Edgewood landowners challenge what they owe the city – again

Property owners in Edgewood are pursuing another round of legal challenges in an ongoing dispute over how much they should have to pay for the city’s new sewer system.

The five complaints, filed last week by seven landowners, come more than six months after a state court of appeals ruling forced the city back to square one in assigning property assessments for a local improvement district.

The LID was formed to pay for Edgewood's $21 million sewer project, which was completed in 2011.

Following construction, officials hired an appraiser to assess property values within the LID area and calculate how much each property owner would pay.

The city moved forward with those assessments despite opposition from about two dozen landowners in the East Pierce County suburb. Some appealed their amounts to Pierce County Superior Court and won a favorable ruling in March.

Now, less than a month after the city adjusted the assessments, several of the property owners who appealed the first assessments are challenging the new amounts.

City Manager Mark Bauer noted that all of the amounts have been reduced, some considerably, compared with the old figures. The collective total to be paid by the seven challengers, about $2.3 million, was reduced from about $2.8 million, he said.

“I believe they are fair amounts,” Bauer told The News Tribune.

But the property owners claim in court documents that the city’s process was “fatally flawed,” which “robbed” them of meaningful input, and that the city’s appraiser included excessive information when calculating the assessments. They also contend that the special benefits — the difference between each property’s value before and after the sewer was built — are “every bit as unrealistic” as the original ones.

The appeals cite dozens of other objections, some of which the property owners claim add “hundreds of thousands of dollars to LID property owner carrying charges.” They include claims that the city’s appraiser “wrongly based value on future development that cannot take place” based on city code.

The appraiser included unusable acreage in each assessment — such as protected wetlands designated as critical areas — and the error “artificially inflated” the amounts, court documents state.

They are asking the court to reduce or annul the newest assessments.

The Edgewood City Council had a hearing for the re-assessed properties Sept. 17. The property owners presented their objections, which the council rejected before approving the new amounts Oct. 2.

“The council didn’t see evidence that swayed them to believe that the analysis the property owners provided was an accurate assessment,” Bauer said.

He said the city’s official position is, and always has been, that it managed the process properly.

Residents petitioned in 2008 to form the LID to build the sewer system, which runs almost the entire length of Meridian Avenue from 32nd Street East to Enchanted Parkway north of the city limits.

The city obtained loans to cover costs, and 106 landowners are responsible for paying the city back over 20 years. The property owners not involved in litigation have either paid their share of the total cost or have agreed to pay fees annually.

The ongoing dispute has created financial uncertainty in Edgewood. The city’s bank loan has been extended three times since litigation started.

Bauer has said an additional $2.5 million in interest could trickle down to all property owners in the LID if legal challenges continue. If the amount collected isn’t enough to cover any additional costs, he told The News Tribune earlier this year, the city would have to complete a supplemental assessment and collect more from all 106 properties.

Bauer has acknowledged that sewer LID costs aren’t cheap, and likely caused sticker shock for the handful of residents in the city of more than 9,300. Confirmed per-parcel assessments – those that are paid off or under payment plans – range from about $7,000 to more than $1 million.