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DOCUMENTS: Should Shoreline Water District be the Agency to Take Over SPU Water System?

Shoreline Council balked at proposed merger between Shoreline Water District and Ronald Wastewater District; Shoreline Water District had to make some changes after being dinged in state audit earlier this year.

Debate over water systems and who should be running what are raging in Shoreline these days.

As the city of Shoreline and Shoreline City Council try to get Proposition 1, the Seattle Public Utilities water system acquisition ballot measure, passed by voters in November, critics claim that there are better alternatives.

Despite a mantra of local control if the city acquires the SPU system, some residents prefer the local control of the Shoreline Water District and want that local government to take over the SPU system rather than the city of Shoreline.

At a Sept. 5 public hearing at Shoreline Water District offices, about 40 people showed up and more than 20 spoke. About twice as many people who spoke were opposed to the city's acquisition of SPU's system, than were for it, and several people who were for it were current Councilmembers.

The Shoreline Water District Board met this past Monday night, Sept. 10, to further discuss the SPU acquistion issue and what stance it should take. The district's options were to support Proposition 1, take no position on it, or oppose Proposition 1. The District's attorney Andrew Maron, who has represented it for 20 years, laid out reasons for doing any three of the above. 

The Water District Board will announce a decision on its position or refusal to take a position at its Sept. 17 meeting at 7 p.m.

Several people said they want local control but would prefer the Shoreline Water District, which handles water service for homes east of I-5 and a section of Lake Forest Park to be the district in charge.

Back in December, Shoreline Water District manager Diane Pottinger sent a letter (see attached PDF) to Shoreline City Manager Julie Underwood proposing that the Shoreline Water District and Ronald Wastewater District merge and enter in a long-term interlocal governance and operating agreement.

Underwood's response (see attached PDF) on behalf of the City Council was that while efficiencies would be gained under a consolidation, the city was best suited to do that. She offered up the third floor of City Hall, now largely vacant, as a place to house the Shoreline Water District and Ronald Wastewater District offices, touting having all the services under one roof.

Meanwhile, the Shoreline Water District was cited by the State Auditor's Office back in May.

The Auditor found the District’s "internal controls over financial statement preparation are inadequate to ensure accurate reporting.” This wasn't the first time the auditor had noted these issues.

“We noted control deficiencies over financial reporting to management in prior audits,” according to the audit.

Pottinger said that concern has been addressed with by adding a third party peer review.

"We are a small district and have two people in the finance department, both of whom prepare and monitor the finances.  The auditor suggested a third financial person review the financial statements.  The District does not believe this adding staff (was needed, sic) but we have worked with other special purpose districts to provide a third party peer review," Pottinger said in an e-mail. 

Errors included the statement of net assets, depreciation, cash flow, and notes to the financial statements, Washingtonstatewire.com reported.

"The financial statements were materially correct with the intangible assets listed on the financial statements but not in the corresponding footnotes," Pottinger said. "The auditor also suggested reviewing our depreciation schedule and suggested purchasing a software program.  We have purchased the program and reconciled the assets.  We are awaiting our 2011 audit at this time.  We feel confident that all issues have been resolved."

Ronald Wastewater District per a 2002 agreement with the Shoreline City Council is supposed to be assumed by the city in 2017, but the Ronald Board has said that decision should be made by a vote of the people and believes that contract is not necessarily binding.

Wendy DiPeso September 12, 2012 at 03:17 AM
Lets remember that the issue on the ballot is whether or not to allow the City of Shoreline to purchase Seattle Public Utilities. According to Seattle City Council members there is no purchase and sale agreement, and a price has not been agreed upon. The City of Shoreline has underestimated costs for separation and over estimated revenue according to their own documents. The City of Shoreline has a history of not getting fiscal matters right. Prop 1 was supposed to solve their budget problems but it has not produced the revenue they expected. Aurora Corridor was supposed to cost $53 Million for all three miles. We are approaching $100 Million with a mile to go. With this kind of track record can we trust what the City of Shoreline is telling the voters over the purchase of Seattle Public Utilities?
Melissa Anderson September 12, 2012 at 10:27 PM
I am a Shoreline resident in favor of acquiring the SPU and was not a member of the SPU acquisition steering committee. The opposing speakers at the Sept. 5 hearing, which I attended, were not at all representative of Shoreline's general populace. Most of the opposing speakers lived in East Shoreline, which makes up only 1/3 of the City of Shoreline and were unaffected by the problems that Proposition 1 solves. Several of the opposing speakers made extreme and agitated statements against the City of Shoreline that were not at all representative of most residents. 2/3 of Shoreline residents are under the Seattle Public Utilities and will be highly supportive of passing this measure. Their rates currently go to Seattle and support Seattle's police department, parks department, etc. Seattle is not properly maintaining their water utility infrastructure, thus hampering the ability of Shoreline's fire department to respond to fires in West Shoreline. These residents were under-represented at the hearing. Further, the East Shoreline residents that I know who hold moderate views about local government were under-represented. These residents agree that West Shoreline residents should have the same benefits of local control that East Shoreline residents currently have. It would be a big mistake to form any conclusion concerning Shoreline residents' opinions on Proposition 1 from the 40 non-representative individuals who showed up at the hearing. Melissa Anderson
Tony Dondero (Editor) September 13, 2012 at 02:24 AM
Melissa you raise some good points. According to the city's survey about 79 percent supports the SPU acquisition when given information (from the city.) People are probably too busy or figure the city is doing all right, but other than people like Melissa, there seems to be a restive majority that is not terribly engaged. The Point Wells issue seemed to be a wake up call for people in Richmond Beach and got a lot of people coming to Council meetings and City Hall but that's waned. There are a handful of people who have a particular issue or cause and organize and show up to Council meetings, but that's several dozen people, more than that comment on e-mail, but there are thousands that are probably not heard from.
Janet Way October 23, 2012 at 03:28 PM
Dear Tony and Melissa, I must point out that the survey done by the City was done before the "NO" side had gotten it's information to voters and as you say, most voters are uninformed. Now voters are looking at their ballots and wallets and deciding whether this is really right for them as ratepayers and taxpayers. To say that voters on the East side are not affected, is just not accurate. When the City, which is supported by all property owners and affects all residents makes a move like this to seize an enormous powerbase and responsibility, like acquiring the SPU system, it matters to all voters. The City has pledged in this proposal to pay at least $26 million, which it must borrow! And the true costs are actually going to be much greater and the City knows that. This effects all property owners taxes potentially, whose hard earned money funds City programs. Melissa, labeling 40 people who took the time to show up at a Shoreline Water District meeting, (which usually attracts hardly anyone) are "non-representative", is dismissive and disrespectful. Shoreline Water District ratepayers could be very directly affected if the City moves to take over, which is very possible. And to say there are just a "handful of People" supporting "NO", is really insulting to the many, many voters who are highly suspicious of this huge boondoggle by the City of Shoreline. Those in the know, have done enormous amounts of research, and we are grateful for their efforts to inform us all.

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