Shoreline City Council authorizes contract with outside legal counsel to help defend against Ronald Wastewater lawsuit

Wednesday, July 24, 2013

City Council authorizes contract with outside legal counsel to help defend against Ronald Wastewater District’s lawsuit disputing terms of 2002 Interlocal Operating Agreement

On July 22, the City Council authorized the City Manager to execute a contract not to exceed $60,000 with Kenyon Disend, PLLC to provide legal assistance in responding to and defending the City against Ronald Wastewater District’s (District) lawsuit disputing the terms of the 2002 Interlocal Operating Agreement (Agreement) between the City and the District. The Agreement provides for the unification of District operations with the City in October 2017.

At the District’s June 25 meeting, without advanced public notice, the Ronald Wastewater District Board of Commissioners authorized District staff to sue the City. The District is asking the Court to set aside the District’s promises to cooperate with and to plan for the transition of the assumption. 

City Manager Julie Underwood stated, “It is not productive for a community to be fighting itself. When the Agreement was entered into in 2002, it was considered a friendly assumption so for the District to treat it as hostile is troubling.”

Under the State’s utility special purpose district assumption statute (35.13A RCW), the City could have assumed the District after the City’s incorporation; however, the Agreement provides that the City will wait until October 2017 to assume the District.

The Agreement also protects District employees upon assumption and calls for the City and the District to negotiate in good faith the terms of the final transition, with negotiations starting no later than 24 months prior to the assumption. The City Council tried to start those discussions by inviting the District Commissioners to a joint meeting between the City and the District on August 12.

Instead of meeting, the District has decided to dispute the terms of the Agreement through a lawsuit.

“It is very disappointing that Shoreline taxpayers and District ratepayers have to have their dollars used in this manner,” stated Mayor Keith McGlashan. “It is unfortunate that now, 11 years into a 15-year agreement, the District Board of Commissioners does not want to honor the agreement that the District co-authored and approved.” 

In fact, three of the current District Commissioners approved the Agreement in 2002. Commissioners Wadekamper and Lind approved the Agreement as District Commissioners and Commissioner Ransom, who did not vote to sue the City, approved the Agreement as a City Councilmember.

In 2002 when the City and the District entered into the agreement, both the City Council and the District’s Board of Commissioners agreed that it made sense for the wastewater district to be consolidated into City operations. In 2007, when designing City Hall, the City included the assumption and acquisition of utilities into its space planning. In addition, the City just acquired property to serve as a maintenance facility to meet current and future utility program needs.

The City firmly believes that the Shoreline community supports the common sense consolidation of separate governmental entities into a single service provider. The City’s Comprehensive Plan, which was developed after a thorough public process, anticipates unification of utilities under the City. And in November 2012, over 70% of Shoreline voters approved the acquisition of the SPU water system in Shoreline.

Unification of the wastewater and water utilities with the City will enable streamlined services such as one-stop shopping for billing, starting or stopping service, permitting and long-range community and economic development planning.

Instead of having to work with three separate entities, contractors and homeowners will only need to work with one. Consolidating utilities under the City will also reduce administrative and operational costs by using shared staff, equipment, and facilities. Another key benefit will be transparency and accountability of utility operations by improving the community’s access to and participation in establishing financial policies, rates, and capital and operating budgets.

The Council will be discussing the agreement and the lawsuit at its upcoming July 29 meeting. A copy of the agreement and lawsuit documents can be found here.


Anonymous,  July 25, 2013 at 4:39 AM  

The City was going to sue on 5/22/2013 and they weren't concerned about taxpayers monies on that particular date.

And the City wasn't too concerned when they dumped over $500,000 of taxpayer monies on the metadata lawsuit.

The City has an odd way of showing concern about taxpayer monies since they just spent $3 million for a storage yard over at Brugger's Bog using money they don't have, they had to borrow most of from the surface water utility enterprise fund.

Anonymous,  July 25, 2013 at 7:00 AM  

So much for being an unbiased news source. Shoreline Area News is quite apparently little more than a mouthpiece for the Shoreline City Council.

Anonymous,  July 25, 2013 at 7:35 AM  

The citizens really need to look into some of the maneuvers being done by the District in an attempt to stop the assumption, while being assisted by Shoreline Water District. These moves by the District is unnecessarily costing the ratepayers tons of money. Once the citizens of Shoreline really understand what is going on, they will support the assumption hands down !!!! Hopefully once the assumption of Ronald Wastewater is complete, an assumption of Shoreline Water District will soon follow. All utilities need to be under one umbrella in the City !!!!

Anonymous,  July 25, 2013 at 8:02 AM  

What is the Ronald Wastewater lawsuit asking? It is asking the court to determine if a vote is required before assumption by the city is to take place - part of the US Democracy? The city is opposed to democracy? Well, of course it is, they tried to dispense with this law (and affect the entire state) in 2011 via HB 1407 in dispensing with any public vote before acquiring SPU or Ronald Wastewater. Now the City is objecting to Ronald Wastewater asking the court to clarify this part of the interlocal agreement.

Ronald Wastewater is not STOPPING the assumption, they are asking the court to determine which parts of the agreement are valid and enforceable. Is it costing the ratepayers TONS of money, nope. I understand the city just dumped a carload of money fighting it's own citizen over the Crista Master Use Plan and mostly lost, but I don't see anyone complaining about THAT.

The City has lost so much money in its own self-generated lawsuits over the years it is insane: the critical areas suit over Twin Ponds, the open public meetings lawsuit (that current Ronald Wastewater Commissioner Bob Ransom was party to), the Crista Master Use Plan, the poorly done light pole standards in North City & along Aurora, etc.

I find it hilarious that people are attacking Ronald Wastewater when the City built a $30 million City Hall with no vote of the people that sits half empty, meaning that at least $5 million of taxpayers money is being wasted on empty space before they can expect a tenant for one floor, and no idea when they can get a private tenant for the other floor.

Sheila Long,  July 25, 2013 at 8:33 AM  

Please, if you are going to comment and make assertions, state your name!

Anonymous,  July 25, 2013 at 9:31 AM  

Julie Underwood is quoted as saying it is not productive for a community to fight itself -- then why did the Richmond Beach community send all that email to the Washington State Legislature and Governor Inslee in support of SB 5417 and against Ruth Kagi's HB 2068 on the donut hole annexation? Richmond Beach trusts Woodway more than the City of Shoreline, it is the City of Shoreline who creates these fights and doesn't play well with others. Richmond Beach trusts the Town of Woodway more than the City of Shoreline.

It is the City of Shoreline creating all of these fights within the community - the city staff and council (plus their supporters).

They won't participate in the Ballinger Watershed Interlocal to resolve flooding issues, don't work with Lake Forest Park or Mountlake Terrace, the city is in legal battles with community groups (like Innis Arden or those around Crista), just to mention a few, because they don't play well with others and they are ENABLED in this dysfunctional behavior by Ruth Kagi.

Anonymous,  July 25, 2013 at 9:36 AM  

Ok they wasted our dollars and are doing nothing about the Point Wells impact on our tax dollars and now they are throwing away more of our tax dollars to sue the Waste Water that has been doing a good job for the 38 years I have lived here. Isn't this the same council that was bellyaching over the Maggie Fimia lawsuit expense on the city's tax dollars. What the heck.

Anonymous,  July 25, 2013 at 9:39 AM  

I don't know about the rest of you, but I am not going to vote for any of the COuncil people that are now seated!

Anonymous,  July 25, 2013 at 12:02 PM  

As lawyers go, $60K sounds like a lowball figure. The actual cost will more likely be twice that. Does the city plan to come back later for an contract extension, at which time they will complain again about how much this "irresponsible" lawsuit is costing the city? What's wrong with asking for the true amount up front? Worried it might look like the waste it is?

Anonymous,  July 25, 2013 at 12:56 PM  

The reason why the City didn't assume Ronald Wastewater when it incorporated is because the VOTERS didn't want to, the entire incorporation petition stated they wanted to keep the special purpose districts INTACT. The special purpose districts in Shoreline are:

Shoreline School
Shoreline Fire
Ronald Wastewater
Shoreline Water

The organizers behind the petition clearly stated they did not want to the city to be a full service city, they wanted to keep the special purpose districts. Is the city going to try assume Shoreline Schools and Shoreline Fire next?

The City keeps on trying to make up their own version of history and think if they keep on repeating it people with think it is true. Even without the interlocal agreement, there is still a state law that states that if a code city is not in the water/wastewater utility business, then they must have a vote before they can assume a utility. It also means in 2002 the Interlocal Agreement violated this state law, what is so hard to understand? Ronald in their lawsuit has asked the court to make the final determination on this point and they continue to make their payments to the city in the meantime.

Anonymous,  July 25, 2013 at 2:10 PM  

Ronald has been making payments to the City for 11 years in exchange for the City's "forbearance" regarding assumption. If the City ultimately convinces the courts that the clause requiring that forbearance would itself be rendered invalid by the court's potential ruling on other clauses, would the courts then rule that the City must return the "protection" premiums to Ronald? I mean, why should Ronald ratepayer be paying for nothing?

Anonymous,  July 25, 2013 at 3:50 PM  

Ronald paid the City $7 million in the last 11 years, but the City's Agreement prohibits Ronald from listing this extortion payment on its monthly bill. "The fee paid by the District under this section is a business expense that will not be separately identified on customer billings." (page 7) So, the City for all its talk of transparency wanted to hide this extortion expense from the ratepayers.

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