Under the terms of the agreement, the city will pay $250,000 for the 129th Avenue Southeast building appraised at about $750,000. In addition, the city will agree not to assume the utility for the next 10 years.

The purchase has been surrounded by controversy since the council first approved it in a 4-3 vote Sept. 16. Deputy Mayor John Drescher, Councilman Gordon Bisset and Councilman Rich Crispo voted against the deal then, and did it again Jan. 20.

Former and current council members alike have raised questions about the agreement’s legality, feasibility and the logic behind giving up the city’s right to take over the district for the next decade.

“You want to make us roll into Bellevue’s arms really quickly? Make purchases like this and then we’ll be forced into their arms,” Drescher said. “I, for one, want to stand alone and stand strong as Newcastle, and the only way we’re going to do that is to be really wise about how we spend our money. There’s no wisdom in this decision, none.”

Drescher’s comments stem from the fact that if the city assumed control of the utility, as it legally has the power to do, all it would need is four votes of the council and approval from the King County Boundary Review Board.

The city would then assume all of the district’s assets, including the building at the heart of the discussion, for free.

Councilman John Dulcich and Mayor Steve Buri argued that it wouldn’t really be “free,” though. Legal fees, a paid analysis of assuming the district and other miscellaneous filing costs would come with assumption.

“Let’s not kid ourselves that assuming a district that doesn’t want to be assumed would be free,” Buri said. “It’s not free.”

Wyman reiterated Jan. 20 that the city needs the building. It will serve as a place to store and work on the city’s public works vehicles, which are currently parked at City Hall. It could also serve as a future museum for Newcastle Historical Society artifacts.

The city of Newcastle long expressed interest in the property, said Robert Russell, CCUD’s general manager. The district and city entered into informal discussions about an agreement in 2010, he added.

Utility district officials worked with the city to offer a budget-friendly price for the $750,000 property, Russell said. The result was the $250,000 price tag and the 10-year non-assumption clause.

“The non-assumption agreement is important to the district because it gives the district assurance to be able to plan for the future and continue to serve our utility customers,” Russell said.

The 10-year non-assumption agreement unjustly binds the hands of future city councils, though, according to former Newcastle City Councilman Sonny Putter, who has been a constant presence at recent meetings, speaking strongly against the purchase.

He has consistently contended that the deal is illegal and a misuse of public funds.

Putter isn’t the only former council member speaking out against the agreement, though. Prior to the Jan. 20 vote, in a stunning reunion of public servants, four former Newcastle City Council members, including two former mayors, used the public comment period to urge a no vote on the purchase of the building.

Former council members Bill Erxleben, Claudia Hirschey and Jean Garber joined Putter in insisting the council conduct a thorough analysis on the financial impacts of assumption prior to making any decision.

“Please do not throw a quarter of a million dollars of the city’s limited funds out the window,” Putter said. “Make a decision based on facts, not feelings or favoritism.”

Councilwoman Lisa Jensen noted that the agreement doesn’t preclude the city from assuming the district if both parties agree at any time, though.

Bisset, who admitted he believes the city should assume the district, said the lack of a city-owned utility prompted popular Public Works Director Mark Rigos to leave for North Bend, where he can manage a utility district.

“I just about croaked, because I’ve been in favor of taking over that district for many years, and here we lost an extremely good employee,” he said.

Dulcich noted that other cities have non-assumption agreements with utilities, including neighboring Issaquah. That agreement came in 2014 after a nasty feud between the city and the Sammamish Plateau Water and Sewer District.

“This is an issue that shouldn’t be an issue,” he said. “We’re giving away nothing here. It’s not a nefarious action. This is best for the community.”

Putting himself in a taxpayer’s shoes, Buri said any private citizen would jump at the opportunity to acquire an asset at one-third of its value.

“If a taxpayer were in this position, they would do the exact same thing,” he said, “even if there were a 10-year encumbrance on the property.”

In September, the council authorized City Manager Rob Wyman to enter into a purchase-sale agreement for the Coal Creek Utility District-owned property on 129th Avenue Southeast.

In exchange for the property appraised at $750,000, the city would agree to pay $250,000 and forfeit its legal right to assume the utility district for 10 years.

It’s the non-assumption clause, in particular, that has some current, and one former, council members questioning the logic of the agreement.

“I was perplexed by this decision from the start,” Deputy Mayor John Drescher said, “and it only gets uglier the closer you look at it.

“The need for the building is suspect, the cost is unnecessary because it would be zero if we chose to assume the CCUD, but most of all I cannot believe we would surrender a potentially valuable city right to assume the district for 10 long years.”

Drescher was one of three council members who voted against the initial agreement, along with Councilmen Gordon Bisset and Rich Crispo. It passed 4-3, though, Sept. 16.

The building would serve as a place to store and work on the city’s public works vehicles, which are currently parked at City Hall. It’s an ideal location, just down the street from City Hall.

The property wasn’t for sale, said Robert Russell, Coal Creek Utility District’s general manager, but the city of Newcastle expressed interest, so they entered into discussions about an agreement.

The utility district worked with the city to offer a budget-friendly price for the $750,000 property, Russell said. The result was the $250,000 price tag and the 10-year non-assumption clause.

The non-assumption agreement is important, he added, because it “gives the district assurance to be able to plan for the future and know we are going to be around.”

“It seemed like a win-win for us and the city,” he said.

The agreement unjustly binds the hands of future city councils, though, according to former Newcastle City Councilman Sonny Putter.

The longtime councilman spoke as a citizen during the council’s public comment period Nov. 3, and contended that the deal was illegal and a misuse of public funds.

“You’re going to spend $250,000 for an asset that you could get for zero cost, that, I maintain, is a violation of your fiduciary duty to the city,” he told the council.

The city does have the legal right to take over the utility district. All it would need is four votes of the council and approval from the King County Boundary Review Board to assume all of the district’s assets.

Newcastle is in no position to make such a move, though, Councilman John Dulcich said at the Dec. 16 meeting, after Drescher proposed rescinding the previous agreement.

“We heard our city manager the other day talk about how full up the staff is, how there’s not another thing they can do,” Dulcich said. “For people to think that we could assume the district and it’s a plug and play, is wrong. It’s going to take time and effort and we don’t have the capacity in-house at this point.”

Dulcich added that he felt the initial agreement was a good deal, and didn’t see the non-assumption clause as an “egregious or errorful action.”

Drescher’s Dec. 16 attempt to rescind approval for the agreement automatically failed when the vote ended in a 3-3 tie, with Councilwoman Lisa Jensen absent.

“I am not currently advocating the need to assume, but I believe it is my responsibility to maintain and strengthen the financial tools at our disposal — not surrender them,” he said. “I also believe that compelling future councils to uphold the surrendering of this right is far from clear in the law.”

The agreement has not yet been finalized, Russell said, as legal counsels on both sides work through it. He said he had hoped it would get finished before the end of the year, but that is no longer possible.

The City Council will have at least one more chance to vote on the agreement’s funding, though it is unclear when that will be, as both sides continue to work on it.