SENATE BILL REPORT

SHB 1217

BYHouse Committee on Local Government (originally sponsored by Representatives Cooper, Ferguson, Haugen and Hine)

Revising provisions for water and sewer districts.

House Committe on Local Government

Senate Committee on Governmental Operations

Senate Hearing Date(s):March 29, 1989; March 30, 1989

Majority Report:  Do pass as amended.

      Signed by Senators McCaslin, Chairman; Thorsness, Vice Chairman; Conner, Sutherland.

Senate Staff:Sam Thompson (786-7754)

                  March 31, 1989

AS REPORTED BY COMMITTEE ON GOVERNMENTAL OPERATIONS, MARCH 30, 1989

BACKGROUND:

Sewer districts and water districts are authorized to acquire property necessary for their purposes, and to provide sewer or water facilities.  They are permitted to annex territory that is adjoining or in close proximity to district boundaries.  Districts located in certain small counties composed entirely of islands may annex any non-adjoining territory.  Two or more districts are permitted to consolidate or merge if they are adjacent or in close proximity.

The board of commissioners of sewer and water districts may sell district property if the property is found to be unneeded by a unanimous vote.  A notice of intention to sell district property must precede a sale.  No notice is required for sale of personal property valued at less than $500.  Sewer district personal property valued at less than $500 may not be purchased by a commissioner or an employee of the district, nor by relatives of the commissioners or employees if a sale is not preceded by a notice of intention to sell.  District real property may not be sold for less than 90 percent of its appraised value.

General laws prohibit any local government official from entering into a sales contract with the local government.

SUMMARY:

Sewer and water districts are granted clear authority to construct, acquire, and own buildings and other necessary facilities.  They may annex any territory located in the same county or counties in which they are located.  They may also annex territory that is adjoining or in close proximity if it is located in another county.  Any two or more sewer districts or water districts may merge or consolidate.

Boundary review board objectives are amended to allow noncontiguous annexations, mergers or consolidations by sewer districts and water districts.

A sewer or water district board of commissioners may determine by majority vote rather than unanimous vote that district property is not needed and may be sold.  The maximum value of district personal property that may be sold without prior notice of intention to sell is raised from less than $250 to less than $500.  A district is permitted to sell real property for less than 90 percent of its value if the property is valued at less than $500.

Language prohibiting sewer district commissioners and employees from purchasing district personal property that is sold without notice of intention to sell is stricken.

Water districts are permitted to contract to manage other water systems.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

SUMMARY OF PROPOSED SENATE AMENDMENT:

A sewer or water district board of commissioners must base charges for connection to a district's sewer or water system on a pro rata share of specified costs.  These costs include the cost of existing facilities, the cost of facilities planned for construction within the next 10 years according to a district's adopted comprehensive plan, and other costs borne by the district which are directly attributable to the improvements required by property owners seeking to connect to the sewer or water system.  A connection charge can include accrued interest applied from the date of the construction of the sewer or water system until the connection or ten years, whichever is shorter.  The accrued interest will be based upon the rate applicable to the district at the time of the construction or major rehabilitation of the sewer or water system, or at the time of installation of the sewer or water lines to which the property owner is seeking to connect. 

Revenue from connection charges (excluding permit fees) are to be considered payments in aid of construction as defined by Department of Revenue administrative rule.

If a district approves an extension of a sewer or water system that will be financed by property owners, the district must, upon request, establish latecomer contracts providing for reimbursement of the owners by other property owners that subsequently connect to the system.  Construction of an owner- financed extension is contingent upon comprehensive plan approval.  Connection of the extension to the district system is conditioned upon construction according to plans approved by the district, inspection and approval of the system by the district, transfer of the extension to the district without cost to the district, payment of all connection charges to the district, full compliance with the contract, provision of sufficient security to the district to ensure completion of the extension, payment to the district of all district costs associated with the extension, and verification and approval of all contracts and costs related to the extension.  The latecomer contracts must be recorded in the county auditor's office.

Owners subject to the latecomer contracts will receive a pro rata share of construction and contract administration costs of the sewer or water project.  Sewer and water districts that finance construction projects may utilize latecomer contracts for reimbursement to the district, if the board of commissioners specifies the conditions of district participation in the project in a resolution.

Senate Committee - Testified: Joe Daniels, Washington State Association of Water and Wastewater Districts (pro); Dave Rogers, citizen (pro); Mark Triplett, Homebuilders Association (pro); James Henry, Washington State Association of Sewer Districts (con)