Due Diligence Phase of SPU Water System Acquisition Heating Up

The long-term goal of acquiring Seattle Public Utilities’ water system that serves Shoreline, mostly west of I-5, is multi-faceted from the city’s perspective, with making development easier, diversifying the tax base and having more representation paramount.

The SPU acquisition is on the Shoreline City Council's agenda tonight.

In November, the city may put the issue to a vote of all the people of Shoreline, whether they are served by Seattle Public Utilities or not, with the question being: Do you want to purchase Seattle Public Utilities water system for $25 million?

If the answer were yes, the city would qualify to issue bonds for the $25 million purchase that would pay SPU for the assets of the system and future lost revenue. Of course, the city would be taking on maintenance and operations, if the system comes under its ownership that has costs of its own.

The $25 million asking price is considered much more reasonable than the $40 million that SPU asked for in the early 2000s.

Still, some citizens believe that Ronald Wastewater District or Shoreline Water District would be a better fit to take over the SPU system instead of the city.

Wendy DiPeso, a Shoreline resident who blogs for Patch, said at the Jan. 23 Shoreline City Council meeting that those water district’s do a good job managing their resources and specialize in water, whereas the city has many competing interests within in it.

The City Council’s objectives to go forward with the acquisition are to “acquire it a price that when added to other costs to operate and maintain the system, would fall within a rate structure equal to or less than what SPU” would charge over a reasonable period of time.  The Council’s other objective is to “reinvest back into the system more aggressively with operations and maintenance,” capital improvements.

In presentations made to the City Council, neighborhood and community groups, Shoreline Public Works director Mark Relph has further laid out the city’s case maintaining that the acquisition is seen as long-term solution benefitting the city’s long-term interests. The city’s residents do not have direct representation regarding SPU since it reports to the Seattle City Council while Shoreline residents are merely under contract to SPU. If the city were to run the system, the Shoreline City Council would represent citizen interests and field input.

“It’s another opportunity for local control,” he said.

Besides representation benefits, the city could better coordinate construction if it oversaw the water utility and it would create operational efficiencies, Relph said.

Shoreline depends heavily on residential property tax and making it easier for redevelopment projects of commercial and retail spaces to be built within the city would ease that burden in the long-run, Relph said.

The topic is extremely complex and one that will likely be discussed frequently in coming months as the city goes through, the “due diligence” phase. A citizens steering committee made up of people of “diverse backgrounds and perspectives,” according to the city, is studying the proposal and meeting regularly before making a recommendation to the city.

For a list of members of the committee and the committee Web site go here.