The Anacortes City Council approved on Monday an agreement with Skagit Public Utility District to work out the details of the city’s proposed acquisition of Fidalgo Island Water System.

The 63-year-old water system serves Dewey Beach, Gibralter, Fidalgo Heights and Summit Park. The city, which has a water right on the Skagit River, supplies water wholesale to the Fidalgo Island Water System as well as the Town of La Conner, the Swinomish Tribe and the City of Oak Harbor. The City of Anacortes has the right to 54 million gallons a day from the Skagit River, but typically draws 20 million gallons a day, city Finance Director Steve Hoglund said in an earlier interview.

The proposal as it now stands is for a no-cost transfer of service area from Skagit PUD to the city, according to Hoglund.

Before the transfer takes place, Skagit PUD would have public meetings with system customers, and the transfer of ownership would need to be cleared by the county Boundary Review Board.

Skagit PUD officials say transferring ownership of the system to the city makes sense because the city, by virtue of its location, could respond more efficiently to system needs.

Acquisition of the Fidalgo Island Water System would increase the size of Anacortes’ water system by 9%, Public Works Director Fred Buckenmeyer said. It would generate about $424,000 in annual revenue and cost $51,000 a year to operate. The revenue balance would go toward capital improvements on the system, he said.

What must be finalized is which improvements will be completed by which agency, according to Skagit PUD general manager George Sidhu. Projects on Skagit PUD’s priority list: routine pipe replacement; relocation of a pressure-reducing valve, which would allow more water to flow through the existing connection; and adding a fourth connection to Anacortes’ water transmission line.

Fidalgo Island Water System consists of about 95,000 linear feet of pipe, four reservoirs and one booster pump station. The system serves about 720 customers in Gibralter, Dewey Beach, Fidalgo Heights, Summit Park, and the Highway 20/Deception Road. The area is outside the city limits and the city’s urban growth area.

By comparison, Anacortes’s water system comprises 850,000 feet of pipe and 8,000 connections. Fidalgo Island Water System would increase by 9% the total feet of water lines under the city’s ownership and the number of water customers by 11%, Buckenmeyer said. He doesn’t believe the acquisition would warrant an increase in the current city water staff of seven employees.

Sidhu said Skagit PUD collected $442,000 from Fidalgo Island Water System customers and spent $110,000 to operate the system in 2017.

Buckenmeyer said of the city’s rates, “If we imposed our rates (at Fidalgo Island Water System), we would have $424,000 (in revenue), really closely to the same amount,” Buckenmeyer said. “It’s a financially viable system and is able to stand on its own.”

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