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Lake Oswego offers West Linn $5 million for pipeline route

Residents question timing and amount of agreement


UPDATE: The Lake Oswego City Council held an executive session Jan. 10 to discuss the proposed $5 million payment.

After three hours of discussion, the council convened in open session and voted to direct LOT not to give West Linn the requested terms on the payment. However, the council authorized LOT staff to work with West Linn staff as it prepares its proposal for the West Linn City Council.

This means that West Linn could add the $5 million as a condition of approval, but LOT will not be making a formal offer of the $5 million.

Lake Oswego made a $5 million offer to West Linn that could sweeten the pot in getting its water treatment plant project and pipeline approved.

On Monday, the West Linn City Council approved pursuing an agreement with the Lake Owego-Tigard Water Partnership (LOT) for a $5 million lump-sum payment for the use of city right-of-way for a proposed water pipeline that is in conjunction with the proposed LOT water treatment plant expansion.

Lake Oswego has operated a water treatment plant between Kenthorpe Way and Mapleton Drive in West Linn’s Robinwood neighborhood since 1968. In cooperation with the city of Tigard, Lake Oswego wants to expand the plant and run a new pipeline to address the future water needs of both cities under the water partnership.

According to the proposal, the plant would hold up to 2 million stored gallons of water underground and handle up to 38 million gallons each day. The facility currently serves as an emergency backup water supply for West Linn.

The project also involves the installation of a 4-foot-diameter pipeline from the Clackamas River, through a portion of Mary S. Young State Park, to the water treatment plant and then down Highway 43 toward Lake Oswego.

The multi-year projects have been highly protested by Robinwood neighbors and others in West Linn.

The West Linn Planning Commission in November 2012 denied the two permit applications, citing that the projects did not benefit the West Linn community. LOT in December appealed the planning commission’s decision, which now takes the process to the city council level. The West Linn City Council will hear the appeal next Monday, Tuesday and possibly Wednesday.

Months ago, when the permits were still at the planning commission level, the city started discussing whether it should charge LOT franchise fees for the use of West Linn right-of-way for the pipeline. Since then, the city has been in negotiations with LOT.

According to Mayor John Kovash, LOT came to the city Jan. 4 with a proposal of a lump-sum payment of $5 million with some stipulations rather than an annual fee that is typically associated with franchise fees.

The council discussed the proposal during an executive session Monday after the regular council meeting. The council then reconvened and unanimously approved putting together a business agreement with LOT by this Friday for city council review that provides a $5 million lump-sum payment in lieu of any annual fee or share of future water sales.

Because the agreement is still under negotiation, the suggested stipulations and other proposals could not be shared, according to Assistant City Manager Kirsten Wyatt.

“It seemed like money in hand that could help West Linn,” said Jane Heisler, LOT communications director. “It might be more desirable now than over many, many years.”

Heisler said LOT offered the one-time payment because Lake Oswego didn’t want to pay ongoing fees that could escalate over the years.

“It seemed like this might be a good alternative,” she said, adding that West Linn originally wanted a portion of water sales during negotiations.

“We wanted to make it clear this one-time lump-sum payment did not include other items,” Heisler said.

Already, residents are questioning the timing of the proposal, which came just days before the hearing, and its intention.

“I’m surprised, but not surprised,” said Scott Gerber, an officer in STOP, a registered limited liability company that is fighting the expansion. “I think it’s some wheeling and dealing with the boys in the back room. … I think they (LOT) had this card in their back pocket. It didn’t happen by accident.”

Of the timing, Kovash said, “I don’t know if there is a specific reason on our side. … They set the timing, we didn’t.”

Heisler said the timing was just part of the ongoing discussion.

LOT could use the $5 million as part of the criteria that needs to be met for approval, which could be considered community benefit.

“It’s really not related to any of the criteria,” Heisler said. “It certainly could be interpreted as a benefit.”

“Any issues that would come up would impact the vote if it fits the criteria of approval,” Kovash said.

“If they can make that point, they should make it in the hearing,” Council President Mike Jones said. “I think if I was Lake Oswego, I’d want to have it settled before the hearing started.”

What the city could use the $5 million for is yet to be determined, but some Robinwood residents would like to see some of it funneled into the neighborhood.

“There is no amount that they can throw at this … that can now make up for the damage they are going to do to the Robinwood neighborhood,” Gerber said, calling the offer a bribe. Though he believes the projects should not be approved, he said if they are, “I think the neighborhood deserves a substantial portion of that (money).”

“Too bad the $5 million is only a quarter of what they've (LOT) already spent on engineers and studies. The amount is an insult. It wouldn't even cover a reservoir.The one-time payment is also an insult. If this project is renegotiated in the future, a reasonable benefit to West Linn would include regular payments tied to the revenues received from the project,” STOP officer Gwen Sieben said.

LOT, however, wants West Linn to invest in its water infrastructure.

“We’d sure like to see them spend some money on the Bolton Reservoir,” Heisler said.

According to Wyatt, the cost to replace the reservoir is $8 million, of that $2.4 million would be paid using system development charges. That would leave the city to come up with the remaining $5.6 million.

Will the $5 million sway council votes? It remains to be seen.

When asked whether the money would sway his vote, Jones said, “The honest answer is, I don’t know.

“I really want to see the land use hearing. At this point, I’m absolutely neutral. … How this particular negotiation plays into that as a factor is determined then. I’m working incredibly hard to stay neutral.”

Heisler said, “It’s an attempt to get the best project we can get and get to ‘yes.’ There are a lot of things West Linn can do with that money.”

STOP is speculating that new members on the Lake Oswego City Council are willing to delay or terminate the projects.

“We have made repeated gestures to the Lake Oswego new council we would be willing to discuss a project that stays within the existing footprint, provides a less threatening pipe then a 4-foot pipe and they learn how to play nice in the sandbox,” STOP managing partner Dave Froode said. “Certain individuals representing the partnership made a mess of this with their misrepresentations, manipulations and trying to marginalize and vilify us. The new Oswego council understood our situation, was empathetic and said they would definitely do better in the future. We would certainly welcome that.”

“This $5 million amount is a last-ditch effort of desperation on the part of the LOT leadership who sees change coming within the city of Lake Oswego and wants to ram the thing forward before their own oversight committee reigns them in. West Linn should not be taken in by this offer, which is, yes, a 'bribe,'” Sieben said.

The West Linn City Council will meet Monday at 6 p.m. to hear the land use applications for both the water treatment plant and the pipeline projects. The meeting may be continued until all public comment is heard and the council makes a decision. If the city council approves the land use applications for the water treatment plant and the pipeline, the $5 million agreement will be subject of future council approval.



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