Cost of utility fight tops $623,000

BELLEVUE, Nov. 03, 2000 (Eastside Journal)—Water and sewer customers in Bellevue and Newcastle have spent more than $623,000 funding a five-year battle over utility service in south Bellevue.

The smaller Coal Creek Utility District is outspending Bellevue to keep from losing half its customer base — that portion located within the Bellevue city limits.

Coal Creek Utility Board President Pam Martin said it's a battle against big government, and that it's worth the cost.

"We wouldn't have spent a dime if they just left us alone," Martin said. "But they have their manifest destiny to provide water and sewer to all in the city limits.

"We don't believe we are doing our customers a service if we allow big government to take over."

The Coal Creek Utility District has spent $369,689.59 for experts, attorneys, studies, public relations, newsletters and signs and buttons advertising support for the district since 1997, according to documents obtained by the Eastside Journal. The district has a $5 million annual budget.

Bellevue has spent $253,519 since 1995 on engineering experts, public relations and studies. Bellevue wants to take over service for about 5,600 homes — 11,500 of the district's 20,660 customers — within city limits.

Customers' monthly utility fees — not tax dollars — are paying for the fight. In addition to south Bellevue homes, the district serves all 3,577 homes in Newcastle and 57 homes in Renton.

And costs will continue to rise as the utility district takes its battle to King County Superior Court. Coal Creek hopes to overturn a county decision that allows Bellevue to take over the part of the district that's inside the city limits.

Officials never questioned how much money they should spend to fight Bellevue's takeover bid, said Tom Peadon, general manager of the Coal Creek district. It's an emotional issue for employees and customers who like the district, which has been in business more than 40 years.

Coal Creek outspent Bellevue in public relations, $38,000 to $19,000, sending informational mailings and hiring a firm to represent the district.

Half of what the district spent, $188,000, has gone to attorneys.

Bellevue's costs do not include five years of city staff time — including that of in-house attorneys — devoted to the proposed takeover. Bellevue's utility department this year has a $44.3 million water and sewer budget.

Bellevue Utilities Director Lloyd Warren said Coal Creek is the last big utility district takeover within the city limits.

Bellevue's consultant costs have multiplied, Warren said, in order to collect and compile hard-to-get financial information on the Coal Creek district to build a case for county approval of the takeover. The county decided in Bellevue's favor in August.

"It isn't money I wanted to spend," Warren said. "These ratepayer dollars could have been spent on delivering services to customers."

The smaller district has demanded a $16.8 million alimony payment from Bellevue if the takeover is approved. Without that, Coal Creek officials claim they would need to increase water rates 55 percent and sewer rates 23 percent.

Both sides are now discussing how to avoid a date in court next April, but they remain far apart on what should be negotiated.

"We've tried to stop, to negotiate with them," Martin said. "They have one goal in mind. There is no negotiating."