Anacortes reviews draft general sewer plan, $244.5 million wastewater capital program and looming revenue shortfall

Anacortes City Council members heard a technical briefing Sept. 2 on a draft general sewer plan and a 20‑year wastewater capital improvement program that together identify roughly $244,500,000 in potential projects and show a multi‑year gap between projected expenses and existing utility revenue. The presentation took place at City Hall during the regular council meeting.

Why it matters: The plan identifies near‑term work on aging equipment and pump stations, modeling tools that will inform where the city can accept new development, and a long‑range potential upgrade to remove nitrogen if state regulators require it — steps that could carry large capital costs and influence future rates, grants and permitting decisions.

HDR Engineering consultant Kenny Packard told the council the plan combines a new hydraulic model, flow monitoring and projected population growth to identify collection‑system and treatment‑plant needs. “We built a sewer model for the city,” Packard said, noting the city now has a calibrated tool to test wet‑weather events, future growth and how projects perform. Packard said the city’s system includes about 21 pump stations, a combined sewer in many older areas, and a wastewater treatment plant built in the 1990s that is currently meeting conventional permit limits for biological oxygen demand and suspended solids but was not designed for full‑scale nitrogen removal.

The plan models a 10‑year storm for planning; it recommends projects where pipes surcharge excessively, where force mains exceed safe flow velocities, and where pump‑station capacity is projected to be inadequate. Packard said the city’s recently designed CSO (combined sewer overflow) pump station and outfall work into that modeling to mitigate surcharging along Q Avenue.

City Finance Manager Rhonda Peck presented the revenue outlook tied to the capital program and said the combined operating and capital costs for sewer show a shortfall over the six‑year horizon. Peck noted the 2025 budget used about $8.1 million in fund balance and that the utility expects about $8.8 million in grant revenue; even so, her slides showed service revenues (modeled at 3 percent annual CPI increases) would not cover the projected costs. She told councilmembers the teams are preparing one‑page project summaries for a Sept. 22 capital facilities plan review and a council discussion of revenue options currently scheduled for Oct. 6.

Council questions focused on timing, regulatory risk and how growth will be distributed. Packard said Ecology (the Washington State Department of Ecology) has issued and revised a Puget Sound nutrient general permit addressing nitrogen planning; while that permit was invalidated and subsequently revised in draft form, Ecology still intends to regulate nitrogen discharges to the Salish Sea and the draft contains an opt‑in/opt‑out structure and planning requirements. Packard said the city’s approach in the CIP assumes optimization and staged implementation: 0‑6 years for optimization planning, 6‑10 years for additional implementation, and 10‑20 years for potential large‑scale upgrades if required by future regulation.

Councilmember Young emphasized that the revenue gap is real and will require policy decisions, while others asked how the model can be used to require concurrency or to guide permitting in areas with aging pipes. Packard and staff said the model allows concurrency analysis and will support alternatives analysis for specific projects, including the potential to evaluate green infrastructure approaches during predesign phases.

What was not decided: The presentation was informational; the council did not adopt any ordinance or funding measure at the meeting. Staff said draft plan documents will be returned to council after internal review, Department of Ecology review and SEPA review. The finance team will present revenue options later this fall.

Key details and clarifications: Packard said the total CIP for wastewater projects across categories (collection, force mains, pump stations and treatment plant) is approximately $244,500,000 over 20 years. The city’s current NPDES permit capacity was reported by staff as 4.5 million gallons per day; under the city’s current permit the plant was described as having capacity for projected BOD and TSS loading through the planning horizon, but not for the levels of nitrogen removal that Ecology’s nutrient planning contemplates. Peck said the service‑revenue projection assumes a 3 percent annual CPI escalation and that a gap remains under that scenario.

Next steps and outlook: Staff will complete the draft general sewer plan and related environmental review, submit the plan for Ecology review, and return to council for capital facilities plan and revenue discussions (preliminary project packet Sept. 22; revenue discussion Oct. 6). The plan and model will also be used in future permitting and development concurrency decisions.