Holmes Harbor Sewer District News

Newsletter July 2026

Wed, 01 Jul 2026 22:34:53 GMT

Its a Newsletter

Holmes Harbor Sewer District

Community Update: Property Planning and 2026 Rate Increase

July 2026

A Message to HHSD Residents

The Holmes Harbor Sewer District (HHSD) Board is committed to keeping residents informed about district operations, finances, and future planning. This newsletter provides an update on two important topics currently affecting the district:

planning related to district property, and

the 2026 rate increase approved by the Board.

We understand that decisions about rates, district spending, and future use of district property matter to our entire community. Our goal is to share clear information about what is happening, why these decisions are being made, and what residents can expect moving forward.

This month:

Property Update

Status of district property planning

Community involvement opportunities

Receivership contact information

2026 Rate Increase

Why rates were increased

Rising operating and equipment costs

Deferred maintenance and compliance needs

What HHSD is doing to control costs

A snapshot of district revenue and expenses

PROPERTY UPDATE

Board Review and Community Involvement

The HHSD Board continues to work through the concept of an Ad Hoc Committee related to district property. At this time, the Board has received one proposal for consideration and is also consulting with legal counsel as part of that review.

A group has stepped forward to offer services to work with the district on recommendations for future use of the property. We appreciate that interest and the willingness of residents to participate in the district’s future planning. More information will be shared as the Board moves closer to finalizing what is needed to make that appointment.

If and when a community group is formally appointed by the Board, HHSD encourages residents to get involved. Community participation will be an important part of shaping recommendations for future use of the property.

Property Status

The property remains in receivership. Questions regarding the receivership process or timeline should be directed to the receiver:

Receivership Contact: 425.954.9277
Website: https://rtcreceivers.com/

2026 RATE INCREASE

Why the Board Approved an Increase

In May 2026, the HHSD Board approved a rate increase based on the district’s historical financial data and the increasing cost of operating and maintaining the sewer district.

We know rate increases are difficult and unpopular. The Board does not take these decisions lightly. However, the increase was necessary to help HHSD keep pace with inflation, maintain district services, address deferred maintenance, and support the district’s long-term financial stability.

HHSD’s last rate increase was in 2025. Even with that increase, district costs continue to rise in ways that must be addressed.

Key Factors Behind the Rate Increase

1) Loan Repayment and Capital Planning

HHSD is responsible for repayment of the General Sewer Plan 50/50 loan , with quarterly payments due over the next five years. HHSD recently completed a required GSP that was initiated in 2018. For more information on requirements refer to RCW 90.48.110 and WAC 173-240-050 as resources.

2) Staffing and Cost of Doing Business

HHSD must continue to support qualified, certified, and competent professional staff, including cost-of-living increases needed to retain the employees who keep the district operating safely and effectively.

At the same time, district operating costs continue to rise, including:

Ecology permit fees

Laboratory and health-related costs

Dam Safety compliance costs

Treatment chemicals

Utility rates

Replacement equipment and repair materials

Some equipment costs have increased significantly. For example, grinder replacement costs have doubled, and HHSD has exhausted its supply of rebuildable units. In addition, rebuild parts are no longer available from the manufacturer.

3) Collection System Replacement Costs

In late 2025, HHSD began tracking replacement expenses related to customer collection system trouble calls. This has provided a clearer picture of the true cost of maintaining field equipment.

As of June 23, 2026 , HHSD has spent $63,000 on customer collection system components, including:

Pumps

Motors

Floats

Switches

Grinders

These are essential system components, and failures must be addressed quickly to maintain reliable service.

4) Deferred Maintenance and Compliance Work

Another major pressure on the district budget is deferred maintenance.

Historically, Dam Safety requirements and EDA storage water reservoir treatment and maintenance were not a priority of HHSD’s budget or regular maintenance responsibilities. In recent years, however, the district has had to catch up in order to bring facilities and systems into compliance. As that work has progressed, it has become clear that several areas require additional attention after years of deferred maintenance.

These projects may not always be visible, but they are necessary to protect district infrastructure, maintain compliance, and reduce the risk of larger and more expensive failures in the future.

5) Reduced Capital Income

HHSD is also facing reduced capital income due to the current water moratorium. Depending on how long the moratorium remains in place, the district may be looking at another 12 months of limited capital-related revenue.

That reduction places additional pressure on the operating budget and makes long-term planning more difficult. This ultimately means HHSD is unable to issue any new sewer connections.

HOW HHSD IS WORKING TO CONTROL COSTS

The HHSD Board and staff continue to look for ways to improve operations, increase efficiency, and minimize expenses wherever possible. Whenever work can be completed safely and competently in-house, staff take it on rather than hiring outside contractors.

Recent Examples of Cost-Saving Efforts

Plant air system changes
HHSD discontinued use of the air dryer for the plant air system and installed a manual valve that is maintained weekly during regular rounds. A specialist service call for the dryer—visit only, with no parts—was quoted at more than $5,000 .

Pond circulation improvements
HHSD has made process improvements to improve pond circulation, reduce odor complaints, and reduce cleaning needs. While these changes can increase energy use, they also improve overall system performance.

Off-spec pond cleaning improvements
This work was long overdue, and HHSD is now evaluating ways to operate the system differently to reduce future cleaning needs.

Using contractors only when necessary
Some work still requires outside support due to equipment, staffing, or project size. For example:

Storage pond cleaning requires outside contractors and specialized equipment.

Line breaks, leaks, and land/facility improvements often require rental equipment, while HHSD staff continue to provide labor and operational expertise.

Small specialized equipment purchases, such as tools for pond liner repair, can help avoid larger contractor costs in the future.

HHSD remains focused on making practical decisions that balance immediate needs with long-term cost control.

FINANCIAL SNAPSHOT

Average Monthly Expenses

HHSD’s average monthly expenses are historically $73,300 .

Revenue at NEW Monthly Rates

The Board reviewed several possible rate scenarios and decided:

$160 per month = approximately $75,200 in revenue
This meets the average monthly expense level and provides modest room for financial stability and future needs.

Expenses have increased by 25% over a seven-year period.

This is an average of 3.6% per year.

Important Revenue Note

These figures assume 100% monthly income , but HHSD does not receive 100% of expected income each month. Not all customers pay monthly, and some accounts carry past-due balances.

HHSD also has approximately $40,000 in outstanding balances . The district has been working consistently with customers to recover overdue accounts, including recovery efforts that can ultimately lead to foreclosure when necessary.

LOOKING AHEAD

HHSD remains committed to responsible operations, transparent communication, and long-term planning for the district’s infrastructure and financial health.

We know that sewer service, district property decisions, and rate changes affect the entire community. The Board appreciates the patience, engagement, and support of Holmes Harbor residents as we work through these issues.

Additional updates will be shared as more information becomes available—especially regarding district property, community involvement opportunities, and future planning efforts.

Thank you for staying informed and involved in your sewer district.

HHSD Contact Information

For district questions, please contact Holmes Harbor Sewer District through its regular communication channels.

For questions specifically about the property receivership process or timeline:

Receivership Contact: 425.954.9277
Website: https://rtcreceivers.com/

FAQ's

Mon, 22 Jun 2026 17:11:17 GMT

Q&A

Q. I saw people removing items from the premises. Is that permitted?

A. All questions in that regard should be directed towards the receiver.

Q. Have any decisions been made regarding use?

A. HHSD has not been able to have any serious planning in regards to use or future use.

No plans have been made by HHSD

Q. What is receivership?

A. It’s an alternative process to bankruptcy. It is estimated to last 30-60 days.

Q. Don’t you need the golf course property to release effluent from the system? Where do they go if the course closes?

A. The effluent (Class A Reclaimed Water) is still being distributed on the property.

HHSD still owns the property.

Golf operations are suspended currently.

Q. Is there any information on the situation with the golf operations I can obtain on the internet?

A. https://rtcreceivers.com This link is posted on our website www.holmesharborwsd.com

Q. I purchased a punch card/membership, now what?

A. This should be addressed by contacting the liable parties of HHGC LLC or the Receiver

Q. What about the flagsticks, markers, flags and cups?

A. We have a claim with the receiver that those materials belong to HHSD.

For Safety and maintenance purposes HHSD has filled the greens cups with sand.

Q. I can see the case number but I can’t get the court’s internet to accept it.

A. This is a King County case number 26-2-17265-0 SEA

Q. Are you still distributing water to the property?

A. Yes. Class A Reclaimed water distribution is business as usual and in compliance with permit conditions.

Q. Who is maintaining the property?

A. HHSD has permission from the receiver. HHSD is meeting their permit requirements for maintaining and irrigating the property. HHSD is also working on preservation of the greens.

Q. Why is my drinking water discolored or leaving stains in my sinks or toilets?

A. These are water quality conditions that have nothing to do with HHSD.

Q. Why did HHSD close the course?

A. The Receiver closed Golf Operations.

Q. Why did it take so long to discover the terms of the lease?

A. The most essential element of this question is that it was discovered. HHSD experienced a turnover of a legacy employee and a board President that was directly involved with the agreement along with the COVID era and its uncertainty of mandates and declarations. When it was discovered, the Board took the necessary action to correct the oversight.

Q. Wasn’t Kevin Hanchett one of the original owners of the Golf Course?

A. Yes. HHGC LLC chose the receiver. HHSD has no influence over that process.

Q. How much are the legal fees for HHSD?

A. HHSD is estimating that this case will be in the $200k range

Q. Who is Holmes Harbor Golf Course LLC?

A. HHGC LLC was/is owned by Paul Lavin

Q. Who owns the land?

A. Holmes Harbor Sewer District

Q. Are the assets in receivership more than the debt owed by HHGC LLC?

A. No, we do not believe they are anywhere near what is owed.

Q. Who is reviewing the appropriateness for the legal fees?

A. A Judge will ultimately review the fees in regards to the case. The receiver also has some obligation.

Q. How many homes are in the District?

A. HHSD has 470 connections currently. There are approximately 200 homes ON the course.

Q. What is the plan for trespassing and events like 4 ^th of July?

A. There isn’t a plan. We are not an entity of enforcement; we would have to initiate a call to 9-1-1 if there was something happening against the posted rules.

Q. Are there plans to develop the property as homes/condos/etc?

A. The property is used to dispose of 100% of our stored Class A reclaimed water. We do not believe that it can be developed without considering other options for disposal. Anything suggested would likely be cost prohibitive.

Q. Is the SAO audit information available?

A. Yes. Available on the HHSD website and also the State Auditor’s Office. It is referred to as an accountability audit

Q. Why is more information not shared in the meeting minutes?

A. Meeting minutes are not transcripts. They try to capture as much subjective information as possible. HHSD is looking into some AI tech that might be useful.

Q. Are you considering a Par 3 course?

A. HHSD will consider all options. Whatever is decided will need to offer financial stability.

Q. Are there other Special purpose districts that operate a golf course?

A. Yes there are. HHSD would also consider their experiences.

Q. What was the cost of mowing the Golf Course for HHGC LLC?

A. HHSD’s fully burdened rate for mowing was $75,000.00 annually.

This is wages, Insurance, Retirement, equipment, maintenance and fuel.

Q What is the estimated cost for just mowing the property?

A. Mowing just the property to meet DOE permit requirements is $12,000 annually.

HHSD

Mon, 15 Jun 2026 21:22:32 GMT

Welcome to the HHSD Blog!

This is a test for the New HHSD blog. This is a commitment to improve communication between HHSD and its rate payers.

Drop Box(s)!

Tue, 28 Sep 2021 17:59:24 GMT

Many of our valued customers like to drop off payments monthly. We have two options to assist in making the process more convenient.

1. Gate locked option

2.Gate open, Admin building locked

PLEASE do not leave cash.

If you insist on cash, please call ahead of time 360.331.4636

Letters of Qualifications

info@whidbeyweb.com (Richard Fagan) — Fri, 21 Jun 2019 01:23:49 GMT

The Board of Commissioners of the Holmes Harbor Sewer district (HHSD) requests Letters of Qualifications from candidates interested in serving on the board. A letter of qualification should include address, contact information including email, relevant qualifications and work experience, and any other pertinent information to assist the board in the appointment process.

Candidates must reside within the HHSD boundary.

Please address the Letter of Qualifications to:

Board of Commissioners Holmes Harbor Sewer District

P.O. Box 1330

Freeland, WA 98249

Letters are due by the end of the business day March 7th, 2019