PORT ANGELES — The National Park Service is expected to sign Monday a settlement with the city of Port Angeles over the transfer of the Elwha water facilities, a landmark agreement that the City Council approved last week.
The council voted 7-0 Tuesday to accept the $6.65 million transfer agreement with the U.S. Department of Interior, ending a two-year stalemate over infrastructure built for the removal of the Elwha dams.
The action quashes a lawsuit that the city filed against the federal government July 27 as a backup to settlement negotiations.
The National Park Service is part of the Interior Department.
“I’m extremely happy that we were able to amicably resolve the issues relative to the transfer of the Elwha water facilities,” City Manager Dan McKeen said in a Friday interview.
In exchange for taking ownership of the National Park Service-built infrastructure that provides industrial water and a backup supply of potable water, the city will receive $6.65 million for operations and maintenance and a pledge from Interior to request an additional $2.5 million for the city in the 2020 federal budget.
The city will provide hatchery water to the Lower Elwha Klallam Tribe at no cost to the tribe for 10 years.
Further details about the settlement were expected to be announced after the agreement is signed and the parties issue a joint news release Monday, McKeen said Friday.
City officials said the settlement averts costly litigation and risk.
“I think that the honest thing to say is that this is a compromise,” Council member Mike French said at the meeting.
“We are kind of stopping a step short of being made whole, but I do think that the amount of effort and cost that would be associated with either litigation or further negotiation would see diminishing returns.”
French added: “I think this is the best deal the city is likely to get.”
McKeen would not discuss the negotiations or the ramifications of the transfer agreement Friday.
The parties had agreed to issue a joint public statement about the transfer, according to the council-approved document.
“It’s been a long, hard-fought two years,” Council member Cherie Kidd said before making a motion to approve the settlement.
“I appreciate that we’ve gotten to this point, and I believe that it’s the best interest of the citizens of Port Angeles to accept this agreement at this time.”
The longstanding dispute between the city and the National Park Service had centered on the quality and availability of water from the Elwha River after the Elwha and Glines Canyon dams were removed from 2011 to 2014.
City officials said the government failed to meet its obligations under the 1992 Elwha River Ecosystem and Fisheries Restoration Act, or Elwha Act, to protect the city’s water right after millions of cubic yards of sediment were flushed downstream.
The Elwha Act guaranteed that Interior would protect the quality and quantity of the city’s water as it existed prior to dam removal, City Attorney Bill Bloor told the council last week.
“We do have some really strong claims,” French said.
“If we read that Elwha Act from 1992, it’s very clear. But having discussed these claims over and over in closed session, there is risk, definitely, of going to trial.”
The city hired Lane Powell PC, a Seattle firm with expertise in federal litigation, to help with the transfer of the Elwha water facilities on a not-to-exceed $830,500 contract.
Lane Powell attorney Grant Degginger filed the lawsuit on behalf of the city in U.S. District Court in Tacoma, seeking unspecified damages and an injunction on the transfer of the Elwha water facilities.
The lawsuit claimed that the city would be “financially crippled” if it accepted the facilities in their current state without compensation.
Potential rate increases from the added cost of operations had “damaged the city’s ability to attract industrial customers,” the lawsuit said.
The city’s industrial water is diverted from the river at the Elwha water facilities and conveyed to the mill on Ediz Hook.
Port Angeles municipal water comes from the Ranney Well, a groundwater collector near the river that functions independently.
During dam removal, heavy loads of sediment clogged the industrial water intake and damaged the Elwha facilities’ pumping station.
Temporary facilities that were built during a pause in the historic demolition of the century-old dams have become permanent.
“What we had in place prior to dam removal was a very simple, very reliable, inexpensive system,” Bloor told the council.
“What they constructed was complex and expensive, and it turned out to be inefficient.”
City officials estimated the cost of operating and maintaining the Elwha water facilities would rise from $60,000 to $600,000 annually.
Rather than taking on the Elwha water facilities in 2016, the city invoked a dispute resolution clause in a memorandum of understanding with Interior.
The regional Office of the Solicitor denied the city’s request for $60 million in mitigation funding, citing “no credible evidence to establish any negligent or wrongful act or omission” on the part of the government as required under the Federal Tort Claims Act.
The claim was also found to be “untimely” because the request was made after the statute of limitations had expired, according to a Jan. 29 denial of the city’s appeal.
In April, Port Angeles Mayor Sissi Bruch, Degginger and McKeen traveled to Washington, D.C., to make the city’s case in meetings with congressional representatives and high-ranking Interior and NPS staff.
During their trip, U.S. Rep. Derek Kilmer, D-Port Angeles, raised the issue of the Elwha water facilities with Interior Secretary Ryan Zinke in a House Appropriations Subcommittee budget meeting, McKeen said.
“Secretary Zinke at that time made a personal commitment to get personally involved,” McKeen told the council last week.
“I really would like to express my gratitude for Secretary Zinke making that personal commitment.”
Bruch added her thanks for city staff, Zinke, Kilmer and U.S. Sens. Patty Murray (D-Seattle) and Maria Cantwell (D-Mountlake Terrace).
“Without their help, we would have not gotten here,” Bruch said.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at rollikainen@peninsuladailynews.com.
