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City eyes potential annexation loophole

POULSBO — Poulsbo may have its hands tied in terms of inking annexation agreements with owner of property outside the city limits but the ropes will loosen early next month when a contract is scheduled to be signed with Puget Sound Energy.

On June 5, city council is expected to seal a “past-minute” deal with the Thompson Road company that apparently flies in the face of a recent state Supreme Court ruling. The very next week, the council will be taking a closer look at its annexation policy and will likely adopt new standards that reflect the high court’s March 14 decision, which made the practice of such pre-annexation agreements illegal.

The loophole the city is hoping to slip through has opened because the PSE-Poulsbo contract was already “in the works,” according to Public Works Supt. Bill Duffy. Duffy said the agreement had also received a much-needed blessing from City Attorney Jim Haney.

This fact won’t make the city’s decision to extend its utilities to the energy company any more popular.

When Poulsbo adopts its new standards for annexation, council will also have to decide whether or not it will continue it’s long-standing practice of providing water and sewer to potential rate payers outside the city limits. Staff has recommended against it because, without the agreements, Poulsbo runs the risk of extending services to customers who may never decide to annex into the city.

As a result, council can either not extend services at all, extend services and not offer them to un-annexed ratepayers or take a leap of faith — ditch the staff proposal — and hope residents and business owners decide to annex into the city without any incentives.

But why Puget Sound Energy?

Duffy said the pipeline project, which will pump water from a city well to the water tank at the Olhava-based Olympic College branch campus, crosses the PSE property.

Without the pipe, the tank would have no water and without the water, combustible construction cannot start at the 20-acre site on the city’s north western edge. No agreement potentially means no college for Poulsbo.

“It’s the opportunity to be a good neighbor,” Duffy said of the agreement with PSE.

However, there is still some question whether Poulsbo will extend such courtesies to residents and business owners on the north end of Viking Avenue, who have been anxiously awaiting the same city services for some time now.

“We’re still looking at (Viking Avenue),” Duffy reported Friday morning. “There’s still an interest. We have a couple others that the city is now evaluating.”

Even though it would bring in additional utility fees, the proposal to allow what could be Poulsbo’s last pre-annexation agreement brought more questions than answers Wednesday night during the Poulsbo Public Works Committee.

“How can we do it after the Supreme Court decision?” Councilwoman Jackie Aitchison asked before being informed that the city attorney had reviewed the issue and said it was legal. “Haven’t we got to repeal this part of our code so we don’t do these extensions?”

“There’s a point that we have to cut it off,” Duffy replied, reiterating that at the earliest council would be making a final decision on the matter would be June 12.

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