Is Lakewood's Sewer Franchise Fee Honest?

Editor's Note: This first appeared Thursday, January 26, 2012, in The Tacoma News Tribune.

I think the city of Lakewood believes it has found a way to line its pockets with more of your money, and I’m trying to put a stop to it here at the Washington State Legislature.

Several years ago, the Tillicum area of Lakewood needed to have a sewer system installed, and the city and state chipped in to provide one. The rest of the sewers in Lakewood are owned and operated by Pierce County, but the city controlled the Tillicum sewers. To help pay off the Tillicum sewer bond, Lakewood began requiring all of its residences and businesses to pay a surcharge, which is now up to $3.25 per month.

At that point the city handed control of the Tillicum sewers over to Pierce County, along with a promise that the city would not compete with the county for control of the sewers. In exchange for that promise, the county agreed to pay a franchise fee to the city, even though the city no longer has anything to do with the Tillicum sewers beyond recouping its original installation costs.

Meanwhile, Pierce County is now passing the cost of that franchise fee onto Lakewood residents, charging each household around $4 more. Together, the two amounts comprise approximately one-tenth of an average Lakewood sewer bill. So in addition to the original surcharge that goes to the city of Lakewood, residents are also paying a franchise fee to the county which in turn hands it over to the city of Lakewood, potentially netting the city up to $600,000 per year. 

What’s worse is that the money being collected by the county and transferred to the city is being deposited into the city’s general fund, rather than into a dedicated account to be used only for sewer-related expenses. Under state definition, this is not a fee for a service being provided, but a tax. The city may even claim that it is collecting the money to be used for some future sewer-related expense. However if the city really wanted to help taxpayers, they could do so by using the extra money to pay off the Tillicum sewer.

While the city and county are arguing that they are allowed to impose the new fee, I believe that it is nothing more than a way to collect more of your money to spend on whatever the city wants. My biggest concern now is that other cities will see the deal that Lakewood and Pierce County have worked to collect more revenue and take it as a cue to tax their residents more as well.

I’ve proposed Senate Bill 6110, which would prevent cities from charging franchise fees (or any other type of fee for that matter) on a sewer utility unless it is legitimately and clearly tied to an expense the city has related to the sewers. When a city does have legitimate sewer-caused expenses, the revenue collected would have to go into a dedicated fund solely for that purpose, and not deposited in the city’s general fund. Until a city can show adequate proof that a utility is costing the city money, it shouldn’t be allowed to create new franchise fees paid by residents and businesses.

Editor's Note: This first appeared Thursday, January 26, 2012, in The Tacoma News Tribune