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Costly water project demonstrates why fiscal responsibility is so crucial

Did you know that the intergovernmental agreement for the Lake Oswego-Tigard Water Partnership was signed in 2008, under Mayor Judie Hammerstad, with an original maximum cost estimate of $90 million (according to a 2007 consultant’s report), and that the total ballooned to $250 million during Mayor Jack Hoffman’s administration?

In November 2012, Lake Oswego elected a more fiscally responsible majority to the City Council, led by Mayor Kent Studebaker. While exiting the very costly project was an obvious solution, the original intergovernmental agreement signed during Hammerstad’s term contained very expensive penalties, preventing Lake Oswego from exiting the agreement. Therefore, Studebaker and the City Council directed staff to find opportunities to lower and control the costs of this project to Lake Oswego ratepayers.

This resulted in the agreement being renegotiated in 2013 to alter the cost-sharing agreement by reducing Lake Oswego’s share of the water. This adjustment reduced Lake Oswego’s capital cost by $20 million, preventing the multi-annual, double-digit rate increases that were being forecast and instead keeping annual rate increases to about 6 percent.

When the new water plant is finished, it will have a water capacity of 38 million gallons a day. Lake Oswego’s share of that will be 20 million gallons per day. Today, the water capacity of the existing plant is 16 million gallons per day and we never use that much water in a day. The existing plant was reaching the end of its life, but other, less-costly ways to update the plant were not thoroughly explored. Was it worth it to Lake Oswego ratepayers to get 4 million gallons a day more for over $100 million (our share of the total cost) to do this project?

It’s important to recognize that the costs of this very expensive project were put in place by previous City Councils, even though the costs are only recently significantly impacting citizens’ water bills. The efforts of the current mayor and City Council have served to slightly reduce projected ongoing cost increases, but it is the decisions of past administrations that have left citizens with huge water bills to cover the costs of this super-sized water plant.

Continuing to elect candidates who are truly fiscally responsible will be important to the future of the city. Beware of candidates and their supporters who claim they want Lake Oswego to be “affordable” for young families and seniors on fixed incomes, yet support costly projects that pose a direct threat to affordability.

With three open council seats, this November is a critical election for ensuring that Mayor Studebaker has the council support needed to ensure true fiscal responsibility.

Gerry Good, a Lake Oswego resident and member of the Lake Oswego Citizens Action League’s steering committee, wrote this article on behalf of LOCAL.

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