Newsletter July 2026

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/