Shoreline reaches tentative agreement with Seattle to purchase SPU water system in Shoreline
Thursday, November 10, 2011
From the Office of the Shoreline City Manager
Purchase plan subject to negotiations and approval by Shoreline voters
The City of Shoreline today announced a tentative agreement with the City of Seattle to purchase the assets of Seattle Public Utilities (SPU) Water Utility within the City of Shoreline. The tentative agreement includes a purchase price of $25 million for the assets, with an acquisition date of 2020.
The Shoreline City Council made the purchase of SPU’s water system a Council goal to improve local decision-making and long-term investment in the utility in Shoreline.
“This purchase allows the City to control reinvestment in Shoreline instead of paying a 14 percent surcharge to Seattle,” stated Shoreline Mayor Keith McGlashan. “Controlling the water utility is imperative to the City’s long-term economic development goals.”
“Seattle respects the City of Shoreline’s interest in providing utility service in their city and will work in coming months to reach an agreement that balances Shoreline’s interests with the interests of Seattle’s water ratepayers,” Seattle Mayor Mike McGinn said of the tentative agreement.
The City and Seattle entered into formal negotiations once the Shoreline Council made it a Council goal in 2009, in part because Shoreline’s ratepayers do not have a direct say in how the water utility services are delivered.
Over the next six months, the City will perform a detailed financial analysis and feasibility due diligence review of the utility’s assets to ensure that the purchase will meet Council’s financial and policy goals. Any final agreement to acquire, maintain and operate the water utility service in Shoreline must ensure that Shoreline ratepayers’ water bills will be equal to or less than what they would have paid to Seattle.
During this due diligence process, the City will engage the community through a public participation and outreach process. Once the City agrees to terms with Seattle, the purchase must go before both Seattle and Shoreline’s Councils for approval. Assuming both Councils approve, the question to acquire the system will then be placed on a ballot for final approval by Shoreline voters.
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6 comments:
What is not being said here is that Shoreline will have to approve a revenue bond for at least $25 million and we, the voters will have to pay for it. That is on top of the levy lift approved last year. The city has been receiving franchise fees in the amount over $600,000 a year and will still have to pay a bulk water rate to Seattle.
Additionally, the City of Shoreline will be able to add utility taxes to our water rates -- utility taxes are one means that the City of Lynnwood has used to balance their budget.
The city staff issued a no bid contract to EES Consulting for the feasibility studies, Shoreline Municipal Code requires that competitive bids be sought for contracts in excess of $50,000, the city staff and council are not spending our money wisely or even in conformance with our local law.
As the city of Shoreline has less than 70,000 people,the WAC prohibits the city from collecting utility taxes. This plan is not well thought out. The entire cost of this purchase and operation will ultimately fall on the consumers. What is critical is to assure that a water district plan be developed that identifies real costs, incomes and potential liabilities, so real planning can occur to assure that a proper decision can be made. Qualified people must be chosen to perform real do diligence which is actually defined by law. Rather than choosing some citizens who have no idea of what a water utility is and then convincing them that the city knows best, a real independent review needs to be conducted. The city staff should use the former director of Ronald Wastewater, and the soon to be retiring head of the Shoreline Water District should be contacted. This is very important and the City can't afford to get this wrong. There are so many things be done wrong I don't have room to post them all. What about the Open Public Meetings Act? How could the expenditure to do this study have been approved without public knowledge. It is time to call the Attorney General.
The Mayor's comments about redevelopment really shows what the city has in mind. Current accepted practice requires developers to pay for improving water utilities when necessary to complete their development. The Mayor apparently believes that those costs should be shifted to the taxpayer. Apparently, he believes that the citizens should pay for some huge redevelopment of our water infrastructure so as to produce unlimited supply for any potential development.Even if this were fair and legal, it won't work. Water systems are a function of geography, supply and pressure. These elements don't change when the owner of the system changes.Here is a very simple example. If you have a well in your back yard and you want to build a shower, you build a tank on your roof that will supply you with enough water to take a shower. When the tank empties you refill it. If you need more water you build a bigger tank, If you need to fill the tank faster you increase the pressure from the well. You don't build more supply than demand because it it is not economically practicable.
The Mayor (Keith McGlashan) and his business partners bought 3 parcels of property and got a rezone, in fact designed a building, for the new James Alan Salon without doing any due diligence - like checking to see if they had adequate water supply. It turns out they didn't have enough money and water (they took out a $1 million loan in July 2009, made 3 payments and defaulted, and construction cost $5 million, go figure since the design was complete by then) but they blamed everyone else but themselves - like Cindy Ryu and Janet Way.
Now Keith McGlashan and the city want the ratepayers to finance water system improvements for developers - make sure there is enough pressure and flow to fund taller buildings. The infrastructure is adequate for smaller buildings but since the developers squawk that they have to make improvements (like Keith & company), they expect the public to pay. If they build inside Seattle, they have to make the same improvements, but they don't have the city council and staff in their back pockets.
Very important observations from various anonymous contributors. Shoreline voters should think very carefully before taking this step.
Question: How closely is this move associated with proposed agreements for Point Wells?
Hey Save Richmond Beach! Follow the money!
Point Wells....Joe Tovar leaving.....buying a water system......are there dots to be connected here?
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