PORT TOWNSEND — Two Port Townsend residents have filed a class-action lawsuit against Jefferson County Public Utility District, charging that PUD has unlawfully levied a tax, making city property owners pay for water service they already receive from the city of Port Townsend.
Former Port Townsend City Councilman Ted Shoulberg and property manager Charles Haniford filed the lawsuit July 17 in Jefferson County Superior Court on behalf of about 6,000 city residents.
“I looked at the enabling legislation for a PUD, and there was a clause that says you can’t tax a municipality if you have a PUD,” Shoulberg said.
The lawsuit asks that the court order PUD end its taxation of Port Townsend residents and reimburse tax monies the city has paid.
Shoulberg has long questioned PUD’s ability to tax inside the city limits, where the city of Port Townsend provides residents’ water and sewer service, but it wasn’t until recently that he said he decided to hire Seattle attorney David Bricklin to file suit.
Explaining his reason for filing the lawsuit, Shoulberg said, “You get a service, you pay for it. You don’t get a service, you don’t pay for it.”
PUD commissioners President Wayne King said the law Shoulberg speaks of came about in 1936, when Jefferson County PUD was formed, leaving it one of two PUDs statewide that taxes the entire county.
The PUD’s levy is about 9 cents per $1,000 of assessed valuation and generated about $375,000 in revenues during 2008, budget figures show.
“The sad thing in this lawsuit is who’s going to pay? The taxpayers of Jefferson County, and that includes Port Townsend,” King said, expressing his disappointment that the suit was filed.
King said the PUD has acquired Peterson Lake in the Eaglemount area and has contracted a study for seawater desalination, or reverse osmosis, both water production options that could benefit the city of Port Townsend as well as Jefferson County.
Water supplies and rights are in question under state Department of Ecology’s proposed in-stream flow rule, with limits intended to protect future water for fish, farms and people.
Potable water produced through desalination could be produced at a cost of about $1 per 1,000 gallons, King said.
King said the PUD is also in the process of exerting the authority voters granted it last November — negotiating with Puget Sound Energy executives over the possible acquisition of electric utility facilities in East Jefferson County. The city could benefit from the service through discounted power rates from Bonneville Power Administration.
Shoulberg argues, “If you want to use taxes, give it to the city as a pass-through.”
Shoulberg asked the state attorney general to institute action against the PUD, but that request was refused, the lawsuit document states.
The court document shows that Shoulberg paid $370 in PUD property tax and Haniford paid $339 since 2006.
Shoulberg said the city has asked PUD for reimbursement of the tax dollars, and PUD has refused.
Shoulberg supports the city, rather than the county, forming its own PUD to produce and sell power to city residents, he said.
“If you do it in the city, you can incrementalize it and ultimately take on the whole county.”
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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com.
