City Council approves controversial building buy

February 6, 2015

By Christina Corrales-Toy

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The Newcastle City Council officially authorized City Manager Rob Wyman to go ahead with the controversial purchase of a Coal Creek Utility District-owned building at the Jan. 20 regular meeting.

Under the terms of the agreement, the city will pay $250,000 for the 129th Avenue Southeast building appraised at about $750,000. In addition, the city will agree not to assume the utility for the next 10 years.

The purchase has been surrounded by controversy since the council first approved it in a 4-3 vote Sept. 16. Deputy Mayor John Drescher, Councilman Gordon Bisset and Councilman Rich Crispo voted against the deal then, and did it again Jan. 20.

Former and current council members alike have raised questions about the agreement’s legality, feasibility and the logic behind giving up the city’s right to take over the district for the next decade.

“You want to make us roll into Bellevue’s arms really quickly? Make purchases like this and then we’ll be forced into their arms,” Drescher said. “I, for one, want to stand alone and stand strong as Newcastle, and the only way we’re going to do that is to be really wise about how we spend our money. There’s no wisdom in this decision, none.”

Drescher’s comments stem from the fact that if the city assumed control of the utility, as it legally has the power to do, all it would need is four votes of the council and approval from the King County Boundary Review Board.

The city would then assume all of the district’s assets, including the building at the heart of the discussion, for free.

Councilman John Dulcich and Mayor Steve Buri argued that it wouldn’t really be “free,” though. Legal fees, a paid analysis of assuming the district and other miscellaneous filing costs would come with assumption.

“Let’s not kid ourselves that assuming a district that doesn’t want to be assumed would be free,” Buri said. “It’s not free.”

Wyman reiterated Jan. 20 that the city needs the building. It will serve as a place to store and work on the city’s public works vehicles, which are currently parked at City Hall. It could also serve as a future museum for Newcastle Historical Society artifacts.

Get involved

The Coal Creek Utility District Board of Commissioners will hold a public hearing Feb. 11 to hear comments regarding the utility’s controversial deal with the city of Newcastle.

The public hearing begins at 6 p.m. in the utility’s district office, 6801 132nd Place S.E.

Call Coal Creek Utility District general manager Robert Russell at 235-9200 for more information.

The city of Newcastle long expressed interest in the property, said Robert Russell, CCUD’s general manager. The district and city entered into informal discussions about an agreement in 2010, he added.

Utility district officials worked with the city to offer a budget-friendly price for the $750,000 property, Russell said. The result was the $250,000 price tag and the 10-year non-assumption clause.

“The non-assumption agreement is important to the district because it gives the district assurance to be able to plan for the future and continue to serve our utility customers,” Russell said.

The 10-year non-assumption agreement unjustly binds the hands of future city councils, though, according to former Newcastle City Councilman Sonny Putter, who has been a constant presence at recent meetings, speaking strongly against the purchase.

He has consistently contended that the deal is illegal and a misuse of public funds.

Putter isn’t the only former council member speaking out against the agreement, though. Prior to the Jan. 20 vote, in a stunning reunion of public servants, four former Newcastle City Council members, including two former mayors, used the public comment period to urge a no vote on the purchase of the building.

Former council members Bill Erxleben, Claudia Hirschey and Jean Garber joined Putter in insisting the council conduct a thorough analysis on the financial impacts of assumption prior to making any decision.

“Please do not throw a quarter of a million dollars of the city’s limited funds out the window,” Putter said. “Make a decision based on facts, not feelings or favoritism.”

Councilwoman Lisa Jensen noted that the agreement doesn’t preclude the city from assuming the district if both parties agree at any time, though.

Bisset, who admitted he believes the city should assume the district, said the lack of a city-owned utility prompted popular Public Works Director Mark Rigos to leave for North Bend, where he can manage a utility district.

“I just about croaked, because I’ve been in favor of taking over that district for many years, and here we lost an extremely good employee,” he said.

Dulcich noted that other cities have non-assumption agreements with utilities, including neighboring Issaquah. That agreement came in 2014 after a nasty feud between the city and the Sammamish Plateau Water and Sewer District.

“This is an issue that shouldn’t be an issue,” he said. “We’re giving away nothing here. It’s not a nefarious action. This is best for the community.”

Putting himself in a taxpayer’s shoes, Buri said any private citizen would jump at the opportunity to acquire an asset at one-third of its value.

“If a taxpayer were in this position, they would do the exact same thing,” he said, “even if there were a 10-year encumbrance on the property.”

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One Response to “City Council approves controversial building buy”

  1. A. Roosme on February 9th, 2015 10:12 am

    Thank you for the article about how City of Newcastle is wasting our tax dollars.

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