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Spokane, Washington  Est. May 19, 1883
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Spokane shuts off water to Fairways Golf Course amid long-standing rate dispute

UPDATED: Tue., May 30, 2017

The city of Spokane shut off the water Tuesday to the Fairways Golf Course in the middle of a yearslong dispute regarding unpaid bills and a brewing legal fight over how the city charges for water to customers outside the city limits.

But city officials say the water shouldn’t have been on in the first place because it was shut down last year as a result of unpaid bills.

The most recent shutoff came on a day when the temperature reached 90 degrees and it could mean that the golf course, located on the West Plains, may have to cease operations within days, longtime club professional Kris Kallem said.

“Unless something gets worked out with the city very soon, the course is going to suffer some damage,” Kallem said. “We can’t go forward paying their exorbitant fees.”

City spokeswoman Marlene Feist said the city was surprised to learn the water was on Tuesday when utility employees checked what they thought was a leak and learned that Fairways was using water.

“There is a really long history here,” Feist said. “We have done things to try to address their concerns over the years. We felt we were at the end of that process, and then we were faced with a new bill in arrears.”

The immediate concern for the city is a $40,740 outstanding bill for two months from the last golf season. City officials have offered to have Fairways pay $15,000 upfront and $5,000 a month during the golf season to pay back the old bill while continuing to pay the current use.

But Kallem said the course would be forced to shut down if it paid the new rate of $1.37 for every unit (748 gallons) and the extra $5,000 a month.

“There is no way we can do that,” Kallem said. “Either you try to pay the city and lay people off, or go the legal route and see if you have any standing.”

The dispute goes back to the 1980s with the formation of a housing development. The city extended water service to the area with the idea that it could be annexed in the future.

In 2004, Robert “Buster” Heitman purchased land around Fairways Golf Course consisting of 94 lots. But Frank Freeze Inc., the golf course owner, canceled its lease agreement for the course and was preparing to close it in 2006.

Heitman then entered a lease-option for the course in 2007 only after he approached the city and received a written commitment for lower water rates.

Former Water Department Director Brad Blegen wrote an email to Heitman outlining how the course planned to improve its water conservation and eventually get down to 69 cents per unit, which is about half what the course paid per 748-gallon-unit last year.

As part of the same agreement, the city passed an ordinance pertaining to water usage at golf courses. It stated that courses that used fewer than 40 million gallons a year would then get a rate reduction the next year.

During the next 10 years, Fairways used less than 40 million gallons six times. It averaged 37 million gallons during that decade but received no reduction in the water rates. During the same time, the four city-owned golf courses averaged between 46 and 60 million gallons a year.

“We’ve done everything the city asked us to do. They made that commitment to Heitman and obviously never followed through with it,” Kallem said. “By my count, they have overcharged us $200,000 for the last 10 years.”

Feist disputes Kallem’s claim and said the city provided the course a discount for conserving water when it used less than 40 million gallons in a year.

Spokane charges 5,300 of its customers who are outside city limits higher rates. For residential customers, out-of-city rates are 50 percent higher. Commercial rates are more complex but also about 50 percent higher.

“They created within that ordinance golf courses as their own unique rate class. But they say ‘No, we consider you an outside-city rate.’ Their ordinances are conflicting,” Kallem said.

Feist said although the golf courses are elgible for discounts for conservation, golf courses don’t have a unique rate class. She added that the city requires all bills to be paid to maintain the service.

“This is something we have to do to keep that utility whole and to provide that service,” she said. “We try to help as much as we can to make payment arrangements. But we are required to make sure that we are not subsidizing one company with another customer’s payment.”

Spokane attorney Bob Dunn sent the city a letter on May 17 saying that the city would cause “irreparable harm” if it denies water usage to the golf course.

“If the city refuses to timely reconsider its illogical and unlawful course of conduct, the tort claim will be filed,” Dunn wrote. “I can assure you if this matter proceeds, the city will ultimately seriously regret the inevitable outcome.”

The city responded on May 22 with a letter sent by Assistant City Attorney Elizabeth Schoedel. She wrote that the city disagrees with Dunn’s interpretation of how the city charges for water outside of city limits.

“At Mr. Heitman’s request, the City proposed a payment plan to allow Fairways to receive water and pay towards the delinquency as a condition of restoring water service,” Schoedel wrote. “The City continues to be willing to set up a reasonable payment plan.”

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