Wilsonville, as owner of the intake and processing facility, may come out on top in water-share agreement

SPOKESMAN PHOTO: LESLIE PUGMIRE HOLE  - The water intake facility will undergo seismic upgrades and additional capacity. The City of Wilsonville is close to forging an agreement that Wilsonville City Attorney Barbara Jacobson recently described as the biggest real estate deal for underground land in the city's history.

Though a recent development could scuttle the project, Wilsonville city councilors voted Feb. 22 to approve an ordinance that would form an intergovernmental agreement between Wilsonville, Beaverton, Hillsboro, Tualatin Valley Water District (TVWD), Sherwood and Tigard to expand Wilsonville's water intake facility, allow access to its water treatment plant and build a pipeline that would flow from Wilsonville to Hillsboro. If passed, the agreement would last 99 years and the construction of the projects are projected for completion in 2026.

For Wilsonville, the plan would stipulate significant roadway construction that could last over five years.

But, for various reasons, Wilsonville staff and councilors are happy with the proposed agreement, which has been greenlighted by almost all relevant city councils.

Wilsonville is set to pay a significantly smaller portion of construction costs than other cities, attain seismic upgrades to the intake facility for free, gain 5 million gallons per day in capacity and garner permanent designation as the managing owner of the Willamette River Water Treatment Plant (which is in Wilsonville), among other benefits.

Jacobson said she, City staff and councilors drove a hard bargain.

"I'm not going to say it was a great deal for them (the other cities and TVWD) but I think they believed we had justification for what we were asking," Jacobson told the Spokesman.

Wilsonville Mayor Tim Knapp said the project is important for the region.

"This project is an important component for water certainty in some of our neighboring communities. Certainly we don't stand alone when it comes to that. If water became a serious concern for any of our neighboring cities, it would ultimately affect us also," Knapp said at the Feb. 5 city council meeting. "It is important that we are protecting and looking after our own residents but also participating in finding a way for this project to happen for the entire region."

In Wilsonville, the pipeline would run for three miles through Wilsonville, Garden Acres and Kinsman roads. Various projects such as placing pipe under Kinsman Road have already begun.

City Manager Bryan Cosgrove indicated at the Feb. 22 city hall meeting that construction would prove challenging for the Wilsonville planning department to manage.

"This was Barbara's nightmare and baby for a long time," he said. "Now it's going to be mine and Nancy's (Wilsonville Community Development Director Nancy Kraushaar)." SUBMITTED PHOTO: CITY OF WILSONVILLE - Workers lay water pipeline along Kinsman Road as part of the project to expand Wilsonvilles water intake facility.

Though the project is close to approval, a late wrinkle could jeopardize it.

At the current intake facility, Wilsonville has access to four pumps that receive water from the Willamette River. But, at a design meeting last week, various interest groups suggested using one of the pumps for TVWD's new treatment plant.

This would limit Wilsonville's intake flexibility, according to Public Works Director Delora Kerber.

"You want to have pumps put in place to have flexibility to use smaller pumps during the winter or larger pumps during the summer," Kerber said.

As a result, Jacobson added a stipulation into the ordinance stating that it will not go into effect until this design issue is resolved.

"One of our core provisions of the agreement with this group is that nothing that happens with the intake facility is to have an adverse impact on our plant," Jacobson said. "That's not something we're agreeable to from an operations perspective."

In 2000, the City of Wilsonville and TVWD invested $45 million in the Willamette River Water Treatment plant — which can process over 15 million gallons of water per day. Prior to that, Wilsonville obtained its water from city wells. TVWD later sold its intake capacity to Sherwood.

Knapp praised the foresight of Wilsonville lawmakers for greenlighting the project prior to the rise in demand for water in the region.

"The cost of water throughout the Portland metro region is becoming something different than we're used to. Wilsonville did a marvelous job of being on the front edge and getting that water plant built," Knapp said.

Since 2014, Wilsonville has negotiated with the aforementioned cities and TVWD on expanding the intake facility so that water can be transported to adjoining cities via a pipeline that would run beneath Wilsonville roadways. TVWD plans to build its own treatment plant but would continue to use the intake facility.

Establishing a position of leverage, Jacobson told negotiators that the City of Wilsonville could do without the additional water capacity and that the agreement would cause considerable construction hassle in Wilsonville.

"We didn't need this project to happen at all. Other cities in the region did. Their water is going to become a very precious commodity. It's part of our regional job to look out for each other so we did want to cooperate with that but at the same time not at the expense of our residents," Jacobson said.

And in some respects, they seem to have negotiated an advantageous deal.

Regarding the intake facility, Wilsonville would have the third highest ownership capacity of any city or district (16.67 percent) yet will pay just $125,000 in construction costs. On the other hand, Beaverton would pay $752,000 for 3.3 percent of capacity, TVWD would pay $5.8 million for 39 percent capacity and Hillsboro would pay $5.4 million for 24 percent capacity.

"It was a long time walking through the process. Sort of having the other cities understand (that) yes, we were getting a limited benefit but not nearly the same benefit because we already had water for our citizens," Jacobson said.

In addition, Wilsonville will receive more than $17 million in prepaid rent from the other members, which would be paid in installments until 2026.

"We had quite a long negotiation over how much ground rent they were going to pay us to put pipe through the city. Our number was considerably higher than what they anticipated," Jacobson said.

In assuming the role as day-to-day manager of the water treatment plant, Wilsonville could decide upon capital improvements and hiring contractors to help maintain the plant. However, each city would have equal power in managing the water intake facility.

Wilsonville wasn't planning to implement seismic upgrades to the intake facility but Jacobson says Hillsboro and TVWD wanted the upgrades. So the plan stipulates that the intake facility would receive the upgrades without Wilsonville paying a dime. Wilsonville would also hold environmental indemnity if the pipe's construction causes environmental hazards.

"TVWD and Hillsboro, in conjunction with building the plant outside of Wilsonville and using the Wilsonville facility to get water into the plant, determined it was critical in the event of a natural disaster that the intake facility at the existing plant would be well protected," Jacobson said.

Beaverton and Hillsboro currently receive their water via the Joint Water Commission — a partnership with Forest Grove and TVWD that collects water from Hagg Lake. Hillsboro, for one, could succeed Gresham as Portland's largest suburb in upcoming years and may need the extra water source to account for growth.

And though it comes at a steep cost, at least in comparison to Wilsonville's cost, Beaverton City Councilor Cate Arnold says the project would help her city provide water to citizens for a long time and in case of emergency.

"It has to do with providing water to our citizens for the next 50 to 100 years. There have been thousands of hours spent on these items. We have spent years talking about it," she said in a recent Beaverton City Council meeting. "There is good news in that we are finally putting in a resilient water system that, when we have a Cascadia subduction zone event (earthquake), we should be able to get some water going through our valley."

When extending Jacobson's contract at the Feb. 5 council meeting, Councilor Scott Starr said the project is an example of the attorney's value to the city.

"Ms. Jacobson has done an incredible job for the city. One of the pieces of her work that has been really incredible has taken up a huge amount of the city's time (the intake project) but I think she has represented the city extraordinarily well as she does with every piece of legal work that we have," he said. "There are a lot of tax dollars that Ms. Jacobson saves our city and that's very important to note."

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