Council hears water-supply alternatives after April supply-line leak; staff tees up three policy questions for SPU talks

City staff updated the Mercer Island City Council Feb. 4 on alternatives for the island’s primary drinking-water supply after a high‑profile transmission-line leak on the Seattle Public Utilities (SPU) system in April 2024.

Chief of Operations Jason Kittner and city utilities engineers described a proposed alternate transmission alignment that would run a new supply main from the boat launch area along Southeast 30th, up Gallagher Hill to Southeast 40th and tie into the existing transmission near the reservoir. The new alignment would move the critical section out of an erosion-prone, difficult-to-access slope where the 24‑inch SPU line has experienced repeated failures.

Why it matters: Mercer Island is a direct SPU customer and relies on that transmission to fill its reservoir tanks. The April 2024 failure occurred at a steep, constrained site that complicated conventional repair work; staff said moving the primary alignment to more accessible ground would reduce future operational risk and ease repairs.

Three policy questions for council direction

Staff asked the council three targeted questions they will use in negotiations and updates with SPU and to shape next design and procurement steps: (1) should the city pursue a permanent intertie that makes the Shorewood apartment complex a permanent customer of the Mercer Island utility rather than remaining a direct SPU customer; (2) should the older 24‑inch SPU supply line (the section that runs through the steep slope) be taken out of service and abandoned once the new transmission is operable; and (3) should the city seek transfer of ownership of the remaining SPU segment (the portion sometimes called “segment 4”) so Mercer Island would own and operate the island’s distribution from the boat launch to the reservoirs?

Staff recommendation and council feedback

Staff recommended pursuing a permanent intertie with Shorewood, decommissioning the vulnerable 24‑inch segment after the new line is operational, and pursuing transfer of that SPU-owned segment 4 to city ownership — but emphasized that each recommendation requires further financial and legal due diligence. The city’s choice affects who bills Shorewood, which entity carries long-term replacement responsibility, and how capital and operation costs would be allocated.

Council members asked for detailed cost‑benefit and rate-impact analyses before any final decision. Several council members flagged these points:

• Cost allocation and billing: staff confirmed the project has been budgeted in the water utility capital program but that the city is pursuing outside funding (state grants, public-works loans and bonds) and will model rate impacts. Council asked staff to show how any change (e.g., bringing Shorewood onto the city rolls) would affect individual residents and Shorewood tenants.

• Resilience: staff said the city’s canyon 16‑inch line remains an operational backup but that the new 24‑inch alignment would better serve the reservoir hydraulically and reduce the frequency of risky emergency repairs in steep terrain.

• Ownership trade-offs: staff said taking ownership of SPU’s segment would consolidate responsibility on Mercer Island and could speed repairs and operational decisions, but it could also mean Mercer Island inherits an aging asset; the council asked staff to identify the pipe’s age, maintenance history and any accumulated capital replacement funding tied to SPU records.

Procurement and delivery approach

Because the work crosses jurisdictions, includes roadway reconstruction, and must be completed quickly, staff said the city has applied for and received approval for an alternative project-delivery method (heavy-civil GCCM — general contractor/construction manager). The city has selected a design team and is finalizing a scope and expects to have the GCCM under contract to allow contractor involvement early in design and to help manage schedule and coordination risk.

Next steps

Staff will finalize design-team contracts, continue hydraulic and financial modeling, prepare a due-diligence package on the SPU-owned segment, and develop a cost-benefit analysis for a Shorewood intertie and for any transfer of asset ownership. Staff also said they will pursue external funding and return to the council with more precise cost and financing options as design advances.

Ending

Council members generally supported pursuing further analysis and told staff to return with the requested cost, rate and asset-condition information; staff will take those instructions into negotiations and follow-up conversations with SPU and report back to council at subsequent briefings.