Public Works and Natural Resources Committee

**Water System Infrastructure Needs**: The city's aging water system requires comprehensive upgrades including new storage reservoirs at King Mountain and Upper Yew locations, extensive pipeline replacements based on risk assessment, and water treatment plant improvements. The analysis identified fire flow deficiencies throughout the system and pressure zone issues requiring immediate attention. **Nutrient Reduction Regulatory Uncertainty**: The state's Puget Sound Nutrient General Permit has been invalidated by the Pollution Control Hearing Board, creating significant uncertainty around wastewater treatment requirements. Ecology is developing both a voluntary general permit option and individual permit pathways, with final decisions expected around June 2025. This r…

**Staff Position (Mike Olinger, Mike Wilson)**: Recommended phased approach (Scenario 2) for both utilities, excluding nutrient projects until regulatory requirements are clarified. Emphasized need for front-loaded rate increases due to state reserve requirements and pending major projects including emissions control and environmental cleanup. **Consulting Team (Carollo Engineers, FCS Group)**: Presented comprehensive technical analysis supporting staff recommendations. Highlighted that deferring infrastructure investments only increases costs due to inflation, but acknowledged regulatory uncertainty around nutrient requirements justifies excluding those costs from current rate …

**Mike Olinger, on front-loading rate increases:** "Without front loading it, we fall below what we've set. We would actually fall below what's required by the state. And it would also impact our ability to borrow to fund these couple of projects that we have in these early years." **Mike Wilson, on nutrient cost uncertainty:** "We really don't know what those costs are going to be. And if we were to build in this sort of fictitious number for a nutrient program, that kind of takes away any n…

**Water System Planning**: The city now has a complete Water System Plan with detailed hydraulic modeling at the individual pipe level, representing a major advancement in technical analysis capability over previous skeleton-scale models. **Financial Planning Approach**: The city shifted from treating utilities in isolation to comprehensive utility-wide financial planning, revealing the full scale of combined rate impacts across water, wastewater, and stormwater services. **Regulatory Strategy**: Staff adopted a more cautious approach to nutrient reduction requirements, choosing to exclude $870 million in potential projects from immediate rate planning rather than risk overcommitting ratepayers to uncertain r…

### Meeting Overview The Bellingham City Council's Public Works and Natural Resources Committee met on April 14, 2025, to receive a comprehensive presentation on long-range utility planning. The main focus was reviewing the Water System Plan, Nutrient Reduction Evaluation updates, and utility-wide rate impacts that would significantly affect residents over the next 10-20 years. ### Key Terms and Concepts **Water System Plan (WSP):** A state-mandated comprehensive plan required every 10 years that evaluates drinking water infrastructure, projects future demands, and outlines capital improvements needed to meet Department of Health regulations. **Nutrient Reduction Evaluation (NRE):** A required analysis of nitrogen reduction strategies for the Post Point Resource Recovery Plant in response to Washington State Ecology's Puget Sound Nutrient General Permit to protect the Salish Sea. **Capital Improvement Plan (CIP):** A long-term financial planning document that identifies infrastructure projects, their costs, and timing. The water system CIP totals $532 million over 20 years, while wastewater totals $1.5 billion. **AKART:** All Known, Available, and Reasonable Treatment - a regulatory standard used in Washington State for pollution control that considers technical feasibility and economic reasonableness. **Fire Flow:** The water flow rate and pressure required to fight fires effectively, typically requiring 30 PSI minimum pressure while maintaining adequate flow. **Revenue Requirement:** A utility financial analysis method that determines what rate revenues are needed to cover operating costs, debt service, capital investments, and maintain adequate reserves. **Department of Health (DOH):** The Washington State agency that regulates public water systems and must approve the Water System Plan before the city can adopt it. **Scenario Planning:** The practice of evaluating multiple implementation approaches. Scenario 1 represents baseline/full implementation, while Scenario 2 represents a phased/delayed approach. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Hannah Stone | Committee Chair, First Ward Council Member | | Lisa Anderson | Committee Member, Fifth Ward Council Member | | Jace Cotton | Committee Member, At-Large Council Member | | Kim Lund | Mayor | | Mike Olinger | Interim Public Works Co-Director | | Mike Wilson | Assistant Director of Public Works-Engineering | | Aurelie Nabonnand | Project Engineer, Carollo Engineers (Water System Plan) | | Susanna Leung | Project Engineer, Carollo Engineers (Nutrient Reduction) | | Tage Aaker | Financial Consultant, FCS Group | ### Background Context This meeting represents a critical juncture for Bellingham's utility infrastructure. The city faces significant challenges: aging water …