Jayson Jacoby
The Baker City Herald

By Pat Caldwell


When is a deal a deal?

A good question under certain circumstances and especially relevant, it appears, when one considers the dispute between Baker City Mayor Richard Langrell and the city.

Langrell asserts the city owes him $14,907.71 in water and sewer fees he paid over the past nine years for his motel, the Always Welcome Inn.

The city contends it doesn't owe Langrell a cent.

City officials maintain that in 2005 Langrell agreed to continue paying double water and sewer fees in exchange for a 10-year property tax waiver on his property after it was annexed into the city.

Under city code, a business outside city limits that is connected to the city's water and sewer systems pays double the normal rates.

Typically, once a property is annexed into the city limits, the property owner no longer pays double the water and sewer rates, but does have to start paying property taxes to the city.

When the city annexed Langrell's motel, along with adjacent properties owned by the Gyllenberg family and John and Margaret Bootsma, the Gyllenbergs asked the city to exempt their parcel from property taxes, in exchange for their continuing to pay double water and sewer rates.

The city offered the same deal to Richard Langrell and his wife, Lynne.

Richard Langrell admitted last week his business has not paid property taxes since the annexation, but he has continued to pay double water and sewer rates. The city, he said, was wrong to charge him double after his property was annexed in February 2005.

The city asserts it had a deal. Langrell contends no provision exists in writing that requires him to continue paying double sewer and water rates after his business was annexed.

"There is nothing in city ordinance that allows them to charge double rates. The annexation papers, there was nothing there about double rates," Langrell said last week.

The city says there are a host of documents - including minutes from City Council sessions - that show Langrell not only understood he was to pay double water and sewer rates after annexation but in fact asked the city for the same terms the Gyllenbergs had requested.

An examination of public documents related to the case hardly clears up the matter. In fact, the documents show that the city and the Langrells may be both correct.

Sort of.

The consent to annexation agreement, which Langrell signed on Feb. 3, 2005, makes no reference to the Langrells continuing to pay double water and sewer rates after the motel is annexed.

The annexation agreement does, however, spell out the 10-year property tax waiver.

Yet a January 2005 letter to Langrells from then City Attorney Tim Collins, which accompanied a copy of the annexation agreement, does mention the water/sewer double fees in exchange for no property taxes on the motel.

". . . the tax rate attributable to city taxation shall be waived on your property and existing development for ten years commencing with the year within which the property is annexed . . ." Collins wrote.

A few paragraphs later in the letter, Collins mentions the water/sewer rate issue specifically.

". . . City utility policies (water and sewer rates) for service outside the city limits would continue to apply until the development starts paying city taxes. . ."

The terms of the deal - no property taxes in exchange for paying double water and sewer rates - were laid out a few months earlier.

During a September 2004 City Council meeting Langrell said he would agree to the proposed annexation if the city gave him the same deal it had offered to the Gyllenbergs - namely the 10-year moratorium on property taxes.

"If they give us the same deal as the Gyllenbergs we'd be happy to sign and we'd be more than happy to keep paying double for water and sewer," Langrell said in 2004.

According to the minutes from a City Council meeting two months later, in December 2004, Langrell again said he would agree to an annexation as long as the 10-year tax break was included in the deal and that he was willing to continue to pay double water and wastewater charges.

The property tax/water fee issue emerged yet again in late 2007, when Langrell contested the double water and sewer rates.

At that time, the city asked local attorney Dan Van Thiel to give a written opinion on the matter.

Van Thiel wrote ". . . having the benefit of hindsight, he (Langrell) seeks to pay regular water and sewer rates but continues to believe the property taxes on his property should be waived for another ten years. Simply put, I do not believe he can have it both ways . . ."

Although the annexation agreement that Langrell signed in February 2005 doesn't mention his paying double water and sewer rates after the annexation, Van Thiel - who does not represent either party - said Tuesday that a legally binding agreement does not need to be on paper to be valid.

"Contracts come into existence, legally, in a number of ways," Van Thiel said. "You have implied contracts where people reach a verbal agreement, by conduct, by actions, and that is frequently the case," he said.

That the Langrells continued to accept the tax waiver after the 2005 annexation, and pay the double water and sewer fees, indicates there existed some type of pact, Van Thiel said.

"Taxes were waived. From my perspective you have what is by nature a contract," he said.

In the end, the final verdict on this issue may revolve around a miscue regarding what to outline in an annexation agreement regarding fees and a misunderstanding - willful or otherwise - regarding who pays what to whom.

Other than Langrell, most of the other key participants in this saga are not talking. Langrell's attorney, Rebecca Knapp of Enterprise, declined to comment earlier this week.

Baker City Manager Mike Kee - who did not work for the city when the annexation agreement was made - said he is taking the advice of city attorney Brent Smith and not talking about the case.

Van Thiel, while conceding he does not have a dog in this fight, said he still stands by the original opinion he gave the city in 2007.

"I believe in my opinion that the city has a better argument. It is a business deal from my perspective. This is a contractual issue. My focus was a businessman trying to obtain the best of all worlds. I guess my reflection was that a deal is a deal," he said.