City-Sewer District Merger Process Update

April 2024

If you are a Lake Stevens resident, you may have received a letter in the mail in April from Lake Stevens Mayor Brett Gailey on the merger process between the City of Lake Stevens (City) and the Lake Stevens Sewer District (District). As your utility provider, we wanted to be sure you have the most up-to-date and accurate information.

Overview

The District and the City have been collaborating for nearly two years to craft a mutually agreed-upon process to merge District operations with the City prior to the contractual 2033 merger date. The District is dedicated to helping protect ratepayers, public health, and the environment by operating responsibly and ensuring a thoughtful, measured merger in accordance with our agreement with the City.

Since 1957, the District has managed substantial debt, kept rate increases well below the inflation rate, reinvested in rehabilitating the aging sewer system, managed new growth while keeping rate increases as low as possible, and improved several programs ratepayers depend on.

Timeline: City-Sewer District Merger Process
timeline1

2005-2020

In 2005, the District and City entered into a binding legal agreement that described the merger and set the effective date for 2033. In December 2020, the City passed an ordinance to take over District operations in 90 days.

2021-2022

In 2021, the District filed a lawsuit in Snohomish County Superior Court, asking the Court to halt the City’s actions—which breached the original legal agreement—and alleged a violation of the Open Public Meetings Act by the Council and failure to follow proper procedures.

The Court granted the District’s request for an immediate injunction to halt the City’s attempt to assume the District in breach of the agreement while the litigation is pending, and in May 2022 the District and City agreed to pause the litigation and attempt to resolve the matter amicably.

2023

In February 2023, the District delivered a draft settlement and accelerated merger agreement to the city, which included several key provisions aimed at assuring continued commitments to protecting ratepayers, public health, and the environment throughout and following the merger.

2024

The District and City have negotiated and exchanged feedback on the draft agreement since that time. On April 15, 2024, the City notified the District that it would reopen the paused litigation. On the same day, Lake Stevens Mayor Brett Gailey sent a letter to Lake Stevens residents which mischaracterized the merger negotiations and called into question Lake Stevens Sewer District’s commitments to serving ratepayers and protecting the environment.

Addressing Misinformation

The April 15 City letter expressed concerns about “transparency, fairness, and fiscal responsibility” related to recent salary increases. There are a few important facts that the letter does not state:

  • Routine compensation review: The District routinely completes performance reviews, salary surveys and reviews job descriptions to ensure staffing levels are adequate and staff members are compen­sated appropriately when compared with their peers. Commissioners approved cost of living increas­es for all represented and non-represented staff.
  • Salary adjustment for managers: As part of this routine process, District Com­missioners also approved a salary adjustment for managers, based on salary survey data.
  • City participation: The City participated in review of the District's General Manager. The District was not required to invite the City to participate in this review but did so as a good working partner.

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