Liberty Lake sewer annex ruled illegal

Liberty Lake had its day in court and was slapped around with a vengeance.

During a Superior Court hearing on Friday, Judge Michael P. Price ruled that the city’s attempt to take over the Liberty Lake Sewer and Water District utility’s assets violated state laws.

In addition to invalidating city ordinance No. 120, which initiated the assumption process, Price ordered officials to hold a public vote and do required environmental impact studies before resuming any future takeover activities.

State laws give cities the authority to take over special-purpose utility districts if they meet specific conditions, which the judge said the city failed to meet.

Sewer Commissioner Frank Boyle called the ruling “a slam dunk.”

“We couldn’t ask for anything more,” he said.

When asked about the city’s future plans regarding the utility district, Mayor Steve Peterson replied, “We have clarity on the issue. We know what we need to do, and we’ll go forward from here.”

Peterson and the City Council passed ordinance No. 120 in November 2003. Opponents say the city has no plan for protecting the lake and could raise utility rates, even for those customers living outside the city limits.

In December, the district filed a lawsuit to block the takeover, saying that the city failed to follow state laws, among other points of contention. The three-year-old city countersued to have the district’s suit dismissed, a motion that was denied at a previous hearing.

Friday’s blow followed an April hearing by the Eastern Washington Hearings Board, which found that the city’s comprehensive plan failed to meet state Growth Management Act requirements because it relied on unofficial population projections and lacked key documents.

“The city is once again caught with its hand in the cookie jar, because what they’ve done numerous times is bypass state law,” Boyle said.

The city argued that ordinance No. 120 wasn’t meant as a definitive statement regarding takeover, but indicated a potential future course of action. A study examining the potential costs and benefits of taking over the district was commissioned by the council several months after the ordinance passed and the district filed its lawsuit.

The study isn’t completed, and it is expected to cost more than $50,000.

Attorney Philip Talmadge, who represents the sewer district, said such cases are becoming more common because taking over utilities is a way that newly incorporated cities can supplement low tax revenues.

The city of Spokane Valley indicated Tuesday that it may take over the portion of the county’s sewer system that falls within the city limits. Proponents hope the city can use money from monthly sewer bills to help balance its budget. Cities can also levy a utility tax, while special-purpose districts cannot.

Lorna Willard, a Liberty Lake sewer district customer listed as a plaintiff in the district’s lawsuit, was pleased with Friday’s ruling.

“I’m hopeful the ruling will help the city really take a look at itself and realize this has been pretty divisive for the community.”

Even though Willard lives outside city limits, which state law excludes from the “assumption” vote, she’s encouraged that her friends on the other side can voice their opinion.

“I just kind of want my community back.”