Get out your check books, Lake Oswego. In the near future, city council plans to saddle you with hundreds of millions of dollars of new public debt.
The city is already carrying a debt load of $59 million through six General Obligation Bonds, two Revenue Bonds and one recently refinanced Urban Renewal Bond. Last year, annual revenues exceeded expenses by about $8 million. But over the next few years immense new expenditures are planned.
Some proposed expenditures are:
n In Lake Sewer Interceptor: $65 million.
n Decommission Tryon Creek Sewer Plant: $45 to $125 million.
n Break BES contract with Portland: $12 million.
n Storm Water System Improvements: $20 million.
n Community Center: $60 million.
n Urban Renewal, Foothills: $20 million.
n Urban Renewal, Lake Grove: $42 million.
n Streetcar: $20 to $30 million.
Some of the new debt is unavoidable. Neglected for more than a decade, the failing sewer system can no longer be ignored. The main sewer line beneath the lake needs to be replaced at a potential cost of $65 million and our problems do not end there. Storm water improvements will cost another $20 million. Antiquated pipe system must be replaced and relocated, which may involve lowering the lake two years in a row.
In addition, the Tryon Creek Waste Water Plant could be decommissioned to make way for the Foothills Development. Estimates vary between $45 million and $125 million. Another $12 million to break our contract with Portland (BES), plus a resulting three- to four-fold increase in new contract sewer rates. Necessary housekeeping matters are inescapable. We could pay for them through soaring sewer fees rather than through bond measures, meaning that we will have no vote in the matter.
Half of the proposed spending is for non-essential urban renewal, streetcar and recreation projects. The Urban Renewal projects at Foothills and Lake Grove Village Center Plan will cost in the region of $20 million and $42 million respectively. Not including the Measure 37 claims that will arise from property appropriations along Boones Ferry Road, whose value cannot be estimated without a study to evaluate the financial impacts. What's that you say? You didn't ask for a glitzy new Boones Ferry 'Village'? You'll have a chance to express an opinion at the Sept. 25 Open House and again at the Oct. 9 hearing, but don't expect your opinion to matter any more than it mattered on Safeco.
City council purchased the Safeco property without asking your permission. The approximate cost of building a community center has been estimated at $60 million, not including maintenance and operational costs. Also on the table is the streetcar, at a cost of between $160 and $240 million. After federal and Trimet funding, Lake Oswego's portion of the bill will likely be around $20 to $30 million.
Assuming the low figures for the streetcar and Tryon Creek, these coming debts alone amount to an additional $284 million for a city whose debt last year was $59 million. But there's more bad news …These numbers represent today's money. Realistically, it will take years to obtain the requisite permits for the sewer replacement. By the time all these projects are built, material costs will have risen. A 4 percent increase in costs over five years would increase the total bill to $345 million. Amortized over 20 years at 6 percent, the real cost of the new debts would reach a staggering $602.5 million.
These are conservative estimates that do not take into account existing debts, nor any additional debts we may incur over the next few years, nor even all of the proposed debt. They do reflect the triple or quadruple sewage rates we'll be paying to outsource sewage once the favorable rates with Tryon Creek are lost.
We are a community whose average age is 54 and where 69 percent of the households have no children in the home. Fewer young families are moving in because of the lack of affordable housing. Exactly how is an aging population expected to shoulder this massive public debt?
Editor's note: According to Josh Thomas, citizen information coordinator for the city of Lake Oswego:
'At this point, there are no adopted reports, costs or ballot measures that have been advanced by (the Lake Oswego City) Council on any of these proposals. There are public hearings and public processes for most of these items and the city council always encourages citizens to get involved to ensure that their interests are represented. The one exception is the decommissioning of the Tryon Creek Sewer Plant, which the council determined that it would not pursue at the 2006 goal-setting retreat.
'The city is financially viable, with strong bond ratings and low rates on the debt carried. The city looks to remain accountable, efficient and financially stable in future years through continued solid fiscal management.'