Rather than seeking generic opinions on the internet...or trusting some slug at Ciity Hall, go spend $150 and sit down with a knowledgeable real estate attorney for a half hour. Since his license is potentially on the line, he has an incentive to give you accurate information.

The issue is solely dependent upon the laws of the state of Washington and, particularly, how they treat the water district and its lien. In some states a water district maybe a private entity and would not necessarily have the same rights as a state tax lien. That said, tax liens do trump other liens against the property.

You also need to find out about statutory interest. In most states that accrues during the redemption period and must also be paid to the purchaser, and it's often a better investment than many. Either you get paid, with interest, or you end up with the property. In some cases it's really awful, though.

"Protect yourself" is the best advice I can offer. And yes, I used to practice real property law.

Good luck.