Public Works shuts off KPUD water deal

POULSBO — Water rights is an issue that Poulsbo is going to need to keep up with as population numbers grow.

But they’re not enough of an emergency to warrant buying water from the Kitsap Public Utilities District.

That is the message coming from city staff over a proposed partnership with the KPUD. The idea was first floated to Poulsbo in May for the city to financially take part in the KPUD expanding its facilities. City representatives have since had several meetings with the KPUD trying to hash out numbers.

At the Sept. 22 finance/administration committee meeting, Public Works Director Jeff Lincoln reported that his recommendation is for Poulsbo to pass up the deal at this time.

When the KPUD first approached Poulsbo, it was being batted around that there was a potential that the city may run out of available water in the very near future. In a July 2003 memorandum, consulting firm Parametrix estimated that with a 3-5 percent annual growth, Poulsbo could need additional water capacity as early as 2005.

“I think the point we were on is whether or not we were going to need water,” Finance Director Nanci Lien explained of Poulsbo entertaining the KPUD’s offer. “The KPUD had tossed out the idea that the city may not believe it but someday, we will need more water.”

Department heads Bill Duffy and John Stephenson retired after early negotiations with the KPUD. Project Engineer Andrzej Kasiniak stepped up to help out and Public Works Director Jeff Lincoln got involved after he was hired in August. That’s when the tune changed.

Lincoln said he appreciated the KPUD’s offer, but just didn’t feel it was the best decision for Poulsbo at this time.

“The numbers are what they are,” he said. “I don’t think anyone was trying to disadvantage the city but it’s just doesn’t seem, particularly at this time, that we should do this.”

“As the numbers started to unfold, it felt like that’s really good into the future but I don’t know if right away we can do it,” Lien added. “After retooling some of the city’s rights, we discovered that some of them we’re not using and can be developed further.”

The KPUD proposed two scenarios under which Poulsbo could purchase an additional 300 gallons per minute (GPM) capacity. The first would cost Poulsbo $3,369.51 per month, or 46 cents per 100 cubic feet. The second was $6,467 per month, or 29 cents per 100 cu-ft. While the costs seemed minor, Lincoln said he discovered that Poulsbo’s Westside Well had yet to be put to use. That well, which was developed over the last two years, could add 500 GPM at a total cost of $3,369 per month, or 20 cents per 100 cu-ft.

The costs for both KPUD plans also don’t include fees that would be charged for running the water through Silverdale.

Poulsbo’s water supply numbers assume financing the $500,000 Westside Well connection cost over a 20 year period at 5.25 percent rate. Lien explained that before taking out a loan, Poulsbo may be able fund a portion through capital reserves and through an interfund loan.

“Our goal would be to try and finance it in house,” she said.

And as for immediate water needs for Poulsbo, Lincoln said the city is in good shape for anywhere from seven to 20 years. He said his best guess as to where the water crisis idea came from was from what he calls “extremely aggressive” population growth numbers.

The current Growth Management Act projects Poulsbo’s population doubling between now and 2025, which is a 3.2 percent change each year. Using that guideline, the city’s 1998 and current 2000 Capital Water Systems Plan estimated the population for 2003 as 9,743.

It is believed Poulsbo’s water production can serve a population of about 10,251. Using the capital plan’s numbers, Poulsbo could be in a water crisis. But in actuality, there are about 7,000 residents of Poulsbo in 2004.

“If you plan for numbers that aren’t reality, you could get committed to very large capital projects you don’t need,” Lincoln said.

While the GMA shows population growing at a rate of 3.2 percent and planning documents show 3-5 percent increases, Lincoln said Poulsbo’s growth has actually hovered closer to about 2 percent the last 15 years. If population grows by only 2 percent, Poulsbo wouldn’t reach the 10,251 breaking point until 2022. Three percent growth puts water running out nearly 2016 and even the 3.2 percent growth of the GMA gives the city until around 2015 to come up with a new solution.

“And I’ve come to the conclusion that we can build dang near anything in three years,” Lincoln commented.

While Poulsbo has determined it doesn’t need to buy water from the KPUD at this point, Lincoln explained that water is still a topic that will be in the forefront of Public Works planning. Several measures are planned to add to Poulsbo’s current capacity. Lincoln also believes the city should work with the KPUD and Kitsap County on water right solutions with a more regional outlook.

“We believe if we get more water rights, we can go to 2025 but the idea is not just get to the next 20 years and we’re fine,” Lincoln said. “Growth will continue beyond 2025.”


Comparison of Water solutions:

• PUD Option #1, Guaranteed minimums

Gain — 300 GPM

Capital costs — $3,369.51/month

Unit cost — 46 cents/100 cubic feet

• PUD Option #2, Fixed Costs, no minimums

Gain — 300 GPM

Capital costs — $6,467/month

Unit cost — 29 cents/100 cubic feet

• Poulsbo water production, current costs

Gain — 500 GPM (addition of West Side Well)

Capital costs — $3,369/month ($500,000 financed at 5.25 percent over 20 years)

Unit cost — 20 cents/100 cubic feet

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