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Email answers mayor’s concerns about agreement

An email sent by Port Orchard’s city attorney on July 3, answered questions that Mayor Tim Matthes asked pertaining to wanting the city council to reconsider action it took on June 24 in approving an agreement with C&M Golf LLC that restored a water right to the city from a mistake in a 2008 contract.

City Attorney Greg Jacoby stated in an email sent to Matthes and the council, that he was surprised the mayor didn’t include him in an email sent to council members on June 30. In the email, Jacoby wrote that the mayor claimed that he failed to provide him with a list of specific information. Jacoby stated he’d never seen the list and that he recalled one conversation (June 19) on discussing Well 4B since Matthes’ term as mayor.

According to the email, Matthes asked Jacoby to explain the background and context of the agreement with C&M Golf LLC.

“It was clear from our conversation that you did not support the agreement, but I do not recall that you asked me to provide you with any follow up information and I certainly never received an email request,” Jacoby wrote in the email.

In the mayor’s email to council, Matthes asked one of the members to contact the City Clerk Brandy Rinearson and have “Reconsideration of the C&M agreement regarding use of Well 4B water rights and rescission assignment” added to the July 8 council meeting.

At the July 8 meeting, Councilman Rob Putaansuu motioned that the request for reconsidering approval of the contract be removed from the agenda. Councilman John Clauson seconded the motion. The council voted 4-1 to remove it from the agenda.

Council unanimously approved the agreement on June 24.

City attorney answers mayor’s questions

The city attorney’s responses to the mayor’s questions reveal that on Jan. 27, 2003, the city council approved an agreement (signed by Mayor Jay Weatherill) with McCormick Land Co., that the city agreed once the Department of Ecology (DOE) has approved the water right application for Well 4B, the city would assign the water right to McCormick. Lary Coppola, who then served as mayor, signed the assignment for water right to McCormick on May 5, 2008, acting under the authority of the city council’s Jan. 27, 2003 approval.

According to the email, Matthes stated according to a 1998 agreement with the city, C&M Golf needed to obtain permanent water rights for an alternative water source of the golf course. He said the city extended the agreement in 2002 for another 10 years.

“Why has it taken so long to find an alternative source and/or receiver a permit or certificate,” Matthes asked in the email.

Jacoby wrote the city applied for a water right on Well 4B and DOE approved the water right in December 2005. DOE allows the holder of the water right to transfer the rights to a third party upon completion of a form and the submittal of a $50 fee. In 2008, the city and McCormick Land completed and executed DOE’s standard form and submitted the assignment to DOE.

Jacoby said he can confirm that DOE accepted the 2008 agreement because he asked DOE to look at its records and DOE said C&M Golf holds the water right.

In the email, Matthes asked why DOE was contacted first prior to approving the C&M Golf agreement and claimed that he asked the city attorney to schedule a joint meeting prior to the agreement’s approval, but no date had been set.

The city attorney stated the agreement was a two-step process in the June 24 meeting. He said, first, the city needed to have an agreement in place with C&M Golf, whereby C&M Golf agrees to return the water right to the city.

“If we don’t have a binding agreement whereby C&M agrees to re-assign the water right back to the city, then there is no point in meeting with Ecology,” Jacoby wrote in the email.

Once the agreement with C&M Golf was in place, then the city attorney notified DOE.

“I have communicated with Ecology’s water division, explained what we are proposing to do and was told to send in the assignment from with the submittal fee,” wrote Jacoby.

He noted that DOE’s website does encourage pre-application meeting with DOE staff, but he felt those meetings are necessary when the transfer raises questions, such as impairment of other existing water rights, increases in water use or a new purpose to be added.

“In our case, this is a straight-forward return to the status that Ecology approved in 2005,” he wrote.

The mayor wrote the city should consider possible tax implications regarding the agreement and what is the value of the water to the city.

Jacoby wrote the real estate excise tax applies to the transfer of water rights, but there was no tax liability when the city assigned the water right in 2008, because the city is exempt.

“The contract approved on June 24 has been drafted in a way that should ensure that no excise tax is owned by C&M Golf,” the city attorney wrote. “This seems only fair given that both parties are in agreement that the 2008 assignment was a mistake.”

Jacoby stated if the city doesn’t get back the water right, DOE said they would re-designate the water right as irrigation only and the city will forever lose the right to withdraw 645 acre feet of water per year from it municipal wells.

“That would be a loss of incalculable value to the city not to mention that you have built a multi-million dollar well (No. 9) that will be unable to run at full capacity because you no longer have sufficient water rights,” Jacoby wrote.

Regarding Matthes’ question about other possible ways to accomplish the DOE mandate and the city goals, Jacoby wrote, “If the city’s goal is to recover the well 4B water right and if the DOE mandate to document the transaction by completing the assignment form and submitting a fee, then I don’t know why we could change course. But if there are other goals and mandates that I am unaware of, then let’s put them on the table and talk it through.”

In the email, Matthes wrote he feels the public was not given “adequate” background information leading up to the council’s vote and when transferring water rights, should the public have a day when giving up the water right.

“A public hearing is not required by law,” wrote Jacoby. “The city council always has the discretion to ask staff to notice a public hearing. To my knowledge, no such request was received.”

 

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