Thanks to all who joined the meetings online on June 26th and in person at Camp Burton on July 13th. It was great to see so many neighbors. At those meetings and in a series of follow-up emails, the Board asked the community to express a preference among 3 funding options. Here are the results:
Of 140 responses (39% of all potential members):
The community preference for Option #1 was clear. These results are consistent with the straw poll taken last summer, where over 76% of potential members indicated a preference for a lower to moderate connection fee (less than $1000 - $3000) and a larger loan. With the community’s overall preference made evident, the Board is moving forward with the USDA loan application with a submittal in early September. There will also be a community briefing and discussion specifically on the USDA loan application sometime in October.
To receive service from the Burton Water Cooperative when it becomes the owner, one will need to be a member. This is the equivalent of a “service agreement” with a private operator and exactly the same arrangement as all the other community owned and operated systems on Vashon (Westside, Heights, Dockton, Maury Mutual). Membership can be achieved in one of two ways: (1) signing a Joining Agreement or (2) accepting service. In either case there is a $5 administrative charge associated with becoming a member. Being a Coop member has certain privileges (voting, serving on committees or Board, approval of any by-law change), but there is no obligation to do anything other than join. After joining or accepting service, there will be connection and usage charges that will apply to all who have service.
Based on the Financing Option Preference Poll, the Board is proceeding with "Option 1: Higher USDA Loan/Lower Up-Front Connection Charge" (preferred by 82% of the respondents). This option has the following features (as of 8/11/2023) based on our current, best information and subject to change based on USDA underwriting):
Connection Charge: This is a one time charge and may be paid in a lump sum up-front or in bi-monthly installments over a 5 year period.
The Burton Water Cooperative exploratory Operations Committee invites you to come along for a visit to the source location and tour of the infrastructure. It’s really quite cool. Tours will be held in small groups (~10 people/households), by appointment only, and will typically occur each week on Saturday mornings until interest runs out. Tours will be led by Ben Lee (Operations Committee chair) and Nick Simmons (current system operator).
Email firstname.lastname@example.org to get signed up!
The Communications (aka Membership) Committee is developing outreach material to share information with the community and compiling a list of contact information for all potential cooperative members. Outreach material that the committee is working on includes: this website, mailers, email newsletters, and community meetings. The Joining Agreement (link to JA) will provide the contact information to deliver outreach material and eventually a formal ballot on whether or not to purchase the assets of the water system and manage it as a Coop.
The Finance Committee is assessing the financial feasibility of purchasing the assets from the Burton Water Company and then managing the water system as a community-owned cooperative entity. Elements being considered for the purchase of the system system assets include a professional valuation of the system (which will be informed by the Capital Needs Assessment from the Operations Committee), the water company's recent financial records, and availability of financing. Elements being considered for the financial management of the system include the water rates structure, capital reserve needs, and extent of membership in the cooperative.
The charge of the Governance Committee is to research the best non-profit community ownership structure, draft a set of organizational documents (articles of incorporation and by-laws), and select an attorney to assist with these tasks as well as the legal needs of the other committees. As part of our work we will be having panel interviews with four other community owned water systems on Vashon to learn from their experience. We expect our work to occur during the months of January and February.
The Operations Committee is reviewing the physical and operational components of the Burton Water system. The physical components include the wells, storage reservoirs, treatment system, and distribution system. The operational components include the day-to-day labor and materials required to keep the system operating smoothly to supply high-quality drinking water to the system's customers. The first task the Operations Committee is working on is coordinating the services of an engineering firm to provide a Capital Needs Assessment (CNA) of the system, to understand better the current physical condition of the system and what upgrades/replacements might be needed within the 5, 10, and 20 year timeframes. The initial results of the CNA are expected in February and will be used to inform the valuation of the system and overall feasibility of purchasing the water system assets as a community.
William Shadbolt, President - William is a real estate investor with residential property in Washington, manufactured home communities in the Midwest and self-storage in the Midwest and Texas. He serves on numerous boards of both for-profit and nonprofit corporations. He is also a licensed water operator in another state.
Ben Lee, Vice President - Ben is a water resources engineer who specializes in hydrogeology, well design and maintenance, and water rights. He consults for large municipalities and small water systems, irrigators, and industrial clients including the Burton Water Company.
Chuck Weinstock, Treasurer - Chuck (retired) led a community based non-profit developer and manager of affordable housing for 20 years and worked for JPMorgan Chase Bank as a community development banker for 10 years. He has founded and served on numerous not for profit boards.
Norm Seethoff, Secretary - Norm (retired) is an electrical engineer who specialized in IT infrastructure. He led team deployments of IT infrastructure in North America, Europe, India, and China for a Fortune 200 company.
Steve Hill - Trained as an electrical engineer, Steve was the president/owner of a telecommunications company for 26 years until he sold it and retired. The company designed and manufactured secure telephones for the US government and provided cloud-based communication services for private businesses. He spent summers at his parent's house on the Burton Peninsula from when he was two years old and now owns the house next door.
James Culbertson - James is a video production professional with 30 years’ experience working on documentary, performance, education, non-profit, and corporate videos. He is a former board member with Voice of Vashon and 911 Media Arts Center in Seattle.
Merrilee Runyan - Merrilee is a retired educator and lavender farmer who has served on a variety of non-profit boards over the years, most recently the Vashon Island Growers Association (VIGA). She is the founder of VIGA's Food Access Partnership and Sustainable Vashon, and is a community activist around food justice issues. She has lived on Vashon Island for 32 years, the last 10 years in Burton.
The current owners of the Burton Water Company, Evan Simmons and Jim Garrison, have decided they are ready to retire. Before they look to sell on the open market, they are giving the community the opportunity to explore purchasing the water system assets and converting it to community ownership using a cooperative model. The sellers are requesting that the community make a decision on whether or not to purchase. If a sale goes ahead, the actual purchase process (including financing and regulatory reviews) would likely take until late summer of 2023.
Community volunteers have been working since late fall of 2021 to carry out an exploratory feasibility analysis, develop governing documents, and undertake member outreach. A feasibility period (interim) Board of Directors, selected by volunteer committees, is made up of neighbors with diverse skills. You can find out more about them on the website.
This FAQ will be updated as the project evolves.
A water co-op is an entity (e.g., utility-providing corporation) that is owned and controlled by a membership base that is comprised of the end users. In our case, prospective members include all of the current customers of Burton water system. Typically, a co-op is governed by a Board of Directors that is elected from and by the membership. The Board is responsible for stewarding the co-op and overseeing its operations. The Board would also hire someone experienced in the day-to-day operation of water systems, similar to what we have now.
Cooperative ownership of our water means the community decides how the resource is managed, how the system is maintained and improved, and where to allocate any surplus revenue. It also means that the membership decides when to seek a rate increase, based on information and analyses developed by the Board and shared with the community. It is also a unique self-governance opportunity and a new structure that will facilitate stronger community connection and resilience and greater capacity to work on future projects.
The exploratory Membership Committee has been working for several months to reach out to current BWC customers. Along with ensuring the availability of current news and information, the Committee’s main and ongoing effort is to make sure that every household connected to the system has received the Joining Agreement and understands the reasons and ways to join. To keep the Burton community informed, we need your name, mailing address, email address, and the mailing address if different than your physical water connection address. By giving Burton Water Co-op your contact information, you will be kept apprised of the latest developments, have access to important documents, and ensure you are given the opportunity to become a member and have your voice heard. This contact list is confidentially held and it will not be shared outside of the Burton Water Co-op. If you haven’t already done so, fill out the Joining Agreement here to share your contact information. If you do not own property but want to receive updates, request a non-member contact form from email@example.com.
Anyone who owns property with an existing connection to Burton Water Company is eligible to become a member.
Our water bills have not seen an increase, even adjusted for inflation and increased operating costs, since 2018. In addition to the cost of buying the Burton Water Company assets, the Burton water system requires several capital improvements over the next several years to comply with updated fire suppression regulations. These will be required of any buyer. Regardless of the level of member equity we set for each member, our current financial model projects that rates will certainly go up.
There is also a key difference to note between the Coop model and purchase by an investor-owned company. The Coop cannot charge customers above the cost of service while an investor-owned company would be able to submit rate increases to the state regulatory authority for costs plus a rate of return (i.e., profit). Consequently, we believe rates are certain to be lower under Coop ownership. Even more, if the community votes to approve the purchase of the Burton Water Company assets by the Coop, we have the opportunity to form a community-owned and operated water utility run by individuals who live here and who are invested in this community.
Projected costs are detailed at the top of the page.
The sale price of the Burton Water Company assets is $1.2 million. This price has been arrived at during price discussions between the Board and the current BWC owners and is considered by the owners as firm (non-negotiable). More details of the sale price are provided in the Board’s White Paper Executive Summary of the feasibility study, available in the Resources section below.
The owners have provided records of repairs and maintenance which are being evaluated by the exploratory committees. In general, the system appears to be in good condition but does have some significant repair and maintenance expenses projected for the next several years (e.g., parts of the main distribution piping system are nearing the end of their expected life time and should be replaced). With the assistance of a contracted engineering firm, we have developed a 20 year capital improvement plan to make necessary updates/improvements/repairs to the physical system in a systematic and planned way. Those system updates will be worked into the financial planning model and will be carried out over time. Unexpected emergencies may arise - we will have a capital reserve fund with a reasonable amount of funds to deal with such emergencies.
To receive service from the Burton Water Cooperative when it becomes the owner one will need to be a member. This is exactly the same arrangement as all the other community owned and operated systems on Vashon (Westside, Heights, Docton, Maury Mutual). Membership easily can be achieved in one of two ways: (1) signing a Joining Agreement or (2) accepting service. In either case there is a $5 administrative charge. Being a Coop member has certain privileges (voting, serving on committees or Board, approval of any by-law change), but there is no obligation to do anything. If the system was owned by an investor owner, while you would not "join" or have any related rights you would be signing up to abide by a service agreement and its requirements. After that really all one has to do is pay all charges that everyone else pays.
Maury Mutual, Heights Water, Dockton Water, and Westside Water are all cooperatively owned. The exploratory Governance Committee has interviewed leaders and reviewed bylaws and other documents from those water systems to inform the Burton Water Co-op model.
We hope to submit a Purchase & Sale Agreement, Coop By-laws and a slate of incoming Coop Board Members to the community for a vote by late summer 2023.
Send us an email at firstname.lastname@example.org and we'll send you more info about the committees!
Please refer to the recording of the January 17, 2023 Fireside Chat.