The Valley Signal

Government & Accountability

Driggs Will Talk Once Victor Dismisses the Lawsuit. The Suit Came After Mediation Failed.

Driggs will reopen wastewater talks with Victor only after Victor dismisses the lawsuit it filed against the city, the Driggs attorney wrote.

By Wade Williams · ·

DRIGGS — Driggs' attorney told Victor's lawyers last week that the city will reopen negotiations over the wastewater plant that has split it from Victor only after Victor dismisses the lawsuit it filed against the city. Victor filed that lawsuit in March, after nine hours of mediation between the two cities ended in January with no deal.

The dismiss-first condition is not new. Mayor August Christensen said it at the June 2 council meeting, telling Victor's representatives the council needed to decide "about that lawsuit and whether it is dropped" before talks could resume. What changed over the two weeks that followed is the record. The precondition is now in writing, Christensen forwarded it to Victor's elected council over both cities' attorneys, and Driggs attached to it no counter-offer on the settlement terms Victor had already put on the table.

The suit, Victor v. Driggs (CV41-26-0062), is the forum the dispute reached only after negotiation collapsed. Once Victor dismisses the lawsuit, the two cities would return to the kind of talks that already failed once.

The condition, in writing

Driggs city attorney Sam Angell set out the terms in a June 10 letter to Victor's counsel under the subject line "Re: City of Victor Response." Driggs "has reviewed Victor's response," he wrote, and needs one of two things the Idaho Department of Environmental Quality (DEQ) had requested: "A statement that Victor can complete its WWTP by the end date of the Inter-City Agreement," or "Verification that Driggs will NOT be obligated to provide service to the City of Victor upon completion of Driggs' plant."

A letter from Victor's attorneys would not be enough, Angell added; the answer had to come "in a response approved in an action item by Victor's city council." Then the precondition. Victor had asked to "engage in discussions ... regarding potential negotiations," and Driggs was "certainly willing to engage in such discussions, as soon as Victor dismisses its lawsuit against Driggs."

Five days later, on the morning of June 15, Christensen forwarded Angell's letter past the lawyers and straight to Mayor Will Frohlich, Victor's council, and city staff. She had "not seen a response ... yet, nor any special meetings scheduled," she wrote, and Driggs' council would meet the next evening to decide the design of its plant. "It is essential that you as the decision-makers can answer Driggs' questions regarding your plan and the DEQ's letter," she wrote.

Victor routes it back through counsel

Victor declined to answer that way. In a June 16 letter, Victor councilmember Sue Muncaster, not Mayor Frohlich, wrote that, given Idaho's open-meeting law and the active litigation, she did not think it appropriate for Victor council members to appear before the Driggs council "to answer questions regarding legal, contractual, or settlement matters ... outside of a properly noticed joint meeting." Those communications, she wrote, "should continue through our respective legal counsel," and Victor's legal team would respond to Angell's letter "as soon as possible."

The letter was not a refusal to talk. Muncaster proposed a joint working group of staff, engineers, financial advisors, and legal counsel from both cities to work through governance, cost allocation, operations, liability, and water rights, "perhaps preceded by a field trip to the plant." No one on the Victor council "is interested in bankrupting the City of Driggs," she wrote, and she conceded a central Driggs point: if Driggs has to build a plant capable of serving both cities until Victor's own facility is running, "the most cost-effective solution requires sizing the existing facility to serve both cities for the full 20-year planning horizon." That is the design the Driggs council adopted, 4-0, that night.

What the exchange did not contain

On Driggs' side, it contained no new offer. Victor's June 1 letter to Driggs had named its conditions for a joint-powers agreement: rate parity for Victor residents and a share of ownership and control of the plant. Angell's June 10 reply engaged none of them. Its only specifics were the two DEQ items, both of them demands on Victor, and the condition that Victor dismisses the lawsuit.

Muncaster's letter states the premise the suit rests on: "The lawsuit exists because the parties were unable to reach an acceptable resolution during mediation." That mediation ran nine hours on January 21 and ended in impasse; the only offer Driggs had on the table was that Victor disconnect from the shared system by 2030. Victor filed suit on March 5.

Driggs has its own reasons to want the case gone. The city is under a 2025 federal consent decree that requires it to build a new treatment plant on a deadline, and it carries that obligation on a far smaller ratepayer base than a larger utility would. A pending lawsuit clouds the financing and the schedule for the plant the decree compels. Driggs' reasons are legitimate. The asymmetry is in the ask: Victor must give up the legal process the dispute reached after talks failed, for a return to talks with nothing new attached.

The suit Driggs wants dismissed is also the only forum for claims Victor cannot press anywhere else. It seeks to recover what an independent audit found Driggs had overcharged Victor on their shared wastewater loan, money the cities' 2011 agreement gives no administrative path to refund. It also pleads that Driggs breached the confidentiality of the January mediation. Whether either claim succeeds is for the court. Dismissing the case ends them regardless.

What to watch: Victor's legal team said it would respond to Angell's letter. That response, and whether the two councils agree to a noticed joint meeting or the working group Muncaster proposed, will show whether the written stalemate breaks. The lawsuit, CV41-26-0062, remains pending in Idaho's Seventh Judicial District, where venue moved to Jefferson County in May; a scheduling conference is set for July 13.

The letters

Driggs will reopen wastewater talks only once Victor dismisses the lawsuit, city attorney Sam Angell wrote to Victor's counsel on June 10. Mayor August Christensen forwarded that letter to Victor's council five days later, and Victor councilmember Sue Muncaster answered on June 16. The Valley Signal obtained Christensen's message and Angell's letter through a public-records request to the City of Victor. Muncaster sent her own letter to local news outlets. All three are reproduced below in full, trimmed only to remove email routing headers and a law firm's boilerplate confidentiality footer.

Mayor August Christensen's June 15 message to the Victor council

Hello Mayor and Victor City Council Members,

Below is an email sent to some of your attorneys last Wednesday. I am writing to you this morning because I have not seen a response from you yet, nor any special meetings scheduled. The next Driggs City Council meeting is tomorrow, Tuesday, June 16. Driggs Council members have requested information from Victor City Council to help make their decision regarding next steps for the wastewater treatment plant. This is a pivotal moment for our community and it is essential that you as the decision-makers, can answer Driggs' questions regarding your plan and the DEQ's letter.

We look forward to seeing your response.

Thank you,
August Christensen

Driggs city attorney Sam Angell's June 10 letter to Victor's counsel

Jeff,

The City of Driggs has reviewed Victor's response. Driggs would like to reiterate that it needs the following information requested by DEQ:

  • A statement that Victor can complete its WWTP by the end date of the Inter-City Agreement, or
  • Verification that Driggs will NOT be obligated to provide service to the City of Victor upon completion of Driggs' plant.

Driggs needs this information be provided in a response approved in an action item by Victor's city council. Statements in letters from attorneys will not be sufficient.

There was a request by Victor's representatives to engage in discussions with Driggs regarding potential negotiations. Driggs is certainly willing to engage in such discussions, as soon as Victor dismisses its lawsuit against Driggs.

Sincerely,
Sam L. Angell, Hall Angell & Associates, LLP

Victor councilmember Sue Muncaster's June 16 letter to the Driggs council

Dear Mayor Christensen and Members of the Driggs City Council,

Thank you for the opportunity to reopen discussions regarding the future of wastewater treatment for our two communities. Because of the need to comply with Idaho's open meeting requirements, as well as status of active litigation, I do not believe it is appropriate at this time for Victor council members to appear before the Driggs City Council tonight to answer questions regarding legal, contractual, or settlement matters (or to offer personal opinions) outside of a properly noticed joint meeting.

For that reason, I will not be attending tonight's meeting in person. Because our cities have not yet settled litigation, I believe that communications regarding legal and contractual matters should continue through our respective legal counsel. Victor's legal team is actively engaging Victor Council and will provide a response to Mr. Angell's letter sent to our attorneys last week on behalf of a majority as soon as possible. Until then, consider the testimony given by our City Administrator and Treasurer at your 6/2/26 meeting—which represented the position of the Victor's Council majority—as accurately outlining Victor's current status.

My decision not to appear before your council this evening should not be interpreted as a reluctance to engage. To the contrary, I very much look forward to direct discussions between our councils. But these discussions should occur in a setting where both cities are represented equally, legal counsel is available as needed, technical experts can provide information, and the public has a clear understanding of the meeting's purpose and agenda.

No one on the Victor City Council is interested in bankrupting the City of Driggs, just as I assume no one on the Driggs City Council is interested in unfairly burdening Victor ratepayers. The lawsuit exists because the parties were unable to reach an acceptable resolution during mediation. I appreciate and respect the ongoing work between attorneys from both cities to clarify the legal framework within which we can operate going forward.

If Driggs must design a facility capable of serving both cities until Victor has an operational independent facility, then we are effectively looking at a scenario where the most cost-effective solution requires sizing the existing facility to serve both cities for the full 20-year planning horizon. In that context, what's before us is determining what a fair, durable, and financially and environmentally responsible long-term relationship looks like.

To put concrete proposals on the table regarding governance, cost allocation, operations, liability, water rights, regulatory compliance, and long-term oversight in a timely manner, I would support forming a joint working group comprising staff, engineers, financial advisors, and legal counsel from both cities to dig into the details of governance structures, cost allocations, operational responsibilities, and board models. The purpose would be to outline in detail viable alternatives and provide sufficient information for both councils to evaluate.

Once those options are developed, I welcome a joint council discussion, perhaps preceded by a field trip to the plant, where elected officials can review the information together, ask questions, hear from the public and technical experts, and work toward solidifying an agreement that serves both communities and resolves the need for litigation once and for all.

Sources

Waste Water