Two letters focal point of discussion on inter-local agreement with utility district

Two letters were the focal point of discussion in efforts to the city approving an inter-local agreement with the West Sound Utility District (WSUD).

During a 20-minute discussion at the April 8 council meeting, several council members had questions about two letters, both dated April 7, from WSUD and Foster Pepper PLLC, a 120-member, Seattle-based commercial law firm.

Council members stated that they didn’t receive the letters until about 4:30 p.m., less than three hours before the council meeting.

A letter from WSUD stated that the city had provided them with a copy of a letter prepared by Foster Pepper's bond counsel group, which concluded that the marina pump station and sewer force main to the sewer treatment plant “were and are the property of the city.”

The letter from Foster Pepper to the mayor stated, “After reviewing these documents, we are confident that the original agreement between the parties excluded the marina pump station (and the force main connecting it to the treatment plant) from the joint facilities that are the subject of the operations, maintenance and management provision of the 1983 contract, and that both the marina pump station (and the force main connecting it to the treatment plant) were and are the property of the city.”

Mayor Tim Matthes said he’d received several documents earlier last week concerning the agreement.

Councilman John Clauson asked Matthes about an email the mayor sent before the meeting with the letters from WSUD and Foster Pepper.

“In your email that you sent out this afternoon (April 8) sending us copies of these documents, you indicated and apologized for the late delivery, but you wanted to talk to the city attorney before you sent them out,” said Clauson, who continued: “Yet it appears West Sound Utility District received a copy of the Foster Pepper letter yesterday (April 7) or at least their response indicates they received it yesterday.”

Councilman Fred Chang said it looked like WSUD officials received the letter before the council did.

“If their letter is dated April 7, then they are talking about a letter they received,” Chang said.

Clauson noted in an email that WSUD stated the city provided them with a copy of a letter prepared by Foster Pepper.

“Their letter was written on April 7, so they obviously received the letter yesterday,” said Clauson. “We received it late this afternoon. It’s a timing issue. Looks like the district received it before the council received it.”

“No, I wanted to talk it over,” Matthes said. “I didn’t want to send that out. I held that letter for a day because I wanted to talk with Mr. Jacoby about it.”

“But you didn’t hold it from West Sound, it appears,” Clauson told the mayor. “You gave it to West Sound before you gave it to the council.”

City Treasurer Alan Martin said Foster Pepper PLLC represents WSUD and the city (both as an agency) along with the joint waste water treatment facility. He said that Foster Pepper had the city sign an engagement letter and conflict of interest waiver between the city and the utility district.

“Foster Pepper was going to make an opinion that may or may not be in the favor of the city or in the favor of West Sound,” said Martin.

Martin said the letters were made available during the late afternoon of April 7.

Clauson asked if the document WSUD signed gives Foster Pepper the approval to issue the opinion to the city without a conflict.

“Foster Pepper issued the letter to the city dated April 7. West Sound received a copy of the letter — from the city — early enough that they (WSUD) could prepare a letter dated yesterday (April 7) for which we received today,” said Clauson. “And yet the council wasn’t given access to either of the letters until the mayor’s email at 4:30 this afternoon.”

City Attorney Greg Jacoby noted that a letter from the city requested Foster Pepper to examine documents they received on the matter and issue an opinion.

“The context of the letter is what council requested,” said Jacoby.

“They’re not representing either party, but they represented both parties on the bonds,” said Matthes. “They are doing an independent third-party opinion. That is what we are after.”

Councilman Rob Putaansuu said the information was good, but asked when the letter on the conflict of interest was signed by the mayor.

Jacoby clarified that the document is an engagement letter that law firms use when an individual or group wants to hire them and outline their terms and scope of work.

Pataansuu asked Jacoby when the letter was dated.

“March 26,” Jacoby replied.

“So why weren’t we informed on March 26 of this process?” asked Putaansuu. “It is good information, but I think we should have been informed.”

Jacoby said the only conflict of interest that the letter points out is that Foster Pepper has represented both the city and WSUD on bond matters in past years.

“In order to avoid future conflict, they wish to point out that their scope of work is going to be limited to simply looking at historical documents and giving an opinion about the documents,” said Jacoby. “That’s what they did in their April 7 letter.”

Pataansuu asked the mayor why the council wasn’t informed about the March 26 letter.

“I don’t need to ask your permission to get some of these questions answered and I just wanted to move forward and get some questions for this meeting answered,” Matthes replied.




Subcommittee will make recommendation




Councilman Jerry Childs reminded the council that the appointments on the four-member subcommittee were to interview and look into what had been presented and to make a recommendation to the council.

The subcommittee members are council members Jerry Childs, Cindy Lucarelli, Chang and Clauson. Only three of the four members can be at a meeting (required by state law regarding open meetings).

“The last council meeting we had a discussion on this, this council meeting we’re having another discussion and the committee hasn’t made its report yet,” said Childs. “It seems like we’re getting out of order.”

Councilwoman Bek Ashby said she thought the subcommittee would give the council a report and recommendation during the meeting.

“I believe that was the direction given at the last council meeting,” she said.

Childs asked the council whether they still want the subcommittee to proceed with their directions from the council.

Clauson said, based on the letter, that all of his concerns about the agreement have been answered.

“I’m comfortable about moving forward and approving the document set before us,” he said. “That’s my personal opinion.”

Clauson and Chang said the subcommittees have not met recently except at council meetings.

“To get something at 4 o’clock this afternoon and to be able to digest it and review it, and act on it this evening is not the best course of action, in my opinion,” Pataansuu said.

Clauson suggested the subcommittee meet and bring its recommendation to the April 22 meeting.


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