State Supreme Court rules in favor of O.S. in $10 million case

OCEAN SHORES — The city appears to be finally clear of legal challenges in the nearly decade old Banks v. Ocean Shores civil lawsuit alleging it has billed property owners for improper storm drain fees for more than a decade.

Mayor Crystal Dingler on Thursday said the city was notified by the state Supreme Court that it had chosen not to hear the case.

A Grays Harbor Superior Court jury reached a verdict in favor of the city in a civil trial in October 2010. The unanimous order by the Supreme Court said it denied the plaintiff’s petition for review as well as a request to strike down the 2010 verdict.

The class-action suit was filed in 2004, challenging the city’s practice of levying storm drainage charges on all lots to provide the funds to regulate and operate a storm drainage utility. The action essentially questioned the city’s authority to levy and collect these storm drainage charges.

Had it lost, the city estimated the cost in refunded fees could have been more than $10 million.

Dingler noted the city had nearly $2 million in legal fees as a result of the case, and is still about $1 million “in the hole” from “money we borrowed from ourselves to keep fighting it.” In 2010 and 2011, the city made interfund loans from the sewer operations fund to the storm drain operations account to cover the cost.

A city tally shows $36,648 was spent this year alone through March, with a total of $1.91 million in legal fees.

The city now may begin to collect back storm drain fees that property owners might have been withholding, counting on a more favorable court ruling.

“There are some property owners, whether they were part of the lawsuit or not, who were waiting to see how it turned out,” Dingler said. “I am assuming they will all pay up, if not we can place liens against their property.”