Cities and community weigh Lake Tapps offer
April 30, 2009 · Updated 11:16 AM
By Dennis Box-The Courier-Herald
The proposal to buy Lake Tapps by the three cities surrounding the reservoir has quickly changed the balance of power and politics at the negotiating table.
The three mayors - Neil Johnson of Bonney Lake, Pete Lewis of Auburn and Dave Enslow of Sumner - along with state Rep. Chris Hurst, D-Greenwater, delivered an official offer to Puget Sound Energy Sept. 12.
The $33 million deal was presented to Kimberly Harris, executive vice president and chief resource officer at PSE, and Ed Schild, director of hydroelectric resources.
“We were well received,” Hurst said. “It's not lost on anyone that this is a serious offer. These mayors have a vision for the cities they represent and the region. They don't separate the value of the fish and the lake from the recreation value (to the area). Cascade (Water Alliance) is looking at purchasing a commodity and the cities are looking at a holistic approach that solves everyone's needs.”
The mayors' offer counters an offer from Cascade Water Alliance, an eastside water alliance, for $37 million. The difference between the two offers is the cities are offering the $33 million when PSE, the owner of the lake, signs on the dotted line of the purchase and sale agreement.
Cascade is offering $10 million up front and the balance after the drinking water rights for the lake have been issued by the Department of Ecology and cleared of any legal challenges, which could drag out for many years.
Johnson said he thought Harris and Schild were “positive about the offer.”
Roger Thompson, spokesman for PSE, said there was no timeline concerning the offer, but the utility would consider it as “promptly as possible. We have been negotiating with Cascade Water Alliance for some time and that is the path we are on. We have a provision that provides for exclusive negotiations (with Cascade.)
However, Thompson said he knew of no “defined penalties” if PSE negotiates with another entity for the sale of the lake.
“We are not looking for an exit from that arrangement,” Thompson said.
PSE is regulated by the Washington Utilities and Transportation Commission and it is a publicly-traded utility on the New York Stock Exchange.
Thompson said the first step for PSE is to analyze the offer and then decide whether it has to rethink its arrangement with Cascade.
Any financial decision concerning the sale of the lake by PSE would ultimately be overseen and approved by the utilities commission.
“Any sale has to be prudent for our customers and assets and we are assessing the steps we need to follow,” Thompson said.
Mike Gagliardo, general manager for Cascade, said the alliance had been notified by PSE about the offer.
“As far as we are concerned we have an exclusivity arrangement and we are honoring that,” Gagliardo said.
According to Gagliardo, there will be a meeting between the alliance board members and PSE this week.
The mayors, Hurst and Pierce County Councilman Shawn Bunney met with members of the Lake Tapp Community Council Friday at the Tapps Island clubroom.
Chuck Romeo, community council president, said the members had a “good meeting with the mayors. It was very positive for the community. The cities are still gathering information.”
Leon Stucki, a council member from Snag Island, said the council is not officially taking sides, “but it was nice to hear the local mayors stress their concern to keep the lake levels up during the recreation period. They are willing to work with the community to help keep the lake up and that is obviously a positive incentive.”
Hurst said the community members will “have to decide which horse to back. If they look at the future, I think the choice is clear.”
Community members around the lake and city officials have been voicing concerns for months about Cascade's unwillingness to listen to their issues about the lake levels and the cities need for water.
A political shootout is looming over the offer and the future owner of the lake that could reach the governor's office.
“The cities need the lake for the same reasons the community council does,” Lewis said. “The question is how to protect the lake in the future. This is a window of opportunity that needs to be carefully examined.”
The cities plan to use the lake to fulfill their future water needs and preserve the recreational value for the area.