Water co-op purchases Burton Water Company

The sale completes three years of work by the former owners and community.

After three years, it’s official: the Burton Water Company has been sold to the Burton Water Co-operative at a price of $1.2 million, putting the control of their own water into the hands of Burton residents.

The Water Company serves a total of 414 connections (including residential and commercial customers) in the Burton peninsula and surrounding area. It’s one of several water companies that service Vashon and Maury islands.

Selling the company to a locally-grown co-op has been a goal for both the community and the Water Company’s former owners since 2021, when talks began. The co-op closed on the sale on Friday, Oct. 25 and recorded documents on Monday, Oct. 28.

A board of directors and community volunteers will guide the transition and operate the co-op, which will also maintain current staff members Nick Simmons and Morgan Berry in their roles as System Operator and Assistant Operator, respectively. They bring with them crucial institutional memory of the water system, co-op Board President William Shadbolt said in an interview.

“And (Nick Simmons) point blank said he wouldn’t work for a publicly listed company,” Shadbolt said. “So we retained that knowledge base of the system.”

BWC owners Jim Garrison and Evan Simmons expressed enthusiasm and optimism over the sale.

Garrison said this outcome is “way better” than having a large corporation running the water company and said he wished the new owners of BWC “all the best.”

“It took a long time, but I think overall, it’s the best outcome for the community,” Garrison said. “They get to control their resource and their financing of it. … Having had this in our family for a long time, it feels pretty good to pass it on to the customers. … I think the people who participated in the sale and the organization of the sale are quite capable.”

It’s been a “long, surprisingly difficult process” getting here, Simmons said, but one he’s “really, really happy” to see end this way.

“It seems like the ownership has landed in a place where it belongs,” Simmons said. “Water being such a primary human need, I think it’s just really good that the ownership of that resource is in the hands of the people that are using it, that rely on it.”

The co-op already has several improvements for the water system planned, including enhancements to fireflow capabilities and overall system resilience. Upcoming work includes electing an operational board of directors and finding increased opportunities for member participation, according to the co-op.

“By the time we’ve finished, the vast majority of customers are going to be within the required 350 feet of a fire hydrant, and the pipes are all going to be sized to have enough flow to serve those fire hydrants,” Shadbolt said.

The purchase was financed through a U.S. Department of Agriculture Rural Development loan, supplemented by member connection fees, according to the co-op.

The final vote in June to approve completing the sale, made up of 251 votes (79% of the Co-op’s eligible members), resulted in 97% voting yes and 3% voting no, according to the co-op.

Buying into the co-op will involve either a single $2,500 payment; a $500 down payment plus $2,500 paid in installments over the course of five years; or a payment plan struck between the customer and board.

History

Community efforts to take ownership of the water company began in fall 2021, when Garrison and Simmons indicated they were ready to retire and sell the business.

BWC had been approached by both Portland-based NW Natural Water and Washington Water Service, a subsidiary of the California Water Service Group, to purchase the company. Garrison and Simmons declined, and indicated they wanted to sell to a community co-op that could own and operate the water company instead.

“There was really a binary option,” Shadbolt said. “Either they were going to sell to the community, which was their preferred route, or it was going to be sold to a publicly listed company that would obviously increase the rates considerably, because they have shareholders to compensate.”

Benefits of community ownership include the ability for residents to control the infrastructure, vote on budgets and major improvements, and — if the co-op reaches enough buy-in — set their own rates directly.

Shadbolt said the co-op will reach 100%, meaning co-op members will indeed be able to set their own rates.

In a more philosophical sense, community ownership means just that — residents are in control of their own destiny and dollars when it comes to their water service. A co-op keeps the district’s money in the community and out of the hands of a third party.

As Shadbolt put it: “It is not at the whims of Wall Street.”

Of course, it also means more work for residents, who are now responsible for maintenance, repairs, capital projects and governance of the system.

Over the last three years, BWC customers began forming committees and a board and conducted a feasibility study and community engagement process to purchase the water system and operate it as a cooperative.

The co-op and BWC began price negotiations in June 2022. Chuck Weinstock, then-vice president of the Cooperative, told The Beachcomber via email that Garrison and Simmons had given a firm selling price of $1.2 million for BWC. (In initial meetings held the year before, BWC’s market price range was valued at between $1 to $1.5 million.)

In August that year, a straw poll of the district’s 364 users (conducted by the co-op) showed overwhelming support for the co-op’s purchase. The straw poll had a 72% response rate, with 96% of those responding saying yes to the idea of community purchase of BWC at the sellers’ asking price of $1.2 million.

The price tag for buying in, Weinstock said at the time, would be somewhere between $1,000 and $5,000 per household, with flexibility allowed for those with financial hardships. BWC agreed in 2023 to sell sell its system connections for $1.2 million, slightly less than $3,000 per connection.

Now, the water company is in the hands of its users.

“It’s just been a long road, and I’m personally very grateful for all the other volunteers that have dedicated, in some cases, hundreds of hours of time to be able to get it to this point,” Shadbolt said. “Hopefully the improvements and the construction phase will go smoothly and we’ll have a great, resilient system for decades to come.”

Learn more about the co-op at burtonwater.org.