On June 11, 2019 at 7PM in the Snoqualmie Casino ballroom, members of the Sallal Water Association will vote on an amendment making several changes its bylaws, an amendment that could have big consequences for the 50-year old water coop – and even threaten its existence.
Earlier this year about 200 members – many opposed to the idea of Sallal signing a wholesale water purchase agreement with the city of North Bend – petitioned to change the bylaws, proposing an amendment that would require a full membership vote to approve water purchase contracts. It would take that power away from board members who are currently charged with making those complex decisions for the association. Supporters of the amendment believe that because the water association is owned by the members, that all members should be voting on important contacts/agreements.
The Sallal Board is recommending members vote against the June 11th amendment. Their reason is twofold: 1) a water agreement with North Bend is only viable solution for Sallal to serve new homes and in absence of such agreement, the City of North Bend will begin serving new development inside Sallal’s service area, increasing the risk of condemnation of the association; 2) the way Sallal’s voting system is structured, only a 5% turnout and simple majority is required to validate new amendments. That means under the current system, only 85 members – out of 1700 connections – would have to vote, with 43 voting yes, to approve complex water agreements.
As structured, a small number of members or a special interest group could control the future of the large association. Sallal Board Member Daylin Baker commented that she feels some in the community are using water as a way to slow/stop growth. She said she thinks many members would like to slow grow in North Bend if there was a legal, legitimate way to do it, but putting Sallal at risk of ‘invasion’ by the city is not the way to do it.
Both Sallal and the city are bound by a legal duty to serve new development if water is available. In North Bend water is available. The city was issued a very large water right in 2008 by Washington State DOE. North Bend was issued enough water rights to serve its entire Urban Growth Area – which includes some Sallal’s service area. That city water right covered the future water needs of North Bend and Sallal and assumed they would use a water agreement structured so Sallal would get un-chlorinated water from North Bend’s centennial well and in exchange Sallal would sell North Bend mitigation water from its Rattlesnake Lake wells.
This is one of the key reasons the state will not issue new water rights to Sallal – because their future water needs are already covered by the large water right issued to North Bend. So although Sallal does not have enough water rights remaining to serve new development, it does have water options to continue serving if an agreement is signed with North Bend.
Last summer, though, some members began to vocally oppose that water agreement, which prompted North Bend to look for other mitigation water sources, including the Cascade Golf Course well they recently purchased. At that time a Sallal advisory vote also showed a strong majority opposed signing the water agreement, but only 16% of members voted – although that seemingly low turnout was considered a big turnout as very few member typically vote.
Some development projects stalled while the water agreement talks continued, but now the first developer, Shelter Holdings, has said it won’t wait any longer and has petitioned the county to allow North Bend to be the water purveyor for the 212-unit apartment complex approved by the city for the Dahlgren Property. The appeal says Sallal cannot provide water in a timely manner. Sallal is not opposing the developer’s request to allow North Bend inside its service area because doing so could lead to a lawsuit by the developer.
The Dahlgren project is considered to be the first domino that could fall and determine the future of Sallal. And the risks are big. Without a water agreement, every new project planned in the city limits of North Bend that lie in Sallal’s service area will likely petition to have North Bend be the water purveyor, as the city has water and is bound by a duty to serve or be at risk for lawsuits.
According to Board Member Baker, the more service North Bend provides within Sallal’s area, the greater the risk for condemnation of the entire association, which is a longterm solution North Bend Interim City Administrator Mark Rigos has already said he prefers.
Increased water rates are also a risk to Sallal members if North Bend becomes the water purveyor. Currently Sallal’s water rates are estimated to be at least 40% cheaper than city rates.
Baker said Sallal has some protection from condemnation by terms in the USDA loans used to finance its infrastructure, but she said those protections lessen if they do not have enough water to serve all – which they do not without the water agreement.
North Bend and Sallal are still working on that water agreement. The two sides met in April. The Sallal Board feels is it in the association’s best interest sign an agreement, as all other options have been exhausted. It also reiterated that water purchased from North Bend would be non-chlorinated, something that is important to many Sallal members.
So it all comes down to one vote. The Sallal Board is currently working to improve communication with members in hopes that more members understand everything at stake and cast votes. Included in those communication efforts are monthly newsletters that answer membership questions and efforts to create a member advisory board.
Baker said no water agreement will be signed before the June 11th vote or before the results of the Golder Water Study are known. If members approve the amendment, she cautioned that it is still subject to approval by the USDA which has financed Sallal’s infrastructure loans.
About the Amendment: It would require member approval via a vote for any action that meets any of the five specified criteria: buying water, selling water, supplying mitigation water, transfer of water or water rights, and any certificates of water availability beyond Sallal’s capacity. The amendment includes exceptions to these criteria to allow for some emergencies and for agreements already in effect like Sallal’s contract with Wilderness Rim. The process for future voting (when an action meets the criteria) describes calling a special meeting to discuss the issue and the requirement of a board presentation. A second special meeting must be called to hold the vote. 30 days notice must be given prior to both meetings.