Cheney Free Press -

By Lee Hughes
Staff Reporter 

Medical Lake, state dispute service contracts

Facilities rely on city services, city says it needs state to pay


Last updated 5/9/2019 at 4:15pm

If the most recent budget appropriations are any indication, Medical Lake may be losing a long-running battle of wills with the state for funding of municipal services provided to Eastern State Hospital.

The city and the Department of Social and Health Services, whose facilities — the Eastern State Hospital campus and Lakeland Village — take up about half of Medical Lake’s incorporated boundary, have been tied at the hip for decades for the delivery of nearly all the services a municipality typically provides its residents, including law enforcement, fire protection and wastewater treatment.

But the relationship between the two public entities has steadily soured during the past two decades, devolving into a tit-for-tat stalemate, where each side holds various needs and wants hostage, according to documents and statements from the two taxpayer-funded organizations.

In a long email that included historical internal and external correspondence related to the issue, DSHS officials responded to an April 11 Cheney Free Press article in which Medical Lake officials claimed the state was not fully reimbursing the city for municipal services they use.

Not so fast, says DSHS. They claim they’ve made multiple attempts to work with Medical Lake officials since as early as 2009 to resolve various funding issues, all without results.

Medical Lake officials say they only want equity for providing police services. They point to Western State Hospital, which resides within the city of Lakewood. DSHS is slated to pay Lakewood $621,090 during the fiscal biennium that begins in June as reimbursement for providing policing services related to Western State Hospital, a sister facility to Eastern State Hospital, but about three times larger.

Medical Lake, according to budget language, is slated to receive $38,000 from the state during the next two years as compensation for providing police services to Eastern, an amount Medical Lake Mayor Shirley Maike called “a pittance” at a recent city council meeting.

That pittance is supposedly intended as reimbursement through the new biennium, which begins in June, and is $26,000 less than the previous biennium.

DSHS officials did not provide a rational for the difference, or the underlying justification for the amount, by press time.

Police services

In terms of population, DSHS facilities make up about 10 percent of the city’s total population of just fewer than 5,000 people.

But Medical Lake officials claim DSHS requires an inordinate amount of police services based on its population and, like Lakewood, that the city deserves additional compensation for it.

The city claims about 25 percent of all law enforcement calls in the city are related to Eastern State Hospital, according City Administrator Doug Ross.

The Spokane County Sheriff’s Office, who has been providing police services to the city since 2009 after the city began outsourcing its law enforcement services, places the total number of 2018 calls to the hospital at just under 7 percent. Calls are trending at about the same rate so far this year, according to Sheriff’s spokesperson Cpl. Mark Gregory.

DHSH spokeswoman Kelley Stowe claims Medical Lake has not provided the department with the required proposal, including “current and historical data” to support their policing efforts at Eastern State Hospital to “justify funding for a community policing program.”

However, language in both the 2017-2019 and 2019-2021 state budgets doesn’t require Medical Lake to provide any data — only a “proposal.”

And Medical Lake has provided DSHS with the required proposal, according to Ross.

“That’s how the city was able to receive payment,” Ross said in an email.

(Lakewood is likewise required to justify its policing services in an annual report that includes data outlining its use of state funds and the number of calls made to Western State Hospital.)

According to a 2019 proposal provided by the city, allegedly sent to both DSHS and a long list of elected state and congressional representatives, Medical Lake claims the cost of providing police services to DSHS facilities for fiscal year 2019-2021 is $690,500. However, the proposal offers no data to support the estimate.

The city will pay the Spokane County Sheriff $1,029,000 for law enforcement services in 2019, according to Ross.

That is, per the city community police program proposal and other available data, the city wants DSHS to pay for 67 percent of its law enforcement costs for facilities that account for about 10 percent of its population and roughly 7 percent of its law enforcement response.

Stowe contends DSHS remains willing to work with the city to create a policing proposal that would then be used to appropriate a reasonable amount of funding from the Legislature for policing state facilities. But to do that “the department would need data from the city of Medical Lake or (the) Spokane County Sheriff to determine the level of effort spent on our campus,” she said.

In other words, trust but verify. And trust may be a tall order if the two organizations recent history is any indicator.


The city and DSHS have been partners in the city’s wastewater treatment plant since its inception. In a 1998 agreement, both entities agreed to share a proportional cost of the construction plus a 50-50 split of the operational cost of the treatment plant for the first year, after which the operational cost was to be split proportionally based on usage as identified by an annual review, according to the contract.

But those reviews never occurred.

A 2004 DSHS-funded study concluded Eastern State Hospital was using only 35 percent of the treatment plant. The agency sought a billing adjustment from Medical Lake. According to DSHS calculations, the adjustment would save state taxpayers $110,000 annually — which equates to a revenue loss in the same amount for Medical Lake.

The city dug its heels in, disputing the results of the report, according to Ross.

DSHS claims the city’s reasoning was monetary. “Its fiscal position did not allow a correction to the wastewater allocation without an increase in the fire/EMS contract,” Stowe said.

In 2007, DSHS sent a draft operation and maintenance agreement to Medical Lake that included a reduction in DSHS payments for wastewater treatment.

“The city rejected the (draft O&M agreement) in February 2008,” an internal memo summarizing the situation with Medical Lake stated. “The city would not provide any details, and did not follow through on our requests for a counter-proposal.”

Two letters requesting another meeting went unanswered, the memo states.

The state then debated invoking the dispute clause of the original 1998 wastewater treatment plant agreement, according to the memo. They have yet to follow through.

“We believed we could resolve the issue,” Stowe wrote in an email.

The city’s position, insofar as DSHS understood it, was that the state should pay for a majority cost of treating reuse water, as required under a state-mandated Lake Management Plan that required 66 percent of reuse water disposed into West Medical Lake be treated a higher, and more costly, level than would otherwise be required.

Two letters were sent by DSHS to Medical Lake in June 2015. In the first, an expansive June 22 letter written about a year after a meeting between the two organizations, DSHS discussed the three sticky issues —police funding, fire and EMS funding, and charges for wastewater treatment.

The letter noted the city continued to bill the state for “more than its usage rates, which is in clear violation of the agreed terms of the contract,” and again asked for a billing correction.

The letter noted that, “we cannot sign any contract to provide additional funding for fire and EMS until such time as the city agrees to comply with our wastewater contract and bill us on actual use levels as required by contract.”

The second letter, dated June 25, was more blunt.

“We will not sign nor begin payment of these new Fire and EMS rates until such time as our wastewater bill has been adjusted per the terms of our contract,” the letter concluded

Fire and EMS rates

Since 1996, Medical Lake and DSHS have had a $50,033-per-year contract to provide fire protection services to Eastern State Hospital, Lakeland and the now defunct Interlake School. City officials acknowledged continued receipt of that funding.

Emergency medical services, according to the internal DSHS memo, had been provided for free.

In late 2015, after DSHS sent their lengthy letter, DSHS claimed Medical Lake sent an agreement proposal that added emergency medical services to the existing fire protection contract that was based on a square foot calculation. It increased the cost of annual fire protection, and now charging for EMS services, by nearly $35,714 to $85,747 annually.

DSHS rejected the proposal.

“DSHS has no budget for that amount,” Stowe wrote in her email.

This is the fire and EMS proposal DSHS had held hostage in return for re-negotiation of wastewater treatment plant charges by the city.

But Ross claims that it was DSHS that sent the proposal to the city, that the city signed it, and that DSHS never executed it.

Regardless, any fire and EMS contract re-negotiation may soon be rendered moot if Medical Lake and Spokane County Fire District 3 voters agree to annex the Medical Lake Fire Department into the district in an August special election.

Ross noted that the city’s current 2019 budget for fire and EMS services is $283,691, funded by the city’s general fund and its current EMS levy, which accounts for $140,000 of the total budget.

That budget, along with disagreements between the city and DSHS regarding related issues — will disappear if voters approve the annexation.

District 3 Chief Cody Rohrbach said the district is planning to negotiate an agreement with DSHS if the annexation passes, and is currently reaching out to other fire districts to determine a reasonable rate for coverage of state facilities.

Rohrbach said that of the 625 calls by Medical Lake fire last year, 126 were to state facilities.

DSHS said it remains ready to resolve the numerous issues between itself and the City of Medical Lake, but only if the city will cooperate in good faith.

“What we want is what is fair and balanced,” Stowe said.

Lee Hughes can be reached at


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