Title
Approval of a Resolution Authorizing a Memorandum of Understanding with State of Washington Department of Enterprise Services, State of Washington Department of Natural Resources, Squaxin Island Tribe, Thurston County, City Of Tumwater, Lott Clean Water Alliance and Port Of Olympia for Governance and Funding of a Restored Estuary
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Approval of a Resolution authorizing a Memorandum of Understanding with State of Washington Department of Enterprise Services, State of Washington Department of Natural Resources, Squaxin Island Tribe, Thurston County, City of Tumwater, Lott Clean Water Alliance and Port of Olympia for Governance and funding of a Restored Estuary.
Report
Issue:
Whether to approve a Resolution authorizing a Memorandum of Understanding with State of Washington Department of Enterprise Services, State of Washington Department of Natural Resources, Squaxin Island Tribe, Thurston County, City of Tumwater, Lott Clean Water Alliance and Port of Olympia for Governance and funding of a Restored Estuary.
Staff Contact:
Jay Burney, City Manager, 360.753.8740
Rich Hoey, Interim Assistant City Manager, 360.753.8227
Presenter(s):
None
Background and Analysis:
The Washington State Department of Enterprise Services (DES) is nearing completion of an Environmental Impact Statement (EIS) for the Capitol Lake - Deschutes Estuary (CLDE) Long-Term Management Project. The EIS has been an extensive, multi-year process involving the City and numerous other stakeholders.
In June 2021, DES released the Draft EIS for the CLDE Long-Term Management Project. The Draft EIS included information on long-term management alternatives and key findings from in-depth technical analyses. The management alternatives included: no action, managed lake alternative, estuary alternative and a hybrid alternative. Following a subsequent “Decision Durability” process, in March 2022, DES announced that the Estuary Alternative is the likely preferred alternative.
This was welcome news for The City of Olympia. On August 10, 2021, during the draft EIS public review period, the Olympia City Council passed Resolution M-2248 unanimously supporting the Estuary Alternative. In addition, on October 7, 2021, the City of Olympia and the Squaxin Island Tribe enacted an Accord that includes a commitment to support the restoration of the Deschutes Estuary and efforts to restore treaty-protected salmon populations.
A key part of the EIS process has been the convening of Executive, Funding and Governance (FGWG), and Technical Workgroups made up of representatives from the key state, tribal and local government partners and agencies, including The City of Olympia.
A primary focus of the CLDE Funding and Governance Workgroup (FGWG) has been to create a shared funding and governance framework for maintenance of the preferred alternative. This work has also involved and been guided by the Executive Workgroup. Mayor Selby has represented the City on the Executive Workgroup, while Jay Burney and Rich Hoey have represented the City on the FGWG.
Since the Estuary Alternative has emerged as the likely preferred alternative, the FGWG’s efforts have been focused on long-term management of the restored estuary. This includes a plan for shared funding of on-going sediment management in West Bay following the removal of the 5th Avenue Dam. Another key element for the City of Olympia would be the acceptance of ownership and maintenance of a new 5th Avenue Bridge following construction by the State of Washington.
The FGWG has developed the attached Memorandum of Understanding (MOU) to reflect preliminary, non-binding, consensus on governance and shared funding around on-going sediment management. Under the MOU, Olympia would be responsible for 23.1% of the maintenance dredging costs above the No Action Alternative (see attachment 1 of the MOU). Olympia’s share of costs is higher than the other FGWG partners (15.4%) given the location of the working waterfront within Olympia’s downtown and the increased benefits of sediment management to Olympia.
DES will be submitting the final EIS to the Legislature in late October along with the adopted MOU from the FGWG partners. All of the FGWG partners are taking action on this MOU during the month of October. DES has stressed that local support and shared funding will be important in gaining Legislative support and funding for the preferred alternative.
DES and their consultant team provided City Council with an overview of the MOU and expected implications for Olympia in August. There have only been minor changes to the MOU since that time.
The MOU, while non-binding at this stage, reflects the preliminary consensus by the FGWG members and a shared commitment in good faith to develop a binding Interlocal Agreement that will govern the long-term management of the restored estuary.
Neighborhood/Community Interests (if known):
There is significant community interest in the CLDE process, including the selection of the Estuary Alternative as the likely preferred alternative. Sediment management within lower Budd Inlet is of high interest to the Port of Olympia, local marinas, and boating community.
Options:
1. Approve the Resolution Authorizing a Capitol Lake-Deschutes Estuary Memorandum of Understanding for Governance and Funding of a Restored Estuary. Olympia would join with the other FGWG members in signaling local support, including financial support, towards the implementation of the Estuary Alternative.
2. Do Not Approve the Resolution Authorizing a Capitol Lake-Deschutes Estuary Memorandum of Understanding for Governance and Funding of a Restored Estuary. The City would potentially jeopardize state support for the Estuary Alternative.
3. Request Modification of the Memorandum of Understanding. Depending on the changes, the modifications may not be supported by the other FGWG partners. The City would also potentially impact DES’ plan to include this MOU in the submittal of the final EIS to the Legislature.
Financial Impact:
Since this MOU is non-binding, there are no firm financial commitments at this time. However, the MOU does signal Olympia’s commitment in good faith to work towards a binding Interlocal Agreement that would include financial commitments. Under the preliminary consensus reflected in the MOU, Olympia’s share of sediment management costs would amount to a financial commitment of $4,297,000 (in 2022 dollars).
Starting as early as 2025 (when the State could appropriate construction funding for the estuary alternative), Olympia would be expected to make an annual contribution to a state managed account dedicated for West Bay sediment management. Assuming payments begin in 2025 and extend through 2050 (a period of 26 years), Olympia would be expected to contribute approximately $165,000 annually (plus inflation). If State construction funding is not appropriated until a later year, the amount of annual funding would need to increase in order to generate the full $4,297,000 (plus inflation) by 2050. FGWG members have preliminarily agreed to apply an annual 3% inflation increase to these annual payments.
Staff recommends that the source of funding for the annual payments be a combination of general fund and utility funds. Staff proposes that the detail on funding sources be addressed as part of the 2024 budget process.
Attachments:
Resolution
Memorandum of Understanding
Draft EIS
Capitol Lake-Deschutes Estuary - Advisory Groups