Clallam County Public Utility District has agreed to pay $3.8 million for the 14-plus acre former Costco Wholesale property and building at the southwest corner of Hooker Road and U.S. Highway 101 in Carlsborg.

The district plans to use the building as its main warehouse and possibly build a new headquarters west of the building.

Clallam PUD’s current headquarters is located at 2431 E. Highway 101, east of Port Angeles.

The district was able to buy the 14 acres and 72,000-square-foot building for "a very, very good price," said Clallam PUD general manager Doug Nass.

Clallam PUD staff looked at buying other land and buildings but they were half the size and land and twice the price, he said.

"Plus, there is an added bonus of no additional cost of land for the headquarters new building in the future. I believe the commissioners showed real vision and financial acumen by allowing us to pursue this purchase," Nass said.

The purchase and sale agreement was signed by both sides after six months of negotiations.

The purchase was made because a facilities study that’s been ongoing for the past year recommended the district consolidate operations closer to the center of its current and future customer base, Nass said.

"When new customers come in to our headquarters, we have to send them to another building, then to Carlsborg. That’s not very efficient for them or for us. This helps us become that one-stop shopping center," he said.

Clallam PUD has 130 employees who work in offices and shops in Sequim, Carlsborg, Port Angeles, Forks and Clallam Bay/Sekiu.

It serves abou t 28,500 electricity customers in Sequim, Forks and the unincorporated areas of Clallam County plus the Port Townsend Paper Corp. mill.

The district also operates nine water systems that serve about 4,200 customers throughout the county: Fairview, Gales, Mount Angeles, Monroe, Carlsborg, Clallam, Panoramic, Evergreen and Island View.

It also built a 24-mile fiber optic loop between Port Angeles and Sequim and operates a

small sewer department with a 2009 budget of $86,000 and 53 sewer connections on three systems.

Clallam PUD water and wastewater superintendent Mike Kitz said both the district’s electric and water departments are growing "fairly rapidly," especially in Carlsborg.

The 560-acre Carlsborg urban growth area west of Sequim has an estimated population of 875 people but has no sewer service. The Western Washington Growth Management Hearings Board has ruled that Carlsborg must have sewer service (and urban-level police service) if it is to remain an urban growth area.

Kitz said moving purchasing and warehousing functions out of the district’s current warehouse at its Carlsborg Operations Center at 115 Idea Place about one mile north of U.S. Highway 101 would allow a portion of the property to be used for the sewer system’s treatment plant.

"When sewer comes to Carlsborg, we’ll be the service provider. What we were planning was our sewer treatment plant would be at that operations center. It was debatable before but now this frees up the area," he said.

Nass said the district probably would sell the headquarters building east of Port Angeles and the water/wastewater building behind it but lease the Sequim office at 410 E. Washington St. that is being remodeled.

The district will keep its Forks and Sekiu offices to serve the West End and a small payment center or drop box will be kept in Port Angeles and Sequim, he said.

Clallam PUD Commission president Hugh Haffner said the three-member board has debated for the past year, developing a long-term strategy for its building.

"I’ve been saying we need to be planning for the next 25-30 years. Every time we wait until we absolutely need to buy a building or land, the price has tripled," he said.

The new site has enough space and land to last for the next 20 to 40 years depending on the county growth rate, he said.

Clallam PUD treasurer Josh Bunch said the purchase was funded by $8.65 million in 20-year revenue bonds at a 4-percent interest rate.

Nass said the district submitted a conditional use permit application to the county about a week ago that was necessary because the site’s land use is changing. That permit application is scheduled to be heard by the Clallam County hearings examiner on Nov. 12, he said.