West Linn discusses financing for Abernethy Bridge waterline
West Linn City Councilors aren't thrilled with the $10 million price tag a waterline replacement. The Oregon Department of Transportation wants the city to pay for this replacement as part of the department's Abernethy Bridge improvements in the next few years.
When the bridge was constructed in 1970, ODOT and the city struck a deal for the water pipe carrying water from Oregon City to West Linn to run along the bridge. Now that ODOT is preparing to retrofit the bridge as part of the I-205 widening project, the agency says that agreement means the city should pay for the work on the waterline that must accompany the bridge construction.
"I know ODOT has a system of culverts and pipes running all across the state in the public right of way, and under freeways, interstates and roads, which they pay for when they need to be upgraded and repaired or moved, so why is this project different?" Mayor Jules Walters said during a council discussion of the waterline at the council's Oct. 18 meeting. "I think the cost of this pipe replacement should be included in the cost of the overall project of the Abernethy Bridge."
At the meeting, city staff informed the council that while the work won't begin until 2024, ODOT needs to demonstrate to the Federal Highway Administration that it has all the funding available for the project before going out to bid this December.
"If they can't show that our portion is funded, they cannot put our portion in the bid packet," Finance Director Lauren Breithaupt said. "Then they would go out to bid, select the lowest bidder and our portion of the contract would have to be a change order, which means it would likely be a lot more money."
ODOT gave the city four options to show the waterline funds are available by December.
Breithaupt said the first option presented by ODOT was for the city to give the department a check for the $10 million projected cost of the waterline project. However, she said the city did not have $10 million to write the check.
The second option was providing the funds through a letter of credit from the city's bank, though Breithaupt noted most banks haven't done this since before the 2008 financial crisis.
The third option, and the one staff recommended to the council, was giving ODOT access to the city's local government investment pool. Breithaupt explained that the city hosts its non-operating funds in the pool so they would have until the project begins in 2024 put the necessary funds in the account.
The final option presented by ODOT was for the city to obtain a loan from the Oregon Infrastructure Bank. Breithaupt said the loan would come with a 1% interest fee for the total loan amount plus other possible fees. She also noted that most of the paperwork for such a loan was already due, but ODOT had saved a placeholder for approval of this loan at its Nov. 15 meeting if West Linn chose this route.
Breithaupt reminded council it had considered using $3 million in funds from the American Rescue Plan Act for the project, adding that the city could issue a general obligation bond vote for the remaining $7 million.
"I haven't seen evidence as to why West Linn is responsible for the full cost," Councilor Rory Bialostosky said. He added he was uneasy about making a decision before seeing that evidence.
Breithaupt and Public Works Director Lance Calvert said they had the same concerns as council and noted the city was pursuing a better understanding of its cost sharing obligations for the project. However, they noted the need to make a decision for how the city would finance the project, whatever its share of costs may be.
"I don't think that this action tonight precludes the city in any way from pursuing legal remedies or action on what our appropriate cost or cost share would be as part of the project," Calvert said.
Calvert said it's important for the city to stay involved in the process, because failure on the city's part to demonstrate its committed funding would force ODOT to remove the waterline work from the project. That would likely cause the overall cost of the waterline work to go up, he said.
Breithaupt also said that if waterline work was not included with the bid for the rest of the project, it may not qualify for ARPA funding.
"I feel conflicted about asking the people of West Linn to pay tolls to reimburse the funds that are being used for this repair and upgrade, and then also ask them to pay for a $10 million pipe that would not be moved if the bridge wasn't being upgraded," Walters said. "It feels like you're being double taxed."
The council will continue discussion of the waterline at its Nov. 1 meeting.
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