Money recoupment at issue in debates over alternative Eastown sewer plans

The council in July voted down a utility latecomers agreement negotiated with landowners in Eastown that would have funded the $4 million project up front with money being paid back to the city and the landowners as developers connected to the city's system.

After a few weeks off to marinate on the issue, the Bonney Lake City Council returned to the topic of Eastown sewers Tuesday night.

“The sewer is a definite issue that needs to be resolved out there,” Deputy Mayor Dan Swatman said as he re-opened the discussion on how to get pipes in the ground in the city’s Eastown section as a way to spur development.

The council in July voted down a utility latecomers agreement negotiated with landowners in Eastown that would have funded the $4 million project up front with money being paid back to the city and the landowners as developers connected to the city’s system.

Under the agreement, the corporation representing the landowners would have contributed approximately $201,000, or 5 percent, to the project cost. The council even went so far as to pass an ordinance lowering the minimum partner investment to 5 percent of the project to make it easier for the landowners.

But then the council voted down the measure, with several saying the risk to the city was too great and several mentioning they felt the Eastown landowners were making “demands” of the city that they felt sent up “red flags” about their partner.

Roger Watt, an unofficial spokesperson for the corporation and the speaker during the public hearing who seemed to cause the questions in the minds of the council denies making any demands of the city and a text of his comments bears that out.

On Tuesday, the council re-vistied the issue, looking at the possibility of installing a shorter system at a cost of $2 million. The smaller system would reach about halfway into Eastown, instead of the full length as proposed previously.

Councilman Tom Watson, who voted against the ULA on grounds that the city may not make back its investment over the 20-year life of the agreement, proposed the city pay for the $2 million system up front without a ULA.

Under Watson’s plan, the city would recoup no money as developers connected into the system.

Watson cited the more than $1.3 million the city has already put into design work on the system as a reason to move forward.

“We can’t ignore it because we’ve come this far already,” he said. “We have to do something out there.”

Councilwoman Katrina Minton-Davis, who also voted against the ULA, again disagreed that the city should do anything in Eastown.

“Is it the city’s responsibility?” she asked. “Is it the taxpayers responsibility?”

Minton-Davis said the city would still be “speculating” with taxpayer money by putting those pipes in the ground in hopes that developers would connect within 20 years.

“Where’s the proof?” she asked, adding that she believes the city needs to lower its fees to spur development, particularly as infill int he city’s Midtown section. “Why do we need to develop Eastown?”

Councilmember Jim Rackley, one of the leading voices on the council in favor of the ULA said he would vote for Watson’s $2 million package because he believes the sewer lines are that important to the future development of the city, but again reminded the council that without a ULA or a Utility Local Improvement District, the city would have no chance of recouping any of the money it invested in Eastown.

Rackley reiterated that the city needs a partner – the landowner corporation -in order to get any money back. He also reminded the council that once the city received a check from the corporation, their attitude and potential issues regarding the sewers would be moot as the city would be in charge.

Watson said $4 million was simply too much for the city to spend, even though there was the possibility of getting the money back and that a $2 million outlay made more sense.

“We can use that money elsewhere in the city for other development,” even if it meant borrowing it, Watson said. “We have other areas to think about.”

The council instructed Public Works Director Dan Grigsby, who has been working with the landowners corporation, to gauge corporation interest in a smaller system, though the council still seemed interested in maintaining the corporation’s buy-in at $201,000, even though the overall cost of the project would drop.

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