An Orcas utility is hoping to embark on a big project.
The Eastsound Water Users Association is applying for funding from the U.S. Department of Agriculture’s Rural Development program for a multi-faceted, $2 million proposal. The money would come in the form of both a loan and grant.
“The application will go in at the end of June, and we’ll know about the money by the end of September,” said general manager Paul Kamin. “Partly because we really want to work with local contractors, we’re setting up a phased planning calendar. We’re doing one or two projects per season and it will take around two years to knock them all off … we’re small, so we can only supervise so much construction at a time. By breaking it out, it makes it more manageable for us, and as ideal as possible for only local folks to be doing the work.”
Kamin says the federal program requires that bidding be open to both local and off-island contractors, but by phasing out the tasks, it’s less likely a mainland company will be awarded the bid.
The first phase of the two-year undertaking is replacement of the storage tanks on View Haven and the top of Double Hill with larger units. Other projects include: replacing mains that are leaking at Madrona Point and Matia View; treating the new Mt. Baker, Greer, and Klein wells so they can be used for future growth; installing 19 fire hydrants in a number of areas to improve firefighting capacity; upgrading members’ water meters to include a “radio read” system that will reduce meter reading time by over 70 percent and improve the Association’s abilities to identify leaks quickly; partnering with San Juan County’s GIS Department to electronically map all of the system features; and controlling corrosion of the Longwood Tank.
Kamin hopes to launch the first phase in the spring of 2011, but says, “USDA won’t let us start anything until the entire package has been reviewed by state engineers and is approved.”
The bulk of the money for these improvements would come from a 40-year loan with an interest rate no higher than 4.125. Kamin is hoping for a rate of 3.25, given the service area’s median income.
“The idea that we can spread this out over 40 years means people’s bills won’t go through the roof,” Kamin said. “The EWUA board is considering what kind of formula to apply for payback.”
He says the monthly increase to existing members would be nominal – probably well under $10.
“Everyone will benefit from all of the projects one way or another,” Kamin said. “It’s how do we equitably apply that so it lessens the burden on existing members.”
The EWUA operating budget is currently funding capital improvement reserves that will cover much of the loan repayment obligations. Projects that are associated with developing capacity for growth will be paid with proceeds from the sale of new memberships, not by existing members. System improvements (such as the main replacements) will be repaid by existing members’ water service fees.
The Board of Directors is hosting a meeting for both association members and the public on June 8 at 5 p.m. in the Lundeen Room of the Orcas Senior Center to decide a payment plan. The meeting is also a requirement of the loan, as EWUA needs to show there is community support.
So why is EWUA going for this federal money now? Kamin says there are several reasons: more money is available because of the stimulus program; interest rates are low; during this year’s funding cycle USDA can fund the full amount without the need for supporting funds from other public sources; construction-related project bids have been extremely competitive; and this funding source allows EWUA to continue to pursue needed system improvements in the most cost effective way possible.
