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Return to Previous PageSeattle offers $1.6M to Pend Oreille

Boundary Dam: City Light offers $1.6 million for Boundary Dam fees as legislators take up the cause for the financially strapped county.

By Emily Heffter
Seattle Times

Seattle City Light offered this week to pay $1.6 million to a tiny Eastern Washington county that is home to its biggest hydroelectric dam.

For two years, Seattle has refused to pay Pend Oreille County while it negotiates a new contract.

The move marks a major shift in a two-year negotiation between Seattle and Pend Oreille County and a sign that the city may be feeling pressure from Olympia. A bill moving through the statehouse could force the city to pay millions in new fees to Pend Oreille County.

Seattle has paid the county an annual impact fee since the 1960s, when it built Boundary Dam across the Pend Oreille River there, the source of 60 percent of Seattle’s hydroelectric power. The city also built the county a school.

But now the school is falling apart, with a roof so leaky buckets line the hallways on rainy days. Seven school levies have failed. The county’s unemployment rate ranges between 12 and 15 percent. As population has dwindled to under 13,000, the county’s tax base has dipped, and it is struggling to find money for its $9.6 million general fund. Its 150 employees will take eight furlough days this year. In 2009, the county laid off one full-time and two seasonal workers.

When it came time to renegotiate the city’s impact fees in 2008, Pend Oreille County asked for more money. Seattle refused, saying the impact of the dam has not changed, and Pend Oreille County shouldn’t depend on Seattle to subsidize its budget.

The city and the county have been at an impasse for a year. During that time, Seattle has refused to extend the old contract without a deal in place, leaving Pend Oreille County short two anticipated $1.3 million payments.

The county is so strapped financially it’s making payroll by borrowing money from its government counseling center.

Seattle City Light was using “negotiation by starvation,” said the bill’s sponsor, Rep. Joel Kretz, R-Wauconda, Okanogan County.

The county has spent about $35,000 on a Seattle consultant and has refused arbitration because commissioners say Seattle would be able to afford better attorneys and experts.

“All I want is a level bargaining field,” said Rep. Ross Hunter, D-Medina, whose amendment would require Seattle to make payments during negotiations. “I can make the negotiations fairer, and I’m sticking up for the little guy here.”

The bill, which passed unanimously with Hunter’s amendment Monday through the Ways and Means Committee, creates a formula based on utility taxes.

Seattle City Light would have to pay Pend Oreille County 7 percent of the amount it pays in city utility taxes, according to one formula, supported by the bill’s sponsor and Pend Oreille County commissioners. In 2008, that would have amounted to about $2.3 million. In past years, Seattle has paid the county about $1.3 million.

Its best offer in negotiations so far has been about $1.5 million a year for the next decade.

“I felt like the payments that the county’s been getting for a long time have been pretty inequitable,” said Kretz, the bill’s sponsor. “To me, it’s David and Goliath.”

Seattle City Light says it’s facing its own budget problems. The utility just raised rates and is about $33 million short of projected wholesale revenue for 2010.

Still, City Light Superintendent Jorge Carrasco agreed Tuesday to pay $1.6 million for 2009 and the first quarter of 2010, pending approval by the Seattle City Council.

“I’m sure that they’re feeling some pressure from the Legislature,” said Diane Wear, the chairwoman of the Pend Oreille County Board of Commissioners. “I sure would be.”

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com

Seattle Times
Seattle, WA
February 11, 2010

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