By Erin Freeman | Lynnwood Times Staff
The Lake Stevens Sewer District is pushing back against the city of Lake Stevens for a one-sided decision to absorb district operations twelve years earlier than planned.
On March 9, the Snohomish County Superior Court granted a motion put forward by the district, preventing the city’s integration of sewer services until court review is completed.
The Lake Stevens City Council unanimously passed an ordinance allowing for a takeover of the district during its December 8 public meeting. The ordinance was discussed before passage in an executive session due to the potential threat of litigation by the district, stated the city of Lake Stevens.
In 2005, the city and the district entered into an agreement that created a unified sewer system. It reads that, except under certain limited conditions, the district would be “solely responsible” for operating the Unified System until 2033 or such an earlier or later date to which the city and district might mutually agree.
According to the court documents, the city began driving discussions in 2017 about accelerating the date to transferring the combined sewer system to the city. Discussions continued, but the city and district never reached an agreement on accelerating the date of transfer.
In the last week of January, when the district informed of its intent to sue, the city proposed an extension on the consolidation from March 16, 2021, to the end of the year. The district declined this offer, and a lawsuit was filed.
The district argues that the city’s actions breach its existing legal agreement, while also asserting a violation of the Open Public Meetings Act by the Lake Stevens City Council (Council), and a failure to follow proper procedures through not quickly notifying the Boundary Review Board of their actions.
Lake Stevens says that the consolidation was accelerated to save money for taxpayers and will support the city in managing growth while enhancing economic development.
“Many governments are looking for ways to be more efficient for taxpayers,” said Lake Stevens Mayor Brett Gailey. “We’re ready to provide this service, which means taxpayers will realize cost savings and benefits.”
According to the city, an independent analysis reveals that the merging of the two agencies is projected to save its taxpayers up to $595,000 – best case scenario – in the first three years, through the elimination of duplication of services in accounting, human resources, facilities and IT departments. The consolidation will also provide more favorable prices for goods and professional services due to economies of scale, said the city.
However, Mariah Low, Interim Manager of the Lake Stevens Sewer District, says that its first priority is serving its ratepayers and accelerating the assumption date would not benefit the ratepayers.
“The district has a strong track record of managing the system well,” said Low. “Why jeopardize the system that everyone relies on? The report the city references doesn’t actually show real savings happening, and the city cannot point to their own record in managing a sewer system. Our job is to protect our ratepayers’ interests, and that’s what we are doing.”
Low says that the district uses facilities charges – fees paid by developers who need to bring new facilities online – to fund sewer system capital improvements, and the city calculates these fees differently. The district says that currently, there is no clear policy from the city on how capital improvements will be paid for and this may mean the dollars ratepayers pay each month may be needed to fund new developments.
The district says it also fears system failures are likely with the accelerated consolidation, saying it cannot simply be transferred without a well-thought-out plan as agreed to take place approximately 10 years from now.
Revenue is reinvested back into the system under the district, says Low, and if the city controls the sewer utility it can use sewer revenues for other general government expenses, which often leads to higher rates.
“The Lake Stevens Sewer District has held rates steady for the last five years during a time of unprecedented growth in the service area,” stated Low.
The city maintains the consolidation of sewer utilities allows it to better manage growth and enhance economic development.
Lake Stevens is responsible for planning and development within the city limits and urban growth area, but right now the Sewer District makes decisions on whether or not to extend service, and so the two governments can have different priorities, argues the city.
Less government is also a benefit of consolidation, says Lake Stevens, as the city has councilmembers and the district has an elected Board of Sewer Commissioners, so the consolidation will eliminate salaries for sewer commissioners and save on future election costs.
If the accelerated consolidation is approved, the Lake Stevens City Council will set sewer rates annually in a public hearing. There will be no change to sewer rates in 2021 or billing services.
Although sewer rates will not change this year, the district is wary of the impact the merge will have on its customers in the city of Marysville, as its sewer area coverage bleeds over Lake Stevens city limits. The consolidation puts these clients’ services at risk, so transferring these service areas need to well be thought out, said the district.
On February 26, Superior Court Judge Janice E. Ellis prevented the city’s ordinance from taking effect until after the court issues a final ruling. Her order recognized the district’s point that the district likely has a legal right to operations as well as the city possibly exceeded its authority to consume control over territory within the city of Marysville.