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Tigard, Lake Oswego discuss water partnership and costs

Lake Oswego might ask Tigard to chip in for more


Tigard-area residents could end up paying more for their water under the city’s partnership with Lake Oswego.

Although the cost of water in Tigard and Lake Oswego has risen dramatically during the past four years, officials in those cities are in talks that could force an increase water costs for Tigard residents to offset high water bills in Lake Oswego.

The Tigard and Lake Oswego city councils met Tuesday in Tigard to discuss the Lake Oswego-Tigard Water Partnership, a years-long project that will rebuild Lake Oswego’s infrastructure to serve both communities. The new system is scheduled to be completed by 2016.

During the meeting, councilors discussed the partnership’s history, a timeline for the next several months and whether to commission an independent review of the operation. They saved the best for last. At the end of the meeting, Lake Oswego Mayor Kent Studebaker turned the discussion to water bills and possible increases.

Some members of the Lake Oswego council have suggested selling Tigard a larger share of the project to alleviate costs in Lake Oswego. The pricetag for the water partnership has ballooned, from $135 million when the project was announced to $250 million today.

To pay for the project, both cities have raised water rates. But Lake Oswego councilors and residents have complained about the costs of the project, and the Lake Oswego council is openly considering whether to ask Tigard to take on more of the project to offset some of Lake Oswego’s costs.

Buying into more of the project would give Tigard access to more water from the system. Lake Oswego doesn’t expect to use about 6 million gallons per day of its share, and Tigard could buy a portion of that excess water.

But buying more water would mean higher water rates for ratepayers in the Tigard Water Service Area, who would see the costs added to their monthly utility bills.

And ratepayers in Tigard are already paying for the majority of the project.

Tigard is on the hook for about 52 percent of the costs to build the new water system, contributing an estimated $127 million toward the $250 million project.

To pay for its share, Tigard more than doubled the cost of water for its ratepayers between 2010 and 2015 and tripled one-time fees imposed on new homes built into the city’s water system.

In 2010, the average ratepayer in Tigard paid about $29 a month for water. The city has gradually increased the costs over the past few years to about $49 monthly today. By the time the water system is built in 2016, Tigard ratepayers will pay about $57 a month.

More water

Dennis Koellermeier, public works director for the city of Tigard, said buying some of Lake Oswego’s share of the partnership might not be such a bad idea.

Tigard wouldn’t just be taking on more financial responsibility. It would be purchasing the right to pull more water from the system, which is expected to provide about 38 million gallons of water each day for the two cities.

“We would also have access to more water,” Koellermeier said.

Even with the partnership with Lake Oswego, Tigard’s expected growth means it will need to look for additional sources of water in the future.

Having access to a few million more gallons of water per day could help the city in the long run, Koellermeier said.

Tigard city councilors have said they’d be open to discussing the idea and have casually talked about the possibility.

Under the original terms of the partnership, Tigard would have access to 14 million gallons of water per day. Although no proposals have been brought to the city, Tigard officials have informally discussed buying up to an additional 5.5 million gallons per day, Koellermeier said.

“And we would have to figure out what the value of that is,” he said. “That would impact our rates over time.”

It’s unclear how much it would cost the city to purchase additional water rights from Lake Oswego, or how it would affect water rates in either city.

Regardless, it’s not likely to fix the high water rate problem in Lake Oswego anytime soon.

Joel Komarek, Lake Oswego-Tigard Water Partnership project director, said the Lake Oswego council would need to discuss how much it is comfortable selling before discussions could go further. It would also have to negotiate a deal with Tigard about how much it would be willing to pay for the additional water.

That’s not likely to be a short process, Komarek said. In 2007, when the two cities were first forming the partnership, negotiations over how much each would pay for the system took about a year.

‘Pennywise and pound foolish’

Decreasing water rates in Lake Oswego is what most residents in that city want, but Lake Oswego City Councilor Donna Jordan said her city needs to make sure it isn’t substituting a short-term solution for trouble down the road.

“We need to be careful about this,” she said. “We always felt we could sell water to Tigard that was in excess of our original agreement if they needed it before we did, and that still is an option. What that doesn’t do is change our fixed costs and affect our rates. That’s where we have to be very careful about trying to save (a) few dollars now and perhaps end up with a big problem later.”

As Lake Oswego grows, Jordan said, it might need more water, which it wouldn’t have access to if it sells those rights to Tigard.

“Any agreements or amendments to our current agreement would have to take into account ... different growth rates between cities; we are two different types of cities,” Jordan said. “That might mean a more flexible agreement that needs to take place so that we don’t end up with Lake Oswego being pennywise and pound foolish someday down the road and not having access to water that it really needs for the city it becomes.”

Background

The Lake-Oswego Tigard Water Partnership plans to build or upgrade Lake Oswego’s water system by 2016 to share treated water between Tigard and Lake Oswego.

Construction is set to begin soon to upgrade and expand a water treatment plant in West Linn, build a new intake facility along the Clackamas River, upsize pipes, build a new reservoir in Lake Oswego and replace a Tigard pump station.

Tigard has long been considered an island without access to its own water and has relied on other cities, mostly Portland, to sell it water.

Its contract with Portland ends in July 2016, and Tigard has spent years working with Lake Oswego to own a piece of that city’s water rights.

But the partnership has been far from smooth sailing.

Neighbors near the water treatment plant in West Linn have been fighting the expansion for years, and the West Linn Planning Commission denied the expansion, saying it offered no benefit to West Linn.

The West Linn City Council eventually overturned that decision, adding several provisions, including a payment of $5 million to the city, before the expansion could happen.

Since that time, residents have filed an appeal with Oregon's Land Use Board of Appeals in an attempt to stop the plant project.



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