PO Council Ponders its Next Move on SKIA Sewers

Clarification 9/8/08: In a comment below, Bob Meadows called into question the following statement on this entry:

“With financing, the expansion cost $21.5 million, of which $4.5 million represents expanded capacity set to be dedicated to SKIA.”

Regarding the total cost of expansion, I checked with City of Port Orchard Treasurer Kris Tompkins, who replied:

“I think there needs to be clarification.  The expansion cost of the treatment plant was $21.5 million including the debt (financing) of $16.8 million.  The City & District (Karcher Creek Sewer District, now Westsound Utility District) together contributed $4.7 million (50/50%).  These numbers do not include the interest (of 1/2 a percent), which over the life of the debt will be an additional $775,000+.  One loan will be paid off in 2022 & the second in 2024.”

Regarding the cost of the expanded capacity dedicated to SKIA, Bob also called into question the $4.5 million (in the statement above), saying he could find no such reference on the city’s annual financial report. The figure I was using came from an e-mail to me from Lary Coppola on why the city wants to pursue its perceived right to provide sewer to SKIA. City Councilman John Clauson cited an amount of $3.5 in a recent interview.

Kris Tompkins, who replied:

“To my knowledge there has not been any calculation of a monetary value that represents the expanded capacity to be dedicated to SKIA.  So I don’t believe the statement “…of which $4.5 represents expanded
capacity set to be dedicated to SKIA” is correct.  Part of the expanded capacity was in order to service SKIA but I never even have heard that a certain percentage of capacity was attributed to SKIA.”

Here’s the original post:

Members of the Port Orchard City Council are considering what to do next on the issue of Port Orchard’s desire to sewer the South Kitsap Industrial Area, since Wednesday, when the Bremerton City Council voted 7-0 to accept SKIA property owners’ petition to annex SKIA south. The council already voted to accept annexation of SKIA north, for a total of 3,400 acres to be annexed.

The council has yet to meet as a whole, yet in previous meetings, said Councilman John Clauson, they have been united in their desire to see Bremerton uphold a 2003 memorandum of agreement between Port Orchard and the Port of Bremerton, primary property owner of SKIA. The agreement designates Port Orchard as the entity that will provide sewer to the area, slated for development as an industrial park.

But Bremerton officials have said they are under no obligation to honor an agreement to which they are not party.

Mayor Cary Bozeman on Wednesday said the city would look for the deal that best served the residents of Bremerton, be it through Port Orchard or another provider.

“Obviously I’m disappointed in the sense that the City of Bremerton and the City of Port Orchard have had a great relationship forever, and I hate to have it get tarnished in this way,” Clauson said. “I do have a great respect for Mayor Bozeman and the city council. I’d like to talk to them directly.”

As to how far Port Orchard will go to press the matter, Clauson said, “We’ve been talking about the possibility of a lawsuit over this whole issue.”

Although he hoped it doesn’t become a matter for the courts to decide, Clauson said, the council and the Mayor Lary Coppola will do what they need to to defend the city’s investment in an expansion of its wastewater treatment plant, made in part on the assumption that Port Orchard would serve SKIA. The plant is operated jointly by the city and Westsound Utility District (formerly Karcher Creek Sewer District). With financing, the expansion cost $21.5 million, of which $4.5 million represents expanded capacity set to be dedicated to SKIA. The city anticipated money from new hook-ups in SKIA would contribute significantly to the debt, Clauson said, but without SKIA, the burden will fall back on city residents.

“It’s just not fair to the rate-payers if we don’t have the expansion growth that we anticipated,” Clauson said. “So, yeah, I expect it could ultimately make it to court. I’d rather not have to go that direction, but if we have to we have to.”

Rob Puutaansuu, chairman of the city’s utility committee, said talk of a lawsuit was “premature.” Puutaansuu said the council needs answers to certain questions from its own legal council and staff now that Bremerton has made the next move. For one thing, “At what point to we have to force the issue,” said Puutaansuu. “Is it now or down the road when services are provided?”

In anticipation of the need for expanded sewer service to SKIA, Port Orchard, were it the provider, would have to expand its collection line from the pump station on Feigley Road near McCormick Woods that was built with SKIA in mind, said Puutaansuu, who also mentioned being “disappointed” with Bremerton’s stance.

James Weaver, Port Orchard’s development director, said the county’s Boundary Review Board will have to address the memorandum as it rules on the proposed annexation. The board’s review could take 45-120 days. At Wednesday’s meeting, Weaver would not rule out a lawsuit, but said the city was “exhausting every avenue.”

“Litigation is an ugly word,” Weaver said.

2 thoughts on “PO Council Ponders its Next Move on SKIA Sewers

  1. Cities suing one another. Now there is a wise use of scarce tax dollars in a down economy.

    “It’s just not fair to the rate-payers if we don’t have the expansion growth that we anticipated” Somebody should have thought of that when they bet the rate-payers money on an unrealized land grab. That “somebody” would have been the city council members at the time…

  2. How has this $4.5 million figure been calculated?
    “With financing, the expansion cost $21.5 million, of which $4.5 million represents expanded capacity set to be dedicated to SKIA.”

    From the city’s annual financial report, it appears that $16 million was raised by issuing bonds which will be repaid by everyone served by the treatment plant. Another $5 million or so of the cost apparently came from the city and the sewer district’s reserve funds.

    When you say “with financing,” it makes it look as though you are including the future interest payments on those bonds. The $21.5 million cost of the expansion doesn’t include interest payments.

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