State sues town of Steilacoom over Western State Hospital sewer bills

The state is suing the town of Steilacoom about the cost of its Western State Hospital sewer bill.

The Attorney General’s Office filed the suit on behalf of the state Department of Social and Health Services on Jan. 20 in Pierce County Superior Court.

The state contends Steilacoom has overcharged for Western State Hospital’s use of the sewer system for more than two decades. It alleges the town violated agreements, has an inequitable rate structure and billed the state unreasonable connection charges.

“Currently, Pierce County charges Steilacoom $33,397 per month to treat the sewage from Western State Hospital,” DSHS spokeswoman Kelly Stowe wrote in an email. “Steilacoom in turn charges WSH $81,720 per month.”

The difference between the two charges includes hook up and other costs Steilacoom passes on to its customers. The hospital accounts for 40 percent of Steilacoom’s system.

The town of 6,100 people has provided sewer service to the hospital since 1964. In 1987, the town contracted with Pierce County to run its wastewater through the county’s Chambers Creek Wastewater Regional Treatment Plant.

At the time, Western State could have stopped using Steilacoom for treatment and instead hooked into Pierce County’s plant.

But officials kept the connection with the town, which then passed the wastewater to the county. A series of new agreements have been drafted in the decades since.

“It’s two willing parties that entered into those agreements,” Steilacoom Town Administrator Paul Loveless said. “The town has simply continued the process set forth in the agreements.”

The state paid $1.27 million to the town in 1988 to cover the cost of tapping into the county plant, according to the lawsuit.

Despite paying the full amount requested by the town, the state says it has been charged $9,743 every month since 1990 for the connection. That amounts to more than $3 million for capital costs related to design, construction and connection charges, according to the suit.

The hospital previously asked that its billing status be changed from hospital to commercial, but hasn’t provided information necessary for the change, Loveless said.

“I get that they would like to have some rate relief. So would I,” Loveless said. “However, at the end of the day, they are still a major component of our system.”

The state filed the suit now because past discussions haven’t changed the situation and “every dollar DSHS spends on operation costs is a dollar that’s not being spent serving the state’s most vulnerable residents,” Stowe said. State and town officials met Thursday to discuss the lawsuit. They plan to meet again soon, Stowe said Friday.

“The town does not want to end up in court and waste taxpayers’ money on a lawsuit,” Loveless said. “That’s not the way we do business.”

Stowe echoed the sentiment.

“The hope is to still resolve this amicably out of court,” she said.

This story was originally published January 31, 2016 at 4:19 AM with the headline "State sues town of Steilacoom over Western State Hospital sewer bills."