Seattle would lose $2 million a year by selling water utility to Shoreline

Tuesday, July 31, 2012

Monopoly card
According to an article in Publicola, the sale of Seattle Public Utilities' water utility assets —pipelines, pumps, and meters -- to Shoreline could cost the City of Seattle $2 million a year and raise Seattle ratepayers' water rates 2-4%.

Shoreline is something of a cash cow for Seattle,  considering the 15.4 percent utility tax and 14 percent surcharge Shoreline pays to Seattle for its water - and according to Shoreline staff and council, SPU reinvests very little of that money back into Shoreline.

”They’re a profit center for us. We’re making a fair amount of money,” SPU spokesman Andy Ryan says."
Shoreline staff also project that the revenue that now goes to Seattle would be enough to pay the purchase price and upgrade the physical equipment. See City page on SPU.

So why would Seattle want to sell to Shoreline? 
The article quotes SPU corporate policy and performance director Judy Gladstone: "It’s really about being good neighbors and feeling it’s the right thing to do, even though it may be that the costs are higher for the folks in [Seattle],"


4 comments:

Anonymous,  August 1, 2012 at 7:03 AM  

What DKH has missed here:

The Shoreline city staff have pegged our future rates to SPU rates - our rates will go up at least 4% which demonstrates that the city promise that the purchase will not raise our rates is UNTRUE.

If you watch the video here:

http://www.seattlechannel.org/videos/video.asp?ID=2021260

Jean Godden & other assure other city councilmembers that the purchase price of $26.6 million is the starting point for the discussion on how much it will cost Shoreline. The resolution was amended to state that Seattle MAY CONSIDER selling SPU.

Other Seattle councilmembers objected that their property disposal procedures was not followed.

There are other costs not included in the $26.6 million to be billed later, such:

time and materials for transferring the billing system (who thinks that sorting and downloading thousands of customer records is going to be cheap when charged by the hour)

the assets associated with the Olympic View wheeling agreement

Shoreline is now talking about the assets in the Southeast corner east of I-5

so many price issues, but if you think that $26.6 million is the final price, you are dreaming.

DKH August 1, 2012 at 4:29 PM  

Follow the link to the City webpage for all the financial details.

Anonymous,  August 1, 2012 at 6:19 PM  

As if the City presents a fair and balanced picture...

Didn't the city state during the levy lid lift less than 2 years ago that by raising property taxes that they would stabilize the city finances until 2016? Well, next year they project a budget that will be at least $135,000 in the red. These are the same financial wizards who did the numbers are the city webpage, DKH.

Anonymous,  August 1, 2012 at 8:22 PM  

The author of this article implies that Shoreline is unique in paying the 15.4% utility tax to Seattle, when in fact Seattle ratepayers pay utility tax as well. And in anticipation of her rebuttal that those taxes support Seattle services like parks, police, etc., realize that most Shoreline residents make use of Seattle's services on a regular basis, certainly $50 a year's worth. Then consider how many Seattleites come up to Shoreline for the day--try virtually none. Shoreline is a suburb. It will always be a suburb, that is, until the City of Shoreline makes such a mess of things that its citizens beg Seattle to annex them.

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