Port Orchard council continues discussion on joint agreement with utility district

The joint agreement with the West Sound Utility District once again became a topic of discussion during the March 25 meeting of the Port Orchard City Council.

Councilman Fred Chang said the council received a letter March 5 from West Sound Utility District suggesting a joint meeting with the two boards. He said that he asked the item be placed on the agenda.

On Feb. 25, the council voted 4-3 against approving the joint agreement and unanimously approved a motion for three council members who voted against the agreement to work with the city attorney and meet with WSUD and come back within 30 days with a recommendation for the council.

Voting in favor of the agreement were Council members Rob Putannsuu, Bek Ashby and Jeff Cartwright, while John Clauson, Jerry Childs, Fred Chang and Cindy Lucarelli voted against approving the contract.

The 1983 agreement was extended to March 1 to accommodate input from the city and WSUD. Both sides have been working on the agreement for over 18 months. The purpose of the inter-local agreement for the management and operations of the wastewater treatment facilities is to formalize new terms and condition for the partnership relative to ownership, management and operations of the South Kitsap Water Reclamation Facility (SKWRF) located in Annapolis.

WSUD commissioners unanimously approved an inter-local agreement with the city during their Feb. 12 special meeting.

Ashby said she meet with West Sound General Manager Mike Wilson.

Ashby said that she has spent many hours reading and reviewing documents that Wilson provided to her on the agreement and the facility.

She added that Wilson also found other documents pertaining to the plant and the agreement.

Ashby asked, “What is the definition of 'operation and maintenance?'” She also asked if the city has assumed all the responsibility for the marina pump station, asking, “Why would we want to alter the ownership as we reflect it on our books?”

Councilman John Clauson said before the joint agreement, the sewer district was “very adamant” they want to operate the plant and negotiated that the city’s pump station and force main would be included into the project if the city agreed once the facility was constructed that they (sewer district) would operate the plant.

“That is why that statement is there, even prior to the construction of the plant, because there had already been an agreement made — must have been verbally — because no one has been able to find any documentation,” Clauson said.

He said he talked with former public works director Larry Curles who remembers the discussion being worked out between the district and the city in 1982.

Clauson said the project was funded through the ULID (Utility Local Improvement District) and the project included the marina pump station, force main, plant and the outfall.

“The district was only interested in running the plant,” said Clauson. “So the city — logically — assumed the responsibility outside of the operation agreement.”

He said the agreement was only intended to cover the operation of the treatment facility and that the city agreed to operate and maintain the pump station and force main.

“One of the questions that we have asked — as a group—  is ‘Technically, who is the owner?’” said Clauson. “If it was in fact a jointly owned, 50-percent facility, then why did the district sell the ground that the plant sits on to the project?”

He said the district gave up ownership of their property to the city.

“There are a lot of questions when you read these documents — like the bonding documents — without knowing the context behind those. You can take it on the surface to make sense,” Clauson said. “But when you understand what took place, there's more to it.”

Clauson said that is why the four council members are pursuing to work and get the “big picture.”

“Some of the folks that were there — Larry Curles, Rob Geiger, Hugh Spitzer and Jim Hart — we are trying to get information from them,” Clauson noted.

Curles is  a former public works director for the city, while Geiger is a former council member.

Clauson said Jacoby plans to meet with Spitzer, who is known as dean of municipal bond work in Seattle.

Clauson, Childs and Lucarelli met with Curles on March 24 and they also plan to meet with Geiger.

Clauson said he tried to set up a meeting with Hart, who is a longtime district commissioner, but was unsuccessful.

City Attorney Greg Jacoby — in regard to Ashby’s questions — said he didn’t what the current loan documents say about who manages or owns the treatment plant.

Ashby said she wanted to make sure the city was not jeopardizing any of its loan status.

Jacoby said in reference to the definition of “operation and maintenance” a person could look it up in any of the reference documents.

“My point would be that operation and maintenance — is often, but not always — is segregated from ownership,” said the city attorney. “Having an obligation to operate and maintain something does not mean you own it.”

Jacoby said the documents that were found a couple of weeks ago are interesting and provide details.

“There is no smoking gun or one document that is definitive,” he noted.

Clauson said he hopes Jacoby’s research on the agreement will find a “silver bullet” or get the council closer to understanding where they are coming from. He said since being on the council, it has always treated the plant as a 50-50 ownership.

“That the mind-set that we’ve had, but legally has it been set up that way? I don’t know,” Clauson said.

He noted — according to past documents — that the district apparently passed a resolution stating that they would be a part of the ULID.

“The legal question is was that necessary,” Clauson commented. “Did the city have the authority to create a ULID with the boundaries extending past its city limits? I don’t know.”

Jacoby said his research found a lawsuit in Kitsap District Superior Court related to the assessment of property under the ULID. The lawsuit was resolved in the summer of 1983.

He said according to the facts and findings in the case written by the judge, it stated the city and the district will jointly own the facilities to be constructed in the ULID.

“It included the Marina pump station and the force main,” said Jacoby. “This is a very clear statement that they will be jointly owned.”

He said the bond documents that Ashby had reference earlier in the discussions, are set up in describing the improvements as to the city’s waterworks utility.

“That is how it was presented to the world who was investing,” Jacoby said.

The council members and city attorney will present more information and findings about the agreement at the April 8 council meeting.























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