Bend May Change Course on City Water Project

Mar 06, 2012

Cascade Business News

Bend May Change Course on City Water Project

What may come as a surprise to residents who have supported the City of Bend’s original Surface Water Improvement Project slated to cost about $68 million, city councilors are now considering cutting the project cost in half by delaying the water filtration system construction and not building the hydropower facility slated to generate renewable energy.

However, opponents of the original plan say the city isn’t changing the project at all, but just spreading it out longer.

Bend’s Surface Water Improvement Project, in the planning stages for more than two years, is supposed to update and improve the surface water component of the City's dual-source system. But the basic premise of and the cost of the project and related increase to ratepayers has brought forth numerous objections from community leaders including Bill Smith of William Smith Properties, Inc. and the Old Mill District and former Mayor Allan Bruckner. They contend that city councilors are not changing the $68 million plan at all, but in fact just delaying the project.

“It doesn’t do anyone any good to delay a bad decision,” said Smith. “They should stop the project and if the city wanted to show good face they would stop engineering on the membrane treatment plant as well.” The city is spending nearly $18,000 a day on engineering for the treatment plan and will eventually spend millions just on consultants. “The city needs to relook at the whole project,” added Smith.

Bruckner also expressed his concerns: “I am extremely disappointed with the city’s proposed resolution. The Stop the Drain committee feels very misled. Rather than economizing and reviewing, it actually commits the city to the entire project. They force any future council to spend the next $30 million, because without that, the $30 million they propose to spend now is totally wasted.

“Additionally they offer no reduction in the outrageous consultant design fees, even though designs may change if parts of the project are delayed. And while it offers some temporary rate relief, the whole project must be paid for, so it merely increases the size of the bond necessary to pay for it. Their spin is very misleading to the pubic.”

The project as planned still rests on the State of Oregon extending the federal deadline of October 2014 to treat its water for cryptosporidium. If extending the inevitable to 2020 as hoped, it will make the project cost even more due to inflation.

The City now says it is planning to mothball the hydroelectric project, but William F. Buchanan, Bend attorney, doubts that. “The city claims to have received $18 million in “grants and loans” for the project,” said Buchanan. “But these are merely loans with a mere $750,000 that is forgivable. Aside from the misleading tenor of a city press release the city’s own term sheet shows that $18 million is from loans, not grants; the $18 million is secured by pledges from the City’s General Fund revenues, thereby jeopardizing police fire and other essential services without sufficient funding mechanisms given the plummet of real property values and the $18 million in loans requires a hydroelectric project.

“Now that the City claims it is mothballing that hydro project, wouldn’t those low interest loans be lost? If so, why isn’t the City mentioning that?”

The Bend City Council plans to continue discussions on its new plan at the Wednesday meeting March 7 and consider a resolution to approve it.

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