Shoreline Councilmembers Address Shoreline Water District's Anti-Prop. 1 Stance

Mayor and deputy mayor make case that Shoreline Water District's fears over the SPU water system acquisition are unfounded

Editor's note: These are comments from Mayor Keith McGlashan and Deputy Mayor Chris Eggen to the 32nd Legislative District Democrats regarding Shoreline Water District's decision to oppose Shoreline Proposition 1, the Seattle Public Utilities water system acquisition.

We are very disappointed by the decision of the Shoreline Water District (SWD) Board to oppose  Shoreline Proposition 1, which authorizes the City of Shoreline to negotiate purchase of the portion of the Seattle Public Utilities (SPU) water system in Shoreline West of I-5. 

If Prop 1 passes it will certainly be to the great benefit of Shoreline residents who live west of I-5.  These Shoreline residents now have absolutely no say in policies or rates for their water system, because the SPU board is the Seattle City Council and Shoreline residents can not vote for the Seattle City Council .  Indeed, currently these Shoreline residents pay a 14 percent surcharge on their bill compared to Seattle residents and also pay a 15.5 percent utility tax into the Seattle General Fund.  The Seattle General Fund is used to support City of Seattle programs which do not directly benefit Shoreline ratepayers.

Aside from the surcharge and utility tax, a significant fraction of the rates identified for operations and maintenance on the bill of West Side Shoreline residents goes to support the water system in Seattle, up to 50% in some years.  At a recent Seattle City Council Meeting an SPU Administrator said that the Shoreline area is a “profit center” for Seattle and that they make a “fair amount” of money from it (http://localcontrolforshoreline.org/publicola_news_article_july_30).  A “fair amount” indeed, $2 – $5 million dollars a year. 

A 2005 Shoreline Water District report noted that 23 percent of the water mains on the west side of Shoreline need replacing.  Seattle Public Utilities has no plans to replace any of these mains unless they fail.  These mains would be replaced if the City of Shoreline purchases the SPU water system west of I-5.  It appears to us that because of misguided self-interest the Board of SWD is willing to sacrifice the interests of Westside Shoreline residents.  We believe that the voters comprising the 2/3rds of the city on the West side (approximately 11,000 ratepayers that are under SPU) will see Prop 1 as an opportunity to gain control over their water system, and hope that the voters on the East side will see the unfairness of the current situation and will join the West side in passing Proposition 1.

The three reasons cited by the SWD Board for opposition to Prop 1 do not make a lot of sense for reasons outlined below:

(1) The Board thinks that the purchase will lead to assumption of the Shoreline Water District without a public vote.  We believe that there is no direct connection between this vote and assumption because:

(a)It is not clear that the City of Shoreline will ever try to assume SWD.  In fact, the city and SWD recently entered into a 15-year franchise agreement that prohibits assumption. 

(b)The Shoreline City Council is very sensitive to public opinion, both because of democratic convictions of the council members and because public opposition has a huge impact on reelection for the council.  If a sizable fraction of the public demanded a vote on a future assumption, they would probably get it.  We believe the SWD Board should not waste its time opposing a measure beneficial to a majority of the residents of Shoreline, but rather should focus on making its service so good that its customers would strongly object to any change in its status.

(2) The Board thinks that the purchase will make it unlikely that there will ever be a combined independent utility district in North King County.  However, we believe that this likelihood is already vanishingly small, because West Shoreline is such a cash cow to SPU.  There is no reason to believe that the SPU Water System in Shoreline could ever be acquired by an independent water district because such districts have insufficient political influence in the region.  In fact, SPU has stated that while they respect SWD as a water system, they are only interested in discussing sale of SPU facilities in Shoreline with the City of Shoreline with whom Seattle has partnered on many local issues. 

And if by some turn of fate SWD could negotiate purchase of the SPU water system in West Shoreline, it would not benefit the SWD ratepayers in Lake Forest Park or Shoreline.  East Side ratepayers have already invested heavily in updating their own infrastructure.  If SWD were now to acquire the portion of SPU West of I-5, by state law the SWD rates would have to be constant over the new water system, which implies East side ratepayers would now have to contribute to the investments in West Shoreline.  So SWD’s desire to take control of SPU in Shoreline is not even a benefit to its current customers.

The SWD board clearly believes that an independent utility is inherently better than a municipal utility because it focuses on one thing.  The counter-argument is that a municipal utility can be more efficient because of sharing of equipment and of labor between departments.  If you look at rates and service levels of independent and municipal utilities around the state, sometimes the independent districts are better and sometimes the municipal.  There is NO clear evidence that either type of utility is consistently better.  If Shoreline purchases SPU in West Shoreline, the City Council is strongly committed to putting together an operation that is efficient and effective.  The details have not been determined and it is even possible that the whole operation would be contracted to SWD (an arrangement which would NOT require the same rates in both halves of the city).

(3)A final reason cited for opposition by SWD is a concern that the City of Shoreline would continue to invest tax dollars in pursuing SPU for several years to come, which would not directly benefit East Side residents.  This is true, although it is not a huge amount of money.  However, this concern is misplaced.  Cities and other governmental entities often make investments that benefit one area and not others.  Then at a later time, they make an investment in another area.  Eventually everyone benefits.  To demand that every single investment benefit every area in a city would make it impossible for government to function efficiently. 

Keith McGlashan, Mayor, City of Shoreline

Chris Eggen, Deputy Mayor, City of Shoreline

Wendy DiPeso October 10, 2012 at 12:40 AM
Shoreline Water District serves the East side of Shoreline and Lake Forest Park with the exception of a small area in the Southeast corner of Shoreline. Ronald Wastewater District, another well run Public Utility serves all of Shoreline. They made a proposal to the City of Shoreline to merge so as to increase efficiency and further lower costs (SWD and RWD have low rates compared to city run utilities) but the City of Shoreline refused to allow them to merge.
Tony Dondero October 10, 2012 at 12:41 AM
Shoreline Water District serves a 5-mile section, most of Shoreline east of I-5 and a swath of Lake Forest Park. http://www.shorelinewater.org/SectionIndex.asp?SectionID=8 There is also a Lake Forest Park Water District that serves the rest of Lake Forest Park.
Wendy DiPeso October 10, 2012 at 01:48 AM
Thanks Tony!
one opinion October 10, 2012 at 03:32 AM
If "West Shoreline is such a cash cow to SPU," why would SPU want to sell it? Wendy, do you have an idea about this?
Wendy DiPeso October 10, 2012 at 05:15 AM
Seattle collects just over $2 million a year. They have invested almost $9 million in Shoreline since 2003. Seattle does not want to sell the SPU system. It is intended to work as a regional asset. Cutting the system apart means you have to then build water storage capacity in order to continue to provide service. This purchase will impact all rate payers whether wholesale or retail because Seattle will make up the difference in lost revenue by raising rates.


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