The drinking water source for Mountlake Terrace is surface water and snowmelt that flows to the Spada Lake Reservoir in the Sultan Basin through a pipeline to the Chaplain Reservoir, and then through four large transmission lines to Everett. The City of Everett manages water treatment and distribution to various water purveyors in Snohomish County through a water use agreement. Everett supplies water to the Alderwood Water District; who in turn supplies water to the City of Mountlake Terrace.