HomeMy WebLinkAboutAgenda Packet 02/08/1999 UtillT~ ADVISORY COMMITTEE
PUBLIC WORKS CONFERENCE ROOM
PORt ANGEleS, WA 98362
FEBRUARY 8, 1999
3:00
AGENDA
I. CALL TO ORDER
II. ~Oll Call
III. APPrOVAl OF MINUTES OF JANUARY I I , 1999, REGULAR MEETING.
IV. ELECTION Of New CHAIR AND VICE CHAIR
V. DISCUSSION ITEMS
a. GOLF COURSE LiD
~. AGREEMENT WITH PUD FOR LOW ZONE CUSTOMER AND FACILITY T~ANSFER
C. STATUS ON REGIONAL WATER SYSTEMS DISCUSSIONS (veRBAL REPORT)
D. STATUS Of fERC LICENSE SURRENDER ON MORSE CREEK
VI. LATE ITEMS
VII. N~ MeeTING -To BE SET
VIII. ADUOURNMENt
UTILITY ADVISORY COMMITTEE
ROLL CALL
Call to Order: ~,~.'
Members Present:
Larry Doyle, Chairman
Orville Campbell, Vice Chairman
Joe Michalczik ~/ Glenn Wiggins (Alternate)
Members Absent:
Staff Present: /~. )~_~~ ~d~ ~
Others Present:
INTERGOVERNMENTAL WATER FACILITIES AGREEMENT
CITY OF PORT ANGELES
AND
PUBLIC UTILITY DISTRICT NO. I OF CLALLAM COUNTY
This AGREEMENT is made and entered into this __ day of ,1999, by and between the City
of Port Angeles (hereinafter called the City) and Public Utility District No. 1 of Clallam County (hereinafter called the
District).
WHEREAS, the City and the District concur that the elimination and avoidance of duplicate water system
facilities would be in the best interests of their customers; and
WHEREAS, the laws of the State of Washington, specifically RCW 35A. 14.900, contains language governing
agreements between utilities regarding service territories and acquisition of facilities;
NOW, THEREFORE, IT IS AGREED between the parties hereto as follows:
1. In order to move toward resolution of water delivery restrictions at the District's Gales Addition reservoir, a new intertie
has been installed in the City's low zone area and a metered delivery point established.
2. The new delivery point will be used to provide water to the northwest section of the District's Gales Addition system.
3. The City will pumhase the District's water facilities as shown on the attached Exhibit A. The City agrees to a purchase
price in the mount of $31,250.42 which will be paid within 30 days after receipt of an invoice from the District. The
purchase price includes plant value, severance costs and net revenue as shown on Exhibit B.
4. The District has transferred, and the City has accepted, the customer services attached to and receiving service from the
water facilities shown on Exhibit A.
5. Both parties agree that this Agreement shall not establish precedent for any future transfem of customers and/or facilities.
6. The City agrees, upon completion of the transfer of the water facilities, to indemnify, defend, and hold harmless the
District and its officials, employees, and agents, from and against any and all claims for damages or any other relief due
to property damage, personal injury, or any other form of loss arising from accidents or injuries occurring after the date
of the transfer. The City agrees to accept facilities as is with no warranty as to condition or suitability for use by the City
except as otherwise provided in this AGREEMENT.
The District agrees, upon completion of the transfer of the water facilities, to indemnify, defend, and hold harmless the City
and its officials, employees, and agents, from and against any and all claims for damages or any other relief due to properly
damage, personal injury, or any other form of loss arising from accidents or injuries occurring prior to the date of the
transfer or occurring as a result of defects.
7. Each party warrants that the undemigned representative has full and complete legal authority to sign for it and to commit
it to the performance of the agreements set forth herein.
IN W1TNESS WHEREOF, the parties hereto have caused the AGREEMENT to be duly signed and executed in two
counterparts as of the day and year first above written.
CITY OF PORT ANGELES PUBLIC UTILITY DISTRICT
NO. 1 OF CLALLAM COUNTY
EXHIBIT B
DEFINITION OF PURCHASE TERMS
A. COST FOR PURCHASING PARTY TO SERVE - The estimated cost to install the necessary distribution facilities
to serve the customers to be transferred at purchasing party's current construction standards and conditions.
B. PLANT VALUE - Current replacement cost using existing unit costs for all system facilities adjusted by the salvage
factor and the cost factor as shown in the following formula:
Plant Value (V) =
Current replacement cost (R) x [1- [Age of Plant (A) x Depreciation Factor (D)]] x Cost Factor (C)
R = engineer's estimate/unit costs to construct facilities
A = the average age, in years, of the plant to be transferred
D -- .025, which equates to a depreciated life of 40 years
C = a factor from the table below which adjusts current costs for the effects of inflation
Age (Years) Cost Factor
1-3 1.0
4-6 0.85
7-11 0.65
12-16 0.56
17-21 0.51
22-26 0.47
27-31 0.43
32+ 0.35
NOTE: Only PVC, Cast Iron and Ductile Iron pipe has value for purposes of determining plant value. All other
types of material shall be deemed to have no value.
Plant Value Calculation:
Item Age (A) Cost New (R) Value (V)
6" A.C. pipe 35 33,264
2" PVC pipe 25 4,365 769.33
2" Steel pipe 35 3,395 148.53
6" tee 35 255
6" elbow 35 540
6" gate valve 35 1,590 69.56
2" gate valve 25 430 75.79
air vac assembly 35 490 21.44
fire hydrant 14 4,160 1,514.24
blow-off assembly 25 455 80.19
3/4" services 15 700 245.00
3/4" services 20 700 178.50
3/4" servmes 12 700 274.40
3/4" services 3 700 647.50
3/4" services 29 700 82.78
3/4" servmes 9 700 352.63
3/4" servmes 8 700 676.00
3/4" servmes 12 700 274.40
3/4" services 5 700 520.63
1" services 3 1,600 1,480.00
1" services 5 800 595.00
1-1/2" services 20 2,425 618.38
Total $60,669 $8,624.28
For purposes of this Agreement, Plant Value is $8,624.28.
C. SEVERANCE COSTS - All costs associated with the transfer of customers including but not limited to removing
interconnecting piping, facilities, and meters and administrative costs.
For purposes of this Agreement, Severance Cost is $0.00.
D. NET REVENUE - Five years worth of net revenue from transferred customers as determined by the following
formula:
Net Revenue (R) =
5 x Customer Usage (U) x Water Rate (W) x Annual System Net Revenue Factor (F)
adjusted for present value using the most current 5 year Treasury note annual yield rate (Y)
U = Most recent twelve (12) months of usage
W = Water rate(s) of each customer in effect at the time of transfer
F = Operating revenue from most recent annual income statement less purchased water costs, less distribution
maintenance expenses, less general taxes all divided by operating revenue
Y = 4.63%
Net Revenue Calculation:
Account 12 Month Revenue
12861-I 193.58
13244-9 281.77
13116-9 360.55
43995-0 32.40
13243-1 156.19
13242-3 194.61
13120-1 172.88
13122-7 3,434.97
13290-2 150.71
13121-9 282.27
13113-6 560.05
13115-1 421.48
13245-6 1~148.15
Totals $7,389.61
R = (.0463, (7389.61 x .7), (7389.61 x .7), (7389.61 x .7), (7389.61 x .7), (7389.61 x .7)) = $22, 626.14
For purposes of this Agreement, Net Revenue is $22,626.14.
COST ANALYSIS OF INTERGOVERNMENTAL WATER FACILITIES AGREEMENT
Initial purchase price: $31,250.42
Annual revenue at PUD rates: $7,389.61
Annual revenue at City rates: $5,172.73
Annual City net revenue: $3,620.91
Payback Calculation:
Year Revenues Lost Earnings Balance
0 $ $ $ 31,250.42
1 $ 3,620.91 $ 1,718.77 $ 29,531.65
2 $ 3,620.91 $ 1,624.24 $ 27,534.98
3 $ 3,620.91 $ 1,514.42 $ 25,428.49
4 $ 3,620.91 $ 1,398.57 $ 23,206.15
5 $ 3,620.91 $ 1,276.34 $ 20,861.58
6 $ 3,620.91 $ 1,147.39 $ 18,388.05
7 $ 3,620.91 $ 1,011.34 $ 15,778.49
8 $ 3,620.91 $ 867.82 $ 13,025.39
9 $ 3,620.91 $ 716.40 $ 10,120.88
10 $ 3,620.91 $ 556.65 $ 7,056.62
11 $ 3,620.91 $ 388.11 $ 3,823.82
12 $ 3,620.91 $ 210.31 $ 413.22
Assumptions:
City earns 5.5% return on investments (lost earnings)
No rate increases
Customer usage remains constant and no additional customers
Comments:
1) An increase in interest rates of 1% increases the payback period by one year.
2) An annual increase in water rates (or customer growth) of 1% decreases the payback period
by one year.
3) The difference in rates between the PUD and the City (42.8%) is a strong motivator for City
residents to seek water service from the City or rate parity from the PUD.
4) Water consumption will almost surely increase due to the reduction in rates.
UTILITY ADVISORY COMMITTEE
Port Angeles, Washington
January 11, 1999
I. Call tO Order: Draft
Chairman Doyle called the meeting to order at 3:00 p.m.
II. Roll Call:
Members Present: Councilmen Campbell, Doyle, and Williams [left meeting at 3:35
p.m.], and Joe Michalczik.
Members Absent: Bill Myers.
Staff Present: C. Hagar, B. Titus, J. Pittis, G. Kenworthy, D. McGinley, R.
Ellsworth, K. Ridout, C. Knutsou, and D. Sawyers.
Joe Michalczik reminded the Committee that he had asked Director Pittis to contact Dean Reed
of Daishowa and invite them to participate in the water study. Mr. Michalczik asked Director
Pittis to report on this. Director Pittis stated he sent Mr. Reed a copy of the draft report and the
scope of work. After Mr. Reed has reviewed both documents, he will call Director Pittis for
discussion.
IlL Approval of Minutes:
Councilman Campbell moved to approve the minutes of the December 7, 1998, regular
meeting. Deputy Director Titus pointed out an error on page three, contingency should read
contingent. Councilman Doyle pointed out that he opened the meeting, not Vice Chairman
Campbell. Deputy Clerk Hagar stated Kevin Curtis had sent a memo asking for a correction to
page one, paragraph two, the last sentence. The words "and there has only been one complaint
regarding an odor in six years.' should be struck. Councilman Willimns seconded the motion,
which carried unanimously.
IV. Discussion Items:
A. Agreement with PUD for Low Zoned Customer and Facility Transfer
Deputy Director Titus reviewed the information provided on this issue and provided a brief
history. Mr. Titus explained that by State Law, when there is a transfer of utilities from one
company to another, the existing provider of the service may continue to provide that service for
seven years because of the investment in equipment and facilities which needs to be recovered.
This agreement allows the City to compensate the PUD for five years (agreed to by PUD) of net
revenues which would have been realized and take over provision of those services. Discussion
followed and Mr. Titus and Attorney Knutson responded to questions and provided clarification
regarding the purchase terms, State law requirements, and the area covered by this agreement.
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Utility Advisory Committee
January 11, 1999
Attorney Knutson noted that a portion of the area covered by this agreement lies within the City
limits. If the annexation occurred more than seven years ago, the City is not liable for seven
years of net revenue. Mr. Michalczik expressed concern over the City paying more than $34,000
for a facility that has a capital value of $8,000. If the City pays the PUD out over a seven year
period, the actual purchase price with interest is about $42,000. The first seven years of owning
this facility would be subsidized by the other rate payers and the City wouldn't realize any profits
to pay operating costs and capital investments until the eighth year.
Councilman Campbell agreed with Mr. Michalczik. He felt the low zone intertie issue needed
to be settled and future water issues should be looked at differently. Further discussion ensued.
Deputy Director Titus stated the revenue which would be received from these customers has not
been computed. It is not a case of money going out and nothing coming in.
Councilman Campbell felt the City could not afford this process and when the City goes forward
with annexation the PUD is going to have to service the water and electric customers in that
annexation area. Councilman Williams noted that an annexation petition just went to the Planning
Commission for review; this sets the precedence for everything else.
Director Pittis stated that when this process was started almost two years ago, it was thought that
this piece was small enough to give the City a good read as to the complexities of this type of
agreement for the future. Director Pittis agreed with Councilman Campbell, in the future there
is no room for future agreements such as this because of the cost. Staff will have to seek a
different way to make annexation look desirable. Director Pittis pointed out that in this particular
instance, the waterline intertie helps to divert some of the flow from the upper system to the lower
system, where it is less expensive to provide water; it lessens the burden on the upper system and
relieves some of the water demands in that area. Therefore, the City has gained some operational
benefits by doing this.
Director Pittis suggested that staff find answers to some of the Committee's questions and bring
this issue back to the next UAC meeting. Joe Micbalczik thanked staff for all the work they have
put into this agreement and asked them to look into trying to reduce the City's costs should this
agreement be approved. Councilman Doyle asked that the wording in item three of the agreement
be changed to" . . . within the City limits shown on... ' Attorney Knutson will check with
Municipal Research to see if other cities have found a different way to handle this type of
situation.
B. Old Joe Road Water Shut Off Notice Pending
Director Pittis summarized the information contained in the packet and provided a brief history
of the issue. The City has received verbal recommendations from the Department of Health, but
is currently waiting for a written recommendation prior to discontinuing service to the Old Joe
Road water line. Once that is received, the residents will receive a letter advising them of the date
of discontinuance of service. Director Pittis felt the UAC should be aware of this problem.
Discussion ensued and staff responded to questions and provided additional clarification.
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Utility Advisory Committee
January 11, 1999
Concern was expressed over the City's liability in this issue should someone fall seriously ill due
to tainted water. Attorney Knutson explained that the City's position is that the water line is
private and, therefore, the City is not liable nor responsible for any problems with the privately
owned waterline. Ralph Ellsworth, Water Superintendent, explained that the City owned water
line is clean, however, the Old Joe Water line is made of galvanized pipe and, due to low water
pressure and poor circulation, is a stagnant system. The City has no control over private property
and cannot force the owners to improve the waterline.
Attorney Knutson stated them is a provision in State law which allows a local jurisdiction to force
a LID for health reasons. The State may choose to go that route rather than just cutting off the
water. The County Health Department is aware of the problem, but has thus far not become
involved.
Further discussion ensued and Joe Michalczik was concerned with simply turning off the water
to the families on this road. Director Pittis stated he will keep the Committee apprised of the
situation as information is received from the State. Mr. Michalczik asked that staff contact the
County Health Depma.ent and get them involved in clearing up this situation without turning off
water to these families.
No action was taken. This issue will be returned to a future meeting.
C. Ediz Hook Sewer Ordinance
Director Pittis reviewed the information provided in the packet and explained why the final cost
of the project was so much lower than the original estimate. Director Pittis and City Engineer
Kenworthy provided a brief history of this issue and responded to questions and offered
clarification.
At the Committee's request, staff explained the sewer connection charge and how the amount was
arrived at. Attorney Knutson explained that sewer costs would be factored into the leases the City
is entering into with Thunderbird Boat House and Global Aqua. The Puget Sound Pilots have
already agreed to pay their costs up-front rather than spreading it out over the length of the lease.
Director Pittis pointed out that the Ordinance amending the amount of the Ediz Hook sewer
connection charge is to reduce the fee due to actual costs and the change to the Milwaukee Drive
Ordinance is to correct references to a Code section. Following further discussion and
clarification, Councilman Campbell commended staff for the savings realized on such a large
project and lowering the Ediz Hook sewer connection charge by more than $2,500. Joe
Michalczik moved to recommend the City Council adopt an Ordinance revising the charges
for connection to the Ediz Hook Sanitary Sewer and revising the Milwaukee Drive Sewer
Connection Ordinance. Councilman Campbell seconded the motion, which carried
unanimously.
-3-
Utility Advisory Committee
January 11, 1999
D. Information on Public Meeting for Feasibility of Marine Bluff Study
Senior Planner Sawyer reviewed the history of this issue. He stated the City has agreed to
facilitate a meeting regarding a feasibility study, which will be held January 21, 1999, at 7:00
p.m. in the Community Room of the Port Angeles Library. The purpose of the meeting is to
determine if there is enough interest among the property owners to pursue a bluff-wide
geotechnical report. Staff will be present to provide the property owners with information
regarding permitting activities along the bluff and development applications. Local engineering
firms will also be invited to participate.
Brief discussion followed. This is information only and no action was taken.
V. Information Only Items - None.
VI. Late Items
Councilman Doyle noted that the minutes referenced a meeting with Senator Gorton; due to
inclement weather, the meeting became a telephone conference call. As Councilman Campbell
had participated in this call, Councilman Doyle asked him to give a summary of that conversation.
Councilman Campbell stated Senator Gorton reiterated his optimism that there will be a resolution
of the Elwha funding in the new session of Congress. However, the impeachment process may
hinder the progress of his issue. Councilman Campbell said that Senator Gorton had
conversations with Congressman Dicks regarding this, Congressman Dicks has a pipeline to the
White House. Senator Gorton was receptive to the City's water treatment problems as they relate
to the Elwha, and indicated that he would be willing to help with funding for water treatment with
or without the Elwha Dam removal project. Councilman Campbell felt he was sympathetic and
agreeable to helping the City.
VI. Next Meeting:
The next meeting will be February 8, 1999, at 3:00 p.m.
Councilman Doyle noted that the March UAC meeting is scheduled for the eighth and he and
Councilman Campbell will be out of town. This meeting will be rescheduled at the next meeting.
VIII. Adjournment:
The meeting adjourned at 4:45 p.m.
Chairman Deputy City Clerk
-4-
pOR?ANGELES
W A $ H [ N G T O N, U. $. A.
PUBLIC WORKS DEPARTMENT
DATE: February 8, 1999
To: UTILITY ADVISORY COiVflVUTi EE
FROM: Jack Pittis, Director of Public Works
SUBd~CT: Upper Golf Course Road Sewer Improvement L.I.D. No. 215 Final Assessment and
formation of Developer Reimbursement Agreement to reduce property owner assessments.
Summary: The construction for the Upper Golf Course Road Sewer Improvement L.I.D. No. 215 has
been completed and the final costs were significantly above the original estimates. Formation of a
developer reimbursement agreernem funded by the wastewater utility is proposed to keep the assessments
in line with the original estimates.
Recommendation: It is recommended that City Council authorize formation of a developer
reimbursement agreement to reduce L.I.D. #215 assessments and to proceed with final L.LD. hearings
based on these reduced assessments.
Issue: Should City Council authorize formation of a developer reimbursement agreement funded by the
wastewater utility and proceeding with L.ID. #215 final hearings?
Background / Analysis: The construction for the Upper Golf Course Road Sewer Improvement LiD
# 215 has been completed and the final costs have been compiled. The total final costs significantly overran
the preliminary cost estimate used for the formation ofL.I.D # 215 as summarized below and shown in
detail in the Final Cost Summary Table.
Prelim. Final Costs Revised Percentage
Assessment fi.om Prelim.
LID #215 Final Assessment
February 8, 1999
Page - 2
The cost of this project was complicated by the following factors:
1) Construction was started in the winter due to the need for sewer service by individuals building
new homes in the area.
2) Costs for an LID are normally estimated during the preliminary heating stage based upon
preliminary information and not the final design which when problems are encountered makes the
original estimate very low, as in this case.
3) Project estimated quantifies were overrun due to the extremely poor soil conditions, compounded
by winter weather, that required large quantities of additional excavation, backfill, paving, and
restoration materials not anticipated in the original estimate for bidding.
4) At the time of award we knew that the LID costs were approximately $270,000 over our
preliminary estimate and a Developer Reimbursement Agreement was suggested at that time as
a method of reducing the assessments.
After evaluating the cost increases and the appropriate ways to distribute the costs to the benefited
properties, the engineering staff concluded that the three methods available are as follows:
1) Distribute all of the costs to the benefited properties resulting in an LID assessment increase from
$4,765.50 to $11,362.17 per unit;
2) Distribute all of the costs to a larger area by establishing a sewer developer reimbursement area
based on the area south of the LID between the City Limits and the UGA. These future
connections outside the LID boundary wood pay a connection charge to the City at the same rate
as the LID, plus interest. This adds 61 units to the area for distribution of costs. The per unit cost
would be reduced to $6,265.90. This revised $6,295.90 assessment is not out of line with the cost
of septic drain fields in the area which can run from $5,500 to $15,000 depending on the soils
conditions.
3) Distribute some combination of the above.
Attach: Final Cost Summary
Loc: N:~PROIECTS~95 -05LID~ASSE $SMTLWNL $-UAC WPD
File: 954)510
LID 215 FINAL COST SUMMARY
FINAL NON-LID FINAL PRELIM. %
DESC. ENGR & ADJUST. LID #215 COST OVER
CONST COSTS (1 ) COSTS ESTIMATES ESTIMATE
DESIGN
PRELIM.
ENGR.-
NTI $5,120.00 $0.00 $5,120.00 $5,000.00 2.
DESIGN $88,491.36 ($6,433.79) $82,057.57 $61,000.00 34.52~
ENGR.-
NTI
CITY $37,557.10 ($2,003.56) $35,553.54 $40,000.00 -11.12~
COSTS
DESIGN $131,168.46 ($8,437.35) $122,731.11 $106,000.00 15.78~
SUBTOTAL
CONST.
-LBR $40,887.00 $0.00 $40,887.00 NONE
-RV $731,370.42 ($59,782.75) $671,587.67 NONE
ASSOC
-RJ SERV. $772.24 $0.00 $772.24 NONE
-WDHVN $16,185.00 $0.00 $16,185.00 NONE
CONST. $789,214.66 ($59,782.75) $729,431.91 $251,418.50 190.13~
SUBTOTAL
jT~TA~S $920.383.12 ~$68.220.10) $852.163.02 $357.418.50 138.42'
1. CHARGES FOR NQN LID FACILITIES (WATER AND POWER) CONSTRUCTED WITH THE PROJECT.
LID/DR.e, ASSESSMENTS
EQUIV. SHARE OF COST PER PRELIM. LID % OVER LID
DWELLING LID CONST EDU #215 COST FORMATION
DESCRIPTION UNITS COSTS PER EDU ESTIMATE
(EDU)
LID #215 75 $469,942.84 $6,265.90 $4,765.58 31.48%
DRA 61 $382,220. lS $8,265.90 NONE
TOTAL~ 136, $852,163.o2 I
LQC: N:~PROJ ECTS~O5LID~ASSESSMT~CNLCO ST.WP D
FILE: 95-05,09
pORTANGELES
WASHINGTON, U.S.A.
PUBLIC WORKS DEPARTMENT
DATE: February 7, 1998
To: Utility Advisory Committee
FROM: Bob Titus, Deputy Director of Utility Services 6~~rO
SUBJECT: Intergovernmental Water Facilities Agreement
This item was discussed at the January UAC meeting and staff was instructed to provide additional
information at the February meeting. Specifically, the UAC asked that a present worth analysis be performed
and used in determining the portion of the purchase price associated with net revenues. In addition, staff was
instructed to estimate the payback period for recovering the costs of acquiring the PUD's customers and
facilities. The revised Agreement and associated exhibits will be available at the meeting.
Action to be taken: Recommend to the City Council that the City enter into an Intergovernmental Water
Facilities Agreement with the PUD.
Estimated time for this item: 20 minutes.
pORTANGELES
WASHINGTON, U.S.A.
PUBLIC WORKS DEPARTMENT
DATE: February 7, 1998
To: Utility Advisory Committee
FROM: Bob Titus, Deputy Director of Utility Services ~
SUBJECT: FERC License Surrender for Morse Creek Hydro Project
January 29, 1999 was the deadline for submitting a response to the Federal Energy Regulatory Commission
(FERC) regarding the City's request to surrender our operating license for the Morse Creek Hydro facility.
The response letter (copy attached) addressed issues raised by FERC and other federal and state agencies and
was reviewed by the City Attorney and the City's water rights attorney prior to submittal. Copies of the
letter's attachments are available if you are interested. FERC will now determine the extent of environmental
review that is necessary and will proceed with any necessary studies. Ultimately, FERC will release a
preliminary license surrender agreement with terms and conditions that the City must comply with in order
for FERC to grant the surrender request. The City will have an opportunity to suggest changes to the terms
and conditions and ultimately can choose to accept the final agreement or withdraw the license surrender
request. This step is likely several months away.
Action to be taken: None. For information only.
Estimated time for this item: 15 minutes.
pORTANCELES
WASHINGTON, U.S.A.
PUBliC WORKS & UTILITIES DEPARTMENT
January 29, 1999
Mr. David P. Boergers, Secretary
Federal Energy Regulatory Commission
Mail Code: HL-20
888 First Street, N.E.
Washinglon, D.C. 20426
Dear Mr. Boergers:
The City of Port Angeles on September 16, 1998 sent the Commission a letter requesting to surrender the
operating license for the City's Morse Creek Hydro project (Project No. 6461-019). On October 16, 1998,
the City received a letter from the Director of the Office of Hydropower Licensing acknowledging the
City's request and indicating that additional information was required before the Commission could
process our request. On December 10, 1998, the City asked for and received an extension of time to
respond to some of the requests contained in your October 16, 1998 letter because of a lack of response
from certain other agencies. The January 29, 1999 deadline for responding has arrived and the City has
still not heard from all of the agencies. However, we are anxious not to delay this process further so we
are submitting, herewith, our response to the six issues identified by number in your letter, including
copies of correspondence between the City and commenting agencies.
1) The City of Port Angeles (City) supplies water to approximately 7,400 customers. In addition, it
provides water under a wholesale water contract to the Clallam County Public Utility District (PUD).
The source of supply for the City water system is a Ranney collector located on the east bank of the
Elwha River. Water from the Ranney collector is pumped into five reservoirs with a total capacity of
18 million gallons. An additional reservoir (approx. 3.5 million gallons) is planned for construction
sometime in the 2000-2002 timeframe to serve high growth areas on the East Side of the City. Water
is available from the Elwha though a 32 mgd water right. The City also has a separate indusU-ial
supply water right (97 mgd) and pipeline to serve a paper mill, fish hatchery and other users along the
city's waterfront. The industrial supply is a small diversiOn dam on the Elwha River a quarter mile
upstream from the City's Ranney collector.
Prior to the Ranney collector construction in 1977, the City's source of water SUl~ply was Morse
Creek. A diversion dam and gravity feed pipeline were constructed in 1924 to provide water to City
customers utilizing a 5 cfs and 15 cfs water right. When the City constructed the Morse Creek Hydro
project, the existing water right was modified to provide for hydro generation and municipal supply.
Although the Morse Creek supply is not suitable for domestic use without treatment, it is critical for
emergency fire flow purposes. Emergencies that would necessitate the use of the Morse Creek supply
could include prolonged power outages or other conditions that would prevent use of water from the
Ranney collector.
321 EAST FIFTH STREET · P. O. BOX 1150 ® PORT ANGELES, WA 98362-O217
PHONE: 360-417-4805 ® FAX: 360-417-4542 ® TTY: 360-417-4645
E-MAil: PU BWO R KS@CI. PORT-AN G eLES.WA. U S
The Elwha River Ecosystem and Fisheries Restoration Act does not guarantee that the City will never
have to depend on an emergency backup water supply: Rather, the pending removal of the Elwha
River dams, resulting turbidity, silting and other changing river conditions increase the likelihood of
needing the Morse Creek emergency water supply. Therefore, the City of Port Angeles does not
"prefer" to retain the diversion dam and pipeline, it must retain them to provide for -the safety and
well being of its citizens. Any license surrender imposed condition that would threaten continued use
of these facilities is unacceptable to the City and would result in retraction of our license surrender
request.
2) Western red cedar, big leaf maple and red alder are the dominant tree species in the project area.
Sword fern and pig-a-back plant are the dominant plant species yvith occasional occurrences of
salmonberry. Deer, chickaree and raccoon are the mammals most frequently found in and around the
project area. A variety of birds frequents the project area and includes owls, jays, sparrows, swallows,
crows and robins. Due to the steepness of the slopes in the project area, slides are not uncommon but
the only project feature that changed the character of the area was the access road to the powerhouse.
Banks and slide areas have been planted with native grasses and in a few cases, jute matting was
installed to stabilize hillsides. Planted areas have successfully taken root and are hot noticeably
different from adjoining areas.
3) At this time it is our intent to retain the powerhouse as is with the exception that we will remove the
power transformer located adjacent to the powerhouse and fill-in the tailrace Channel to pre-project
conditions. Additionally, all potential pollution sources at the powerhouse will be removed. In
securing the powerhouse we will bolt the door closed and securely seal access to the tailrace with
metal grating. General access to the site is already very limited due to the steepness of surrounding
slopes and the only road access to the project site is barred by a locked gate. The access road would
be retained so that we will have continued access to the powerhouse site for landslide monitoring and
future removal of all remaining facilities should resale value exceed salvage costs. Maintenance of the
diversion dam, pipeline and access road will not be affected by license sur)ender. We propose-to
make monthly inspections of all facilities. At times when the pipeline is being used to supply water
under emergency conditions, inspections would be done weekly. In addition, inspections would be
made at any time when weather conditions significantly increase water runoff that in turn increases
the chance of landslides.
4) The environmental assessment (EA) made in 1983 as part of the licensing process indicated that there
were no unusual, rare or endangered species of plant, mammal or bird in or within 200 feet of the
· project site. (If you would like a copy of the EA, we can provide one upon request.) Since that time,
chinook salmon is known to be under consideration for possible listing, which is being determined at
the present time. License surrender will mean that water is not diverted from Morse Creek for hydro
operations leaving it in the creek for the approximately two miles between the diversion dam and the
powerhouse. Additional water in the creek should prove beneficial to all species of fish. Care will be
taken not to disturb or affect any federally proposed or listed threatened or endangered species.
Mr. David Frederick of the U.S. Fish and Wildlife Service and Mr. William Stelle, Jr. of the National
Marine Fisheries Service were twice contacted for comment but NMFS did not respond and USFW
responded on January 27, 1999. USFW's comments have been addressed in sections 1), 3), and 4).
The City also received a response from the Washington State Department of Fish and Wildlife and
they were generally supportive of license surrender if the tailrace was filled in, pollution sources
removed from the site and earth movement monitored along the pipeline route. As indicated in our
response in 3) above, we intend to take these steps.
Because the effect of license surrender is to leave water in the creek, rather than to divert it for
hydropower use, FERC should conclude that this action is not likely to adversely affect bull trout,
chinook salmon or other listed or proposed listed species or critical habitat. The USFWS comment
letter acknowledges that restoring the natural stream flow to the creek will benefit fish and wildlife
resources. A biological assessment under ESA Section 7 is not necessary because there is no major
construction activity associated with license surrender.
5) As part of the origina! license application, a cultural resource survey was conducted. The survey
found no archaeological sites and no historical sites that fell within the project boundaries. Since the
only anticipated physical changes that will come about because of license surrender is the removal of
the power transformer and filling in the tailrace channel, there should be no change in this finding.
The City contacted the Washington State Historic Preservation Officer and the E]wha Tribe for their
comments. The Washington State Office of Archaeology and Historic Preservation indicated that they
have no concerns. The EIwha Tribe responded verbally and indicated that they did not have any
cultural concerns.
6) Copies of all correspondence commenting on the City's proposed surrender of the license for the
Morse Creek Hydro facility are attached.
If additional information is required, please contact me at (360) 417-4701 or by e-mail atpalight~ci.l~ort-
angeles.wa.us.
Thank yqu.
Sincerely,
Robert J. Titus
Deputy Director of Utility Services
Attachments:
City's original letter requesting license surrender
City's letter requesting time extension
FERC's acknowledgement letter
FERC's letter granting time extension
City's original letter to NMFS
City's follow-up letter to NMFS
City's original letter to US Fish & Wildlife
City's follow-up letter to US Fish & Wildlife
US Fish & Wildlife faxed response
City's original letter to Elwha Tribe
City's follow-up letter to EIwha Tribe
City,s original letter to State Historic Preservation Officer
Washington State Office of Archaeology and Historic Preservation response letter
Washington State Department offish and Wildlife response letter
Project map