Kirkland study session previews utility rate choices as Cascade outlines $1.132$1.35B supply program

Kirkland officials on May 8 held a study-session briefing intended to give councilmembers and the public a baseline before formal rate proposals arrive later this year and next. Deputy City Manager Dunlap told the council that the city's four enterprise utilities — water, sewer, surface water and solid waste — have combined annual budgets around $90 million and must be funded from rate revenue rather than the general fund.

Dunlap said the city is completing the first phase of a rate study this year, the revenue-requirements analysis, and expects to bring preliminary rate recommendations to a study session in August, proposed rates in September and a potential adoption in October. She emphasized that large, outside drivers — notably King County wastewater treatment charges, solid-waste disposal costs and contract escalators — will shape any rate change.

"We just wanted to give everybody a good starting point," Dunlap said, explaining the three parts of a rate study: revenue requirements, cost-of-service allocation and rate design.

Cascade Water Alliance, which supplies water to the southern portion of Kirkland and other Eastside members, then briefed the council on its long-term supply plan. Cascade representatives said wholesale purchases from Seattle Public Utilities will decline beginning around 2039; Cascade has arranged two wholesale agreements with Tacoma for permanent and temporary supplies and a regional buildout that will move in phases: a transmission backbone, distribution connections to member systems, and ultimately a Lake Tapps supply-development phase.

Program staff cautioned the council that estimate accuracy is low in early planning. Program executive Brian Bartel described the work as "in a class five red zone" of cost-estimate uncertainty and presented a pre-planning cost projection for phase one of approximately $1.13 billion to $1.35 billion, including major transmission pipeline work, storage tanks, re-chlorination and operations facilities. He said contingencies and a management reserve will be built over time rather than seeking a single sudden rate spike.

Cascade's water-efficiency director James Umsbacker also reported on current supply conditions and conservation: he said the region experienced unusually low snowpack this water year ("the third lowest snowpack on recorded history"), which elevates summer supply risk and increases the importance of voluntary curtailment messaging and efficiency programs.

Councilmembers asked about water-quality comparisons between Seattle and Tacoma supplies, contract termination rights, timing for when Cascade might need to work inside Kirkland, and how project siting and permitting could drive costs. Bartel said Cascade had done a comparative review of watershed parameters and that, in many measures, the Green River/Tacoma system compared favorably; he also urged elected officials to support federal financing tools such as WIFIA to lower borrowing costs for large programs.

What happens next: staff will return with rate-study revenue-requirements results this summer; Cascade said it will return with additional briefings, including rate impact analyses, in future meetings as the program advances and more detailed designs and route options are developed.