Water Storage Asset Management Bill a Big Win for Small Cities

Managing water utility assets has become an increasingly challenging job for cities and towns in Washington. More stringent state and federal regulations, inspection requirements, and public awareness of water quality issues have made maintenance requirements of water storage assets a hefty burden. This means that deferring maintenance on these utility assets has become a fact of life for many cities and towns, which leads, at best, to unnecessarily high repair or replacement costs, and, at worst, to premature failure of the assets. To address these growing problems, the 2015 legislature passed EHB 1989.

This new law grants cities and towns the authority to negotiate a fair and reasonable water storage asset management service contract with firms that submit the best proposals for services such as financing, designing, improving, operating, maintaining, repairing, testing, inspecting, cleaning, administering, or managing a water storage asset. (The legislation defines “water storage asset” as “water storage structures and associated distribution systems, such as the water tank, tower, well, meter, or water filter.”) Contracting for such services should allow cities to determine:

• What condition the assets are in.
• How these assets are performing.
• What risks there are to the assets and the areas they serve.
• What it will cost to maintain the assets over their planned life.
• When assets need to be repaired or replaced and how.
• What may need to be done differently in the future.

Representative Tom Dent (District 13), co-sponsor of EHB 1989, said: “This bill will help small cities manage the costs of managing their water storage assets by providing certainty within the process. It will help save these cities thousands of dollars, which is important because those funds can now be reallocated for other purposes.”

And Quincy Mayor Jim Hemberry testified that, “For small rural communities such as ours, maintenance costs in our water supply system is an ongoing concern. Keeping assets at a higher condition level using this new asset management tool will help lower overall maintenance costs as well as improve overall water quality in the distribution system.“

If a city or town wishes to contract for water storage asset management services, some procedural requirements apply.

• It must publish notice of its requirements, concisely stating the scope and nature of the water storage asset management service and encouraging firms to submit proposals to meet those requirements.
• It can then negotiate a fair and reasonable contract with the firm that submits the best proposal based on criteria established by the city or town.
• If negotiations with that firm break down, the city or town may formally terminate negotiations with that firm and select another firm and continue negotiations.

Quincy and Othello are the first cities to take advantage of this legislation, and they both will be contracting with Utility Service Group to provide these asset management services. As Quincy Mayor Hemberry put it during his testimony:

Long-term maintenance agreement costs can be front loaded in the first three years to cover the cost of the refurbishment and future work. After those initial three years, manageable annual costs determined as part of the agreement are incurred that make it easier for jurisdictions to budget for tank maintenance. Furthermore, as long as that agreement remains in place, all tank maintenance, including inspections testing and refurbishment, are covered by the annual amount. Such agreements will provide financial certainty and reduce future budget shocks from unanticipated water storage system repair and maintenance work. It makes more sense for municipalities with limited public resources to manage these costs under a long term agreement with a private contractor, appropriately bonded and insured.

  Please email me at jcarpita@mrsc.org for contact information in these cities.