastructure at the Idaho Club without interrupting those critical services.

First District Judge Barbara Buchanan is ordering club owner Valiant Idaho to continue using its sewer infrastructure to serve Hidden Lakes Estates and other parcels in the club that the company does not own until VP Inc. builds infrastructure to serve those lots.

VP Inc., meanwhile, is being ordered to continue providing water to the Idaho Club lots it has historically served under service agreements until Valiant Idaho constructs and brings on line new groundwater source wells, according to the order, which was issued on April 28.

Neither Valiant Idaho nor VP Inc. are allowed to interfere with each other’s operation of infrastructure that deliver water and sewer services while Valiant installs new wells and VP isolates its infrastructure from that of the club’s, the order further states. The parties also cannot cut each other off from sewer or water services.

The eight-page order is meant to guarantee that residents inside the club won’t be left in the lurch amid the legal dispute over infrastructure.

The dispute came to head on April 12, when residents reported that their utilities had been shut off by VP Inc. A temporary restraining order restored services.

VP argued that it was acting in compliance with a previous court order which evicted the company from parcels that contain a water and wastewater facilities and attendant infrastructure. VP also maintained that the system was not automated and required on-site monitoring.

Valiant acquired 154 lots at the Idaho Club through a court-ordered foreclosure sale in 2016. The acquisition also included wastewater and potable water infrastructure that serves Hidden Lakes Estates in addition to parcels within the Idaho Club which are not owned by Valiant.

VP Inc. owns the groundwater source wells that allow the water and sewer system to function, in addition to serving Hidden Lakes Estates and other parcels in the Idaho Club which are not owned by Valiant.

Valiant Director Bill Haberman welcomed Buchanan’s ruling because it ensures water and sewer services will not be halted as the company embarks on a plan to relaunch land sales at the Jack Nicholson-signature golf course and housing development. Valiant contends the order solidifies its standing as the owner and operator of the club’s sewer system.

Haberman also pointed out that the order submits VP Inc. to regulatory requirements of the Idaho Public Utilities Commission, which Haberman said was “long overdue.”

“VP doesn’t appear on the list of water service providers on the IPUC web portal that have approved rate schedules on file with the IPUC,” Haberman said in a statement.

VP Inc. contends Valiant was given the infrastructure in error through court proceedings in district court. VP’s owner, Dick Villelli, said he has invested $16 million in the systems and they had been expressly excluded from transactions every time the resort changed hands until the foreclosure proceedings.

VP Inc. is appealing the district court ruling on utility infrastructure to the Idaho Supreme Court.

Valiant maintains that hookup and service fees have enabled VP to recover its development costs and further asserts that infrastructure VP relies upon to provide services was financed by the same loans it foreclosed upon.

“This is an important project for Sandpoint and the issues resolved by this latest ruling provide the needed foundation for this project to get back on the right track,” Haberman said.

Villelli said he is glad the ruling allows VP Inc. to continue serving its clients, but said it gives Valiant the sewer income and requires VP Inc. to process the sewage.

“It is unfair because we still have to pay over $10,000 per month in costs and they receive the income. This entire issue is puzzling to say the least,” Villelli said.

Keith Kinnaird can be reached by email at kkinnaird@bonnercountydailybee.com and follow him on Twitter @KeithDailyBee.

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