Ludlow residents want out of PUD

All county properties taxed, even if not served directly

By Barney Burke
Leader Staff Writer
Port Townsend Leader

Port Ludlow, WA - 12/26/01 - It's not exactly taxation without representation, but Walt Taylor is asking why Port Ludlow residents should keep paying property taxes to the Public Utility District (PUD).

"They've never done a thing as far as I know," the retired newspaper man says. Taylor, 82, and his neighbors are trying to get the new Port Ludlow drainage district under way, and they think they'll get more for their money with their own utility than with the PUD.

Last June, the Ludlow Maintenance Commission (LMC), the homeowners' association which represents more than 1,000 property owners in the North Bay area of Port Ludlow, sent a letter to Jefferson County requesting the formation of a boundary review board.

Their understanding is that forming such a board is the first step in changing the boundaries of a taxing district. Ultimately, they want Port Ludlow excluded from the PUD because they don't believe they'll ever receive any services from it.

After that letter languished, the Port Ludlow Village Council asked the county to look into establishing a boundary review board. On Nov. 8, Chief Civil Deputy Prosecuting Attorney David Alvarez responded with a letter saying, "Only the PUD, a creature of Title 54 RCW, is authorized to act to change its own boundaries." The law does not say how the PUD should go about doing that, Alvarez noted.

"Legally, I don't know if we can change our boundaries," PUD Manager Jim Parker says. Parker notes that people throughout most of Jefferson County - not just Port Ludlow - can make the argument that they don't get water, sewer or other services from the PUD.

Parker points out that most PUDs in Washington don't collect property taxes because they have substantial electrical power revenues. The Jefferson County PUD has discussed the possibility of taking over the Puget Sound Energy system and has also been looking into offering wholesale fiber optic service. Conceivably, properties throughout the county could benefit directly or indirectly from those two utilities, although Taylor says the need for fiber optics is overstated.

"They're not only Johnny-come-lately, they're Johnny-not-needed," Taylor says of the PUD. He's finding that few people even knew they were paying PUD taxes until they heard of his efforts. "I've had more people making nice comments to me in the last two weeks than for anything I've ever done in my life," he laughs.

County Assessor Jack Westerman III recalls that the PUD built a well on the west side of the county many years ago, for the sheriff substation in Clearwater, and suggests that a stronger argument about taxes and services can be made with respect to Port of Port Townsend, which has no facilities or services in West Jefferson County.

In fact, that issue surfaced recently at a port commission meeting. Port Commissioner Bob Sokol has spoken to Marrowstone Island residents about it, at their request, and Port Commissioner Conrad Pirner is slated to meet, in his home district, with the Port Ludlow Village Council Jan. 2.

The port has a public boat launch at Mats Mats Bay, just north of Port Ludlow.

PUD open to change

Port Ludlow is represented by Wayne King on the three-member PUD commission. "If anybody could have done it, we'd have done it in Gardiner," he says of seceding from the PUD. King says he'll be meeting with Port Ludlow representatives this month but doesn't see a way to change the boundaries.

King thinks the only way the PUD can address the concern is to stop taxing throughout the county, as it must tax everyone equally. King believes the PUD could develop enough revenues from electric service to make property taxes unnecessary. "I think it's something we could wean ourselves off of," King says.

Ted Shoulberg, former city counselor, is pleased that Port Ludlow residents are raising an issue he thinks has been overlooked. He says that if Port Townsend can't get out of the PUD, the PUD should at least earmark some of its revenues for projects here. He believes that the Kitsap County PUD has undertaken projects specifically beneficial to Bremerton after that city made the same kind of argument.

The PUD provides no direct services in Port Townsend, and the city is a full-service water and sewer utility.

If it weren't for city residents paying PUD taxes, Shoulberg claims, there wouldn't be enough revenue to finance the PUD's purchase of the Tri-Area water system. But Parker says that deal isn't affected by city tax revenues because it will be funded entirely by Tri-Area customers.

PUD Commissioner Dick Shipman, who represents Port Townsend, says that either telecommunications or electricity service could make the PUD's property tax unnecessary. "If we don't get telecom next year," Shipman says, "I would recommend that we start lowering the taxes a little bit."

He's also open to the idea of the PUD helping out the City of Port Townsend with utility projects with a broader benefit. "I wouldn't rule that out," he says.

PUD chair Ken McMillen has been on the commission for 20 years and says he's also open to ideas for PUD projects that would have a more direct benefit to Port Townsend or Port Ludlow.

Port Ludlow leaders

In Port Ludlow, retired attorney Ron Null and developer Bert Loomis are taking the lead on the issue along with Taylor. Null says that a boundary review commission may not be the only way to achieve their goal. Change could also come through electing new PUD representatives, a lawsuit or other options, but he doesn't have any sense at this time of what the group may decide to do next.

Loomis, a member of the Port Ludlow Village Council who developed the property where the American Marine Bank is located, says the requirement of having a public utility back up the town's private sewer system is a "red herring." He doubts that the PUD has earmarked funds to take it over and feels that the county or a Port Ludlow district could fill that role just as easily.

Also on the village council is Phil Otness, who chairs its utility committee. He's not interested in seeing the PUD undertake projects in Port Ludlow. It's his belief that some of the programs and tax revenues of the PUD are inappropriate, and therefore the PUD tax rate should be reduced or eliminated. However, he sees the PUD as the obvious backup municipal corporation should the private sewer system in Port Ludlow fail. He says his committee will continue working on the tax issue with the PUD.

Otness does see a legitimate need for the PUD's work on the regional water system plan. "That's a reasonable thing that all taxpayers ought to pay for," he says.