With Merger Scuttled and Matter Headed to Court Again...Could City Tax the Sewer District to Offset Legal Costs? The Answer is Yes.

District commissioners hold control of the purse strings and six year terms to carry out their strategies. What -- if anything -- can the city do to offset actions it sees as untenable?

The cash spigots are open as public funds will be used to finance litigation between the City of Lake Stevens and the Lake Stevens Sewer District, with a merger agreement now further away than any time in recent history.

With both agencies back in court, as J425 reported today, the timeline for any merger is scuttled, thus extending the timeline for litigation off into the horizon.

And with the city having to shell out resources to pay for the litigation, the matter will become increasingly unappealing to the council, the commissioners, the ratepayers and the city residents — note to the city and the district: the last two are the same thing.

So what, short of further litigation, could the city do in response to actions taken by a district controlled by a three person board, a majority of which just re-gained six year terms (and the parallel ability to litigate the matter for the duration of those terms, if they choose)?

One possible path of action for the city is to institute an excise tax on the sewer district, charging them back for any and all costs incurred by the litigation. The city has the power to tax agencies working inside its boundaries, and this power was affirmed by the state supreme court in a case with very similar matters at play. Since the 2020 ruling¹,