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Some Lake Oswego councilors hope Tigard will chip in for more

by: FILE PHOTO - Some on the Lake Oswego City Council have suggested selling Tigard a larger share of the Lake Oswego-Tigard water project, which would alleviate costs in Lake Oswego. The pricetag for the water partnership has ballooned, from $135 million when the project was announced to $250 million today.
Tigard-area residents could end up paying more for water under a new partnership with Lake Oswego.

Although the cost of water in Tigard and Lake Oswego has risen dramatically during the past four years, officials in those cities are in talks that could eventually increase water costs for Tigard residents to offset high water bills in Lake Oswego.

The Tigard and Lake Oswego city councils met Tuesday to discuss the Lake Oswego-Tigard water partnership, a years-long project that will build a new water system between the two communities, scheduled to be completed by 2016.

During the meeting, councilors discussed the history of the project, a timeline for the next several months and whether to commission an independent review of the operation. They saved the best for last. At the end of the meeting, Lake Oswego Mayor Kent Studebaker turned the discussion toward water bills and possible increases.

Some on the Lake Oswego Council have suggested selling Tigard a larger share of the project, to alleviate costs in Lake Oswego. The pricetag for the water partnership has ballooned, from $135 million when the project was announced to $250 million today.

To pay for the project, both cities have raised water rates, but Lake Oswego councilors and residents have complained about the costs of the project and the Lake Oswego council is openly considering whether it should ask Tigard to take on more of the project in order to offset some of Lake Oswego’s costs.

Buying into more of the project would give Tigard access to more water from the water system. Lake Oswego doesn’t expect to use about 6 million gallons per day of its share of the partnership and Tigard could buy a portion of that excess water.

But buying more water would mean higher water rates for ratepayers in the Tigard Water Service Area, who would see the costs added to their monthly utility bill.

And ratepayers in Tigard are already paying for the majority of the project.

Tigard is on the hook for about 52 percent of the costs to build the new water system, contributing an estimated $127 million, of the $250 million project.

To pay for its share, Tigard more than doubled the cost of water for its ratepayers between 2010 and 2015 and tripled one-time fees imposed on new homes built into the city’s water system to pay for the system.

In 2010, the average ratepayer in Tigard paid about $29 a month for water. The city has gradually increased the costs over the past few years to about $49 today. By the time the water system is built in 2016, Tigard ratepayers will pay about $57 a month.

But Dennis Koellermeier, Tigard public works director, said that buying some of Lake Oswego’s share of the partnership might not be such a bad idea. Tigard wouldn’t just be taking on more financial responsibility, it would be purchasing the right to pull more water from the system, which is expected to provide about 38 million gallons of water each day for the two cities.

“We would also have access to more water,” Koellermeier said.

Even with the partnership with Lake Oswego, Tigard’s expected growth means that the city will need to look for additional sources of water in the future.

Having access to a few million more gallons of water per day could help the city in the long run, Koellermeier said.

Tigard city councilors have said they’d be open to discussing the idea, and have casually talked about the possibility.

Under the original terms of the partnership, Tigard would have access to 14 million gallons of water per day. Although no proposals have been brought to the city, Tigard officials have informally discussed buying up to an additional 5.5 million gallons per day, Koellermeier said.

“And we would have to figure out what the value of that is,” he said. “That would impact our rates over time.”

It’s unclear how much it would cost the city to purchase additional water rights from Lake Oswego, or how it would impact water rates in Tigard or Lake Oswego.

Regardless, it’s not likely to fix the high water rate problem in Lake Oswego anytime soon.

Joel Komarek, project director of the Lake Oswego-Tigard water partnership, said that the Lake Oswego council would need to discuss how much it is comfortable selling before discussions could go further. It would also have to negotiate a deal with Tigard about how much it would be willing to pay for that water.

That’s not likely to be a short process, Komarek said. In 2007, when the two cities were first forming the water partnership, negotiations for how much the two cities would pay for the system took about a year.

Decreasing water rates in Lake Oswego is what most residents in that city want, but Lake Oswego City Councilor Donna Jordan said her city needs to make sure it isn’t substituting a short-term solution for trouble down the road.

“We need to be careful about this,” she said. “We always felt we could sell water to Tigard that was in excess of our original agreement if they needed it before we did, and that still is an option. What that doesn’t do is change our fixed costs and affect our rates. That’s where we have to be very careful about trying to save a few dollars now and perhaps end up with a big problem later.”

As Lake Oswego grows, Jordan said, it might need more water, which it wouldn’t have access to if it sold those rights to Tigard.

“Any agreements or amendments to our current agreement would have to take into account ... different growth rates between cities. We are two different types of cities,” Jordan said. “That might mean a more flexible agreement that needs to take place so that we don’t end up with Lake Oswego being pennywise and pound foolish someday down the road and not having access to water that it really needs for the city it becomes.”

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