SNOHOMISH PUD

Consolidation of the

Warm Beach Water System

Public HearingJuly 24, 2018

Last Discussed: July 10, 2018

SNOHOMISH PUD

Warm Beach Water Association (WBWA) - Location and Size

WBWA

• WBWA water system has ~600 water service connections

• When merged with Kayak system, will be District 2nd largest water system with ~1,000 connections

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What’s Happened to Date Sept 2015 - WBWA contacted the District

Staff reviewed previous 2005 study & WBWA’s 2015 Water System Plan

Determined new study needed

Sept 2016 - New study completed, partially funded by grant (Resolution 5768)

Sept 2016 - Presented study at WBWA annual meeting

Sept 2016 - WBWA members passed motions to authorize negotiation for ownership transfer

Sept 2016 - Applied to Drinking Water State Revolving Fund (DWSRF)

Jan 2017 - Received DWSRF offer of $3.5M grant/loan (out of $5.7M requested)

Mar 2017 - Discussed proposal at special WBWA membership meeting

Apr 2017 - WBWA advisory vote by mail (46% of ballots returned, 99% “yes” votes)

Jul 11, 2017 - Commission authorized negotiation for ownership transfer (Reso. 5816)

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What’s Happened to Date (cont.) July 2017 - State failed to pass Capital Budget (DWSRF funding put on hold)

Nov 2017 - Updated cost estimates from 2016 study for 2-years inflation

Nov 2017 - Submitted 2nd DWSRF application for $2.7M

Jan 2018 - State passed Capital Budget

Mar 2018 - 2nd DWSRF application selected for funding

June/July 2018 – DWSRF contracts received

Other work over last 12 months• Negotiated for ownership transfer and drafted agreements• SAP programming (monthly rate surcharge & convert gallon meter reads to cubic feet)• Gathered more information on water system• Work with other District departments (Customer Service, Real Estate, Legal, Facilities, Finance, Contracts)• Kept community informed (WBWA newsletters)

July 10, 2018 – Presented at Commission Study Session

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Notice of Public Hearing• Postcard was mailed on July 12, 2018

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Proposed ImprovementsSource

• Replace Well 4 Pump • Improve Treatment

Storage• 200,000 gallon tank sufficient for current customers• Abandon other un-used tanks

Distribution• Replace ~12,050 feet asbestos cement pipe• Install ~2,450 feet new pipe

• Intertie with Kayak• Improve transmission

• Replace ~600 old water meters• Replace ~10 hydrants• Abandon un-used booster pump station

Controls• Integrate with District’s control system

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Upcoming Package for Commission Approval1. Resolution: Adopt Feasibility Study into Water System Plan and Authorize CEO/GM to Execute

Agreement for Ownership Transfer– Feasibility Study identifies improvements needed for the Warm Beach water system consolidation– Resolution describes all steps leading up to the decision to consolidate– Transfer Agreement is the result of negotiations for the ownership transfer

2. Resolution: Authorize CEO/GM to Execute the Two DWSRF Contracts– Up to $6.2M ($3.5M + $2.7M) Federal and State funding (drawn as expenses are incurred)– 50% principal forgiveness (grant)– 1% interest rate on balance (repay over 24 years)– First DWSRF Contract received June 27, 2018– Second DWSRF Contract received July 16, 2018– Contracts reviewed by Legal

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Upcoming Package for Commission Approval (cont.)3. Resolution: Establish Rates & Charges for Warm Beach Water System

– April 2017 vote confirmed WBWA customers support proposed improvements at estimated cost– Establishes $35 per month rate surcharge for 20 years

• Applies to customers connected to the Warm Beach system at time of ownership transfer• Repays costs to bring the system up to par with District’s other systems• Still sufficient to repay loans with updated cost estimate• Includes some buffer if costs exceed estimate

– New customers connecting to system after ownership transfer will pay District’s standard connection charges (but not the monthly surcharge)

– Public hearing required for rate resolutions

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Upcoming Package for Commission Approval (cont.)4. Resolution: Authorize Public Access to One of the Well Sites

– Warm Beach Community Association (WBCA) has written agreement with WBWA to use open space on one of the well sites

– Resolution will allow public access to that area as long as District does not need the property for other purposes

– Very similar situation in District’s Skylite water system (reference Resolution 5675)

5. Resolution: Option Agreement with Water Beach Community Association– Existing WBCA/WBWA agreement includes purchase rights if WBWA sells the well site– WBWA will terminate agreement with WBCA prior to the water system ownership transfer– Option Agreement will give WBCA first right of refusal if District decides to surplus this property

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Open Area – Subject of Public Access and Option Agreement

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• Warm Beach Community Association (WBCA) uses land as extension of community park

• Wells not in use, but might be needed in the future

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Next Steps

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Aug 7, 2018 Resolutions Presented for Commission Consideration

Sep 12, 2018 Target Closing Date for Ownership Transfer

2019 Design Improvements

2020 - 2022 Construct Improvements

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Timeframe

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