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HomeMy WebLinkAbout96-122Resolution No. 96-122 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND AMENDING RESOLUTION 96-023 AND REVISING POLICIES TO GUIDE THE C1TY'S WATER SYSTEM PLAN PROCESS AND THE CITY'S PARTICIPATION IN THE CWSP PROCESS; PROPOSING A REVISION TO THE CITY'S TRI-AREA EXTRATERRITORIAL (OUT-OF-CITY) WATER UTILITY SERVICE AREA; AND REVISING THE CITY'S CWSP SERVICE AREA PROPOSAL THE CITY COUNCIL of the City of Port Townsend, Washington, makes the following Findings and Resolution: A. FINDINGS: 1. Evolving Policy Decision-Making. On February 5, 1996, after holding a two public heatings, the City Council adopted Resolution 96-023, setting preliminary policies for out-of-City service area designations. Resolution 96-023 did not constitute final action, but merely set forth policies to guide City staff in preparing planning documents for the City's water system. The Resolution was based upon a series of Findings, which are incorporated herein by this reference. 1.1 This Resolution is based upon new information, including comments by members of the public, Jefferson County staff, and discussions during negotiations with elected officials from Jefferson County and Jefferson County PUD #1 (the PUD) regarding the City's water service policies. Resolution 96-023 anticipated ongoing, evolving policy development, which would result in amendments to the Resolution. This Resolution represents the outcome of evolving policy discussions, and is intended to supplement and amend Resolution 96-023. 1.2 Similarly to Resolution 96-023, this Resolution does not constitute final legislative action by the City, and is intended to guide staff and the City Council's Utility Committee in formulating policies, in conducting negotiations, and in reviewing and preparing draft water utility plans. 1.3 It is anticipated that the City's final action in designating out-of-City service areas will occur through the Coordinated Water System Plan and/or the City's Water System Master Plan process. 2. Utility Committee Study. Since adopting Resolution 96-023, the City Council's Utility Committee has conducted open, public meetings where the Committee has studied a number of alternative scenarios consistent with Resolution 96-023, for the City's role as a water utility provider in out-of-City service areas. The Utility Committee has reviewed these scenarios with the fundamental goal of providing the best possible water service to the City's water customers in the most efficient and cost-effective manner, within the limits of the City's water resource, and with minimum negative impacts on the City's resident rate payers and tax payers. 2.1 Based upon all information available to the City at this time, including long-term population projections within the City's municipal boundaries, the Council reiterates its concern that the City lacks the firm water capacity on a long term basis to serve all potential water customers within the City's 1986 water service area, as amended by Council Resolution 93-072. The Council further reiterates its goal of not being the rural water purveyor for Eastern Jefferson County, and in not finding itself obligated to "find" new water sources. The City intends to work with other existing and evolving water purveyors to provide the best possible long-term water service to Eastern Jefferson County. 3. Joint O,~y-PUD Negotiations. While studying alternative scenarios for the City's out-of- City water service areas, the Utility Committee, with the assistance of Mayor McCulloch, has conducted open, public negotiation sessions with the PUD to explore common ground in order to establish a mutually beneficial framework for joint regional water utility planning. 3.1 The mutual goal of the two water utilities has been to gain a common understanding of each utilities' limitations, interests, and goals as water purveyors, in order to work together to ensure provision of high-quality water service in a manner that ensures reliable service, maximizes regional integration, minimizes customer costs, conforms with County land use planning consistent with the County-Wide Planning Policies (CWPPs), and meets economic and environmental responsibilities. 3.2 Working together, the City and the PUD have developed criteria to define "best service to water customers." The individual criteria are not intended to be used in isolation, but to be balanced together to form a basis for service area discussions. The criteria are as follows: · · · · · · · · · · · · Lowest cost of service to customers; Highest quality of service; Sustainable use of resources and reliable water supply; Solid, well constructed infrastructure; Well-defined and consistently-applied precommitment process; Logical service area boundaries; Financial soundness of the utility provider; Political representation of customers; Consistency with land use planning; Well-funded operation and maintenance (O&M) program; Non-duplication of infrastructure; and Adherence to the Dungeness-Quilcene (DQ) Plan. 3.3 The City and the PUD recognize that Jefferson County is a key participant in Amended Water Service Area Resolution -2- Res. 96-122 discussions of service areas as they relate to County GMA land use planning. However, at this juncture, the City and the PUD have held only preliminary discussions to better understand each others' planning and service concerns as well as common utility planning concerns. Jefferson County has been invited to attend these meetings and to provide comment. 3.4 At this juncture, water utilities in Jefferson County continue to make utility planning decisions without the benefit of a draft or adopted Jefferson County GMA Comprehensive Land Use Plan. The City has participated with the County in negotiation sessions to discuss the interrelation between water planning and land use planning. These discussions have been inconclusive, particularly in the absence of a draft County Comprehensive Plan. However, at the meetings with the County, the County has expressed its concern that properties outside the City's downsized service areas be provided with public water service. The City assumes, in its water utility planning, that the County will adhere to the CWPPs and adopted, agreed joint population projections. These projections are important for the City in engaging in utility planning, in that population projections form a component of the essential information for any public utility to formulate resource allocation decisions. 3.5 The Jefferson County Water Utility Coordinating Committee (WUCC) has recently prepared a draft Coordinated Water System Plan (CWSP), which is a necessary and mandatory component of County-wide water utility planning. The City has commented upon the Plan and will continue to participate in its preparation. At this juncture, it is critical that the City's policy regarding Tri-Area water service responsibilities and service area designation be absolutely dear, to enable the City to participate appropriately in CWSP preparation and review. One of the goals of this Resolution is to provide the policy basis for the City to prepare its Service Area Agreement for the CWSP, and to provide predictability for the County and the Department of Health in CWSP preparation and review. 4. Concentration of Service in Urban Areas. The Utility Committee's discussions about various scenarios for out-of-City water service and discussions with the PUD have reaffirmed the preliminary direction of the Council in Resolution 96-023, that the City should concentrate its water utility planning efforts within the City's municipal boundaries, in areas immediately adjacent to the City, in areas identified in the CWPPs as probable future Urban Growth Areas (UGAs), and in areas subject to formal, adopted written City contracts. The discussions have likewise reaffirmed the Council's preliminary direction that the City is not the appropriate utility to provide ongoing, long-term water see,ice to rural areas which are not adjacent to the City's municipal boundaries. 5. Service Area Exchanges. Resolution 96-023 stated that "[u]ltimately, the proposed service area revision set forth herein may necessitate the amendment of existing wholesale contracts with the PUD, or new contracts with the PUD or other entities, to further the revisions in service areas Amended Water Service Area Resolution -3- Res. 96-122 and related concerns." (Paragraph B.5). 5.1 The Utility Committee has reviewed financial and utility planning documents, considered advice from City staff and engineering and legal consultants, and considered comments from members of the public and from representatives of Jefferson County. In reviewing the various scenarios for providing water in the Tri-Area service area, and based upon public comment, the City Council is persuaded that at present, the City should continue as a water utility in the Tri-Area and maintain ownership and control of all infrastructure associated with the downsized Tri-Area service area. To address water utility planning concerns, and to fulfill contractual requirements of the Agreement with the Broders, recently negotiated and approved by the City Council (Resolution No. 96-120), the Utility Committee believes that the best interests of the City and its water utility customers are served by expansion of the preliminary Tri-Area service area, designated in Resolution 96-023. The new preliminary service area is described in paragraph B.2 below and as depicted on the map, attached hereto as EXHIBIT A. The Utility Committee has better defined the Tri-^rea service area with additional policies as provided herein. The City Council accepts the Utility Committee's recommendations on these policy revisions. 5.2 As a responsible water utility, the City has weighed options for how to accommodate water service needs in areas outside the revised Tri-Area service area. The following options have been considered: (1) maintain control of all infrastructure and continue providing water service to existing customers only, declining water service to new customers, with the probable consequence of these property owners either having no ability to obtain public water service, resulting in a possible proliferation of small private water systems, or resulting in the duplication of water lines in this area, provided by the PUD or other utility; or (2) negotiating with the PUD to exchange service areas and working with the PUD for the PUD to take over water service to existing and future water customers in these areas, thereby avoiding duplication of infrastructure, avoiding the possible proliferation of small private water systems, and avoiding interruption of water service in these areas. 5.3 The Council believes that it is in the best interests of the City and its water utility customers for the PUD to be a viable, financially secure entity, with an adequate customer base to benefit from the "economies of scale." The City intends to work with the PUD, through service area exchanges, to ensure uninten'upted water service to City and PUD customers. 5.4 Consistent with the policy direction in Resolution 96-023, the City Council has determined that the best interests of the City and its utility customers are served by working with the PUD to negotiate for the PUD to assume control of those areas outside of the area described in paragraph B.2 below and depicted on the map, attached hereto as EXHIBIT A. The Council finds that uninterrupted water service in areas outside the City's revised water service area boundaries, and PUD customer service in these areas, is consistent with the criteria stated in F/nd/rig A.3.2 above, and serves the City's interests in efficient, economical utility planning, and furthers the City's water system policies and the policies stated in Resolution 96-023. Further, Amended Water Service Area Resolution -4- Res. 96-122 the City desires to avoid the proliferation of small private water systems and damage to the aquifer which could result from individual property owners developing individual water systems. 5.5 The Council has determined that transferring areas outside the City's new service area boundaries to the PUD, and providing City water by wholesale contracts, will best serve the City's customers within the City, and within the City's out-of-City service areas, by improving levels of service and lowering operation and maintenance expenditures. The City's fiscal analysis shows that such transfers will not have a significant impact on the revenues or cost of serving remaining City customers, should enable the PUD to more efficiently consolidate its service areas and serve existing and new customers, and will enable the City to concentrate its utility planning and service within the City, in areas which are urban in character, and in areas immediately adjacent to urban areas. The Utility Committee has reviewed a preliminary financial analysis of the proposed transfer of utility customers to the PUD, prepared by the Department of Public Works. 5.6 In the event that the City is not successful in negotiating wholesale agreements with the PUD, the City should work with any other existing or evolving entities, including the Jefferson County Department of Public Works, to ensure ongoing public water service to properties outside the City's revised Tri-Area water utility service area. 6. Necessity. The redirecting of water resources contemplated within this Resolution and Resolution 96-023 is necessary for the public health, safety and welfare needs of City residents and the City's out-of-City water customers. 6.1 This Resolution and the utility planning envisioned herein is necessary to ensure that the City will have adequate water capacity to meet its responsibilities set forth in the City's adopted GMA Comprehensive Plan to serve the projected population growth needs within the City and within its out-of-City water utility service areas. 6.2 The City's existing studies show that within the City's GMA and utility planning horizon, the City's surface water capacity will be needed within the City and the proposed Glen Cove UGA. The City intends through its water planning to designate out-of-City service areas which are sustainable on a long-term basis. 7. Tri-Area Sen,ice Area. As stated in Resolution 96-023, RCW 36.70A. 110(1) permits counties to designate as "urban growth areas" only those areas which are "already . characterized by urban growth or . . . adjacent to territory already characterized by urban growth. ' 7.1 The City will provide water only to the areas defined in Resolution 96-023, as Amended Water Service Area Resolution -5- Res. 96-122 amended by this Resolution, in that these areas are urban in character, constitute areas subject to formal written contractual agreements, and/or constitute areas immediately adjacent to the City. The GMA prohibits the extension of urban govemmental services and facilities to areas which are not urban in character and included within UGAs. 7.2 The City does not contend that public water should not be provided outside of the area described in Resolution 96-023 and this Resolution, nor is it the City's intention to control growth in the County through its service area designations. However, based upon compelling public health and safety concerns, in consideration of the City's limited water resources, and given current uncertainties in County GMA planning policies, at present the City does not believe it is the appropriate entity to deliver rural water service to areas not immediately adjacent to the City, particularly at rural levels of service. Therefore, the intent of this Resolution is to provide policy direction to ensure ongoing public water service to areas outside the City's revised Tri-Area service area by establishing a framework for service area exchange with the PUD and/or other existing or evolving water utilities. 7.3 The City intends to honor its contractual obligations outside its revised service areas. However, the City intends, pursuant to its legislative authority, to review contractual obligations on a case-by-case basis and to consider necessary action to define and/or reduce long- term contractual water service obligations in order to better facilitate utility planning and water service allocation needs. 8. Glen Cove Service Area. The City and the County have shared planning concerns in the Glen Cove area. In accordance with joint planning endeavors, the City anticipates that the County will designate in the County's draft Comprehensive Plan a portion of the Glen Cove area as the City's "out-of-City UGA." Both jurisdictions recognize that it is critical for the City and the County to cooperate in the joint planning for land uses in this area, including the sharing of costs and revenues for infrastructure development. 8.1 The City believes that it is in the long term best interests of the City and water customers in the proposed Glen Cove UGA for water planning and land use planning to be coordinated and integrated. The ongoing, dependable assurance of water availability to commercial and industrial land uses within the Glen Cove UGA is essential to the economic viability of Jefferson County. With appropriate, integrated growth management and utility planning, the City has the capability to provide adequate water service to this area at urban levels of service. 8.2 The GMA anticipates a coordination of utility and land use planning within UGAs. During negotiations, both the City and the PUD have recognized that consolidation of service areas is the most efficient means of providing the best service to customers. The City will continue to work with the PUD for an equitable exchange of service areas with the goal of Amended Water Service Area Resolution -6- Res. 96-122 transferring the Glen Cove area to the City through negotiation. B. RESOLUTION: 1. PLANNING PROCESS. The City of Port Townsend will continue a planning process to amend its water service areas and to adopt a Comprehensive Water System Plan (Water System Plan) consistent with this Resolution and Resolution 96-023. 1.1 This Resolution and Resolution 96-023 constitute the proposed general policy framework for the City's Water System Plan process and further constitute the City's water service area proposal for the Coordinated Water System Plan (CWSP) process. This Resolution and Resolution 96-023 are intended to provide the City with general policy direction to use in the Water System Plan and CWSP processes, and to provide City staff and the Utility Committee with direction in negotiations with the PUD. 1.2 The policies contained in this Resolution and Resolution 96-023, including service area designations, are subject to revision as the City proceeds with its public planning process for the adoption of the Water System Plan, and the CWSP, including review of all policies and provisions stated herein under the State Environmental Policy Act, RCW 43.21C. This Resolution and Resolution 96-023 do not limit or restrict water service reservations provided by the City pursuant to Section 13.14 PTMC, prior to completion of water system planning. 1.3 Resolution 96-023 is incorporated herein by this reference and shall continue in full force and effect unless specifically amended by this Resolution. 2. TRI AREA URBAN SERVICE AREA. Based upon public comment and the need to designate a preliminary Tri-Area service area for water system planning purposes which roughly corresponds to Jefferson County GMA planning, as presently contemplated, and subject to the available water resource defined in Resolution 96-023, the City's Tri-Area retail water service area will be revised and g~graphically defined as follows: lrondale / Hadlock: The Tri-Area Service Area includes Irondale and portions of Port Hadlock. Specifically, the service area is: from Port Townsend Bay, west following Chimacum Creek to the N/S line bisecting Section 34 (Township 30 N, Range 1 W). Then south along this line to the E/W line bisecting the SE 1/4 of the SW 1/4 of Section 34. Then west along this line to the N/S line bisecting the SE 1/4 of Amended Water Service Area Resolution -7- Res. 96-122 the SW 1/4 of Section 34, and then south along this line to Highway 19. The boundary line follows Highway 19 southeast to intersection with Lillian Street. The service area boundary also follows Highway 19 north along the City's pipeline a distance of 6,450 feet. From the intersection of Highway 19 and Lillian Street, the service area boundary follows the City's pipeline along Lillian Street and Sommerville Road west to the City's reservoir. From the intersection of Lillian Street and Highway 19, the see,ice area also proceeds east along the City's 6-inch water line to the intersection of Chimacum Road and then south along Chimacum Road to Hadlock Dump Road. The service area follows the City pipeline in I-Iadlock Dump Road to the E/W bisecting line of the NE 1/4 of Section 11, then east along this line to the eastern boundary of Section 11, then south along this line to the E/W bisecting line of Section 12, then east along this line to the N/S bisecting line of Section 12, then north along this line to the intersection with Oak Bay Road. The service area boundary then follows the City's 6-inch pipeline NE generally following Flagler Road to Portage Canal. The service area boundary follows the coastline north from this point to the point of beginning. 2.1 This area is graphically depicted on the map, attached hereto as EXHIBIT A. This area is defined by the existing urban character of the Hadlock and Irondale communities, and also includes the property identified for inclusion in the City's out-of-City service area in the Broders Agreement, approved by City Council Resolution 96-120. While the County to date has not designated this area as an UGA under a final UGA Ordinance, the CWPPs anticipate the ultimate designation of an UGA in this area. Water will be provided in this area, to the extent of the capacity of the City's Tri-Area wells, at urban levels of service, with design standards identical to those enforced within the City of Port Townsend. The City reserves the right to deny water connections to potential users who may so heavily draw upon the limited water resource as to eliminate the City's ability to serve its existing or reasonably projected retail and wholesale customer base. In such instance, the applicant wilt have the opportunity to seek alternative water service through the CWSP process, RCW 70.116.060. 2.2 In Resolution 96-023, the Tri-Area water service area boundaries were defined in part by the center lines of roadways. The City has heard public comment regarding service of properties located on the other side of roadways, and for sound utility planning reasons, and to provide the best service to City customers, the service area and map included in Resolution 96-023 are amended to include such properties, as provided herein. However, to avoid utility-related problems associated with the inadvertent and unplanned expansion of the service area by large properties "touching" roadways seeking water service, the City will only provide water service to properties on sides of roadways forming the outside boundaries of the City's service area under the following circumstances: (1) at least 50 feet of the property must abut the roadway; and (2) service water lines will not be extended further than 100 feet beyond the edge of the public roadway right-of-way. At the completion of the County's comprehensive planning process, the Amended Water Service Area Resolution -8- Res. 96-122 City will review this policy and may consider further adjustments for consistency with the County's GMA Plan. 2.3 The southern line of the Tri-Area service area will be considered an interim boundary, until the County has completed its GMA planning process. In the event the County designates as an UGA any area to the south of the Tri-Area service area boundary defined herein, the City will work with the County to review whether a service area revision should occur through the CWSP process. 2.4 The City currently serves water to existing customers outside the area described above. Through the negotiation process, the City will offer wholesale water contracts to the PUD to serve these customers. Until such time as wholesale contracts are negotiated with the PUD or another water utility to serve these customers, the City will continue to serve uninterrupted water to these customers. Additionally, the City will serve water to those persons or entities that have a valid, enforceable contractual right to City water service, based upon reasonable contractual expectations, and contingent upon the filing of a complete land use permit application with Jefferson County or other permitting authority (as determined by the permitting authority). The City reserves the right to review and challenge any purported contractual expectation to receive City water, based upon applicable law. 2.5 In addition to the property described above, the City will continue to supply water pursuant to written contracts to the United States Naval Installation on Indian Island, Fort Flagler, and the Marrowstone Island Fish Lab. 3. WltOLESALE CONTRACTS. To provide the best service to existing and future water service customers, the proposed service area revisions set forth in this Resolution and Resolution 96-023 necessitate the amendment of existing wholesale contracts with the PUD, or new contracts with the PUD or other entities. The City Council's Utility Committee, with the assistance of City staff, are hereby directed to initiate negotiations with the PUD and/or Jefferson County to exchange and take over water service for those areas outside the City's downsized service area boundaries, consistent with Resolution 96-023, as amended by this Resolution. In the event the City is not able to negotiate contracts to exchange service areas and to provide wholesale water to another entity to serve existing customers and those persons or entities having valid contractual expectations to City water (outside the downsized service areas), the City will continue to provide water to these customers. 3.1 In the event the City negotiates wholesale contracts with the PUD or other entities to serve existing customers and persons or entities having a valid contractual commitment to City water, the City will include a contract provision requiring disclosure of all known contractual commitments and assuring that the City and the PUD or other entities will honor and perform all existing contractual commitments of the relinquishing utility which have arisen during the term Amended Water Service Area Resolution -9- Res. 96-122 of providing water service to a service area. 3.2 In all areas to be served with City water, through wholesale contracts, the City will install master meters at the see,ice area boundary to measure and monitor the water used in the wholesale service area. The wholesale contract charges will represent a fair calculation of the actual cost to the City to deliver the water to the wholesale customer, including an administration fee and a reasonable, fair share of capital costs for the City to develop an adequate water system to serve the wholesale contract quantities. 3.3 All wholesale contracts will guarantee that the City, the PUD, and any other water purveyor(s) will have access to emergency "interties' to satisfy County-wide water customers in the event of natural or manmade casualty and emergency conditions which result in an interruption or disturbance in the quantity and/or quality of water to any customer groups. 3.4 In reviewing service area exchange options, the City will review any ramifications of service area exchanges on any bond covenants, to ensure that the City does not impair or breach any covenants with the City's bond holders. Likewise, the City will work with the PUD to review its bond covenants in areas exchanged for City service areas, to ensure that the covenants are not breached or impaired; 3.5 In negotiating wholesale contracts with the PUD, the City should allocate adequate wholesale water to the PUD in order to ensure ongoing water service to existing customers, based on past demand, with such additional water as may be justified based upon projected Tri-Area service area customer needs. 4. GLEN COVE AREA. Negotiations with the PUD to exchange service areas should be based on the premise that service area exchanges should be fair and equitable for both utilities as well as their customers. To meet this goal, the City should seek an exchange with the PUD for the City to serve as the service purveyor in the Glen Cove proposed UGA. The City Council recognizes that the City's cooperative relationship with the PUD is essential for ongoing customer service needs. The City should continue to negotiate with the PUD to exchange service areas, including a negotiated transfer of the Glen Cove service area to the City. 5. INCREASED CUSTOMER INVOLVEMENT IN WATER UTILITY SERVICE. The City will work with Jefferson County and the residents living within the City's Tri-Area water service area to consider the establishment of a Tri-Area citizen group to assist the City and the County with ongoing water utility-related education, policy formulation, water system planning, and water system management issues. Amended Water Service Area Resolution -10- Res. 96-122 6. ADOPTION OF CITY WATER PLAN. The City will continue to work on the amendment and formal adoption of a Water System Master Plan pursuant to policies set forth in this Resolution and Resolution 96~023. The Water System Master Plan will provide capital facility analysis to assist the County and the City in the long-term needs of providing water service to urban and urbanizing areas of Eastern Jefferson County. The service area revisions contemplated by this Resolution and Resolution 96-023 will serve as the City's proposed service areas for the City's Water Plan and the CWSP. 6.1 Service area revisions contemplated in this Resolution are subject to potential revisions and will not take effect until after public comment, SEPA review through a deliberative public planning process, and completion of the City's Water System Plan and/or the CWSP. 6.2 Based upon the policies set forth in this Resolution, including the revised Tri-Area service area, the City shall prepare a Service Area Agreement in conformance with RCW Chapter 70.116, and shall forward the Service Area Agreement to the Jefferson County Water Utility Coordinating Committee and the Department of Health. ADOPTED by the City Council of the City of Port Townsend and signed by the Mayor on this 16th day of September, 1996. Attest: ~'an~ Kolacy, City ;lerk~~ water\acrvarT.doc Juli~cCulloch, Mayor ha(n, Ci'{y Attorney Amended Water Service Area Resolution -11- Res. 96-122