By Polly Keary, Editor
A group of Sultan residents seeking a refund of some utility fees they say were mismanaged will get a second chance to get a court hearing.
The Utility Stakeholders Group is suing for a return of funds they say were improperly used to pay for the wages of city employees for work not related to utilities.
In mid-October a judge at first refused to hear the case, saying the Utilities Stakeholders Group hadn’t followed the proper procedure. Before suing a city over mismanagement of funds, a plaintiff is supposed to appeal to the State Auditor. Only if the auditor refuses to investigate can a plaintiff then take a city to court.
But the Utility Stakeholders Group filed a motion to reconsider, arguing that the group had gone to the auditor and the Attorney General, and both declined to investigate before the fall of 2013, which is when the next city audit is scheduled to take place.
Oct. 31, Snohomish County Superior Court judge David Kurtz granted the motion to reconsider, and the case will now go to the next step.
The Utility Stakeholders Group alleges that since 2009, the city has charged too much staff time to the utility fund.
City run utilities are each managed in separate funds, and each fund is supposed to pay for itself, and can’t pay for anything else.
The law allows city governments to divvy up the cost of staff salaries between funds when staff manage several funds at once, as they typically do in small cities.
But the plaintiffs think that the utilities fund is being used to cover unrelated staff time, which they believe makes it an unlawful tax.
“They are saying that one day a week of staff time went to garbage, water and sewer, or that 60 percent of the staff time went to those three things,” said Utility Stakeholders Group attorney Eric Stahlfield. “To me that seems far more than what they actually spent.”
The group believes the money is being used to supplement the general fund.
“Here, plaintiffs allege the city is raising revenue through its utility rates to pay for general-not utility governmental-purposes,” reads a legal document written by the group’s attorney.
Stahfield said that his clients aren’t yet asking for a specific amount of money, and there aren’t plans as yet as to how that money would be divided.
Currently, the case is in the discovery phase, in which each side seeks information and builds its arguments. A court date for a hearing has not been set.
So far, the city of Sultan has spent about $10,000 in legal costs defending the case.
“It has not been discussed with council as to what our next steps are,” said Sultan mayor Carolyn Eslick.