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Shoreline Chamber's SPU Committee Sends Out Letter on Proposition 1

Letter to the Shoreline Chamber membership from the Shoreline Chamber of Commerce SPU Committee

Editor's note: The following letter was sent out Friday to Shoreline Chamber members.

The Shoreline Chamber of Commerce has not taken a position on Proposition 1, but here are some points to consider:

The committee met separately with the "Shoreline Citizens for Good Government" representatives working to defeat Proposition 1 and Public Works Director Mark Relph and Assistant City Manager Debby Tarry in order to hear both sides of the issue.

The City of Shoreline provided the committee with the reports from the Steering committee.

The City of Shoreline's argument is that if allowed to purchase the Shoreline segment of the Seattle Public Utilities water system they will be able to direct how and when the system is maintained.

What the committee found:

There is no agreement between Shoreline government and Seattle City Council or Seattle Public Utilities on a purchase price. There is no legal obligation on the part of Seattle to sell the system. The City of Shoreline is asking voters to approve something that does not yet exist.

According to the 2013 Water System Plan published April 17, 2012 by Seattle Public Utilities, since 1990, water consumption in the SPU service area has decreased 30 percent while population has increased by 15 percent. In the same report SPU's water consumption projections to 2040, estimate water consumption to be about what it is today. Historically actual demand has been below projected estimates.

According to the SPU report consumption for multi-family residences is about half that of single-family dwellings. Conservation efforts are expected to continue.

The City of Shoreline is predicting a 56.4 percent increase in water revenue by 2020. The City of Shoreline expects a 10 percent increase in population through high-density development. The City has failed to explain how they will get more than a 50 percent increase in water revenue without raising rates, out of a 10 percent increase in population when a 15 percent population increase has accompanied a 30 percent drop in consumption. This matters because the budget for being able to provide basic water service without raising rates depends upon this revenue increase.

Under the current plan there will be no funds for main replacement until 2030. If there is a water main break prior to 2030 it is not clear where funds will come from to meet the emergency need.

Costs associated with separating the Shoreline segment of SPU from the rest of the system are based on Tacoma construction rates. Seattle area construction costs more than Tacoma. According to the April 23rd engineering report separation costs could be up to 50 percent higher than the City Staff is considering.

Additional costs that will be incurred between now and 2020 for adding staff and doing additional due diligence necessary to the run up to purchase have not been included in the budget.

The City of Shoreline plans to remove the franchise fee and replace it with a utility tax. A franchise fee is negotiated. Utility taxes have no cap.

If costs are higher, or if revenue is lower, or if Seattle wants to charge a higher price the City of Shoreline will have no choice but to raise rates, defer maintenance, raise taxes or all three to keep the system functioning.

It is unclear whether Seattle Public Utilities can make a sale without a vote of the people of Seattle.

The City of Shoreline has said it is important to get this done now because Mayor McGinn is supporting the sale and he may not be in office much longer. The Mayor of Seattle does not have a voice in the sale of a utility without the agreement of the Seattle City Council.

According to the Growth Management Act, SPU, Shoreline Water District and Ronald Wastewater growth pays for growth; i.e., when a developer proposes a project the utility charges the developer what it will cost to make changes to the utility system to provide the level of service the project will require. According to minutes from a recent Planning Commission meeting regarding changes to the Comprehensive Plan the Shoreline City Staff believes it is not appropriate for developers to have to pay this cost. This means that if Shoreline takes ownership of one or more utilities the cost of development will be shifted from developers to ratepayers.

The City of Shoreline rejected a proposal by Shoreline Water District and Ronald Wastewater to merge their two utilities. Such a merger would increase efficiency, further reduce costs to ratepayers and their combined reserves would make it possible for them to purchase the Shoreline segment of SPU. This would bring the entire area of Shoreline under a public utility that can provide better service at less cost than either Seattle or Shoreline is capable of doing.

 

one opinion November 03, 2012 at 07:26 PM
Great info, though it's too bad that it wasn't out at least a couple of weeks ago, prior to - or about at the same time as - ballots arrived. Like many of us, I've already voted, now immune to the barrage of ads that cascade, one after another, end to end, on all media sources.
John C November 05, 2012 at 11:46 PM
I already voted no and I'm glad I did. This proposal by the City Council doesn't make good sense.

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