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Can we afford the debt of the LOTWP?

Lately, there have been ads in the Lake Oswego Review that question the current council’s approach to fiscal concerns.

This “don’t throw the baby out with the bathwater” distraction is meant to create worry with false claims about cuts to park programs, arts, flower baskets, etc. However, the real worry regarding fiscal responsibility is whether ratepayers can afford the Lake Oswego-Tigard Water Partnership (LOTWP).

Like class 5 rapids on the upper Clackamas River, our community is in for a wild ride with this project that could leave ratepayers with more debt than they anticipate. At the council meeting on Feb. 19, project staff recommended that councilors approve $18.7 million in LOTWP construction contracts while several project variables remain unknown.

The LOTWP was initially estimated to cost $135 million and is now estimated at $253 million with only 60 percent of the engineering completed. It is being built in an area with unstable soil that will require significant engineering. There is a pending WaterWatch lawsuit over the amount of water the project will take from the Clackamas River. Plus, the West Linn City Council recently imposed more than 40 conditions (including a $5 million lump sum payment). Top it off with usage and ratepayer assumptions that have dramatically changed and debt service that may have changed over time. These issues and changes need to be factored into the cost of the project.

At the Feb. 19 meeting, Councilor Karen Bowerman suggested that the council take a moment (during the two weeks before the next meeting) before committing to millions in construction contracts, to reassess the project from the perspective of the ratepayers. We’ve all seen our water rates skyrocket and construction hasn’t even started. With new variables, just what will our water bills look like in the future? Council agreed unanimously with Councilor Bowerman’s motion.

However, at a meeting on Feb. 22, four councilors — Gudman, Gustafson, Jordan and O’Neil — voted against a motion to hire Tiffany Couch, a well-known auditor of public works projects, to conduct an initial $5,000 cost-benefit analysis from the view of the ratepayer. Councilor Bowerman suggested the rate analysis in order to have some clarity on the project cost from the ratepayers’ perspective: fiscal responsibility in action.

The motion failed with those who voted “no” citing concerns that the fee was too low, the study was too small, they had heard bad things about Ms. Couch, other firms should be considered, they weren’t sure what to do with the information and on and on. Another suggestion was to keep moving forward and just monitor the costs more closely with another consultant. Project staff seemed indignant over the idea that an independent auditor would review the financial component of the project.

While no one denies that our water system needs upgrades, the question remains what is affordable for Lake Oswego ratepayers? That financial responsibility lies squarely on the shoulders of the mayor and city councilors and is not the decision of staff, contractors or other government entities.

So, while some want to alarm the community over the loss of flower baskets and exercise programs, the real issue of fiscal responsibility is whether we are going to assume the debt of the LOTWP without fully understanding the impact. Will we be able to afford to water our flowers and shower after the exercise program?

Dianne Cassidy is a resident of Lake Oswego.




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