City Hall

Utility Sale to Shoreline Could Cost City $2 Million a Year, Increase Water Rates

By Erica C. Barnett July 30, 2012

The city council adopted a resolution today agreeing to "consider" selling some $26 million worth of Seattle Public Utilities assets---pipelines, pumps, and meters---to the city of Shoreline, which, since incorporating in 1996, has paid the city to provide its water. Shoreline, which has 11,000 SPU ratepayers, has been trying to create its own water utility since 2001, and has a measure on the ballot this coming November to create an independent city utility.

Only Tim Burgess and Bruce Harrell voted against the resolution. At this morning's council briefings meeting, Harrell said the resolution "seems to signal more than that we're interested in having a discussion" with Shoreline---"I think it signals intent" to sell.

Jean Godden, a sponsor of the resolution, responded, "This is not setting a price. It's expressing an interest in selling. It seemed like a fair thing to do for the regional feeling we have for Shoreline."

For Seattle, the sale would mean an average increase in utility rates between 2 and 4 percent, plus a $2 million annual hit to the city's revenues from the loss of Shoreline's 15.4 percent utility tax and 14 percent surcharge.  "They're a profit center for us. We're making a fair amount of money," SPU spokesman Andy Ryan says.

So why accept a deal that costs the city money and has no obvious tangible benefits? Goodwill, SPU corporate policy and performance director Judy Gladstone says. "The main reason is if the shoe were on the other foot, we'd want to be treated the same way. ... If we say no, we look like big gorillas and that's not where we want to be. It's really about being good neighbors and feeling it's the right thing to do, even though it may be that the costs are higher for the folks in [Seattle], Gladstone says.
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