>> HERE WE GO. GOOD AFTERNOON,
EVERYONE. IT IS JUNE 26, 2024,
MEETING UP BOX, PUBLIC
TECHNOLOGY MEETING WILL COME TO
ORDER. IT IS TO: 03. I AM JOY
HOLLINGSWORTH AND AM THE CHAIR
OF THE COMMITTEE. WILL THE
CLERK PLEASE CALL THE ROLE?
>> [ ROLL BEING CALLED ] THREE
COUNCIL MEMBERS ARE PRESENT.
>> FOR THE RECORD, PRESIDENT
NELSON HAS BEEN EXCUSED AND
COUNCILMEMBER KETTLE IS AT
ANOTHER EVENT AND HE WILL JOIN
US LATER. LOOKING FORWARD TO
HIS PRESENCE. COLLEAGUES, I CAN
TURN THIS WAY BECAUSE THERE IS
NOBODY TO MY RIGHT . WE HAVE
THREE ITEMS ON THE AGENDA
TODAY. WE HAVE A PUBLIC HEARING
. A DISCUSSION AND POSSIBLE
VOTE FOR COUNCIL BILL 120800 .
AN ORDINANCE THAT WOULD
AUTHORIZE THE CURRENT USE OF
TAXATION FOR A P-PATCH OF 4613
SOUTH LUCILE STREET . THAT IS
IN SOUTH SEATTLE. WE ALSO HAVE
A PRESENTATION FROM OUR
PHENOMENAL SPU TO PROVIDE AN
UPDATE ON THAT SHIP WATER
QUALITY PROJECT. THAT IS IN
COUNCILMEMBER STRAUSS'S
DISTRICT. HE KNOWS A LOT ABOUT
THAT PROJECT AND I'M SURE HE
WILL GIVE US SOME COOL FACTORS
WILL. AND THEN ALSO, WE HAVE
OUR FIRST OF THREE BRIEFINGS
FROM SPU FOR THE 2025-2030
STRATEGIC BUSINESS PLAN. WE
WILL NOW CONSIDER THE AGENDA IF
THERE IS NO OBJECTIONS. AS I
LOOK TO MY LEFT, THE AGENDA
WILL BE ADOPTED. SEEING A
THUMBS-UP, THAT MEANS THAT
THERE IS NO OBJECTION AND THE
AGENDA IS ADOPTED. WE WILL NOW
MOVE ON TO PUBLIC COMMENTS. WE
WILL OPEN UP THE HYBRID PUBLIC
COMMENT PERIOD. I WOULD LIKE TO
NOTE THAT THIS PUBLIC HEARING
FOR THIS AGENDA ITEM IS THE ONE
-- I CAN'T READ THAT. THIS
PUBLIC COMMENT IS FOR THE
AGENDA AND WE WILL HAVE ANOTHER
PUBLIC COMMENT FOR THE P-PATCH.
THERE IS TWO PUBLIC COMMENTS
TODAY. CLERKS, HOW MANY
SPEAKERS ARE SIGNED UP? WE HAVE
ONE IN PERSON AND ONE REMOTE
SPEAKER.
>> EACH SPEAKER WILL GET TWO
MINUTES. CLERK, CAN YOU PLEASE
READ THE INSTRUCTIONS?
>> THE COMMENT PERIOD WILL BE
MODERATED IN THE FOLLOWING
MANNER. I WILL CALL ON SPEAKERS
BY NAME IN THE ORDER IN WHICH
THEY REGISTERED, BOTH ON THE
COUNCIL'S WEBSITE OR FROM THE
SIGN-UP SHEET AVAILABLE HERE IN
COUNCIL CHAMBERS. WE WILL START
WITH IN PERSON SPEAKERS FIRST.
IF YOU HAVE NOT REGISTERED TO
SPEAK BUT WOULD LIKE TO, YOU
CAN SIGN UP BEFORE THE END OF
THE PUBLIC COMMENT PERIOD. GO
TO THE COUNCIL'S WEBSITE OR BY
SIGNING UP ON THE SIGN-UP SHEET
NEAR THE PUBLIC COMMENT
MICROPHONE. THE ONLINE LINK IS
LISTED ON TODAY'S AGENDA. WHEN
SPEAKING, PLEASE BEGIN BY
STATING YOUR NAME AND THE ITEM
YOU ARE ADDRESSING. SPEAKERS
WILL HEAR A TIME WHEN 10
SECONDS ARE LEFT OF THE
ALLOTTED TIME . IF SPEAKERS DO
NOT END THE COMMENTS AT THE END
OF THE ALLOTTED TIME PROVIDED,
THE SPEAKERS MICROPHONE WILL BE
MUTED TO ALLOW US TO CALL THE
NEXT PERSON. THE PUBLIC COMMENT
PERIOD IS NOW OPEN AND WE WILL
BEGIN WITH THE FIRST SPEAKER ON
THE LIST. FIRST AND ONLY
SPEAKER IS ALEX TSIMERMAN .
>> PAUSE THE TIMER. YOU HAVE
BEEN WARNED . WE HAVE JEWISH
HOUSEHOLD HERE IN THE SALUTE IS
NOT GOING TO FLY WITH ME IT IS
DISRUPTIVE, ABUSIVE AND I'M
NOT GOING TO TOLERATE IT
ANYMORE. YOU HAVE BEEN WARNED.
THAT IS THE LAST TIME WE WILL
ALLOW THAT TYPE OF SALUTE,
ESPECIALLY IN THIS COMMITTEE.
YOU MAY PROCEED.
>> I RECOMMEND YOU READ
DECISION ABOUT SALUTE. [
INAUDIBLE ] ABSOLUTELY NOT
LEGAL BUT I FORGIVE YOU. MANY
PEOPLE --. I'M SO SORRY. YEAH,
OKAY, NO PROBLEM. I WANT TO
TALK ABOUT NUMBER TWO, UTILITY
PLANT IS A HUGE PLANT. FOR
750,000 PEOPLE, THIS IS HUGE.
WHAT YOU HAVE RIGHT NOW IS
NOTHING. LOOK, ONE MAN COMES
AND TALK ABOUT THIS. WHERE IS
ANOTHER 750,000 PEOPLE HERE?
NOT COMING. WHY? BECAUSE THEY
DON'T BELIEVE YOU. YOU MAKE
LIFE IN SEATTLE MISERABLE. ALL
OF IT, FOR 20 YEARS. ALMOST.
SO, MY PROPOSITION IS VERY
SIMPLE. MAKE PEOPLE INVOLVED IN
THIS BUSINESS BECAUSE PEOPLE
ARE SUPPOSED TO BE DOING
SOMETHING. 750,000 HAVE
OPINIONS. YOU KNOW WHAT THIS
MEANS? THEY HAVE A RIGHT FOR AN
OPINION. FOR THIS I TOLD YOU
MANY TIMES, OPEN BATHROOM AND
FIRST FLOOR , BECAUSE MANY
PEOPLE CANNOT COME. THEY ARE
WORKING. THEY ARE WORKING TO
MAKE MONEY, HAVE FAMILIES. SO
THEY CAN COME AND TALK FOR 3
MINUTES LIKE ALL CIVILIZED
PEOPLE TALK, LIKE I TALK FROM [
INAUDIBLE ] . YOU CONTROL MAKE
ROOM SETTLE 750,000 --
CONCENTRATION CAMP. GIVE PEOPLE
A LITTLE BIT OF FREEDOM. WOULD
HAVE CONSTITUTION, FIRST
AMENDMENT AND FREEDOM OF
SPEECH.
>> REMOTE SPEAKER?
>> WE WILL NOW MOVE TO THE
REMOTE PUBLIC COMMENT . WHAT I
CALL A REMOTE SPEAKER'S NAME,
STAFF WILL UNMUTED THE
MICROPHONE AND AN AUTOMATIC
PROMPT -- THE SPEAKER MUST
PRESS STAR 6 TO BEGIN SPEAKING.
JORDAN SULLIVAN . IT LOOKS LIKE
THEY ARE NOT PRESENT. OUR
PUBLIC COMMENT IS CLOSED FOR
TODAY.
>> THANK YOU. THE PUBLIC
COMMENT PERIOD IS NOW CLOSED.
WE WILL PROCEEDED TO OUR ITEMS
OF BUSINESS. CLERK, PLEASE READ
AGENDA ITEM NUMBER ONE INTO THE
RECORD, PLEASE.
>> COUNCIL BILL 120800 , AND
ORDINANCE RELATING TO CURRENT
USE TAXATION , PROVING AN
APPLICATION FOR CURRENT USE
TAXATION OF PROPERTY LOCATED AT
4613 SOUTH LUCILE STREET UNDER
THE KING COUNTY PUBLIC BENEFIT
RATING SYSTEM. THIS IS FOR
PUBLIC HEARING BRIEFING
DISCUSSION AND POSSIBLE VOTE.
>> THANK YOU. I'M NOW OPENING
UP THE PUBLIC HEARING ON THIS
COUNCIL BILL 120800. ANY
SPEAKERS SIGNED UP FOR THIS
SPECIFICALLY?
>> WE HAVE ONE IN PERSON
SPEAKER.
>> OKAY. EACH SPEAKER WILL GET
TWO MINUTES. CAN YOU PLEASE
READ -- I DON'T THINK WE NEED
TO READ THE INSTRUCTIONS AGAIN
BUT LET'S GO AHEAD AND MOVE
STRAIGHT TO PUBLIC COMMENT.
>> THE FIRST AND ONLY SPEAKER
FOR THIS SESSION IS ALEX
TSIMERMAN.
>> HE HAS LEFT THE CHAMBER SO
IS THERE ANYONE ONLINE?
>> NO ONE ONLINE IS PRESENT.
>> OKAY, THE PUBLIC HEARING FOR
THIS IS NOW CLOSED. BEING THAT
THERE IS NO MEMBER OF THE
PUBLIC HERE PRESENT ON THE
HEARING, OBVIOUSLY THIS IS NOW
CLOSED . BEFORE WE PROCEED TO A
POSSIBLE VOTE , PRESENTING ON
THIS BILL IS BILL BERNSTEIN
FROM KING COUNTY AND YOLANDA
FROM CENTRAL STAFF . I SHOULD
HAVE LOOKED UP. I'M JUST
READING THE PAPER. YOLANDA, SO
GRATEFUL FOR YOU TO BE HERE.
PLEASE INTRODUCE YOURSELF FOR
THE RECORD AND JUMP IN ABOUT
THIS COUNCIL BILL. THANK YOU.
>> TESTING. YOLANDA , COUNCIL
CENTRAL STAFF. I'M JUST
GETTING THE PRESENTATION APPEAR
-- UP HERE. AND YES, BILL
BERNSTEIN IS ONLINE. I THINK I
SAW HIS LITTLE TILE. I AM JUST
GOING TO DO A BRIEF
PRESENTATION ABOUT THIS COUNCIL
BILL 120800 AND PROVIDE CONTEXT
FOR THE COMMITTEE AS THIS IS
THE FIRST TIME YOU ALL ARE
TAKING THIS UP , AND SO, THAT
IS MY PLAN. THIS IS A
PRESENTATION THAT WILL PROVIDE
AN OVERVIEW OF THE CURRENT USE
TAXATION PROGRAM, SPECIFIC TO
OPEN SPACE.
>> PLEASE POSSIBLE FOR THE
RECORD, MR. TSIMERMAN'S
BEHAVIOR RIGHT NOW IS
DISRUPTIVE IN CHAMBERS AND I'M
ASKING HIM TO LEAVE AND HE IS
DOING THAT VERY NICELY. THANK
YOU, MR. TSIMERMAN. YOLANDA,
BACK TO YOU.
>> ALSO, WE END UP PROVING OF
APPLICATIONS AND DISRUPTION OF
THE APPLICATION BEFORE THE
COMMITTEE TODAY. I WANTED TO
MAKE SURE BILL HAD A CHANCE TO
INTRODUCE HIMSELF. SORRY, I
FORGOT ABOUT THAT.
>> I'M BILL BERNSTEIN WITH THE
KING COUNTY DEPARTMENT OF
NATURAL RESOURCES AND PARKS AND
I AM HAPPY TO ANSWER ANY
QUESTIONS THAT MIGHT ARISE
AFTER YOLANDA'S PRESENTATION.
>> THANKS, BILL. SO, JUST IN
TERMS OF UNDERSTANDING WHAT
CURRENT USE TAXATION IS, IT IS
CREATED BY THE STATE TO
ENCOURAGE PROPERTY OWNERS TO
VOLUNTARILY MAINTAIN OPEN SPACE
FARM AND AGRICULTURAL AND
TEMPORAL IS ON PRIVATE LAND. BY
TAXING THE PROPERTY AT A LOWER
RATE BASED ON ITS CURRENT USE
RATHER THAN THE TYPICAL
ASSESSED VALUE BASED ON THE
PROPERTIES HIGHEST AND BEST
USE. IN KING COUNTY,
APPLICATIONS FOR CURRENT USE
TAXATION FOR OPEN SPACE ARE
EVALUATED BASED ON A PUBLIC
BENEFIT RATING SYSTEM , WHICH
IS ALSO KNOWN AS PBRS. I WILL
BE USING THAT ACRONYM,
PROMULGATED BY KING COUNTY IN
ACCORDANCE WITH THE REDESIGN
USED CODE OF WASHINGTON CHAPTER
84 34 . EXAMPLES OF OPEN SPACES
THAT MAY BE ELIGIBLE FOR
CURRENT USE TAXATION INCLUDE
BUFFERS TO PUBLIC LANDS,
LINKAGES TO PEDESTRIAN AND
BICYCLE TRAILS, DESIGNATED
HISTORIC LANDMARK SITES AND
URBAN OPEN SPACES. IN TERMS OF
THE PROCESS, THE KING COUNTY
DEPARTMENT OF NATURAL RESOURCES
AND PARKS DNRP ACCEPTS AND
REVIEWS OPEN SPACE TAXATION
CURRENT USED TAXATION
APPLICATIONS AND USES A RATING
SYSTEM UNDER THE PBRS TO ASSIGN
A RECOMMENDED POINT TOTAL TO
EACH APPLICATION WITH BONUS
POINTS FOR ALLOWING PUBLIC
ACCESS TO THE OPEN SPACE AND
CONSERVATION EASEMENTS.
PROPERTIES MUST BE ELIGIBLE FOR
A MINIMUM OF FIVE POINTS IN
ORDER TO QUALIFY FOR THE
PROGRAM. HIGHER POINT TOTALS
RESULT IN GREATER REDUCTIONS
AND PROPERTY TAXES. FOR
EXAMPLE, A PROPERTY WITH FIVE
POINTS WILL HAVE ITS ASSESSED
VALUE REDUCED BY 50% OR IS A
PROPERTY OF 35 POINTS OR MORE
WOULD HAVE ITS ASSESSED VALUE
REDUCED BY 90%. AFTER DNRP
REVIEWS ELIGIBLE APPLICATION IT
CREATES A REPORT RECOMMENDING T
PROPERTY TAX REDUCTION BASED ON
THE TOTAL POINTS ASSIGNED TO
THE PROPERTY. PROPERTY OWNERS
MUST MAINTAIN OPEN SPACE IN THE
SAME OR BETTER CONDITION FOR
THE DURATION OF THE PROPERTIES
ENROLLMENT IN PBRS. BUT IN
TERMS OF THE PROCESS BEYOND
THAT APPLICATION , BOTH THE
COUNTY, KING COUNTY AND THE
CITY'S LEGISLATIVE BODIES MUST
THEN EACH HOLD A PUBLIC HEARING
AND SEPARATELY VOTE ON WHETHER
TO APPROVE THE PROPERTIES
ENROLLMENT IN THE PROGRAM. JUST
FOR THE COMMITTEE'S AWARENESS,
THE CITY'S PRACTICE HAS BEEN
TO CONSIDER ALL APPLICATIONS
RECOMMENDED FOR ENROLLMENT BY
KING COUNTY FOR CURRENT USE
TAXATION IN SEATTLE FOR THE
PREVIOUS YEAR WITHIN A SINGLE
BILL. WE ONLY RECEIVED ONE
APPLICATION LAST YEAR, SO
THAT'S WHY THERE IS ONLY ONE
ASSOCIATED WITH THIS BILL. LAST
YEAR THERE WAS ONLY ONE
APPLICATION AND SOME YEARS
THERE ARE NONE. IT'S NOT SUPER
FREQUENT. PROPERTY TAXES
AREN'T LEVIED . IN TERMS OF
UNDERSTANDING FISCAL IMPACTS TO
THE CITY, PROPERTY TAXES ARE
LEVIED TO RAISE SPECIFIED
AMOUNT OF REVENUE IN A GIVEN
YEAR. THIS AMOUNT IS DIVIDED BY
THE APPRAISED VALUE OF ALL
PROPERTIES IN SEATTLE. THE
REDUCTION IN THE APPRAISED
VALUE OF PROPERTIES THAT ARE
PARTICIPATING IN THE PBRS DO
NOT DECREASE THE TOTAL AMOUNT
OF REVENUE RECEIVED BY THE
CITY. THESE REDUCTIONS RESULT
IN A MARGINAL LEVY RATE
INCREASE TO ALL OTHER
PROPERTIES SO THERE ULTIMATELY
IS NO FISCAL IMPACT TO THE CITY
WHICH RESULTS FROM APPROVING
THESE APPLICATIONS. ONTO -- IF
ANYBODY HAS ANY QUESTIONS, LET
ME KNOW. BUT ONTO THE SPECIFIC
APPLICATION BEFORE YOU ALL
TODAY, IT IS FOR THE P-PATCH,
WHICH HAS BEEN IN OPERATION
SINCE 1994 AND IT CONSISTS OF
TWO PARCELS OWNED BY GROW , A
NONPROFIT THAT SPORTS ARE GOING
TO GARDENING AND P-PATCH IS IN
THE CENTER PARCEL YOU SEE
BEFORE YOU IS OWNED BY SEATTLE
PARKS AND REC. IT IS LOCATED IN
THE SOUTHEAST CORNER SOUTH
LUCILE STREET AND 46th AVENUE
SOUTH IN THE HILLMAN CITY
NEIGHBORHOOD IN DISTRICT TWO.
THE APPLICATION IS TO
RECLASSIFY THE WEST LOT TO ADD
MORE PBRS CATEGORIES. IT HAS
BEEN ENROLLED IN THE PROGRAM
SINCE 1999, WHICH WOULD FURTHER
DECREASE ITS TAXABLE VALUE AND
THEN TO ENROLL THAT YOU SELECT
FOR THE FIRST TIME IN THE
PROGRAM. DNRP RECOMMENDED A
TOTAL OF 63 POINTS FOR THIS
APPLICATION AND IT RECEIVED A
PRETTY HIGH SCORE BECAUSE THERE
WAS A CONSERVATION EASEMENT ON
THE PROPERTY AND PROVIDES
UNLIMITED PUBLIC ACCESS . IF
THIS APPLICATION IS APPROVED,
IT WOULD RESULT IN DECREASING
THE TAXABLE VALUE OF THE
PROPERTY BY 90%. IN TERMS OF
THE PROCESS, KING COUNTY HELD
THE REQUIRED PUBLIC HEARING IN
NOVEMBER OF LAST YEAR AND THE
COUNTY COUNCIL APPROVED THE
APPLICATION IN JANUARY OF THIS
YEAR. IF THE CITY COUNCIL
APPROVED THE APPLICATION
BYPASSING COUNCIL BILL 120800,
KING COUNTY WOULD THEN
INCORPORATE THE LOWER TAXABLE
VALUES IN THE 2025 TAX RULES.
>> THANK YOU, THAT WAS GREAT. I
WOULD LOVE TO SEE IF MY
COLLEAGUES HAVE ANY QUESTIONS.
COUNCILMEMBER STRAUSS?
>> THANK YOU, CHAIR. I DON'T
HAVE ANY QUESTIONS. I HAVE
WORKED WITH GROW IN THE PAST.
IT'S A GREAT ORGANIZATION. I
THINK THIS IS A COMMONSENSE
DECISION.
>> CHAIR, I WANT TO THANK
VANESSA FOR BEING HERE TODAY
BUT ALSO WE WERE ABLE TO HAVE A
CONVERSATION BEFORE THIS
MEETING IN PREPARATION FOR THIS
MEETING, SO I DON'T HAVE ANY
QUESTIONS. THANK YOU.
>> THANK YOU, COUNCILMEMBER
RIVERA AND STRAUSS. THANK YOU,
YOLANDA AND BILL FOR THE
PRESENTATION. THE QUICK
PRESENTATION. UNDER THE COUNCIL
RULES, A BILL CANNOT BE VOTED
ON THE SAME DAY AS PUBLIC
HEARING, UNLESS THE RULES ARE
SUSPENDED, AND GIVEN THE RESULT
OF THE HEARING TODAY , I
RECOMMENDED THAT WE SUSPEND THE
RULES BY UNANIMOUS CONSENT TO
ALLOW US TO VOTE ON THE BILL
TODAY AND REFERRED TO OUR CITY
COUNCIL. IF THERE IS NO
OBJECTIONS TO THAT , WHICH I
WILL PAUSE , THE RULES WILL BE
SUSPENDED TO ALLOW THE
COMMITTEE TO VOTE ON THE SAME
DAY AS IT WAS HELD . HEARING NO
OBJECTION, THE RULES ARE
SUSPENDED AND WE WILL NOW
PROCEED WITH THE COMMITTEE
RECOMMENDATION . BEFORE WE VOTE
I WANT TO THANK BILL AND
YOLANDA FOR YOUR WORK ON THIS.
WE KNOW THAT P-PATCH IS
IMPORTANT TO OUR CITY. IT
CREATES A COMMUNITY AND
CONNECTION AND ALSO IT
LOCALIZES OUR FOOD AND SHOWS
PEOPLE HOW WE CAN BE ABLE TO
GROW THINGS WITH BEAUTIFUL SOIL
AND OUR LAND . THANK YOU,
YOLANDA, AND GROW AND I THANK
THE COUNTY, BILL, AND ALL OF
YOUR WORK. I NOW MOVE THAT THE
COMMITTEE RECOMMENDS PASSAGE OF
COUNCIL BILL 120800. IS THERE A
SECOND?
>> SECOND.
>> A SECOND AND A THIRD. ARE
THERE ANY COMMENTS ? CLERK,
PLEASE FILL THE ROLL. FOR THE
COMMITTEE TO RECOMMEND THAT THE
CITY COUNCIL PASS BILL 120800.
>> [ ROLL BEING CALLED ]
>> IT PASSES AND WILL BE SENT
TO THE JULY 2nd 2024 COUNCIL
MEETING. IF THERE IS NO FURTHER
QUESTIONS WE WILL MOVE TO
AGENDA ITEM NUMBER TWO, CLERK,
PLEASE READ AGENDA ITEM TWO
INTO THE RECORD.
>> A SHIP CANAL WATER THE
PROJECT UPDATE FOR BRIEFING AND
DISCUSSION. PRESENTING HIS
ANDREW LEE AND KEITH WARD FROM
SEATTLE PUBLIC UTILITIES.
>> KEITH, DIRECTOR LEE, WE
APPRECIATE YOU BEING HERE, AS
ALWAYS. LOOKING FORWARD TO THE
PRESENTATION ABOUT THE SHIP
WATER CANAL. THE WATER QUALITY
CANAL PROJECT. DID I SAY THAT
RIGHT? NO, I DIDN'T. WATER
QUALITY PROJECT. THANK YOU.
>> THANK YOU, CHAIR
HOLLINGSWORTH. WE HAVE TWO
REALLY IMPORTANT AGENDA ITEMS
FOR YOU TODAY AND I WANT TO
THANK YOU FOR THE OPPORTUNITY
TO TALK ABOUT THEM WITH YOU.
THE FIRST IS AN UPDATE ON THE
SHIP CANAL WATER QUALITY
PROJECT, WHICH WILL KEEP MORE
THAN 75 MILLION GALLONS OF
POLLUTED STORM WATER AND SEWAGE
FROM FLOWING INTO LAKE
WASHINGTON SHIP CANAL , SALMON
BAY AND LAKE UNION IN A TYPICAL
YEAR. A LITTLE OVER TWO MONTHS
AGO WE CAME TO THIS COMMITTEE
TO BRIEF YOU ABOUT SPU'S
COMBINED AND THE SHIP CANAL
PROGRAM IN PARTICULAR. TODAY WE
ARE HERE TO GIVE ME THE RESULTS
OF OUR ANALYSIS. AND WITH ME
TODAY IS KEITH WARD WHO IS THE
EXECUTIVE SPONSOR OF THE SHIP
CANAL WATER QUALITY PROJECT. I
WILL PASS IT OFF TO KEITH NOW.
>> I'M TRYING TO DELIVER A
PROJECT BUT NOT TO GET THIS UP
. I'M GOING TO GET SOME HELP
FROM ALEX.
>> IF I MAY, WHILE THEY ARE
SETTING UP, I WANT TO CORRECT
AND APOLOGIZE TO YOLANDA. I
THINK I SAID THE WRONG NAME. I
HAD YOLANDA ON THE BRAIN BUT I
THINK I SAID VANESSA INSTEAD.
YOLANDA IS ARE VERY TRUSTING
STEFFI. APOLOGIES. THANK YOU,
CHAIR.
>> NO WORRIES AT ALL.
>> OKAY. LET'S START AGAIN.
THANK YOU, ANDREW. WE ARE HERE
TO TALK ABOUT A PROJECT UPDATE
THAT WE JUST COMPLETED FOR THE
SHIP CANAL WATER QUALITY
PROJECT. I WILL PROVIDE A BRIEF
OVERVIEW OF THE PROJECT.
FACTORS IN OUR COST AND
ESTIMATES, CHALLENGES ON THE
PROJECT IN THE PAST FEW YEARS ,
AND THE RESULTS OF THE COST AND
SCHEDULE UPDATE WE JUST
COMPLETED. THE SHIP CANAL WATER
QUALITY PROJECT IS AN
INVESTMENT IN PUGET SOUND AND
OUR REGION, AND IT REDUCES
SEATTLE'S SEWAGE OVERFLOWS OR
CSO BY MORE THAN 75 MILLION
GALLONS PER YEAR ON AVERAGE. ON
THIS PROJECT WE HAVE A JOINT
PROJECT AGREEMENT WITH THE KING
COUNTY WASTEWATER TREATMENT
DIVISION THAT INCLUDES A COST
SPLIT OF ABOUT 65% SPU , 35%
KING COUNTY PEER CONSTRUCTION
IS TAKING PLACE IN FIVE
LOCATIONS AND INCLUDES A 2.7
MILE LONG STORAGE TUNNEL. IN
2013, THE CITY SIGNED A CONSENT
DECREE WITH THE U.S. DEPARTMENT
OF JUSTICE , THE EPA AND
WASHINGTON DEPARTMENT OF
ECOLOGY ABOUT COMBINED SEWAGE
OVERFLOWS. THE CONSENT DECREE
REINFORCES THE CITY'S
COMMITMENT TO MEETING THE STATE
AND FEDERAL REQUIREMENT TO
REDUCE CSO TO LESS THAN ONE
OVERFLOW PER OUTFALL PER YEAR
ON A 20 YEAR MOVING AVERAGE.
SINCE 2013 WHEN THE CONSENT
DECREE WAS SIGNED, SPU HAS MADE
SIGNIFICANT PROGRESS BY
COMPLETING MORE THAN 50 SEWER
SYSTEM IMPROVEMENTS TO INCREASE
SYSTEM EFFICIENCY INCLUDING
PROJECTS LIKE INCREASING
WASTEWATER PUMP STATION
CAPACITY , REPLACING OUTDATED
PASSIVE CONTROL SYSTEMS WITH
MODERN SMART GATES , AND LINING
THE REPLACING PIPES WE HAVE
ALSO COMPLETED AT LEAST TWO
LARGE GREEN STORMWATER
INFRASTRUCTURE PROJECTS THAT
MANAGE NEARLY 13 ACRES OF
IMPERVIOUS AREA IN CSO BASINS
WHICH KEEP STORM WATER OUT OF
THE SYSTEM. WE HAVE COMPLETED
OVER 1000 RAIN GARDENS OR
CISTERNS INSTALLED ON PRIVATE
PROPERTY TO MANAGE STORMWATER
RUNOFF THROUGH THE RAIN WISE
PROGRAM. WE HAVE COMPLETED FOUR
STORAGE FACILITIES FOR A TOTAL
OF 5.4 MILLION GALLONS OF
STORAGE ADDED THROUGHOUT THE
COMBINED SYSTEM. IN 2017 SPU
WILL COMPLETE CONSTRUCTION OF
OUR LARGEST CAPITAL PROJECT THE
SHIP CANAL WATER QUALITY
PROJECT, WHICH WILL PROVIDE 30
MILLION GALLONS OF ADDITIONAL
CSO STORAGE AND REDUCE THE
NUMBER OF CSO'S IN SEATTLE BY
NEARLY HALF. WE MADE
CONSIDERABLE PROGRESS ON THE
PROJECT THE PAST 10 YEARS WHICH
HAS BEEN SHOWN IN THIS
TIMELINE. WE COMPLETED THE
DESIGN FOR ALL OF OUR PROJECTS
IN THIS PHASE IS SHOWN IN THE
LIGHT BLUE BARS. WE HAVE
COMPLETED CONSTRUCTION ON ONE
MAJOR CONSTRUCTION PROJECT AND
NEARLY COMPLETE WITH TWO MORE
AND JUST RECEIVED BIDS FOR OUR
LAST REMAINING PROJECT. THE
BALLARD PUMP STATION AND
CONVEYANCE PROJECT. UNTIL A
MONTH AGO WE DID NOT HAVE COST
CERTAINTY ON THIS LAST PROJECT
BECAUSE WE NOW HAVE EITHER
COMPLETED OR HAVE BIDS FOR ALL
OF OUR CONSTRUCTION WORK . WE
HAVE MORE COST CERTAINTY ON
OVER $470 MILLION OF
CONSTRUCTION WORK. I WILL TALK
MORE ABOUT THIS LATER. WE HAVE
COMPLETED OVER $410 MILLION OF
PROGRESS ON THE PROJECT SO FAR.
WE EXPECTED TO HAVE THE ENTIRE
FACILITY COMPLETE AND
OPERATIONAL BY 2027, WHICH IS
SHOWN BY THE YELLOW STAR. IN
2019, SPU ASKED TO RENEGOTIATE
THE TERMS OF THE WASTEWATER
CONSENT DECREE AND NEGOTIATIONS
INVOLVING THE U.S. DEPARTMENT
OF JUSTICE EPA WASHINGTON
DEPARTMENT OF ECOLOGY, SPU AND
KING COUNTY WASTEWATER CHAIRMAN
DIVISION HAVE BEEN ONGOING
SINCE 2020. NEGOTIATIONS WERE
CONCLUDED AND TODAY THE MAYOR
TRANSMITTED THE DRAFT CONSENT
DECREE MODIFICATION TO COUNCIL
FOR REVIEW AND APPROVAL. THIS
MODIFICATION INCLUDES A SHIP
CANAL WATER QUALITY PROJECT
COMPLETION DATE OF DECEMBER
31st , 2027 , WHICH ALIGNS WITH
THE SCHEDULE SHOWN HERE. I WANT
TO QUICKLY COVER HOW FAR WE
HAVE COME THE PAST SEVEN YEARS
OF CONSTRUCTION WORK. OUR FIRST
PACKAGE, THE EARLY WORKS
PROJECT BUILT A NEW PERMANENT
PEER REMOVED CONTAMINATED SOIL
AND BROUGHT POWER TO THE SITE
FOR FUTURE TUNNELING
OPERATIONS. OUR LARGEST
CONSTRUCTION PACKAGE, THE
STORAGE TUNNEL IS ALMOST
COMPLETE . WE SELECTED THIS
CONTRACTOR IN 2019 AND THEY
HAVE BEEN WORKING FOR THE LAST
FOUR YEARS THROUGH THE PANDEMIC
AT EACH OF OUR SITES . THEY
COMPLETED THE STORAGE TUNNEL
AFTER 22 MONTHS OF TUNNELING IN
JUNE , 2023 AND THEY ARE NEARLY
COMPLETE WITH HEAVY
CONSTRUCTION WORK AND WILL
FINISH THIS FALL. OUR THIRD
CONSTRUCTION PACKAGE, THE
WALLINGFORD CONVEYANCE PROJECT
IS IN CONSTRUCTION AND WILL
ALSO FINISH THIS FALL. THE
FINAL SHIP CANAL WATER QUALITY
PROJECT IS THE BALLARD PUMP
STATION AND CONVEYANCE PROJECT,
WHICH WILL CONSTRUCT A NEW 12
MILLION GALLON PER DAY PUMP
STATION IN BALLARD TO DRAIN THE
STORAGE TUNNEL AND BUILD A NEW
EIGHT FOOT DIAMETER TUNNEL TO
BRING COMBINED SEWAGE OVERFLOWS
TO THE STORAGE TUNNEL INSTEAD
OF OVERFLOWING IN SALMON BAY
NEAR THE BOWERS LOCKS. YOU CAN
SEE THE ALIGNMENT OF THE NEW
CONVEYANCE TUNNEL AS WELL AS A
RENDERING OF THE COMPLETED PUMP
STATION FROM THE NEW PUBLIC
PEER THAT WE REBUILT AT THE END
OF 24th AVENUE NORTHWEST. THIS
PROJECT WILL START CONSTRUCTION
IN THE FALL OF THIS YEAR AND
WILL BE COMPLETE IN 2027 . THE
PROJECT WILL ALSO BE
RESPONSIBLE FOR STARTUP AND
TESTING, AND INTEGRATING ALL OF
THE COMPONENTS THAT WERE
PREVIOUSLY CONSTRUCTED BY OTHER
PROJECTS. THERE IS A LOT OF
TERMINOLOGY AND COST
ESTIMATING. I WANT TO HIGHLIGHT
TWO KEY FACTORS THAT WERE
INFLUENTIAL FOR THE REVISED
COST ESTIMATE I AM TALKING
ABOUT TODAY. FIRST IS
ESCALATION. THIS IS WHAT WILL
COST TO COMPLETE WORK IN THE
FUTURE. OUR NATIONAL EXPERTS
BRICK THE PROJECT DOWN INTO
COMPONENTS SUCH AS CONSTRUCTION
LABOR , STEEL, DIESEL,
CONCRETE, SOFT COST AND
PROPERTY COST. THE SECOND
FACTOR ARE RISKS , CONSTRUCTION
PROJECTS HAVE RISKS. WE PLAN
FOR AND MANAGE RISKS THROUGH
OUR RISK REGISTER AND INTEGRATE
RISK RESERVES OR CONTINGENCIES
INTO OUR PROJECT COST
ESTIMATES. RISK CAN IMPACT NOT
ONLY THE COST BUT ALSO THE
SCHEDULE. IT'S IMPORTANT TO
REMEMBER THAT OUR COST
ESTIMATES INCLUDE NOT ONLY A
SINGLE ESTIMATE FOR FUTURE BUT
FOR A RANGE OF POSSIBLE
OUTCOMES BASED ON VARIOUS
SCENARIOS. THIS TYPE OF
ESTIMATING IS BEST PRACTICE FOR
MEGAPROJECTS AND IS PRACTICED
BY OTHER AGENCIES SUCH AS THE
WASHINGTON DEPARTMENT OF
TRANSPORTATION AND SOUND
TRANSIT. GIVEN THE
UNCERTAINTIES , LONG-DURATION
AND COMPLEX UNDERGROUND
CONSTRUCTION, WE USE VARIOUS
BEST PRACTICES TO MANAGE THIS
MAJOR PROJECT. THIS INCLUDES
ESTIMATE OF ESCALATION IN OUR
COST ESTIMATES AND TRACKING
FUTURE ESCALATION PROJECTIONS.
MANAGING A COMPREHENSIVE RISK
REGISTER AND MANAGING COST
THROUGH MONTHLY REVIEWS , VALUE
ENGINEERING, PROJECT COST
REVIEWS, AND FINANCING OPTIONS.
THIS IS A CHRONOLOGY OF A FEW
KEY BUDGET RELATED ITEMS SINCE
2018. IN THE BLUE , WE SET OUR
CURRENT BUDGET IN THE SPRING OF
2018. COUNCILMEMBER WAS CHAIR
OF OUR COMMITTEE WHEN WE
DEVELOPED THIS BUDGET DUE TO
CHANGES IN HISTORICAL RAINFALL
AND INCREASE IN REGIONAL
CONSTRUCTION MARKET COST. AT
THAT TIME IN 2018, SEATTLE'S
COMMERCIAL AND INFRASTRUCTURE
CONSTRUCTION MARKET WAS ONE OF
THE HOTTEST IN THE WORLD. I WAS
BROUGHT ON BOARD ABOUT THE TIME
IN ORDER TO DEVELOP THIS BUDGET
AND WE INITIATED AN EXTENSIVE
10 MONTH LONG COST ESTIMATE
REVIEW AND RECONCILIATION
PROCESS. WORKING WITH NATIONAL
EXPERTS, WE EVALUATED ALL THE
KEY FACT THERE'S AND WE WORKED
WITH THE MAYOR AND CITY COUNCIL
TO SET THE PROJECT BUDGET AT
570 MILLION AT A 65% CONFIDENCE
PICK 65% CONFIDENCE MEANS THAT
THERE IS A 65% CHANCE THAT COST
WILL BE AT OR BELOW THE
ESTIMATED BUDGET AND A 35%
CHANCE OF THE ESTIMATED COST
WILL BE EXCEEDED. INCLUDED IN
THIS ESTIMATE WAS AN ESTIMATE
OF $60 MILLION IN ESCALATION.
SINCE 2018 WE HAVE BEEN
MANAGING COSTS, RISKS, AND IN
SUCH A TEASE AND LAMENTING COST
REDUCTIONS. CONSTRUCTION OF THE
STORAGE TUNNEL BEGAN IN 2019
AND WE UPDATED THE COUNCIL ON
THE PROJECT AND THAT WE WERE ON
TRACK TO DELIVER THE PROJECT AT
570 MILLION. IN 2020 AM A AS WE
ALL KNOW, THE GLOBAL PANDEMIC
BEGAN, WHICH DISRUPTED SUPPLY
CHAINS , DECREASED
PRODUCTIVITY, CREATED A
SHORTAGE IN CONSTRUCTION
WORKERS AMONG OTHER IMPACTS.
RIGHT AT THE BEGINNING OF THE
PANDEMIC , ESCALATION DECREASED
BUT THAT IT INCREASED TO LEVELS
FAR BEYOND HISTORICAL AVERAGES
IN 2021 AND 2022. IN 2022, OUR
TUNNEL BORING MACHINE NAMED
MUDHONEY AFTER THE SEATTLE
GRUNGE BAND ENCOUNTERED A
BOULDER AFFECTIONATELY NAMED
THE MEGA BOULDER PICK WITH
UPDATED THE COUNCIL ABOUT THE
EVENT WHICH IMPACTED THE
PROJECT. WE DISCUSSED THE
PROJECT BUDGET WOULD EXCEED THE
$570 MILLION VALUE AND THAT WE
WOULD UPDATE THE COUNCIL IN
2023 AFTER WE RECEIVED BIDS FOR
OUR LAST CONSTRUCTION PROJECT.
IN 2023, WE RECEIVED BIDS BUT
DECIDED TO REBUILD THE PACKAGE
TO REDUCE COST. WE JUST
RECENTLY SELECTED A CONTRACTOR
FOR THIS PACKAGE SO WE CAN KNOW
OF THAT COUNCIL ON THE PROJECT
BUDGET AND SCHEDULE. A MAJOR
CHALLENGE FOR US IS RECORD HIGH
ESCALATION FOR ITEMS LIKE
CONSTRUCTION LABOR, MATERIALS
AND EQUIPMENT. WE DISCUSSED
THIS WITH THE CITY COUNCIL IN
TWO PRESENTATIONS IN 2022 AND
APRIL OF THIS YEAR. OUR 2018
COST ESTIMATE WAS COMPLETED
DURING WHAT IS CONSIDERED A
PERIOD OF HIGH ESCALATION FROM
2017 THROUGH 2018 AND WE
ASSUMED THAT SEATTLE WOULD
RETURN TO HISTORICAL AVERAGE OF
ABOUT 2.3% WITHIN FIVE YEARS.
STARTING IN 2021, ESCALATION
INCREASED AT BETWEEN 11 TO 24%
ANNUALLY. THIS WAS
RECORD-SETTING AND IMPACTS THE
BIDS , CONSTRUCTION PROJECTS
RECEIVED. AS YOU ARE LIKELY
AWARE, THIS ESCALATION HAS ALSO
IMPACTED BUDGETS FOR MANY OTHER
REGIONAL AND NATIONAL
MEGAPROJECTS. THIS FIGURE SHOWS
HOW ESCALATION COMPOUNDS OVER
TIME SINCE WE SET OUR $570
MILLION BUDGET IN 2018. OUR
2018 ESTIMATE OF CUMULATIVE
ESCALATION IS SHOWN IN BLUE AND
THE REALIZED IN FUTURE
ESTIMATED ESCALATION IS IN
GREEN. CONTRACTORS WILL BE
STARTING WORK ON THE $187
MILLION PUMP STATION AND
CONVEYANCE PROJECT LATER THIS
YEAR AND WILL BE COMPLETING THE
WORK THROUGH 2027 , WHICH IS
SHADED IN PURPLE. WE RECEIVED
BIDS FOR OUR $255 MILLION
STORAGE TUNNEL CONSTRUCTION
PACKAGE IN MID-2019 BEFORE
ESCALATION RATES INCREASE.
THERE IS NO RISK OF ESCALATION
PRICE INCREASES THERE. ALSO
SHOWN HERE, WHEN WE SOLICITED
BIDS FOR THE BALLARD PUMP
STATION , WHICH I WILL DESCRIBE
MORE IN A FEW MINUTES. WE HAVE
ALSO ENCOUNTERED UNDERGROUND
RISK EVENTS, INCLUDING ONE THAT
WAS LESS THAN 5% LIKELY. OUR
TUNNEL BORING MACHINE
ENCOUNTERED A 12 FOOT DIAMETER
BOULDER , WHICH WE BELIEVE IS
THE LARGEST BOULDER EVER SEEN
IN A NORTH AMERICAN TUNNEL
ALIGNMENT. OUR TEAM INCLUDING
THE CONTRACTOR WORKED
DILIGENTLY TO ASSESS AND THEN
GRIND THROUGH THE MEGA BOULDER
AND TO NOT HAVE TO REMOVE THE
BOULDER FROM THE SURFACE, WHICH
WOULD HAVE IMPACTED A MAJOR
ARTERIAL AND LOCAL BUSINESS THE
CONTRACTOR ASSERTED DAMAGES OF
ABOUT 3.5 MONTHS OF SCHEDULED
DELAY AND OVER $17 MILLION IN
COST. WE ALSO DISCOVERED
UNDERGROUND INFRASTRUCTURE THAT
WASN'T ACCURATELY REFLECTED IN
100-YEAR-OLD HISTORICAL RECORDS
CALLED AS BILLS. THESE ARE
RECORDS IN WHICH PEOPLE
DOCUMENT HOW THEY ACTUALLY
INSTALLED NEW INFRASTRUCTURE.
UNFORTUNATELY THIS DIFFERENT
CONDITION COST $1.8 MILLION.
SOME BEST PRACTICES INCLUDE
FINDING OVER $67 MILLION IN
COST REDUCTIONS THROUGH THREE
MAJOR ENGINEERING AND COST
REDUCTION EFFORTS. WE SECURED
$341 MILLION IN THREE LOW
INTEREST RATE FEDERAL AND STATE
LOANS, WHICH WILL SAVE $267
MILLION. AS DESCRIBED EARLIER,
WE RECENTLY OPENED CONSTRUCTION
BIDS FOR THE BALLARD PUMP
STATION AND CONVEYANCE PROJECT.
IT WAS FIRST BID IN 2023 AND
SPU RECEIVED A SINGLE BID FOR
MORE THAN $65 MILLION OVER OUR
BUDGET, INCLUDING CONTINGENCIES
AND RESERVES. AFTER OPENING THE
BID IN 2023, SPO VALUED AND TRY
TO UNDERSTAND THE LARGE COST
VARIANCES AND WHY THERE WAS
ONLY ONE BIDDER. WE HELD
DEBRIEF CONVERSATIONS WITH
BIDDERS WHO DROPPED OUT OF THE
BIDDING PROCESS AND CONVENED A
GROUP OF NATIONAL PROJECT
DELIVERY EXPERTS TO HELP US
EVALUATE THE SITUATION. IN THE
END, THE CITY AND COUNTY
DECIDED NOT TO AWARD THE BID
AND PROCEED WITH THE REBID
PROCESS. A BIG PART OF THE
REBID PROCESS WAS TO UNDERSTAND
PAINT THAT IS CHANGES IN THE
MARKETPLACE TO CREATE
COMPETITIVE TENSION AND REDUCE
PROJECT COSTS. WE SOLICITED
INPUT FROM THE CONTRACTING
COMMITTEE TO INTO INFORM WHAT
CHANGES TO MAKE IN THE PROJECT
AND ULTIMATELY MADE SEVERAL
CHANGES TO TERMS REGARDING RISK
ALLOCATION ALONG WITH SMALLER
SCOPE CHANGES. WE ADVERTISE FOR
BIDS AGAIN IN JANUARY 2024 AND
OPENED BIDS AT THE END OF MARCH
OF THIS YEAR. WE RECEIVED THREE
BIDS AND ALL THREE WERE BETWEEN
4% UNDER AND 2% OVER ENGINEERS
ESTIMATE. AFTER EVALUATING THE
BIDS WE SELECTED A CONTRACTOR
LAST MONTH , RESTRUCTURING THE
DESIGN AND CONTRACT TERMS AND
REBIDDING THE CONSTRUCTION
PACKAGE SAVED RATEPAYERS $22
MILLION. WE WILL START
CONSTRUCTION ON THIS FINAL
PACKAGE IN THE FALL OF THIS
YEAR. LOOKING FORWARD WE WILL
CONTINUE OUR REVIEWS OF PROJECT
SCOPE , SCHEDULE AND COST AS
WELL AS RISK REGISTERS AND
OTHER COST MANAGEMENT
PRACTICES. WE ALSO WORK TO
MANAGE CONSTRUCTION COST AND TO
CONTAIN THOSE. WHO HAVE BEEN
WORKING ON A COMPREHENSIVE
UPDATE TO OUR PROJECT BUDGET
AND SCHEDULE SINCE THE LATE
2023 AND NOW THAT WE HAVE COST
CERTAINTY ON OUR LAST PACKAGE
WE CAN PROVIDE REVISED COST AND
SCHEDULE ESTIMATES. THE NEW
BUDGET IS 710 MILLION HAD AN
80% CONFIDENCE. THIS MEANS THAT
THERE IS AN 80% CHANCE THAT WE
WILL FINISH THE PROJECT AT OR
BELOW 710 MILLION AND AT 20%
CHANCE THE COST WILL BE
EXCEEDED. THIS LEVEL OF
CONFIDENCE IS NORMAL FOR OTHER
MEGAPROJECTS. AS I SAID, SO FAR
WE HAVE ACCOMPLISHED OVER $410
MILLION OF WORK SO THERE IS
ABOUT $300 MILLION OF WORK
REMAINING. SPU'S REMAIN IS
ABOUT $234 MILLION. SPU IS
COMMITTED TO MANAGING THESE
COSTS WITHIN OUR STRATEGIC IS
THIS PLAN RIGHT PATH WITH NO
IMPACT TO THE CITY'S GENERAL
FUND AND THIS WILL BE DISCUSSED
MORE IN THE NEXT BRIEFING.
I WANT TO CONNECT THE REVISED
COST ESTIMATE TO THE COST
INCREASE DRIVERS THAT I SHOWED
EARLIER. OUR REVISED COST
ESTIMATE IS 710 MILLION AND IT
IS A $140 MILLION INCREASE TO
OUR 2018 ESTIMATE. 80% OF THE
COST INCREASE, 112 MILLION, IS
FROM THREE CATEGORIES SHOWN IN
GREEN, ESCALATION INCREASES,
DIRECT PANDEMIC IMPACTS,
UNDERGROUND RISK EVENTS. DIRECT
PANDEMIC IMPACTS INCLUDE HIGH
RATES OF WORKER TURNOVER IN THE
CONSTRUCTION INDUSTRY WHICH
IMPACTED PRODUCTIVITY AND
IMPACTED THE SCHEDULE, WHICH
RESULTS IN MORE ESCALATION. THE
REMAINING CATEGORY SHOWN IN
GREAT REPRESENTS THE DESIGN
REFINEMENTS, TO CONCEPT LEVEL
FOR PARTS OF OUR PROJECT THAT
WERE IN THE VERY EARLY PLANNING
STAGES IN 2018. INCLUDING OUR
BALLARD PUMP STATION AND
CONVEYANCE PROJECT. FINALLY,
THIS PROJECT HAS BEEN IMPACTED
BY ESCALATION, THE PANDEMIC AND
UNDERGROUND RISK EVENTS. OUR
NEW PROJECT BUDGET AS I SAID IS
710 MILLION WITH AN 80%
CONFIDENCE AND WE ANTICIPATE
COMPLETING THE PROJECT IN 2027.
SPU SHARES ARE MANAGED WITHIN
OUR SIX-YEAR RIGHT PATH AND
THERE IS NO IMPACT TO THE
CITIES GENERAL FUND. AS WE LOOK
AHEAD TO THE FINAL THREE YEARS
OF THIS PROJECTS CONSTRUCTION,
I WANT TO REMIND US OF THE END
GOAL. ONCE THIS PROJECT IS
FINISHED TOGETHER WITH MORE
THAN 50 OTHER PROJECTS WE HAVE
COMPLETED SINCE 2010 , WE WILL
HAVE ELIMINATED APPROXIMATELY
175 COMBINED SEWAGE OVERFLOWS
PER YEAR AND REDUCED OUR
COMBINED SEWAGE OVERFLOW
VOLUMES BY MORE THAN 50%
ANNUALLY. WE ARE MAKING
SIGNIFICANT IMPROVEMENTS TO OUR
REGION'S WATER QUALITY. THANK
YOU. MIKE THANK YOU .
>> THAT WAS GREAT. I WANT TO
PAUSE AND SAY FOR THE RECORD WE
ARE JOINED BY COUNCILMEMBER
KETTLE. THANK YOU FOR JOINING
US TODAY. WE ALSO SAID THAT YOU
NOTIFIED US THAT YOU WOULD BE
TARDY TODAY BECAUSE OF A
PREVIOUS ENGAGEMENT. SO, THANK
YOU. DO ANY OF MY COLLEAGUES
HAVE QUESTIONS? COUNCILMEMBER
RIVERA AND THEN STRAUSS .
>> THANK YOU, CHAIR, AND THANK
YOU FOR THE PRESENTATION AND
BEING HERE TODAY. I REMEMBER IN
YOUR LAST PRESENTATION ABOUT
SOME OF THIS WORK, SO I
APPRECIATE AN UPDATE. I DO HAVE
A QUESTION ABOUT THE IMPACT TO
THE RIGHT PAYERS. WHEN YOU SAY
COST WILL BE MANAGED WITHIN THE
STRATEGIC RIGHT PATH, AND I
THINK YOU MIGHT HAVE SAID THIS
LAST TIME YOU WERE HERE, BUT
CAN YOU JUST REMIND US WHAT
IMPACT THIS WILL HAVE ON
RATEPAYERS?
>> WE WILL BE TALKING IN THE
NEXT PRESENTATION ABOUT OUR
PROPOSED RIGHT PATH, WHICH ,
FOR CONTEXT IS ABOUT 4.7% PER
YEAR OVER THE SIX YEAR
TIMEFRAME. THAT'S WHAT KEITH
IS REFERRING TO. WE WILL MANAGE
THE COST WITHIN THAT RATE PATH.
WE HAVE CALCULATED , BASED ON
OUR LAST TIME, WHAT IS ACTUALLY
THE IMPACT ON THE RATE ? IT
COMES OUT TO 0.2% OVER THE SIX
YEARS, SO WHEN WE TALK ABOUT
DIFFERENT RATE DRIVERS, IT IS
ONE OF A NUMBER OF RACE DRIVERS
, BUT ARGUABLY A SMALLER WHEN
COMPARED TO SOME OF THE OTHERS.
>> THANK YOU.
>> COUNCILMEMBER STRAUSS?
>> THANK YOU FOR THE
VISITATION. -- THE NUMBERS
BEFORE US TODAY , YOU HAVE ONLY
-- THE 710 AT 80% CONFIDENCE,
THAT'S SOMETHING THAT YOU HAVE
ONLY BEEN ABLE TO REALLY
IDENTIFY IN THE LAST FEW MONTHS
BECAUSE OF THIS REBIDDING
PROCESS. AND WITHIN THAT, IF
YOU HAD GONE WITH THE ORIGINAL
BID FROM A FEW YEARS AGO THAT
WE ONLY HAD ONE RESPONSE, THAT
WOULD HAVE BEEN $732 MILLION?
>> ABOUT $22 MILLION MORE AT
LEAST.
>> SO WE WERE ABLE TO DO
SAVINGS. AS I WAS LOOKING AT
SLIDE 15 WITH YOUR --. IN ANY
PROJECT, THERE IS SOME
ESCALATION. WE DID KNOW IN 2021
, NATIONWIDE ESCALATION
OCCURRED AT HIGHER RATES THAN
WE COULD HAVE PREDICTED BECAUSE
OF THE UNPREDICTED ENDEMIC.
JUST AS I'M LOOKING, IT'S
ALMOST AS --. I'M SEEING 36%
OF THE UNDERGROUND AND DESIGN.
BALLARD WAS ITS OWN CITY AND IF
A DEAD HORSE HAD NOT SHOWN UP
IN OUR RESERVOIR, --. JUST TO
SAY, IT LOOKS LIKE 36% ARE MORE
TYPICAL. YOU HAVE 64% THAT ARE
PANDEMIC RELATED OR ESCALATION.
IF YOU EVEN JUST TO LITTLE
SLICE OUT OF THAT ESCALATION OR
-- WE ARE CLOSER TO A 50-50
PERCENT.
>> FOR ESCALATION?
>> FOR PANDEMIC RELATED
>> WE BROKE DIRECT PANDEMIC
BECAUSE WE WERE ABLE TO
ACTUALLY SEE THAT AT 5%, BUT IF
YOU JUST -- IF WE HAD GONE BACK
AND NEVER HAD THE PANDEMIC, WE
WOULD PROBABLY BE TAKING OUT
60% OF THE COST INCREASE AT
LEAST, SO THE 5% PLUS -- IT
WOULD BE 64%.
>> THANK YOU. AND THEN I
BELIEVE IT IS SLIDE 11 , WHEN
WE ARE USING THIS GRAPH, THE
BLUE LINE, THE 20 PROJECTED
TREND, THAT I ASSUME HAD SOME
INFLATION ESCALATION BUILT INTO
IT. IS AT THE 60 MILLION
OVERRUN?
>> IF WE GO BACK IN 2018,
SEATTLE ACTUALLY HAD THE
HIGHEST NUMBER OF TOWER CRANES
IN THE NATION AND THAT WAS
RIGHT --. WE WERE AT THAT POINT
ESCALATION WAS ABOVE OUR NORMAL
AVERAGE OF 2.3%, SO WHEN WE
DEVELOPED THE 2018 BUDGET, WE
ASSUMED IT WOULD TAKE FIVE
YEARS TO GET BACK TO THE
HISTORICAL AVERAGE, SO WE BUILT
IN THE EXTRA ESCALATION. THE
TOTAL VALUE OF ESCALATION,
INCLUDING FIVE YEARS TO GET
BACK TO NORMAL WAS 60 MILLION.
AND SO, AS YOU CAN SEE HERE,
WITH THE GREENLINE, IT'S ALMOST
ON TOP OF THE BLUE LINE. WE
WERE RIGHT ON TRACK THEIR AND
THEN COVERED HIT AND IT WENT
ABOVE THAT. IT EXCEEDED THE 60
MILLION BY FAR.
>> IN THE ACTUALS, AT THE
BEGINNING OF THE PANDEMIC YOU
WERE BELOW.
>> YES, SLIGHTLY BELOW.
>> FOR A MEGAPROJECT, THAT IS
VERY DIFFICULT TO DO. WE CAN GO
BACK TO THE SLIDE 14. YOU WERE
UNDER PROJECTED BUDGET. THE
PANDEMIC CAME IN AND CREATED
ALL OF THESE UNCERTAINTIES. WE
HIT AN ERRATIC BOULDER THAT NO
ONE COULD HAVE FORESEEN AND YOU
WERE STILL ABLE TO -- YOU
BREEZED OVER THIS RATHER
QUICKLY . I DON'T KNOW THAT
THE GENERAL PUBLIC UNDERSTANDS
THAT THE OTHER OPTION THAN WHAT
YOU CHOSE WAS TO ACTUALLY CLOSE
DOWN SHELL AVENUE , GO THROUGH
THE HEAVY CORRIDOR CONCRETE
THAT IS POURED THERE AND SHUT
DOWN ONE OF THE ARTERIALS
LEADING IN AND OUT OF ALLARD.
>> WE HIT THE BOULDER , ON
APRIL 21st, 2022 AND BY ABOUT
TWO WEEKS AFTER THAT, IN OUR
TEAM WE WERE DEVELOPING A
BACKUP PLAN. WE ALWAYS DEVELOP
CONTINGENCY PLANS, AND THAT WAS
ONE OF THE PLANS THAT WE COULD
HAVE IMPLEMENTED, WHICH WOULD
HAVE PROBABLY TAKEN OUT BOTH
LANES. WE WOULD HAVE BASICALLY
HAD TO DESIGN A SHAFT ,
LITERALLY BREAK THE BOULDER UP,
BACKFILL IT AND THEN THE
MACHINE COULD MOVE FORWARD. IN
ABOUT FOUR DAYS IN EARLY JUNE
OF 2022, THE CONTRACTOR WAS
ABLE TO SUCCESSFULLY GRIND
SLOWLY THROUGH THE BOULDER.
>> DID YOU HAVE A COST ESTIMATE
TO WHAT THE SECONDARY OPTION OF
DIGGING THE SHAFT?
>> I DON'T BELIEVE WE
DEVELOPED A SPECIFIC COST
ESTIMATE. BASED ON THE COST FOR
OUR OTHER SHAFTS, PROBABLY ,
INCLUDING -- PROBABLY IN THE
$10-$15 MILLION AT LEAST.
>> AND THAT WOULD HAVE BEEN ON
TOP OF WHAT WE ALREADY INCURRED
THE 17. SO BACK TO THE ENVELOPE
MATH, WHILE WE ARE SEEING THIS
A VERY LARGE NUMBER BEFORE US,
WHAT WE DID NOT KNOW ABOUT WAS
THE PANDEMIC AND THEN THE OTHER
TWO ITEMS IS THAT YOU HAVE
ALREADY SAVED US $22 MILLION IN
ADDITION TO ANOTHER $15-$17
MILLION. SO, COLLEAGUES, I MAKE
THAT STATEMENT BECAUSE THIS
NUMBER IS BIG AND SCARY AND THE
TEAM HAS DONE A VERY GOOD JOB
TO REDUCE THIS NUMBER. LAST
QUESTION HERE , ARE THERE ANY
GRANTS OR FEDERAL FUNDING THAT
WE SHOULD BE SEEKING TO OFFSET
THIS COST ESCALATION?
>> IN SLIDE 13, SECOND ROW .
UTILITIES HAS DONE AN
INCREDIBLE JOB OF ACQUIRING
THREE LOW INTEREST RATE LOANS
OF STATE AND FEDERAL, WHICH
BROUGHT $341 MILLION. THAT WILL
SAVE THE RATEPAYERS ABOUT $267
MILLION OVER THE 30 YEAR LIFE
OF THE LOAN AS OPPOSED TO
CONVENTIONAL BOND. SO THERE HAS
BEEN SOME GREAT FINANCING
OPTIONS ON THIS PROJECT AS
WELL.
>> JOB WELL DONE. THANK YOU.
>> COUNCILMEMBER , ANY OTHER
QUESTIONS. I KNOW WE ARE
LOOKING FORWARD TO THE
STRATEGIC PLAN PRESENTATION
THAT IS GOING TO COVER SOME OF
THIS AS WELL AND ANSWER SOME OF
THE QUESTIONS THE OTHER
COUNCILMEMBERS HAVE. THANK YOU
SO MUCH. I KNOW YOU ARE ALL
LOOKING FORWARD TO THE PROJECT
BEEN COMPLETED AS WELL. SO,
THANK YOU. WITH NO FURTHER
QUESTIONS, WE WILL PROCEED TO
OUR ITEM AGENDA NUMBER THREE.
-- AGENDA ITEM NUMBER THREE
INTO THE RECORD.
>> RESOLUTION 32136 A
RESOLUTION RELATING TO SEATTLE
PUBLIC UTILITIES ADOPTING A
2025 -2030 BUSINESS PLAN FOR
SEATTLE PUBLIC UTILITIES
ENDORSING A THREE-YEAR 2025 TO
2027 RIGHT PATH AND SUBSEQUENT
THREE-YEAR 2028 TO 2030 RATE
FORECAST TO SUPPORT THE
STRATEGIC BUSINESS PLAN UPDATE.
>> THANK YOU. WE ARE LOOKING
FORWARD TO THIS. I WANT TO GIVE
A SHOUT OUT TO MY FAVORITE
HENNESSY, BOB, WHO IS IN THE
AUDIENCE. THAT IS A RUNNING
JOKE. THANK YOU, BOB. I DIDN'T
MEAN TO PUT YOU ON BLAST. YOU
ARE NOT A SHY GUY. AND AS WE
ARE FIGURING OUT OUR
PRESENTATION AND GETTING THAT
SETTLED, COUNCILMEMBER STRAUSS,
DO YOU HAVE ANY INTERESTING
FACTS ABOUT BALLARD YOU WOULD
LIKE TO SHARE?
>> WE ARE -- THE BOULDER WAS
ADJACENT TO THE ICE RINK IN
BALLARD. IT WAS OPERATIONAL
WHEN THE SEATTLE METROPOLITANS
WON THE STANLEY CUP. IT WAS WON
JUST THIS WEEK AND SO URBAN
LORE SAYS THAT THE PLAYERS THAT
WON THE STANLEY CUP ALSO SKATED
ON THE ICE RINK IN BALLARD
ADJACENT TO THE ERRATIC
BOULDER.
>> THAT IS COOL.
>> COUNCILMEMBER KETTLE NAMED
COUNCILMEMBER STRAUSS OUR
COUNCIL HISTORIAN AND THAT IS
FASTER. THANK YOU,
COUNCILMEMBER STRAUSS.
>> YOU ARE WELCOME. DIRECTOR
LEE, ALL YOURS.
>> THANK YOU, CHAIR
HOLLINGSWORTH AND MEMBERS OF
THE COMMITTEE. THIS IS GOING TO
BE THE FIRST OF THREE
PRESENTATIONS THAT WE ARE GOING
TO HAVE ON OUR 2025-2030
STRATEGIC BUSINESS PLAN AND THE
PLAN I WILL TALK ABOUT, IT'S
THE DOCUMENT THAT GUIDES THE
SERVICES THAT WE DELIVER TO OUR
CUSTOMERS AND IT'S REALLY
FOCUSING ON THE NEXT SIX YEARS
AND HOW WE ARE PLANNING ON
DOING THAT AND PAYING FOR IT.
FUNDING FOR THESE SERVICES THAT
WE WILL BE DISCUSSING ARE PAID
FOR BY UTILITY RATES, NOT BY
THE GENERAL FUND. IMPORTANTLY,
THE PLAN REALLY HELPS FOCUS ON
THE NEEDS OF THAT COMMUNITY AND
GIVE CUSTOMERS A PREDICTABLE
THREE-YEAR RATE PATH AND ALSO A
PROJECTION FOR THE NEXT THREE
YEARS. THIS SINGLE DOCUMENT
REALLY BRINGS TOGETHER ALL OF
OUR SERVICE GOALS, DRIVERS AND
CHALLENGES AND PLAN FOR HOW WE
WILL WORK THROUGH THEM. WITH ME
TODAY ARE DENNY PURNELL OUR
DIRECTOR OF CORPORATE POLICY
AND PLANNING AND KARL STICKEL
OUR FINANCE DIRECTOR. I WILL
REFER TO IT AND GIVE THE ENTIRE
PRESENTATION BUT THEY ARE HERE
TO ANSWER QUESTIONS AND I WANT
TO GIVE CREDIT TO THEM BECAUSE
THEY HAVE DONE AN AMAZING JOB
OF ASSEMBLING THIS DOCUMENT.
NEXT SLIDE. I WOULD LIKE TO
BEGIN BY GROUNDING US IN SPU
SUBMISSION AND VISION AND FOCUS
FOR THE FUTURE. OUR MISSION IS
SHOWN ON THE LEFT SIDE AND OUR
VISION IS SHOWN ON THE RIGHT.
PEOPLE SOMETIMES ASK ME, WHAT
DOES IT MEAN TO BE COMMUNITY
CENTERED , ONE WATER, ZERO
WASTE. WE ARE HERE TO CENTER
OUR WORK ON SERVING
COMMUNITIES, ESPECIALLY THE
MOST VULNERABLE. THE SECOND
PART, WE BELIEVE ALL WATER HAS
VALUE AND EVERYONE HAS THE
RIGHT TO ACCESS SAFE, CLEAN,
AND HEALTHY DRINKING WATER.
LASTLY, WE ARE COMMITTED TO A
FUTURE WHERE WE ARE NOT
PRODUCING WASTE WHERE
EVERYTHING IS REUSED. WE ARE
NOT POLLUTING OUR PRECIOUS
WATER BODIES. THESE STATEMENTS
ARE CODIFIED IN EVERY BUSINESS
PLAN. FORTUNATELY, THESE ONES
ARE THE SAME AS THE ONES IN OUR
LAST ONE SO WE DIDN'T SEE ANY
TO CHANGE THEM. THIS IS A RECAP
OF WHAT OUR STRATEGIC THIS PLAN
IS. AS I MENTIONED, WE UPDATE
THIS PLAN EVERY THREE YEARS SO
OUR LAST BUSINESS PLAN WAS
ADOPTED IN 2021. THE PLAN
IDENTIFIES OUR BUSINESS GOALS
AND STRATEGIES AND INCLUDES OUR
PLAN INVESTMENTS AND
INITIATIVES ACROSS OUR THREE
LINES OF BUSINESS. CENTRAL TO
THE PLAN IS OUR SIX YEAR
PROJECTION OF OUR RATES. WE
CALL IT A THREE-YEAR RATE WITH
AN ADDITIONAL THREE-YEAR RATE
FORECAST. WE KNOW AND WE HEARD
THIS FROM OUR CUSTOMERS TIME
AND TIME AGAIN. TRANSPARENCY
AND PREDICTABILITY ARE REALLY
IMPORTANT TO THEM. THE
STRATEGIC BUSINESS PLAN IS OUR
TOOL TO BE BOTH TRANSPARENT AND
PREDICTABLE BUT I WILL ADD A
THIRD WORD, ACCOUNTABLE. WE
VIEW OUR STRATEGIC BUSINESS
PLAN RIGHT PATH AS OUR
COMMITMENT AND PROMISE TO OUR
RATEPAYERS AND WE HAVE DONE A
REALLY GOOD JOB OF KEEPING OUR
COMMITMENT SINCE PUBLISHING OUR
FIRST BUSINESS PLAN IN 2014. I
WILL TALK ABOUT THAT A LITTLE
BIT MORE IN SUBSEQUENT SLIDES.
THE PERIOD OF THIS SBP COVERED
IN TERMS OF RATES IS FROM 2025
TO 2030 . OUR NEXT UPDATE WOULD
HAPPEN IN 2027. DESPITE WHAT
MR. TSIMERMAN SUGGESTED, THAT
WE HAD NOT DONE A LOT OF
CUSTOMER ENGAGEMENT. WE HAVE
DONE QUITE THE OPPOSITE. WE
HAVE DONE A TREMENDOUS AMOUNT
OF CUSTOMER ENGAGEMENT AND I
WILL TALK ABOUT THAT IN THE
NEXT SLIDE. ONE OF THE KEY WAYS
THAT WE GET INPUT FROM OUR
CUSTOMERS IS THROUGH OUR
CUSTOMER VIEW PANEL. WE CALL
THEM OUR CRP. THEY MEET WITH US
OVER THE COURSE OF YEARS TO
UNDERSTAND OUR BUSINESS TO
REVIEW OUR PROPOSALS AND
PROVIDE FEEDBACK TO US AND ALSO
REVIEW OUR RATE PROJECTION.
NOEL MILLER WHO SOME OF YOU
HAVE MET IS THE CO-CHAIR OF OUR
CRP AND HE WILL BE HERE AT THE
NEXT MEETING TO PROVIDE THE CRP
FEEDBACK ON THE PLAN, WHICH IS
ALSO INCLUDED IN A LETTER TO
COUNCIL. AFTER THE PLAN IS
ADOPTED, THE CRP CONTINUES TO
HAVE A REALLY CRITICAL ROLL IN
MONITORING OUR EXECUTION OF THE
PLAN AND TRACKING OUR
PERFORMANCE AND WHETHER WE ARE
MEETING OUR COMMITMENTS. I
MENTIONED THAT CUSTOMER
ENGAGEMENT WAS A CRITICAL PART
OF DEVELOPING THE STRATEGIC
THIS PLAN AND TO THAT END WE
HAD 20 CUSTOMER MEETINGS AND
THAT INCLUDES PEOPLE LIKE NOEL
WHO IS A RETIRED UTILITY
DIRECTOR AND RESIDENTS OF
SEATTLE , IT ALSO INCLUDES
PEOPLE LIKE THE CO-CHAIR AMANDA
RICHARD WHO IS A STRONG
ADVOCATE FOR THE UNHOUSED. WE
ALSO HAVE REPRESENTATION FROM
THE BUSINESS COMMUNITY AND
REALISTIC COMMUNITY, PORT OF
SEATTLE, OFFICE OF HOUSING ,
HOUSING AUTHORITY, WITH
REJECTION ADVOCATE, SMALL
BUSINESS OWNERS AND OTHERS.
IT'S A WONDERFUL CROSS-SECTION
OF OUR CITY REPRESENTING THE
ENTIRE CITY IN THE REVIEW AND
ENGAGEMENT ON THE PLAN
DEVELOPMENT. WE DID A
RESIDENTIAL SURVEY ALONG WITH
AN ONLINE FOCUS GROUP AND
RESEARCH. I MENTIONED THESE
FOCUS GROUPS BECAUSE IT NEVER
CEASES TO SURPRISE ME HOW
PEOPLE SEE US OR DON'T KNOW
THIS BUT WHEN THEY GET TO KNOW
US, THEY ARE CONSISTENTLY
REALLY FLOORED AT THE WORK WE
ARE DOING AND THEY ARE SO
IMPRESSED AND SO GLAD THAT WE
ARE REFLECTING THEIR VALUES AND
OUR INVESTMENTS. IN OUR
PARTNERSHIP , WE ATTENDED A
NUMBER OF COMMUNITY EVENTS AND
THAT IS SHOWN ON THE RIGHT-HAND
SIDE OF THIS PICTURE. I HAD A
CHANCE TO VISIT THESE COMMUNITY
EVENTS AND IT WAS WONDERFUL TO
SEE OUR COMMUNITY ENGAGED AND
PROVIDING FEEDBACK ON OUR
WASTEWATER SERVICES.
>> IF IT'S OKAY, CAN WE ASK
QUESTIONS THROUGHOUT THE
PRESENTATION? COUNCILMEMBER
RIVERA?
>> THANK YOU, CHAIR. I JUST
WANTED TO ASK QUESTIONS ABOUT
THE COMMUNITY MEETINGS YOU HAVE
HAD. CAN YOU TALK A LITTLE BIT
ABOUT THOSE, WHERE YOU WENT
ACROSS THE CITY AND WHAT THAT
LOOKS LIKE . I JUST WANT TO
MAKE SURE CONSTITUENTS KNOW ,
WHEN WE ARE TALKING ABOUT OUT
REACH , THIS IS SOMETHING
CONSTITUENTS CARE ABOUT, AS DO
WE. WE REALLY SHOW , WHEN WE
SAY WE DO THESE MEETINGS, WHAT
DOES THAT MEAN? I THINK THAT IS
HELPFUL, IF YOU DON'T MIND
TAKING US THROUGH THAT.
>> I'M GOING TO LET DANNY
CHIME IN. THE 20 WAS OUR
CUSTOMER REVIEW PANEL MEETINGS.
IT WAS A SMALL GROUP OF FOLKS
REPRESENTING THE CITY OF
SEATTLE BUT WE DID DO A
SIGNIFICANT AMOUNT OF OUTREACH
TO COMMUNITIES. I WILL LET
DANNY TALK ABOUT THAT.
>> THANK YOU FOR CLARIFYING.
>> THIS IS ON? WE HAVE A
FANTASTIC PARTNERSHIP WITH THE
DEPARTMENT OF NEIGHBORHOODS AND
THEY WORKED WITH US TO IDENTIFY
OVER 13 OUTREACH EVENTS IN THE
SUMMER AND FALL THAT WERE
HEALTH FAIRS AND COMMUNITY
EVENTS THAT WERE ALREADY TAKING
PLACE , AND WE WENT WITH THEM
AND D.O. ENDS COMMUNITY
LIAISONS. AND PROVIDED A SERIES
OF SURVEY QUESTIONS THAT WERE
IN LANGUAGE AND TRANSLATED
RELATED TO OUR SERVICES AND
ALSO BROUGHT ALONG SOME OF OUR
CUSTOMER PROGRAM STAFF TO DO
OUTREACH AT THE SAME TIME.
>> THANK YOU. MAYBE YOU ALREADY
DO THIS AND I KNOW WE ARE IN
CLOSE CONTACT, SO I REALLY
APPRECIATE THE PARTNERSHIP ,
AND JUST KNOW THAT WE ARE READY
AND WILLING AND ABLE TO HELP
GET THE WORD OUT WHEN YOU ARE
DOING THE COMMUNITY OUTREACH
BECAUSE I KNOW IT IS HARD TO
REACH ALL OF THE RESIDENTS OF
THE CITY , ALL 750,000, ABOUT
SEATTLE. WE ARE REALLY A
CONDUIT TO HELP WITH THAT. SO,
I KNOW, LIKE I SAID, WE
PARTNERED GREATLY TOGETHER AND
I WANT TO CONTINUE THAT AND
HELP WHERE I CAN IN GETTING THE
WORD OUT. THANK YOU.
>> IT IS A WONDERFUL
PARTNERSHIP AND THEY ARE
HELPING IS NOT JUST WITH
OUTREACH, BUT WITH A LOT OF
OTHER COMMUNITY ENGAGEMENT WE
ARE DOING WITH OUR CAPITAL
PROGRAMS ET CETERA. JUST
RETURNING TO THE SLIDE QUICKLY,
I WILL SAY, FROM ALL OF THESE
ENGAGEMENT OPPORTUNITIES, WE
HEARD FOUR THINGS OVER AND OVER
FROM OUR CUSTOMERS. THOSE FOUR
THINGS ARE SHOWN AT THE TOP IN
THE COLORED WORDS. WE HEARD
THEY CARE ABOUT RELIABILITY AND
CONSISTENCY OF OUR SERVICE . WE
HEARD THEY CARE ABOUT
SUSTAINABILITY , THE
ENVIRONMENT , EQUITY AND MAKING
SURE SERVICES ARE EQUITABLE AND
LASTLY THEY CARE ABOUT
AFFORDABILITY. THESE VALUES
HAVE REALLY PERMEATED THROUGH
THE STRATEGIC THIS PLAN AND I
WILL TALK ABOUT THAT IN THE
NEXT FEW SLIDES. JUST TO CLOSE
OFF THIS SLIDE, WE NOTIFIED
PEOPLE FOR THE PLAN ADOPTION
PROCESS. WE LET THEM KNOW WE
ARE HERE TODAY AND WE WILL BE
AT THE NEXT COUPLE OF MEETINGS
AS WELL. NEXT SLIDE. OUR
STRATEGIC BUSINESS PLAN
INCLUDES 21 PROPOSED
INITIATIVES AND INVESTMENTS
THAT ARE SUMMARIZED AND
ORGANIZED ON THE SLIDE. THEY
ARE SEPARATED INTO FOUR FOCUS
AREAS. THE FIRST THING THAT I
WILL NOTE BEFORE I DIVE INTO
THIS SLIDE IS THAT THE
HIGHLIGHTED INITIATIVES AND
INVESTMENTS IN NO WAY DO ENOUGH
JUSTICE TO THE WORK THAT WE DO
ON A DAILY BASIS. THERE IS SO
MUCH MORE THAT OUR STAFF DO TO
KEEP THE WATER RUNNING, THE
TOILET FLUSHING, AND THE
GARBAGE PICKED UP. WHAT THIS
FOCUSES ON THAT WAS HOW WE ARE
PLANNING ON ADVANCING OUR WORK.
IMPROVING ON IT OVER THE NEXT
SIX YEARS. I WILL PROVIDE SOME
BRIEF HIGHLIGHTS AND I'M HAPPY
TO GO INTO MORE DETAIL ON ANY
OF THE BULLETS. ON THE TOP LEFT
IN THE SERVICE BOX, WE HAVE
WORKER FACILITIES THAT ARE
INSUFFICIENT TO MEET OUR NEEDS.
OUR PRIMARY BACKUP CONTROL
CENTER AND STAGING AREA FOR OUR
NORTHSIDE CRUISE IS IN A
SEISMICALLY UNSAFE BUILDING.
OUR BACKUP CONTROL CENTER FOR
OUR ENTIRE WATER SYSTEM
OPERATION. OUR PRIMARY FACILITY
THAT WE USE IS THE LIQUEFACTION
ZONE. WE HAVE A SUBSTANTIAL
RISK IN THOSE TWO FACILITIES.
ONE OF THE THINGS WE HAVE IS A
SIGNIFICANT INVESTMENT PROPOSED
IN THE PLAN AS DEVELOPMENT AND
CONSTRUCTION OF A NEW NORTH
WHEN WATER OPERATIONS FACILITY.
OUR HOPE WOULD BE TO ACQUIRE A
PARCEL IN THE NEXT YEAR AND
WORK TOWARDS DESIGN AND
CONSTRUCTION OF THE FACILITY
THE FOLLOWING YEARS. ANOTHER
KEY INVESTMENT IN THE TOP LEFT
BOX IS OUR WATER TREATMENT
PLANTS IN HOUSE. WE HAVE TWO
WATER TREATMENT PLANTS THAT
SERVE THE 1.6 MILLION PEOPLE IN
OUR CITY IN THE GREATER SEATTLE
KING COUNTY AREA. BOTH WERE
CONSTRUCTED IN THE EARLY 2000
AND THEY HAVE BEEN OPERATING
THROUGH DESIGN BUILT OPERATING
CONTRACTS. WE HAVE NON-CITY
STAFF OPERATING THESE
FACILITIES . IT HAS BEEN A GOOD
RELATIONSHIP AND I WILL SAY
FIRSTHAND THAT DURING THE
PANDEMIC , I WANTED CONTROL OF
THESE FACILITIES. WE HAD VERY
LITTLE CONTROL OVER THE
STAFFING AND THE CONTINUED
OPERATION. SO THESE CONTRACTS
ARE EXPIRING SOON AND WE ARE
LOOKING TO BRING THESE
OPERATIONS IN HOUSE. ON THE
BOTTOM LEFT IN THE EQUITY BOX,
ONE OF THE THINGS WE ARE
LOOKING TO COME NOT IMPLEMENT
IN THE NEXT THREE YEARS, BUT
STARTING THE PLANNING PROCESS
ON IS ADVANCED METERING. THAT
WOULD BE SWITCHING OVER FROM
MANUAL READ METERS TO WIRELESS
METERS SO PEOPLE CAN GET THEIR
HOURLY WATER CONSUMPTION AND
ALSO BE NOTIFIED IN THE EVENT
OF A WATER LEAK. THIS PROVIDES
A SIGNIFICANT ADVANCEMENT IN
CUSTOMER SERVICE AND SO IN THE
NEXT COUPLE OF YEARS WE ARE
PREPARED TO DO PLANNING FOR
IMPLEMENTATION OF AMI IN THE
NEXT DECADE. WE ARE ALSO IN THE
PROCESS OF CUSTOMER
AFFORDABILITY PROGRAMS. I WILL
TALK ABOUT WHAT WE HAVE IN
PLACE RIGHT NOW BUT WE WILL SEE
IF WE CAN IMPROVE THOSE
PROGRAMS TO BE MORE SUPPORTIVE
OF CUSTOMERS WHO HAVE TROUBLE
PAYING BILLS. ON THE BOTTOM
RIGHT IN THE AFFORDABILITY BOX,
WE HAVE SOME OF OUR CORE ASSET
MANAGEMENT WORK. THAT INCLUDES
REPAIRING, REPLACING, AS WELL
AS PROVIDING MORE RESILIENCY IN
OUR WATER SYSTEM IN THE EVENT
OF AN EARTHQUAKE AND WE ALSO
HAVE EFFORTS TO LOOK AT MORE
ALTERNATIVE FUNDING AND
FINANCING WE HAVE A FOR THE
SHIP CANAL PROJECT, AS WELL AS
A NEW STRATEGIC TECHNOLOGY PLAN
THAT WILL EXPAND ON THE USE OF
TECHNOLOGY THROUGHOUT THE
UTILITY. I SKIPPED OVER THE
SUSTAINABILITY BOX BECAUSE I
HAVE ANOTHER SLIDE TO TALK
ABOUT THAT BUT I'M WANTING TO
PAUSE AND ASK IF YOU HAVE ANY
QUESTIONS ON ANY OF THESE
PROPOSALS.
>> COUNCILMEMBER KETTLE?
>> THANK YOU VERY MUCH FOR
BEING HERE. I HAVE TO ASK THE
QUESTION OR FOLLOW UP ON THE
POINT REGARDING --. EMERGENCY
PREPAREDNESS , I NOTE YOUR
POINT ABOUT HAVING FACILITIES
IN THE LIQUEFACTION ZONE,
SEISMICALLY UNFIT BUILDING.
THESE ARE VERY IMPORTANT POINTS
AND IT'S IMPORTANT TO ADDRESS
NOW AS TRYING TO DEAL WITH IT
LATER. IT ALSO HIGHLIGHTS --
THIS IS THE SAME WITH ME --
WITH THE FOLKS UPSTAIRS,
HIGHLIGHTING HOW THIS PUBLIC
SAFETY ELEMENT NEEDS TO BE PART
OF THE PLANNING SYSTEM. IT
NEEDS TO BE PART OF THE
COMPREHENSIVE PLAN , PART OF
THE TRANSPORTATION LEVY AND
TRANSPORTATION PLAN, BUT ALSO
ACROSS THE DEPARTMENTS IN THE
ISSUES THEY ARE FACING. AT THE
END OF THE DAY, IF AN
EARTHQUAKE HITS, WE WANT TO
HAVE THIS RESILIENCY. WE HAVE
THE SERVICE AND CAPABILITY AND
IT COULD MAKE A DIFFERENCE IN
TERMS OF SOMEBODY IN THAT
SITUATION LIVING OR DYING.
SADLY, NOT EVERYBODY HAS THREE
WEEKS WORTH OF WATER AT THEIR
HOUSE. SOMETIMES IT'S
IMPOSSIBLE. SO, WHAT EFFORTS
YOU DO ON THE FRONT END AS IT
RELATES TO EMERGENCY
PREPAREDNESS IS REALLY
IMPORTANT. SO, THANK YOU.
>> I REALLY APPRECIATE YOU
EMPHASIZING THE POINT. ANY
OTHER QUESTIONS ON THIS SLIDE?
I WILL KEEP ON GOING. I'M
SEPARATING THIS OUT BECAUSE OUR
DEPARTMENT HAS AN INCREDIBLY
STRONG COMMITMENT TO PUBLIC
HEALTH AND ENVIRONMENT AND THAT
REALLY SHOWS IN THE STRATEGIC
BUSINESS PLAN PROPOSED
INVESTMENTS , SPECIFICALLY, WE
PLAN TO SPEND EFFORT ON ROBUST
AND RESILIENT WATER SUPPLY FOR
THE NEXT 50 TO 60 YEARS. WE
JUST CAME OUT OF A DROUGHT LAST
SUMMER AND FALL AND WE KNOW
THAT CLIMATE CHANGE IS GOING TO
HAVE LONG-TERM IMPACTS IN OUR
FUTURE WATER SUPPLY. WE ARE
DOING A FIFTY-YEAR PLANNING
EFFORT TOWARDS THAT END TO MAKE
SURE WE ARE SECURING AGAIN. WE
ARE ALSO FOLLOWING THE CITY'S
GOALS OF CARBON NEUTRALITY AND
WE ARE SPENDING MONEY TO
REALIZE THAT GOAL BY 2030. WE
TALKED IN THE PAST ABOUT
REDUCING POLLUTION ,
SPECIFICALLY STORMWATER AND
WASTEWATER POLLUTION AND WE
WILL CONTINUE OUR EFFORTS TO DO
THAT THROUGH PROJECTS LIKE THE
SHIP CANAL WATER QUALITY
PROJECT IN ACCORDANCE WITH OUR
DISSENT. I ARTIE TALKED ABOUT
THE ONE WATER FACILITY. NEXT WE
WILL BE INVESTING IN COMMUNITY
RESILIENCE PICK THE FOCUS OF A
LOT OF THE SEPARATE IS IN THE
SOUTH PARK NEIGHBORHOOD IN
GEORGETOWN WHERE WE HAD THE
TREMENDOUS FLOODS A COUPLE OF
YEARS AGO. IN PARTNERSHIP WITH
THE KING COUNTY FLOOD CONTROL
DISTRICT, WE WILL BE MAKING
INVESTMENTS IN THE DUWAMISH TO
ADDRESS THE LEVEL RISE AND WILL
BE EXPANDING OUR LOW INCOME
ASSISTANCE PROGRAMS FOR SIDE
SEWERS, WHICH IS A HUGE
ADVANCEMENT FOR OUR CUSTOMERS
WHO HAVE A HARD TIME PAYING FOR
THOSE UNEXPECTED BILLS. WE SEE
OUR ROLL AS AN ACTIVATOR OF
GREEN JOBS AND ALSO FOR
CIRCULAR ECONOMY. EVERY
COMMODITY IS USED AND REUSED
AGAIN . A GREAT EXAMPLE OF THIS
IS OUR BUILDING DECONSTRUCTION
GRANT WHERE WE ARE
INCENTIVIZING BUILDING
DECONSTRUCTION INSTEAD OF
DISPOSING OF DEMOLISHED GOODS
LIKE WOOD AND LUMBER INTO OUR
LANDFILLS. WE RECEIVED A $4
MILLION GRANT FROM EPA EARLIER
RELATED TO SALVAGING AND
REUSING WOOD FROM RESIDENTIAL
BUILDINGS AND THIS WILL HELP
PROMOTE MORE BUSINESS
ACTIVATION IN OUR CITY. WE ARE
DOING SIMILAR WORK AROUND FOOD
WASTE RECOVERY WHERE WE ARE
GIVING MONEY TO ORGANIZATIONS
SEEKING TO FIND NEW WAYS TO
CONNECT FOOD THAT WOULD
NORMALLY BE THROWN OUT TO
COMMITTEES OF PEOPLE THAT ARE
STRUGGLING WITH FOOD SECURITY.
NEXT SLIDE. ALL OF THE SERVICES
AND INVESTMENTS THAT I JUST
DESCRIBED ARE MADE POSSIBLE BY
THE RATES THAT OUR CUSTOMERS
PAY. THIS IS A KEY SLIDE. HERE
IS OUR PROPOSED SUMMARY OF OUR
THREE-YEAR RATE PATH AND OUR
THREE YEAR FORECAST. TO ORIENT
YOU ON THIS SLIDE, THE
LEFT-HAND SIDE HAS THE FUNDS ,
AND AT THE BOTTOM OF THE TABLE
IS THE COMBINATION OF ALL THE
FUNDS. ACROSS THE TOP YOU CAN
SEE THE YEAR IS 2025 THROUGH
2030 AND ON THE FAR RIGHT IS
THE AVERAGE ACROSS THE SIX
YEARS. I WILL START OFF WITH
THE OVERARCHING MESSAGE WHICH
IS SHOWN IN THE BOTTOM
RIGHT-HAND CORNER . WE ARE
PROPOSING AN AVERAGE 4.7 ANNUAL
RATE INCREASE FOR ALL THE
COMBINED UTILITIES FROM 2025 TO
2030. FOR REFERENCE WE WERE AT
4.2% FROM 2021 THROUGH 26. IT
REPRESENTS A HALF PERCENTAGE
POINT INCREASE FROM A PREVIOUS
PROJECTION. YOU CAN ALSO SEE IN
THE DARK BLUE BOXES UNDER THE
YEAR IS 2025 TO 2026, FOR
DRINKING WATER AND SOLID WASTE
, THOSE RATES ARE ALREADY
FIXED. THAT IS A 2% FOR
DRINKING WATER AND 2.5% FOR
SOLID WASTE. THOSE WERE ADOPTED
BY COUNCIL ORDINANCE IN 2022
AND 2023. IN ADDITION TO THE
4.7 OVERALL 60 OR ANNUAL RATE
INCREASE, I WOULD LIKE TO FOCUS
ON THE BLUE COLUMNS , WHICH ARE
FOCUS ON THE NEXT THREE YEARS.
YOU CAN SEE THAT FOR 2025 WE
ARE PROPOSING A COMBINED
UTILITY RATE OF 3.7% AND FOR
2026 IT'S A 3.9% COMBINED
INCREASE. BOTH OF THOSE
INCREASES ARE ACTUALLY WELL
BELOW RATE OF
INFLATION AND I WILL TALK ABOUT
THAT ON THE NEXT LIGHT. THE
ONLY OTHER ITEM I WILL POINT
OUT, WASTEWATER AND DRAINAGE,
YOU CAN SEE FIVE, FIVE, FIVE,
AND 5.1 INCREASES WE ARE
PROPOSING FROM 25 THROUGH 27,
YOU WILL SEE THOSE NUMBERS
AGAIN. THIS YEAR WE ARE GOING
TO BE COMING BACK LATER THIS
YEAR WITH OUR DRAINAGE AND
WASTEWATER INCREASES AND THOSE
WILL BE THE EXACT SAME RATES
YOU WILL SEE IN THAT PROPOSAL.
I JUST WANT TO CLOSE OF THIS
SLIDE BY SAYING THESE RATE
PROJECTIONS HAVE BEEN REVIEWED
AND RECOMMENDED BY BOTH OUR
CUSTOMER REVIEW PANEL, WHICH IS
THE BODY OF REPRESENTATIVES, AS
WELL AS THE CITY BUDGET OFFICE.
PEOPLE ARE ALWAYS GOING TO ASK,
WHAT ARE YOUR BIGGEST RATE
DRAWERS. THEY ARE SUMMARIZED
HERE. THE FIRST AND MOST
OBVIOUS ONE IS INFLATION. WE
HAVE BEEN IN A PERIOD OF RECORD
INFLATION THE PAST TWO OR THREE
YEARS AND KEITH TALKED ABOUT
CONSTRUCTION INFLATION
SPECIFICALLY, BUT WE ALL KNOW
IT HAS IMPACTED EVERYTHING.
REGIONAL INFLATION, 2023, WAS
5.8% , REGIONAL INFLATION 2022
WAS CLOSER TO 8% TO 9%. UNLIKE
MANY OTHERS IN THE REGION, WE
DID NOT INCREASE OUR RATES
ABOVE AND BEYOND OUR PREVIOUS
STRATEGIC BUSINESS PLAN
COMMITMENTS. I'M HAPPY TO
REPORT OUR THREE-YEAR RATE
INCREASES ARE BELOW THE
REGIONAL RATE OF INFLATION. THE
SECOND MAIN RATE DRIVER IS THE
INCREASE COST IN OUR CAPITAL
PROGRAM. SOME OF THIS IS DRIVEN
BY THINGS LIKE THE INCREASE OF
COST OF CONSTRUCTION , BUT IN
ADDITION TO THIS WE HAVE TO
STILL MEET OUR REGULATORY
REQUIREMENTS, THINGS LIKE
SEWAGE OVERFLOW, SEDIMENT
CLEANUP, AND OUR
INFRASTRUCTURE. OUR
INFRASTRUCTURE CONTINUES TO AGE
, IT DOESN'T FOLLOW A NICE
SMOOTH PATHWAY. IT CONTINUES TO
INCREASE AND SO THESE COSTS ARE
GOING UP EVERY SINGLE YEAR.
WHILE WE HAVE AN EXCELLENT BOND
RATING AND ARE OFTEN TIMES ABLE
TO GET FAVORABLE INTEREST
RATES, WE KNOW THOSE INTEREST
RATES HAVE INCREASED
SUBSTANTIALLY OVER THE LAST
SEVERAL YEARS. LAST MAJOR
DRIVER IS THE AMOUNT THAT THE
-- THE SIGNIFICANT AMOUNT OF
MONEY WE PAY TO OTHERS. OUR
LARGEST CONTRACT IS WITH KING
COUNTY FOR WASTEWATER
TREATMENT. OUR NEXT LARGEST
CONTRACTS ARE WITH OUR GARBAGE
HAULERS. KING COUNTY SEWAGE
TREATMENT RATES ARE PROJECTED
TO INCREASE ANNUALLY FROM 5.75
PERCENT UP TO ABOUT 8% BY 2030.
WHICH IS ALSO SIGNIFICANT FOR
RATE INCREASES. NEXT SLIDE.
>> AND I ASK A QUESTION? THE
AGING INFRASTRUCTURE POINT IS A
VERY IMPORTANT POINT , BACK TO
MY EARLIER POINT IN TERMS OF
ITS RESILIENCY. IT'S ALSO VERY
IMPORTANT IN TERMS OF THE
COMPREHENSIVE PLAN. OUR
DENSIFICATION. I LOVE THE
WATERFRONT PROJECT BECAUSE WE
ARE SUCH A BIG HOLE FOR SUCH A
LONG TIME I KNEW THEY WERE
DOING INFRASTRUCTURE WORK. MY
CONCERN IS WE PRESS FORWARD ON
DENSIFICATION, WHICH IS NEEDED,
BUT IF IT IS ON TOP OF AGING
INFRASTRUCTURE, THIS IS LIKE
MICROSOFT LOADING ON TOP OF THE
OLD MS-DOS. AT SOME POINT IT
DOESN'T WORK ANYMORE. IS THERE
ANY SPECIFIC AREAS OF THE CITY
THAT YOU ARE MORE CONCERNED
WITH RELATED TO AGING
INFRASTRUCTURE? OR IS IT ACROSS
THE CITY? IS THERE ANY
CONCERNING AREAS FROM YOUR
PERSPECTIVE?
>> YEAH, IT FOLLOWS DEVELOPMENT
PATTERNS. AND SO, I THINK ABOUT
THE AREA THAT I LIVE IN , MOST
OF THAT WAS DEVELOPED IN THE
1940S AND SO YOU HAVE AREAS
LIKE BALLARD OR QUEEN , THAT
MIGHT HAVE BEEN DEVELOPED IN
THE 1920S, AND SO THE AGE OF
THE INFRASTRUCTURE IS VERY
CLOSELY RELATED TO THE AREA
TIME OF DEVELOPMENT. THE OTHER
KEY FACTOR IS, AGE DOESN'T
ALWAYS A GOOD INDICATOR OF
QUALITY. SOME OF THE
CONSTRUCTION WE HAD OF THE
PIPES IN THE 1920S ARE BETTER
THAN THE ONES WE BUILT IN THE
1950s AND 1940S. IT JUST VARIES
AND WE HAVE ACTUALLY VERY
COMPLEX ASSET MANAGEMENT MODELS
TO LOOK AT THE AGE AND TYPE OF
MATERIAL AS WELL AS THE SOILS
THEY WERE BUILT BECAUSE THOSE
CAN HAVE A HUGE EFFECT ON THE
RELIABILITY, BUT THAT ALL HELPS
US INFORM ON ONE IS THE OPTIMAL
TIME TO REPLACE THE AGED
ASSETS.
>> THANK YOU FOR THE AGED
POINT, AS THE ELDEST MEMBER OF
THIS COMMITTEE.
>> TWO ELDEST MEMBERS.
>> THIS NEXT SLIDE IS REALLY
TRYING TO SAY, IN THE MIDST OF
ALL OF THESE DRIVERS THAT ARE
FORCING COST UPWARDS, WE HAVE
AN INCREDIBLE TEAM OF PEOPLE
WHO ARE WORKING TO PUSH OUR
COSTS DOWN AND KEEP OUR RATES
AS LOW AS POSSIBLE. OUR WORK IN
SAVING MONEY IS REALLY
MULTIFACETED. THE FIRST
CATEGORY IS GOOD FINANCIAL
MANAGEMENT AND SAVE MONEY JUST
BY REFINANCING LOANS. WHEN
THERE'S A GOOD INTEREST RATE,
WE REFINANCE AND WE SAVE TENS
OF MILLIONS OF DOLLARS. IT ALSO
HAS TO DO WITH GETTING A GOOD
BOND RATING. I'M HAPPY TO
REPORT THAT WE ACTUALLY COME IN
OUR MOST RECENT WATER BOND
RATING, WE GOT THE HIGHEST AAA
RATING, WHICH MEANS LOWER
INTEREST RATES THAT WE WERE
ABLE TO PASS ON TO OUR
RATEPAYERS. PURSUING
ALTERNATIVE FUNDING IS ANOTHER
CRITICAL WAY THAT WE SAVE MONEY
FOR CUSTOMERS AND KEITH
MENTIONED THE AMOUNT OF MONEY
WE GOT FOR THE SHIP CANAL,
WHICH IS TRANSLATING DIRECT
LEAD TO SAVINGS OVER THE LIFE
OF THE LOANS. WE ARE ALSO
ACTIVELY PURSUING MORE THAN
JUST THAT. FOR THE SHIP CANAL
WE ARE GOING TO BE APPLYING FOR
MORE STATE FUND LOANS. ACCOUNT
FOR SOME OF THOSE INCREASES.
THAT'S NOT JUST FOR THE SHIP
CANAL. WE TALKED ABOUT THE KING
COUNTY FLOOD CONTROL DISTRICT.
WE ARE PURSUING THOSE FUNDS
WHEREVER FUNDS ARE AVAILABLE,
THE INFRASTRUCTURE BILL THAT
WAS PASSED, CLIMATE REDUCTION
ACT , WE ARE CONSTANTLY LOOKING
AT WAYS TO REDUCE OUR COST FOR
CUSTOMERS. LASTLY, WE ARE
LOOKING INWARDS AND IT MEANS
CONTINUOUS IMPROVEMENT. WE HAVE
A VERY ACTIVE LIEN , WHICH IS
FOCUSED ON REDUCING WASTE AND
THAT INITIATIVE ALONE HAS SAVED
US THOUSANDS OF LABOR HOURS.
WHICH ALSO TRANSLATES INTO
SAVINGS FOR CUSTOMERS. I TALKED
ABOUT KING COUNTY AND I WANT TO
MAKE A POINT ON THIS. I
MENTIONED THIS BEFORE, FROM THE
CHARGE, YOU CAN SEE KING
COUNTY'S PROPOSED TREATMENT
RATES ARE RANGING FROM 5.75% ,
AND THIS DATA IS LOW. IT'S
OLDER NOW AND IT USED TO BE 7%
BUT JUST EARLIER THIS WEEK OR
LAST WEEK , THE COUNTY ADOPTED
PROJECTIONS THAT GO UP TO A
.25%. SO, THIS HAS AN
INCREDIBLE IMPACT ON US. IT
CAN'T BE UNDERSTATED, AS YOU
CAN SEE FROM THE BOTTOM TABLE,
OUR PROPOSED RATE PATH , IF WE
DID NOT INCLUDE KING COUNTY,
WOULD BE 3.15% AVERAGE OVER THE
SIX YEARS. WITH THE COUNTY
INCREASES , IT GOES UP TO 4.7%.
I WILL TALK ABOUT THE IMPACT ON
THE BILL , BUT ABOUT HALF OF
WHAT THE CUSTOMER IS GOING TO
SEE IN TERMS OF AN INCREASE ON
THEIR BILL IS GOING TO BE MONEY
WE ARE PAYING TO KING COUNTY.
SO, IT HAS A SUBSTANTIAL
IMPACT. NEXT SLIDE. SO, A
SIGNIFICANT PORTION OF OUR BILL
GOES TO PAY CITY AND STATE
TAXES. WE ARE A HUGE CONTRIBUTE
TO THE GENERAL FUND AND YOU CAN
SEE WE ARE EXPECTING IN 2025 TO
PAY $140 MILLION IN CITY TAXES.
THESE TAXES, WHICH ARE AS HIGH
AS 20.57% , AND NO LESS THAN
13%, ARE INCLUDED IN ALL OF OUR
RATE PROJECTIONS, AND IT DOES
AMOUNT TO OUR CUSTOMERS BEING A
SIGNIFICANT AMOUNT DUE TO THE
CITY'S GENERAL FUND. GO
FORWARD AGAIN. I MENTIONED IN
THE BEGINNING THAT IN THE
SPIRIT OF TRANSPARENCY,
PREDICTABILITY, AND
ACCOUNTABILITY, WE TREAT OUR
BUSINESS PLAN AS A PROMISE THAT
WE WILL HOLD FAST TO THE RIGHT
PATH WE PUBLISHED. AS YOU CAN
SEE IN THIS CHART, THAT'S WHAT
WE HAVE DONE TO A T. OUR
PREVIOUS BUSINESS PLAN RIGHT
PATH WAS AN AVERAGE OF 1.2%
ANNUAL RATE INCREASES AND IF
YOU LOOK AT THOSE NUMBER FROM
2021 THROUGH 2025, FOR THE PAST
SIX YEARS WE HAVE COME IN UNDER
THAT AT ABOUT 4% AND THAT IS
DESPITE RECORD INFLATION THAT
WAS AROUND 8% IN 2022 AND 5.8%
IN 2023. YOU CAN SEE FROM OUR
FUTURE LOOKING FORECAST, WE
PLAN TO STAY VERY COMMITTED TO
THAT. OUR COMMITMENT WOULD BE
TO COMBAT THAT OR BELOW THERE.
NEXT SLIDE. THIS SLIDE , WE
ALWAYS COMPARE OURSELVES TO OUR
NEIGHBORING WEST COAST
UTILITIES AND THIS CHART SHOWS
HOW WE HAVE COMPARED AGAINST
OUR NEIGHBORS FOR THE PAST
COUPLE OF YEARS, SPECIFICALLY
FOR DRINKING WATER AND
WASTEWATER. THE PANDEMIC AND
EFFECTS OF RUNAWAY INFLATION
FORCED A LOT OF OUR NEIGHBORS
TO INCREASE AND ADOPT RATE
INCREASES THAT WERE IN THE
NEIGHBORHOOD OF 9% UP TO 13.8%
OR EVEN 17.2%. MANY UTILITIES
HAVE GONE THAT DIRECTION OF
REALLY STARTING TO INCREASE. WE
RECOGNIZE HOW DISRUPTIVE THAT
CAN BE FOR OUR CUSTOMERS AND IT
SPEAKS VOLUMES THAT WE KEPT OUR
RATE COMMITMENT DESPITE THOSE
INCREDIBLE INCREASES FOR THE
PAST SEVERAL YEARS AND WE
INTEND TO KEEP DOING SO. LAST
FEW SLIDES. ON A PER MONTH
BASIS, OUR TYPICAL
SINGLE-FAMILY PAYS ABOUT $186
PER MONTH ON THEIR DRINKING
WATER, WASTEWATER AND SOLID
WASTE BILL. THEY PAY ON THEIR
PROPERTY TAX BILL , THEIR
DRAINAGE RATE, WHICH IS
SEPARATE FROM THEIR BIMONTHLY
BILL BECAUSE MOST CUSTOMERS GET
IT AS A BIMONTHLY BILL. THE
COST OF UTILITY SERVICES WILL
INCREASE ABOUT $10-$13 PER
MONTH ON AN ANNUAL BASIS
BETWEEN 2024 AND 2030. OVER THE
SIX YEAR TIME PERIOD, THE BILL
WILL INCREASE BY ABOUT $55. AS
YOU CAN SEE FROM THIS CHART, A
LITTLE LESS THAN HALF OF THAT
GROWTH IN THAT BILL IS FROM
COSTS THAT WILL BE PAID TO KING
COUNTY FOR WASTEWATER
TREATMENT. IN TERMS OF WHERE
OUR CUSTOMERS MONEY GOES , THIS
IS SHOWING ON A TYPICAL 2025
BILL, ABOUT A QUARTER OF THAT
MONEY WILL GO TOWARDS CAPITAL
FINANCING. THIS IS ALL THE NEW
CONSTRUCTION WE ARE DOING,
ASSET MANAGEMENT, REGULATORY
DRIVEN PROJECTS, ET CETERA.
ABOUT 30% OF THAT WILL GO
TOWARDS OUR DAY-TO-DAY
OPERATIONS AND MAINTENANCE.
ABOUT 15% AND 30% , ABOUT 45%
IS MONEY WE WILL PAY TO OTHERS.
30% OF THE BILL WILL GO TO KING
COUNTY AND OUR SOLID WASTE
COLLECTION CONTRACTS AND THEN
50% IS TAXES AND FEES THAT WILL
BE PAID TO THE CITY IN THE
STATE. CLOSING OFF , I THINK I
WANT TO EMPHASIZE AND RECOGNIZE
THAT THESE ARE HIGH BILLS.
THERE IS A PORTION OF OUR
POPULATION THAT HAS A DIFFICULT
AND CHALLENGING TIME PAYING FOR
THEIR BILLS. WITH THAT, WE HAVE
ONE OF THE MOST GENEROUS
FINANCIAL ASSISTANCE PROGRAMS
IN THE COUNTRY. WE HAVE A LOT
OF DIFFERENT AVENUES AVAILABLE
FOR FOLKS TO BE ABLE TO TAP
INTO THOSE FUNDS AND SOME OF
THEM ARE LISTED HERE. THE
EMERGENCY ASSISTANCE PROGRAM IS
A PROGRAM FOR INCOME QUALIFYING
CUSTOMERS WHERE WE ARE HELPING
THEM WITH ONE OR TWO BILLS
DURING THE COURSE OF THE YEAR.
AND THIS IS JUST RECOGNIZING
THAT SOMETIMES PEOPLE DEAL WITH
HARDSHIPS, WHETHER UNEXPECTED
HEALTH DIFFICULTY, ANOTHER
UNEXPECTED BUILD OR
UNEMPLOYMENT SO THE EMERGENCY
ASSISTANCE PROGRAM IS THERE AND
AVAILABLE TO THEM FOR THAT. WE
ALSO GIVE CONSIDERABLE PAYMENT
FLEXIBILITY TO OUR CUSTOMERS UP
TO THREE YEARS AND IN SOME
CASES --. JUST TO HELP THEM
SPREAD OUT THE COST OF THOSE
HIGH BILLS. WE HAVE A COMMUNITY
DONATION FUND , A VOLUNTARY
CONTRIBUTION TO HELP PEOPLE IN
NEED. RECENTLY IN THE LAST
COUPLE OF YEARS WE STARTED THIS
ASSISTANCE PROGRAM AND THIS IS
JUST RECOGNIZING THAT OUR
CUSTOMERS, WHEN THEIR SIDE
SEWER FAILS, IT CAN BE VERY
TRAUMATIC. THEY GET HIT WITH A
$15,000 OR $20,000 BILL . I
HAVE SEEN THEM AS HIGH AS 40 OR
$50,000, ESPECIALLY IF IT'S AN
ARTERIAL, THEY HAVE TO GO
ACROSS SIGNIFICANT AMOUNT OF
PAVING. SO, THE SIDE SEWER
ASSISTANCE PROGRAM PROVIDES NO
INTEREST LOANS TO LOW INCOME
CUSTOMERS. IT'S A GREAT AVENUE
THAT WE DIDN'T HAVE AVAILABLE
BEFORE . LASTLY WE HAVE OUR
UTILITY DISCOUNT PROGRAM, WHICH
OFFERS A 50% RATE DISCOUNT TO
QUALIFIED CUSTOMERS. AND ALL OF
THESE PROGRAMS , WE WILL BE
TAKING A CLOSE LOOK AT THEM IN
THE LATTER HALF OF THIS YEAR
AND COMING BACK TO YOU WITH
SOME RECOMMENDATIONS THAT WE
HAVE ON POTENTIALLY REVISING
THOSE PROGRAMS OR EXPENDING
THEM TO PROVIDE MORE EXPERIENCE
TO OUR CUSTOMERS IN NEED. THIS
SHOWS THE TOTAL VALUE OF OUR
UTILITY DISCOUNT CREDIT PROGRAM
THIS IS ALSO BEING WORKED INTO
THE RATE PROPOSALS WE HAVE PUT
FORWARD BEFORE YOU. THE TOTAL
AMOUNT OF THOSE CREDITS IS
ESTIMATED ABOUT $30 MILLION AND
WE ARE PLANNING TO CONTINUE TO
GROW THIS OVER THE NEXT SIX
YEAR TIME PERIOD. YOU CAN SEE
IT ASSUMES ANNUAL ENROLLMENT
GROWTH OF 2500 PARTICIPANTS PER
YEAR. AND SO, THAT EQUATES TO
ABOUT $2.8 MILLION IN CREDITS.
SO THAT COMPLETES THE
PRESENTATION. I'M HAPPY TO
ANSWER ANY QUESTIONS ABOUT ANY
ELEMENTS OF OUR PLAN OR RIGHT
PATH. THANK YOU.
>> THANK YOU SO MUCH. IT WAS A
LOT OF INFORMATION AND YOU ALL
DO SUCH A GREAT JOB WITH
PLANNING OUT FOR THE FUTURE,
STRATEGIC PLANNING. I HAVE BEEN
IMPRESSED WITH THE
THOUGHTFULNESS AND THE
KNOWLEDGE OF SPU. I KNOW IT IS
HARD AS WE ARE CONTINUING TO
BUILD OUR CITY AND THE
INFRASTRUCTURE INVESTMENT
PIECES THAT WE HAVE WHILE
INCREASING OUR POPULATION . BUT
ALSO TO KEEP IT AFFORDABLE.
AND, I SAY EVERY TIME I GO, WE
HAVE THE BEST CLEAN DRINKING
WATER IN THE COUNTRY. IT'S THE
BEST TASTING EVERYWHERE WE GO
AND I THINK WE ARE EXTREMELY
LUCKY TO HAVE THE WATERSHEDS
THAT WE DO AND TO HAVE THE
PEOPLE WHO ARE VERY
KNOWLEDGEABLE ABOUT IT, KEEPING
THE DRINKING WATER SAFE.
ANYWAYS, ANY OTHER COLLEAGUES
HAVE ANY QUESTIONS?
COUNCILMEMBER STRAUSS?
>> THANK YOU FOR COMING BACK UP
A -- A COUPLE MORE TIMES. I
LOOK FORWARD TO GETTING INTO IT
WITH YOU BECAUSE AS YOU MAY
REMEMBER, I HAVE A DEEP
INTEREST IN OUR UTILITY
DISCOUNT PROGRAM AND SOFTENING
THE CLIFF THAT IS THERE RIGHT
NOW AND WHAT I THINK A LOT OF
SEATTLEITES ARE UNAWARE OF IS
THE PROGRAM ITSELF BECAUSE
THERE IS A HIGHER ELIGIBILITY
RATE IN THE CITY . I WOULD LOVE
TO WORK WITH YOU THERE. I WILL
NOTED THAT DURING THE LAST RATE
CYCLE , THE LAST THREE OR FOUR
YEARS, WE HAVE BEEN ABLE TO
KEEP RATES LOWER THAN INFLATION
AND THAT HAS BEEN ANOTHER ONE
OF THE SILENT HIGHLIGHTS OF
SEATTLE NAVIGATING THE
PANDEMIC, WHERE PEOPLE WERE IN
A VERY DIRE SITUATION. MANY
PEOPLE LOST THEIR JOBS. WE DID
NOT INCREASE THOSE COSTS TO
THEM. I WILL ASK IF BRIAN
GOODNIGHT HAS ANYTHING TO ADD.
>> ABSOLUTELY. I'M SO SORRY.
>> I DON'T HAVE ANY COMMENTS
FOR TODAY. I THINK GENERAL
MANAGER LEE COVERED THE
TIMELINE. WILL BE COMING BACK
JULY 10th , THE CRP CHAIRS WILL
HAVE A CHANCE TO PRESENT. I
WILL PRESENT THE MEMO AT THE
TIME WITH POSSIBLE ISSUES AND I
WILL BE ASKING QUESTIONS AS
WELL. IF YOU HAVE THOSE AND YOU
WANT TO SEND THEM MY WAY I CAN
HELP COORDINATE THEM. THE PLAN
WILL BE, IF THE COMMITTEE STILL
FEELS COMFORTABLE TO COME BACK
AT THE AUGUST 14th MEETING FOR
A POSSIBLE VOTE AND ANY
AMENDMENTS IF COUNCILMEMBERS
ARE INTERESTED. THANK YOU.
>> COUNCILMEMBER KETTLE?
>> I APPRECIATE THE BRIEFING
AND THESE NUMBERS . WE BOTH SIT
ON THE WATER QUALITY COMMITTEE.
WE SEE SOME OF THESE SAME
CHALLENGES AND THE CUMULATIVE
EFFECT. I APPRECIATE THE
EFFORTS AND THE RATES. I DID
NOT KNOW ABOUT THE SIDE SEWER
PROJECT BECAUSE, IT IS A
SEPARATE CONCERN. PARTICULARLY
IN THESE OLDER NEIGHBORHOODS,
TRYING TO GET A NEW ROOF,
TRYING TO GET YOUR HOUSE
PAINTED, TRYING TO DO XYZ, YOU
NEED A NEW WATER LINE BECAUSE
IT IS GALVANIZED STEEL FROM 100
YEARS AGO. IT'S AWKWARD IN
TERMS OF HOW TO GET IN. SO, THE
SIDE SEWER PROGRAM I THINK IS A
FANTASTIC ADDITION, SO THANK
YOU FOR ADDING THAT. AGAIN,
THANK YOU FOR THE TEAM, TO MR.
GOOD NIGHT, AND ALSO THANK YOU
TO MR. HENNESSY OUT THERE. I
UNDERSTAND HE MAY BE YOUR
FAVORITE HENNESSY BUT THAT BEGS
THE QUESTION, WHO IS YOUR
FAVORITE BOB? CHAIR, DON'T
ANSWER THAT.
>> I WON'T. THANK YOU. YOU ARE
MY FAVORITE BOB COUNCILMEMBER
THAT I HAVE. COUNCILMEMBER
RIVERA?
>> THANK YOU, CHAIR. I JUST
WANTED TO REALLY EXTEND
GRATITUDE TO THE DEPARTMENT FOR
THE WORK THAT THEY DO. WE DO
HAVE AGING INFRASTRUCTURE AS WE
DO ACROSS THE COUNTRY. WE DO
ALSO IN SEATTLE. I VERY MUCH
APPRECIATE YOUR THOUGHTFULNESS
IN THE WORK THAT IS GOING
BEHIND, ENSURING THAT AS WE ARE
DOING THE WORK AND WE ARE DOING
MORE DEVELOPMENT IN THE CITY
THAT OUR INFRASTRUCTURE
DOESN'T GIVE OUT AND I KNOW
THINGS ARE GETTING UPDATED AS
NEW THINGS ARE GETTING
DEVELOPED. I KNOW THAT AS PART
OF THE PLAN, TOO. I KNOW THAT
YOU ARE DOING THAT AND
COUNCILMEMBER KETTLE, YOU JUST
RAISED TODAY . I KNOW HOW HARD
THAT WORK IS AND I REALLY
APPRECIATE THE INTENTIONALITY
AND FOCUS THAT YOU ALL BRING TO
ENSURING THAT THESE -- WE
DON'T HAVE FAILS IN THE SYSTEM
AS WE MOVE FORWARD, AND I KNOW
THAT IS VERY CHALLENGING, SO I
APPRECIATE THAT. I APPRECIATE
THE WORK YOU DO TO KEEP RATE
POWER -- PAYER RATES AS LOW AS
THEY POSSIBLY CAN BE BECAUSE
COSTS INCREASE OVER TIME. THEY
ARE CONTINUING TO INCREASE,
PARTICULARLY POST-PANDEMIC. IT
SEEMS TO HAVE REALLY -- THE
COST OF EVERYTHING HAS JUST
REALLY BALLOONED AFTER THE
PANDEMIC. I'M REALLY SENSITIVE
TO THE FACT THAT RATEPAYERS
HAVE A LOT OF FINANCIAL
CHALLENGES. I HAVE ALWAYS BEEN
A BIG FAN AND CONTINUE TO BE OF
THE DISCOUNT UTILITY PROGRAM
BECAUSE I KNOW THAT THERE ARE
FOLKS , INCLUDING SENIORS WHO
REALLY BENEFITS FROM THAT
PROGRAM, AND SO I REALLY
APPRECIATE, IN ADDITION TO ALL
OUR LOW INCOME RESIDENTS, ET
CETERA, I REALLY APPRECIATE THE
FOCUS THAT GOES INTO THAT
PARTICULAR PROGRAM. I THINK
IT'S ONE OF THE BEST I HAVE
EVER SEEN ACROSS THE CITIES I
HAVE LOOKED AT. AND SO, I
REALLY APPRECIATE YOU TALKING
ABOUT THAT TODAY. THANK YOU.
>> WENT COUNCIL MEMBER STRAUSS
WAS TALKING, IT REMINDED ME
ABOUT HOW A LOT OF PEOPLE DO
TAKE ADVANTAGE OF THE PROGRAM
AND COUNCILMEMBER RIVERA
ALLUDED TO IT. AND THEN ALSO,
THE RAISING OF THE -- WHAT YOU
CALL IT? THE THRESHOLD? THE ONE
THING I HEAR A LOT ABOUT IS
THAT PEOPLE THAT ARE -- WHO
DON'T QUALIFY FOR -- THEY ARE
RIGHT IN THE MIDDLE, THEY ARE
FEELING TREMENDOUSLY. THE
RISING PROPERTY TAXES AND ALL
THE INVESTMENTS AND
AFFORDABILITY IS LIKE KEY.
PEOPLE IN THE MIDDLE ARE
FEELING IT . IT IS STUFF. AND
THEY ARE ON FIXED INCOME AND A
WHOLE BUNCH OF THINGS. AND I
KNOW, OFTEN YOU ALL GET RATED
ON TRASH PICKUP AND RATES.
THOSE ARE THE TWO THINGS
EVERYONE TALKS ABOUT. DOES MY
TRASH GET PICKED UP ON TIME? I
REALLY APPRECIATE THE LEVEL OF
SERVICE YOU ALL DOING GETTING
BACK TO PEOPLE. DEFINITELY
GOING TO WORK ON THE
AFFORDABILITY PIECE FOR FOLKS
AND SOME OF THOSE RELIEF
PROGRAMS AND CREATIVE WAYS IN
WHICH SOME OF OUR MIDDLE CLASS
FOLKS CAN BE ABLE TO FIND SOME
PROGRAMS THAT CAN POTENTIALLY
HELP BECAUSE THEY ARE GETTING
SQUEEZED IN THEIR CITY. THANK
YOU ALL. DO YOU HAVE ANY
CLOSING COMMENTS OR ANY OF MY
COLLEAGUES HAVE ANY QUESTIONS?
>> THANK YOU FOR YOUR TIME. WE
LOOK FORWARD TO THE NEXT FEW
MEETINGS.
>> WE ARE LOOKING FORWARD TO
IT, TOO. AND COLLEAGUES, IF YOU
HAVE ANY QUESTIONS, SEND THEM
TO GOOD NIGHT, MY FAVORITE GOOD
NIGHT. AND, --.
>> I WANTED TO FLAG THE ONLINE
DIDN'T HAVE THIS --. I WANTED
, FOR ANYONE WATCHING, THAT
WILL GET UPDATED. THE SLIDE
DECK THAT WAS MOST RECENTLY
THAT YOU WENT THROUGH IS NOT
ONLINE FOR PEOPLE TO SEE. SO I
WANTED TO FLAG THAT. THAT WILL
GET UPDATED.
>> YES. WE WILL PUT THE UPDATED
-- THANK YOU -- OF THE UPDATED
PRESENTATION DONE. OKAY, IF NO
FURTHER QUESTIONS, OUR MEETING,
WE WILL START COMING TO A
CLOSE. THANK YOU, EVERYONE. DO
ANY OF MY COLLEAGUES HAVE ANY
OTHER ITEMS OF BUSINESS FOR THE
COMMITTEE? SEEING NONE, THIS
CONCLUDES JUNE 26, 2024 MEETING
OF PARKS , PUBLIC UTILITIES AND
TECHNOLOGY . OUR NEXT MEETING
IS SCHEDULED WEDNESDAY JULY
10th AT 2:00 P.M. IF THERE IS
NO FURTHER BUSINESS THIS
MEETING IS ADJOURNED AND THE
TIME IS 3:33 . GO PLAY THE
LOTTO BECAUSE THAT IS OUR LUCKY
NUMBERS. ADJOURNED.