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Council adopts costly Dillard sewer solution

After nearly five hours of testimony and discussion, members of the Oak Harbor City Council voted on a solution to the Dillard’s Addition sewer controversy designed to stave off lawsuits.

Under the motion, which passed 6 to 1, the city of Oak Harbor will purchase the disputed, low-pressure sewer system for $124,434 from the developer, essentially nullifying a proposed latecomer’s agreement he had hoped to collect on.

Also, the motion directs staff not to enforce requirements that the Dillard’s Addition residents hook into the system within six months and to investigate the residents’ proposal for an alternative gravity system to serve the area.

The motion, which was recommended by city staff, is designed to satisfy both Robert Anderson, who put in the sewer system and wants to be reimbursed, and the majority of residents of Dillard’s Addition, who didn’t want to connect to it and pay for it.

On the other hand, it looks like city residents will get stuck with the bill. The money to purchase the system will come from a sewer fund that sewer rate payers pay into.

Councilman Paul Brewer was the only member to vote against the motion. He said it wasn’t fair for the rate payers to be on the hook for the costly system.

In an interview after the meeting, City Administrator Paul Schmidt said the staff recommended the purchase in order to prevent litigation from either side. He said Anderson clearly had a strong case if the city would have prevented or delayed him from collecting latecomer’s fees. He feels that the Dillard’s Addition residents’ case was far from airtight — and he denies the city did anything incorrectly — but he said defending a lawsuit could be extremely expensive.

“The amount of money to find out if we are right, with the risks should we not prevail, just wasn’t worth it,” he said, adding that the city should recoup at least some of the $124,000 investment if any residents hook into the system.

The question remains of how — and when — residents of the waterfront neighborhood will get off of septic tanks and connect to the city’s sewer system. The residents could elect to fund a regular gravity system through a local improvement district process, also known as an LID, which would allow them to pay for the system over time.

Or, Schmidt suggests that residents could connect to the sewer as their septic tanks fail. He pointed to new state and county regulations governing septic tanks and pollution, which could expedite that process.

Another “looming question,” Schmidt said, is whether the residents or city would own and maintain the grinder pump and wet wells at each home.

The Dillard’s Addition sewer controversy began last April when the City Council approved an application for a preliminary latecomer’s agreement submitted by Anderson under the name Granite Parks Holdings Company LLC. This allowed him to install a sewer system for the entire neighborhood which residents would be forced to hook into and pay a proportionate share of.

The problem was the residents didn’t know about it until crews dug up their streets. The majority of owners of the 30 or so homes were upset that they weren’t notified and had no input into the type of system that was chosen for them. The low-pressure sewer lines require each home to install and maintain a grinder pump and wet well, which wouldn’t operate during power outages.

A consulting firm hired by the city estimated that the net present value for each homeowner over a 50-year period would be $18,644 for the grinder pump system.

City officials contend that earlier notice to homeowners was not required and that the low-pressure system was the least expensive, as well as being the best choice for the sensitive, waterfront environment.

The dispute blossomed from there, with a group of four Dillard’s residents finding a wide range of issues that concerned them, from what they felt was an effort by city staff and the mayor to squelch openness and hide public information to a plethora of laws they felt the city failed to follow.

Tuesday night, the City Council went into a private, executive session to discuss possible litigation involving the Dillard’s Addition controversy. Afterward, city staff and Dillard’s residents offered lengthy and dueling interpretations of laws and regulations, as well as the events themselves.

City Engineer Eric Johnston gave a presentation addressing many of the concerns and accusations that residents brought up during the last hearing, which was continued until Tuesday. He explained that he and Steve Bebee, director of wastewater collection, urged Anderson to install a grinder-pump system in the area because of concerns about what effect a gravity system would have on the fragile waterfront environment.

Johnston argued that the city and applicant followed all the necessary regulations. He said the council should accept the sewer system because Anderson complied with all the conditions set forth at the time of preliminary approval.

Several residents gave presentations, however, challenging the staff’s assertions.

For example, Marc Goetz, part-owner of a home in the Dillard’s neighborhood, said that an email from the city engineer to Anderson showed that the real reason a low-pressure, grinder-pump system was chosen was simply to save the developer up-front costs.

He argued that a shoreline development permit was clearly required because the project was within 200 feet of the water. He said the permit would have led to the neighborhood being aware of the project, which could have averted the controversy.

“I think the people in Dillard’s Addition are truly miffed that they had no input,” he said.

Robyn Kolaitis, another resident, gave a PowerPoint presentation complete with videos of past council meetings. She and a group of several other individuals spent hundreds of hours reading through city files on the Dillard’s sewer, as well as researching city and state laws. She recited a long list of city and state regulations that she felt the city may have violated.

“This is an unfair, illegal and incomplete system,” she said.

Like others in the neighborhood, she argued that a gravity system should have been installed to cover a larger area to reduce costs for each home. She felt this could have been financed through an LID process.

“There are still a lot of unanswered questions and the biggest one is, ‘Why?’” she asked. “Why make us work so hard just to protect the biggest investment of our lives?”

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