In the Matter of The Ltd. Tax Gen. Obligation Bonds of The City of Edmonds.Rowena Rohrbach v. City of Edmonds
| Decision Date | 05 July 2011 |
| Docket Number | No. 64492–1–I.,64492–1–I. |
| Citation | 162 Wash.App. 513,256 P.3d 1242 |
| Court | Washington Court of Appeals |
| Parties | In the Matter of the LIMITED TAX GENERAL OBLIGATION BONDS OF the CITY OF EDMONDS.Rowena Rohrbach, Public Representative, Appellant,v.City of Edmonds, Respondent. |
OPINION TEXT STARTS HERE
Steven J. Peiffle, Attorney at Law, Arlington, WA, for Appellant.William H. Patton, Hugh D. Spitzer, Foster Pepper PLLC, Seattle, WA, for Respondent.SCHINDLER, J.
[162 Wash.App. 515] ¶ 1 The City of Edmonds (City) authorized the issuance of $4.2 million in taxpayer bonds to extend and complete its fiber optic network in order to convert to a wireless water meter system, as well as provide broadband access to police, fire, and other public institutions. Because the issuance of the bonds is primarily for a public purpose, the City has the authority to allow private individuals and nongovernmental organizations to use the current excess capacity of its high-speed broadband network. We hold that the City's decision to issue the taxpayer bonds does not violate article VII, section 1 of the Washington State Constitution and is not an unconstitutional gift of funds or lending of credit in violation of article VIII, section 7.
¶ 2 The facts are not in dispute. In November 2004, the Edmonds City Council formed a Citizens Technology Advisory Committee (CTAC). The “Edmonds CTAC Charter” defines the objective of the committee as follows:
Within the framework of this charter, the CTAC seeks to advance the City's interests by identifying and recommending viable technologies that will:
— Stimulate economic activity within the City and help attract the types of businesses that will add to the City's economic vitality and stabilize the operating revenues of City Government.
— Allow City services to be offered in a way that optimizes the efficiency of the City Worker while improving the quality of service delivered to Edmonds Citizens.
— Improve Public Safety functions by enabling seamless inter-jurisdictional communication and enabling more efficient deployment of Public Safety resources.
— Help stabilize/recover Utility Tax and Franchise fee revenue.
In March 2005, the CTAC issued a “Municipal WiFi Issue Paper” analyzing the need to create a City-owned high-speed broadband network.
¶ 3 In June 2005, the Washington State Department of Transportation (WSDOT) requested expedited approval of permits and use of City-owned right-of-way to install 36 strands of fiber optic cable to link the Edmonds Ferry Terminal to the existing WSDOT fiber optic cable that runs along Interstate 5. The fiber optic link to the Edmonds Ferry Terminal was part of an infrastructure security initiative funded by the Department of Homeland Security.
¶ 4 In exchange for the City's agreement to expedite approval and the use of its right-of-way, WSDOT gave the City access to 24 of the 36 strands of fiber optic cable. WSDOT also agreed to allow the City to determine placement and installation of the fiber optic cable. The City requested installation and termination of the 24 strands at the Public Works Administration Building. The Public Works building is located near the Public Safety Building in downtown Edmonds.
¶ 5 In late 2005, the City joined a consortium that owns and operates a 256–strand fiber optic cable that runs underground “from downtown Seattle to the King/Snohomish County Line along the centerline of Hwy 99.” The consortium includes the city of Seattle, King County, and the University of Washington. As a member of the consortium, the City was able to use six unallocated strands of fiber optic cable.
¶ 6 In December 2006, the City completed construction of a link connecting the 24 fiber strands at the Public Works Administration Building to the six strands located at the county line under Highway 99, providing:
[A] direct link to the regional internet connection hub at the Westin building in downtown Seattle and the fibers it had previously acquired from WSDOT running from the ferry terminal to the City's Public Works Administration building off 212th Street in Edmonds.
Completion of this link allowed the City to provide broadband internet service to other public institutions in the City, such as the Edmonds School District, Stevens Hospital, and Edmonds Community College, as well as other broadband users. By using its own broadband fiber optic network, the City obtained significant cost savings and performance improvements.
¶ 7 The overall transmission capacity, or bandwidth, of a fiber optic network is defined by the smallest segment. Each strand of the City's fiber optic network simultaneously transmits and receives up to 10 Giga (billion) bits per second (Gbps), or 10,000 Mega (million) bits per second (Mbps). Using the smallest segment of the City's current fiber optic network, the six-strand link from the City to downtown Seattle, the current capacity is 60 Gbps. The bandwidth of the segment connecting the Edmonds Ferry Terminal to the Public Works Administration Building is 240 Gbps. It is anticipated that in the near future, it may be possible to expand the bandwidth of each strand to 100 Gbps.
¶ 8 On April 16, 2008, fiber optic network consultant Rick Jenness issued the “Edmonds Fiber Network” report addressing the City's use of the fiber optic network as well as use by “other governmental, educational and not-for profit institutions.” The “Introduction” to the Report states that the City had been working for several years to establish a fiber optic network “to reduce municipal telecommunications costs while increasing telecommunications functionality.” In addition, the Introduction also states that the City had “examined two other uses for this network: providing high speed broadband access to other local governmental and not-for-profit entities, and expanding the network to provide ... services for residents and businesses.”
¶ 9 The Report recommends the City move ahead with “the development of the Edmond's Fiber Network (EFN) for internal and intergovernmental uses.” The Report points out that future excess capacity would allow the City to offer access to the network to residents and businesses. However, based on estimates of the cost to provide a connection to each home, the Report recommends against expanding the network to provide service to all residential and commercial users.
¶ 10 The Report recommends proceeding with a proposed project to extend the fiber network geographically in order to replace the water meters throughout the City with a wireless system. According to the Report, utility savings would offset the costs of replacing the water meters. The Report describes the proposed wireless water meter reading project as follows:
By extending the EFN northward to the Seaview area, and southward towards Esperance area, the City can provide a wireless communications infrastructure capable of remotely reading every water meter in the City without the need for employees of the Water Department to drive to each location and manually capture the meter value. Currently 37% of the City's meters are over 20 years old, and a full 66% are over ten years old. As meters get older, their accuracy degrades causing lost revenue to the City.
To read meters centrally, several radio reception points are needed to be located in various parts of the City. These reception points would be connected to the central office via an expansion of the City's fiber optic backbone. The base cost of meter replacement (necessary in any event) is estimated at just under $2.0 million. Moving to smart meters adds just over $2.0 million.
The Report sets forth the following costs for the project:
¶ 11 The City conducted a study of the wireless meter reading project analyzing the costs and benefits. The study estimates that the cost savings from a wireless water meter system are significant and that the costs incurred in converting to a wireless system would be offset in eight years.
¶ 12 In July 2008, the City issued the “Edmonds Broadband Initiative Confidential Executive Summary.” The City recommended extending the “existing WSDOT backbone to connect other public sector partners who require high volume internet capacity,” and creating “a fiber optic ring that would connect the 5 major zones of the City” to allow “[e]lectronic [m]eter reading” 1 AND ACCESS BY POLICE officers, fire fighters, fire marshals, inspectors, and public works employees “while working in the field.” According to the Executive Summary, “[b]ecause of the large capacity of the fiber optic technology,” consideration should also be given to leasing “some of this excess capacity to commercial and residential users within the City thus accelerating the payback time of the investment.”
¶ 13 On December 16, the City Council adopted “Ordinance No. 3721.” Ordinance No. 3721 authorizes issuing $4.2 million in general tax obligation bonds to install 24 strands of cable to...
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