Water Projects

Overview

The City is in a period of significant capital reinvestment as major components of the City’s water distribution system reach the end of their useful life.

Most of the Island’s water distribution system was constructed 50 to 75 years ago. Though the City has made investments to effectively operate and maintain the water utility, system components are reaching the end of their useful life and require significant reinvestment over the next six years.

Between 2025 and 2030, the water utility requires an estimated $74 million (M) in escalated capital spending.

How the City has Addressed these Infrastructure Needs

Knowing that components of the water utility system were reaching the end of their useful life, City staff undertook a number of steps to help address these needs, including:

• Adopting a six-year Capital Improvement Program (CIP) as part of the 2023-2024 biennial budget.
• Using federal funding to accelerate work on some of the utility capital projects from the 2023-2024 biennial budget.
• Identifying and outlining a strategic financial plan to further acquire, expand, or rehabilitate public infrastructure, including the City-owned and operated water distribution system, as established in the City's current, six-year CIP 2023-2028.

Filling the Gap: Funding through Water Utility Charges and Outside Funding Sources

Historically, the Utility Board has tried to balance the many infrastructure investment needs by maintaining similar year-over-year water utility rate adjustments so not to put an undue burden on current water utility customers.

To fund these critical infrastructure projects, for the next six years, minimal water utility rate adjustments will need to be paired with additional outside funding.

At the September 3, 2024 City Council meeting, staff recommended financing a portion of these investments with proceeds from Bonds that were issued to the City in 2011.

Bond Funding - How it Works

Debt financing spreads the cost of short-term projects throughout the life of the updated infrastructure.

This not only helps prevent spikes in annual rate adjustments for utility customers, it establishes generational equity, where rate payers across multiple generations, who all benefit from these investments, help pay down the associated costs.

The City has an outstanding debt amount of $655,000 tied to Limited Tax General Obligation Bonds that were issued in 2011. Those 2011 Bonds were used to finance a portion of a water system improvement project in the First Hill neighborhood.

The City may have the opportunity to refund (refinance) these outstanding 2011 Bonds for interest rate savings. Bond refinancing (also known as refunding) is an important tool in the local government debt management toolbelt.

Staff have recommended proceeding with the refunding, if it results in savings to ratepayers.

If approved, the City will pledge its full faith and credit to the repayment of such Bonds. Water utility revenues will be used to pay principal and interest on the obligations.

Next Steps

The water rate adjustments in the 2023-2024 biennium assumed a portion of the scheduled water capital projects will rely on debt proceeds, so this outside funding is crucial. Between 2025-2030, staff estimate the water distribution system will require nearly $74 M in escalated capital reinvestments.

This proposal went before the City Council on September 3 for first reading. Review the Agenda Bill (AB 6528), draft ordinance (Ord. No. 24-06), and watch the presentation here.

Staff will return to Council for second reading on September 17.

The competitive Bond sale is tentatively scheduled for the week of October 14, 2024. If the competitive sale goes as planned, Bond closing and the delivery of Bond proceeds would tentatively take place October 30.

The City’s water distribution system includes more than 113 miles of water mains of varying age, size, material, and condition.

Most of the system is composed of cast iron and ductile iron pipe. There is also nearly five miles of asbestos-cement (AC) pipe and one mile of steel pipe within the City's water distribution system.

Each year, the City identifies and undertakes projects to replace aging cast iron and AC pipe throughout the system.

AC Pipe vs. Cast Iron Pipe

Pressurized asbestos-cement (AC) pipe is a material known for developing leaks and breaks as it nears the latter part of its expected life. The AC pipe in the Mercer Island water system was primarily installed in the 1950s and 1960s, making it some of the oldest piping within the distribution system.

Cast iron pipe in the Mercer Island water system was primarily installed in the late 1950s and early 1960s. Some of the older cast iron piping is brittle, undersized, and known for developing leaks and breaks as it nears the latter part of its expected life.

2024 Water System Improvements - Cast Iron Pipe Replacements

The 2024 Water System Improvement project is part of our yearly water system improvement program to replace under-sized and aging cast iron water mains. The City expects to replace over 6,000 LF of cast iron water mains.

Along with water main replacement, this work includes two stub-outs for future connections in the Town Center, and storm drainage improvements within the neighborhood between SE 46th and SE 47thStreet west of Island Crest Way. The streets in this neighborhood will be repaved in 2025 as part of the City's residential street resurfacing program.

This work also encompasses water main replacement along SE 42nd Street near the shoreline of Lake Washington, which requires additional permitting, some possible slope restoration and drainage improvements, as well as easement acquisitions.

Learn more about the project here.

2024 AC Water Main Replacement

The purpose of the AC water main project is to systematically eliminate all AC water mains within the City of Mercer Island over a six-year period by replacing approximately 5,000 feet of AC pipe per year. 2024 replacements are scheduled for:

• SE Gallagher Hill Rd (3700 Block to 3600 Block)
• Greenbrier Lane (SE 40^th St, north to Gallagher Hill Rd)
• SE 40^th St from Greenbrier Lane to 93^rd Ave SE
• 93^rd and 94^th Ave SE from SE 40^th St to SE 43^rd St
• Crestwood Place

Learn more about the project here.

The City receives its potable water from Seattle Public Utilities (SPU) and is contained in two, 4.0-million-gallon steel reservoir tanks before being distributed to roughly 24,000 residents.

Both tanks are similar in size and generally in good condition. The north tank was constructed in 1962 and the south tank was constructed in 1975. The tanks were seismically enhanced in 1999 and the interior and exterior coatings were replaced in 2000-2001.

Many components have aged or deteriorated since these upgrades were completed. After over 20 years, the interior and exterior coatings have reached the end of their useful life and are in need of replacement to protect the tanks. As the "heart" of the city's water system, it is imperative to complete this work.

The project will:

• Replace the interior and exterior reservoir tank coatings
• Install new stairway access to the roof
• Install a roof guardrail
• Replace hatches, air vents, and cathodic protection

In 2022, City staff began the design process for necessary improvements to both reservoir tanks. In the summer of 2023, work on these improvements began. Over the winter of 2024, the north tank was drained for the interior maintenance, which was complete by May 2024.

Crews will focus on the south reservoir over the winter of 2025, draining and completing interior maintenance.

For more information about this project, including pictures, updates, and timelines click here.

On April 3, 2024, the City of Mercer Island learned of a leaking underground Seattle Public Utilities (SPU) water pipe. The leak created unstable soil conditions, which could have resulted in dangerous flooding if the soil were to move substantially and break the water line, putting homes at risk. After a geotechnical engineer reviewed the soil conditions, the City notified residents in approximately 20 homes near 95th Court SE to evacuate their property.

All affected residents were allowed back in their homes after City and SPU crews were able to reduce or eliminate flows in the two water mains adjacent to the unstable slope, mitigating the risk of property damage if either water main were to break. The City declared an emergency and activated its Emergency Operations Center while plans for a repair were developed.

Mercer Island’s water system received water from a smaller backup supply line for 120 days while emergency work was underway to repair a leak in the main pipe. During this time of reduced water supply, the community successfully curtailed water use to maintain adequate levels in the Island’s reservoirs.

On August 1, the City confirmed that repairs and quality testing have been completed for the SPU water supply line and the line had been returned to service. This means Islanders can now resume normal water use. Final restoration work at the two access pits continues throughout August and September.

Learn more about the leak and repair work here.

The City sincerely thanks our residents and businesses for their hard work throughout this emergency.