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Tigard, Lake Oswego exploring water pact

Lake Oswego and Tigard officials will soon decide whether they should share more than just a common interest in expanding water facilities.

On the table is a proposal that could see the cities merge resources to expand Lake Oswego's water service, with Tigard signing on as part owner or as a wholesale customer.

Lake Oswego is already looking at improvements to its water utility, which currently serves 39,821 customers. The city is likely to see that number boost to 47,275 by 2030, according to projections, and will need upgrades along the way. Water needs are projected to exceed the carrying capacity of the system in three years. Early projections show costs in the tens of millions of dollars.

At issue is whether Tigard, which has no water rights of its own, should sign on to fund some of the upgrades in Lake Oswego's water system exchange for either wholesale water rates for its 55,000 customers or shared ownership in Lake Oswego's utility.

Right now Tigard buys water from a variety of sources, with most coming from the Portland water system. Portland faces costly upgrades to its own water utility and Tigard officials say wholesale customers like their own tend to get the short stick as wholesale customers.

Dennis Koellermeier, public works director for Tigard, said the city has several interests in securing equity in a utility, possibly Lake Oswego's.

'One would be cost. In the long-term, city of Portland water will continue to be one of our most expensive options for water,' said Koellermeier.

He said the city also wants a predictable water supply, the ability to anticipate costs and could use system development charges - charged on new development - to fund utility improvements if the city had equity in a utility.

The proposal to pair Tigard's need for a permanent and affordable water supply with Lake Oswego's need for utility improvements is still in its infancy.

Right now, Lake Oswego's water system lacks the capacity to serve Tigard, but engineers charged with exploring a joint water system suggested many of the upgrades would be needed whether Tigard joins the system or not. Lake Oswego could see financial benefits by opening a partnership but would lose some control in the exchange.

In their study session Nov. 14, elected officials probed four possible scenarios for Lake Oswego's water utility, which ranged from going it alone to a full-fledged partnership with Tigard. They differed as to when to involve public input in the decision during the study phase.

If Lake Oswego were to utilize all of its water rights on the Clackamas River for the shared system, both cities would still exceed their combined demand for water in approximately 2030. Under the current proposal, Tigard would continue to buy additional water from other sources.