For By Allan Bruckner                                                                                                                    Cascade Business News

For several decades the City of Bend has used both surface water from Tumalo Creek and ground water (wells) to serve the citizens of Bend. Now the city plan for a $70 million expenditure to maintain the surface water source has become a highly controversial issue.

HISTORY
Bend’s original source of drinking water was the Deschutes River. Then in 1924 the City purchased water rights from Tumalo Creek and in 1926 installed a pipe to deliver the water. Additional water rights were purchased in 1949 and a second pipe installed in 1957. It was determined in 1964 that there was a very high quality and great quantity of ground water available. The first well was constructed in 1972, and many since. All three private water companies serving the Bend vicinity are served exclusively by well water, as are the cities of Redmond, Sisters, Madras and Prineville. Most other cities in Oregon also use well water exclusively.

RECENT OPERATION AND POLICY
The City has done a great deal of well expansion in the past several decades, almost none in surface water, except for some pipe replacement in the 1980s.  The City has one large well, plus two acquired from Juniper Utility, that have never been used, because the city doesn’t need the capacity.  The city presently meets its winter demand almost exclusively from surface water – an average of 5 million gallons per day (mgd). Peak summer use, of 22 mgd in 2011, is met primarily by using ground water. Surface water and well water each supply approximately two billion gallons annually. If the city could not use its surface water for whatever reason, it could meets its peak demand using only well water, and still have a third of its well capacity unused. It can provide only about one-third of its peak summer demand with surface water. The quality of the water from the two sources is almost identical.

As noted the city has invested primarily in ground water for the last 40 or more years. More recently its documents have confirmed the desirability of groundwater. For example the Bend Water Management and Conservation plan of 2004 stated, “Groundwater is a sound choice for future municipal supplies when considering water quality, water availability, reliability and environmental impacts to the basin. The impacts of groundwater use have the added benefit of being attenuated over time and space due to the large magnitudes of water in the regional aquifer and the high annual recharge rate.”

Bend’s Water System Master Plan Update of 2007 stated, “The City reports the belief that ample quantities of groundwater are indeed broadly available and accessible throughout the City’s urban planning area, as supported by prior studies…. groundwater sources may be developed in certain convenient location, relative to various distribution facilities….may avoid the need to construct high cost transmission piping that might be required with an approach that focuses on more centralized source development …existing and proposed groundwater supply facilities could provide a significant volume of emergency storage to the City…needed additional constructed ‘tank storage’ may be reduced significantly, potentially saving cost for the City in the long-term.”

THE BIG CHANGE
In 2008 the federal Environmental Protection Agency notified the City that if it intended to continue using surface water (e.g. Tumalo Creek) for domestic use, it would need to install a filtering system to treat for “ crypto.” The order does not affect water from wells. The city hired Brown and Caldwell to address the issue. Its October 2009 report recommended what has become known as the Surface Water Improvement Project. They pointed out that the existing pipelines were 50 and 80 years old, 12-14 inches in diameter and 41,000 to 49,000 feet in length. They estimated repair costs at around $10 million. But they recommended replacing them with a 36 inch diameter pipe, so that the water flow could be used to generate electricity. This approach was the “highest risk” rating and was substantially more expensive than alternatives. They recommended it because of the total project cost of approximately $70 million, over $20 million would be funded by tax credits, and other various subsidies for the power generation portion, lowering the actual cost considerably. It also estimated $1.8 million in revenue from power sales.

In May 2010 the city hired HDR consultants to design the first phase of the Surface Water Improvement Project.

By the summer of 2010 it became apparent that the hydro electric subsidies, on which Brown and Caldwell justified their case for the project, were no longer available. In August 2010 the city finance director so advised the City Council. The Council requested a review of the project costs and an analysis of wells as an alternative.

HDR consultants, the designer of the project, was hired to do the review. They created a new model, based on different assumptions than Brown and Caldwell used, and endorsed moving forward with the project, without the $20 million subsidies, in a memo October 27, 2010. If they continued to design the project, which they are, design fees were estimated at $13-$18 million.

THE CONTROVERSY
Critics charge the City and the consultants with many errors and neglecting many facts. They maintain the conclusions are based on improper assumptions and ignoring important factors. Critics believe the city has adopted a bunker mentality and refused to, or has been unable to, address legitimate concerns. In no particular order, some of their questions and concerns are:

The original Brown and Caldwell recommendation was justified because the city would receive over $20 million in subsidies for the hydro electric facility. Planning began, but less than a year later it was determined that no such subsidies were available. Critics say, if that’s what made it economical before, how can it still be justified now with the huge subsidies gone?
The original projection for revenue from the power plant was $1.8 million annually which helped make it feasible. Now the projection is $0.5 annually. Much less income, but still a deal?
How much of the piping expense is necessitated for the power component. If the power component went away, could savings in piping occur?
The City says all the piping must be replaced. Isn’t it reasonable that the pipe built in the 1950s should last at least as long as piping built in the 1920s? if so, there should be at least 30 years of life remaining in the ‘50s pipe.
5. As noted above, when it was determined that the power facility subsidies were gone, the council asked for a fresh review of the surface water project verses going to wells. In an amazing decision the city hired the consulting firm (HDR) to do that analysis. They were chosen despite the fact that HDR stood to make an additional $15 million if the surface water project was picked. How could anyone expect an objective study?
Critics charge the basic assumptions used by HDR were in error and that led directly to improper conclusions. Some of those assumptions included using cumulative cash flow rather than net present value; using unrealistically high increases in power prices thus overstating future income; using unrealistic increases in water use making well water costs higher; using minimal maintenance costs for the treatment plant; adding unreasonable costs for piping and reservoir costs in the well model and improper addressing of peaking supply and charges. How can the council accept this study as unbiased?
Cities under 10,000 do not have to test for crypto because the government believes it is too expensive.
There are many other contaminates in surface water for which treatment is not now required. It is possible that the EPA could order more expensive treatments in the future, making surface water more uneconomic.
Addressing the overall project cost the city engineer, at a planning commission meeting, stated that that $68 million is a class 5 estimate. This means it could cost up to as much as 100 percent more.
10. An alternative, not thoroughly investigated, involved leaving the water in Tumalo Creek until just uphill from the City’s Outback storage and treatment facility. It would allow more water in the streams and save $30 million in piping. Brown and Caldwell indicated this was less risky both engineering and financially. When the city hired a value engineering firm to find ways to save money, they were expressly told not to consider this.
11. Another alternative is to abandon the 1920’s era pipe and continue use of only the 1950’s era pipe. This pipe can carry 6 mgd and provide for the city’s average daily winter use. This would avoid the $30 million in new piping, greatly reduce the cost of the treatment facility, and eliminate the expense of the power plant. The value engineering study was also forbidden from looking at this.
The city unduly romanticizes the dual source for water. Outside of Portland’s Bull Run water system, very few cities in Oregon use surface water. It is just too prone to pollution and other problems. And in 20 years, 90 percent of Bend’s water will be from wells. $70+ million is a tremendous price for a source of continuously less importance.
Inadequate attention is paid to the fact that surface water is very undependable in drought years. Should such an investment be made on an undependable source?
Because of fire risk and other potential problems, the City requires a reserve equal to the entire Tumalo Creek capability. In fact the City wells can meet the peak demand, without Bridge Creek, with 30 percent spare capacity.
Additional well capacity providing 1 mgd can be provided for less than $1.5 million.
The city plans to double its withdrawal from Tumalo Creek to provide for the power plant. The detrimental effect of taking more water from Tumalo Creek and the Deschutes River has not been valued.
If the City pursued # 10 and #11 above, additional water would be returned to Tumalo Creek and the Deschutes. This value of this has not been evaluated.
The interest on the newly borrowed money will vastly exceed the cost of power to operate all the wells needed to replace Bridge Creek water.
The financial effect of borrowing for a project of this magnitude has not been addressed. This one project would likely increase the indebtedness of the city by 50 percent, if it comes in within estimates. Sewer bonds of a similar magnitude might also be needed. Combined with the recently passed road measure this means the city indebtedness will likely double in the very near future.
The city finance director reports that Moody’s financial services indicates that borrowing, just for the water project, could increase the cost of all Bend’s borrowing up to ½ percent, in addition to requiring rate increases to cover the expense. This could mean an additional interest charge up to $250,000 on this project alone, plus increases on every other new bond issued by the city. Moody’s indicated this may be unavoidable because of the significant debt projected and the uncertainty of revenue growth.
The City makes it sound like this project must proceed in order to protect its surface water rights. But a city can lease its surface water rights and, by state law, they cannot lose their rights.

Many of those opposed to the City’s Surface Water Improvement Project have formed the committee “Stop the Drain.” They believe the city has not addressed these points in an open minded unbiased manner. They believe a project of this magnitude needs a much more thorough investigation and the city should obtain a new analysis of alternatives from an unbiased third party.

Most recently, the City Council sent a letter to the State of Oregon requesting a delayed implementation of the EPA’s new rule to treat surface water for cryptosporidium.

The City has hired a Washington D.C.-based lobbyist, Dan Bates of Thorn Run Parners, to assist the City in putting together its case to the Oregon Health Authority to allow for more time to address the state and federal rules on it surface water project.

Representative Greg Walden has asked the EPA to grant Bend flexibility from arbitrary water treatment deadlines so the city can sequence compliance in a way that avoids burdensome impacts to the community while protecting public health and safety.

Of the estimated $70 million bill for its surface water treatment project—$30 million is specifically tied to compliance with an October 2014 deadline for compliance with the Long Term 2 Surface Water Treatment Rule (LT2).

“If that flexibility is not granted, the city will be forced to decide between missing this arbitrary enforcement deadline or accelerating the project in a manner that would deal a dangerous economic blow to the city through substantial water rate increases to Bend ratepayers,” said Walden.

Bill Buchanan, an attorney and one of the project’s leading opponents, is a member of the broad coalition opposing the Creek Water Project that includes seven former Bend mayors. “The City hasn’t considered cheaper and more reliable alternatives that also happen to be better for the environment,” says Buchanan. “It has ignored the reasoned views of well respected experts in the basin.

“This project has a huge price tag and the benefits are really very small. For instance, Bend’s water project will cost fifteen times as much per gallon of peak day capacity as Portland’s similar project.”

Paul Dewey, executive director of Central Oregon Landwatch, has concerns for how the City’s project will affect Tumalo Creek and the Middle Deschutes, “We oppose this plan because it will harm our streams and natural environment.  We need to leave as much water in our streams as we can, rather than draining them.”

Another member of the coalition is Bill Smith of William Smith Properties, Inc. who is concerned by the expected sharp increase in water rates. “I don’t want to see our town needlessly turn brown… at least not any more than it already has. It is a quality of life issue.”

Allan Bruckner is a former mayor of Bend and a member of the Stop the Drain coalition. For more information: www.bendwater.info

By Andrew Clevenger/The Bulletin

Bend has hired a lobbyist to help the city make its case for a longer timeline to comply with state and federal rules regarding its drinking water supply.

The city chose Dan Bates of Thorn Run Partners — a Washington, D.C.-based lobbying firm — to help it deal with rules concerning the potentially fatal microbe cryptosporidium. Before joining Thorn Run, Bates served as director of government relations for Portland.

“(The City) Council had made the decision a couple of months ago to get some assistance with our surface water project,” city manager Eric King said. “Dan Bates with Thorn Run Partners was hired to help us put together our case for the state.”

Bates refused to comment for this article, and referred all questions to King.

The Environmental Protection Agency’s Long Term 2 Enhanced Surface Water (LT2) rule — which has been in effect since 2006 — targets high-risk water systems, particularly those that include open-air water storage. The cost for a water treatment plant for Bend’s Bridge Creek water system is projected at $29 million.

In November, the Oregon Health Authority announced that it intends to give Portland a 10-year variance from the stricter standards. Bend considered formally requesting a similar variance, but concluded that it was unlikely to succeed, King said.

Since the city began testing its water in 2005, it has found cryptosporidium in amounts higher than allowed under the regulations seven different times. Portland had no occurrences during the year leading up to its application.

Earlier this month, Bend officials wrote to the Oregon Health Authority, acknowledging that they were not seeking a variance like Portland’s but would like more time to allow the city to put in pipes under Skyliners Road to replace aging conduits built in the 1920s and 1950s.

Bates, who is a registered lobbyist on Capitol Hill, will also monitor developments as the EPA reviews its LT2 rule in 2012, King said.

The decision to hire Bates “came from Dan’s experience in working with Portland – he had a very good handle on the issues,” King said.

Bend’s contract with Thorn Run Partners runs through April 1 and is “not to exceed $9,900,” said Bend purchasing manager Gwen Chapman.

Bates joined Thorn Run Partners in 2010. The Portland resident worked for the Washington, D.C.-based lobbying giant Patton Boggs, LLC, before working for Portland.

A cryptosporidium outbreak in Milwaukee’s drinking water in 1993 led to more than 100 deaths, largely elderly people and people with weakened immune systems. More recently, the pathogen sickened dozens of people at an Idaho water park in August 2007, according to the Centers for Disease Control and Prevention.

Following the January 4 Council meeting, the Councilors sent a letter to the State of Oregon requesting a delayed implementation of new federal water treatment regulations. A new compliance schedule would postpone construction of the water treatment plant component of Bend’s Surface Water Improvement Project and spread out project costs, reducing the burden on rate payers.

The City seeks to delay compliance for several years so that it can construct a pipeline associated with the project before the water treatment facility. Under the adjusted schedule, design of the water treatment facility would continue so that the project would be “shovel ready” by the new compliance date. The adjusted schedule also would allow water rates to increase at a slower pace over a longer period of time to pay for the project.

The Oregon Health Authority is the state agency responsible for enforcing the Environmental Protection Agency’s Long Term 2 (LT2) Enhanced Surface Water Treatment Rule to filter surface water for cryptosporidium, a microbe that can make people sick.

The letter sent to OHA outlined the City’s economic troubles and the negative impact that increased water rates would have on its citizens at this time. As the recession hit, Bend’s reliance on two volatile industries – real estate/development and tourism – made it especially susceptible to high levels of unemployment, foreclosures, and poverty.

The letter follows recent discussions with the Oregon Drinking Water Program, regarding whether Bend could qualify for a variance to the LT2 Rule as Portland did last December. Bend would not likely qualify for a variance because, unlike Portland, Bend has detected cryptosporidium in its surface water source, Bridge Creek, at levels higher than the EPA would allow seven times since testing began in 2005. The Bridge Creek watershed also is open and accessible to the public and at risk of wildfire, both of which increase the likelihood of water contamination without a treatment plant.

The City’s plans to replace failing water pipelines would not be impacted by a compliance delay, if granted. The new pipeline will be installed beneath Skyliners Road before planned road reconstruction in 2013. If the pipeline is not installed before road reconstruction, current County code would require the City to wait five years before the new pavement could be cut. This would add to the project’s cost and risk failure of the old pipelines.

About the Project
The Bend Public Works Department is addressing aging infrastructure and new federal requirements to provide continued access to cost effective, clean, and reliable drinking water for Bend residents and businesses now and for the future. The Surface Water Improvement project will update the City’s Bridge Creek water supply system by:

· Replacing failing water supply pipelines with a new pipeline under existing roadways.
· Providing opportunity for several new fire hydrants along Skyliners Road for fire suppression.
· Adding flow-control features to the new pipeline; minimizing environmental impacts by only diverting water needed for beneficial use by the City of Bend.
· Providing fish screening and passage facilities at the Bridge Creek intake facility site.
· Building a water treatment plant to filter surface water from Bridge Creek and meet new federal drinking water regulations.
·Building a new hydroelectric facility to generate renewable energy.

More information is available on the project website: www.bendoregon.gov/surfacewater

Click here for direct link to article at Cascade Business News

By Paul Dewey vs. Greg Lane
Executive Director of Central Oregon LandWatch vs. President of Fidelity National Timber Resources

The Skyline Forest is a 33,000-acre tree farm west of Bend that was once owned by timber company Crown Pacific. In 2003, Crown Pacific filed for bankruptcy, and its assets went to its creditors. Ownership of Skyline Forest fell to Fidelity National Financial of Jacksonville, Florida and its subsidiary, Fidelity National Timber Resources. The dissolution of Crown Pacific and its use as timber lands led to a struggle with many stakeholders. The plot’s owner, Fidelity, seeks legislation that would change Skyline Forest’s land use to accommodate residential units. Nonprofit Central Oregon LandWatch fought to restrict the use of the land and the number of residential units. In May 2009, Oregon legislators asked Fidelity, Central Oregon LandWatch and the Deschutes Land Trust to negotiate a deal that would create incentives for the landowner to limit the footprint of their development. Those negotiations ended in HB 2228, which the Legislature passed in June of that year. That bill allowed Fidelity National Timber Resources to build 282 dwellings on a small portion of the forest if it agreed to sell the remaining acreage to Deschutes Land Trust. Citing insufficient time to research the economics that drove the original bill, Fidelity, after the bill’s passage, sought to change the terms of it with more residential units. Today, the situation remains at an impasse.

For more than ten years Central Oregon LandWatch has fought efforts by developers to build homes on private timberland known as the Skyline Forest, nestled between Bend, Sisters and the Three Sisters mountains. Fundamental to Oregon’s land-use system is the concept that houses should not be scattered across the landscape, especially in our forests and other natural areas.

Now, we have the owner, Fidelity National Financial, seeking to substantially alter the legal framework that has helped make Oregon the most livable place in the nation. Even worse, this Florida corporation is breaking an agreement it made before the Oregon Legislature just two years ago.

In 2007, the 33,000 acre Skyline Forest was identified by the Oregon Legislature as a potential community forest. In 2009, various interested parties, including both Fidelity and LandWatch, engaged in intensive negotiations to craft legislation to govern the Skyline Forest. Finally, a deal was struck. Fidelity would be allowed to build up to 282 houses (far more than would otherwise be permitted) in a 3,000-acre corner of the land. In exchange, Fidelity would sell the remaining 30,000 acres to the Deschutes Basin Land Trust, where the land would remain undeveloped and would serve the interests of the local communities.

Fidelity now wants to triple the number of houses it can build, to around 800 dwellings. This intensive development would harm critical wildlife habitat in the Tumalo deer winter range. It would dramatically increase the difficulty in providing community services, such as fire protection in this high fire risk area, deep in our forest. And it represents a fundamental breach of the agreement the parties reached in good faith just two years ago. The Oregon Legislature should summarily reject Fidelity’s new overreaching proposal, and the parties should focus on efforts to implement the existing Skyline Forest legislation to preserve this important area.

People working together has made Oregon a leader in preserving forestland. The key is to find innovative solutions—alternatives that move away from us vs. them, to a win-win vision. That approach is critical to the success of the Skyline Community Forest.

Before we bought the 33,000 acres, it was being divided and sold piecemeal for development. We ended that practice and agreed to work with the Deschutes Land Trust and the State to preserve 30,000 acres as a Community Forest. In return, we would transfer our development rights to a 1,200-acre sustainable development area. That approach is part of our larger strategy of finding economically viable ways of conserving forestland. For example, we have a track record of successfully partnering with The Conservation Fund and the State to provide the land for the Gilchrist State Forest.

In 2009, a variation of the Skyline Forest proposal was added to a bill without our input. Without supporting economic data, the bill arbitrarily established a formula allowing 282 homes within the 1,200 acres. In case the formula was wrong, we negotiated a provision to make the proposal optional rather than mandatory.

Since then, economic studies have shown the real costs. The number of homes needed to make the project work is closer to 750. Therefore, we propose to revise the legislation to allow more homes on smaller lots. Our revisions will actually reduce the size of the development to 1,000 acres. The other 30,000-plus acres will become the community forest.

Skyline Community Forest can be a win-win. With the revised unit count, it will allow enough homes to make the project work economically and will preserve more forestland forever.

In contrast, a bill that doesn’t work for both sides will only lead to forest fragmentation. We’re committed to meeting both environmental and economic concerns by making Skyline Community Forest a reality.

Click here for direct link to article at the 1859 Content Collective

Bend City councilors are hoping the state takes pity on them and gives them the chance to save local ratepayers money by knocking $29 million off a $68.2 million project.

On Wednesday, the council approved sending a letter to the Oregon Health Authority to ask for a delay in building a new treatment plant as part of the city’s reconstruction of its Bridge Creek water system.

That project has been heavily criticized for its costs as well as its potential environmental implications. But city officials have continued to forge ahead because it includes replacing two aging pipelines they say are in danger of collapse and a building a treatment plant to meet federal clean water mandates.

In particular, the U.S. Environmental Protection Agency wants cities to treat their drinking water for the potentially deadly microorganism cryptosporidium, a parasite that killed more than 100 people in Milwaukee in 1993.

Bend must treat its water by 2014 to comply with the cryptosporidium mandate, known as the Long Term 2 Enhanced Surface Water Treatment Rule, or LT2.

City councilors, however, think they have a chance of proving to the state — which enforces LT2 — that there are extenuating circumstances that might allow them a delay in compliance with the rule.

If successful, it could mean building a $39 million project right away, and adding a treatment plant later, all to the benefit of city ratepayers who are seeing their monthly water bills rise by as much as 40 percent over the next several years.

The council’s letter highlights Bend explosive growth over the past two decades, as well as its deep dependence on real estate and tourism that was exploited during the recession, giving the area one of the highest unemployment rates in the state.

Because Bend’s recovery likely will be slow, the letter states: “Substantial water rate increases during this period of slow economic recovery and high unemployment is detrimental to Bend’s struggling families.”

The city also states in the letter that because of the age of the pipes that currently send water from Bridge Creek to Bend — one built in the 1920s and one in the 1950s — delayed replacement is not an option. Replacing these pipes will cost $30 million, and compounds the burden on the local ratepayers.

In exchange for a delay, the city promises in its letter that it will continue to design its water project for a treatment plant.

It will also work on additional measures to protect the Bridge Creek watershed. This could includes closing off certain areas, placing additional warning signs and putting up educational kiosks at the nearby Tumalo Falls parking area.

“The City still proposes difficult (rate) increases to build reserves over the course of an agreed upon number of years as part of its compliance schedule,” the letter states. “The hope is by spreading them out, the impact will be less devastating to the ratepayers and citizens of Bend.”

It has won awards for its clarity and flavor. It makes amazing beer. It tastes great straight from the tap. It’s so good we’ve never had to filter it. And perhaps best of all, it’s cheap, flowing from Bridge Creek to Bend on a century-old pipe. But now the Environmental Protection Agency says it is not clean enough.

By October of 2014, if we do not begin filtering the drinking water we get from picturesque Bridge Creek that empties into Tumalo Creek just below the falls, the city must start sending “boil your water” notices and possibly paying costly fines.

Click here to read the entire Source Weekly article.

It’s the largest infrastructure project the city of Bend has ever tackled — and that’s a big reason why it’s stirring up some controversy.

“The city gets half of its water from surface water — it’s been that way for 90 years,” Bend Mayor Jeff Eager said Tuesday. “It’s gong to be an important source going forward.”

With failing pipes and new federal regulations, some city officials say spending about $68 million to reconstruct the Bridge Creek water system is really the most beneficial path to ensure good drinking water for the city in decades to come.

But others disagree.

“Plans are not playing out as projected, and the results of this are very serious over a long period of time,” said Jack Holt, a Bend business man. “Not only financially for the city, but it’s a financially serious problem for property owners.

“The reconstruction of the Bridge Creek water system means a boost in water rates, and some argue the cost to the environment is far too great. The project includes a 10-mile-long pipeline, a hydropower generator and a high-tech water filtration system to meet federal safe drinking water regulations.

Those against the water project started a petition online at bendwater.info, to help collect signatures. The effort has since gained a boost from six former Bend mayors.

“When the city reads the 1,000 signatures, they’ll realize these aren’t people that are mad or upset or have an agenda,” Holt said. “We are just citizens concerned about the good of Bend.

“Petitioners said the new system means water rates will jump 42 percent in five years — and 72 percent over nine years.

“It’s a burden,” Holt added. “It’s a burden on business, it’s a burden on individual homeowners, it’s a burden on renters.

“But Eager said he believes completing the project will be cheaper for ratepayers in the long run — it’s just getting some federal leeway.

“The city needs to thoroughly investigate that, and in my opinion, probably move forward with the request to get a change in the way the government is going to enforce these regulations,” Eager said.

Opponents of the proposal, who favor looking closely at more groundwater wells instead, plan a news conference Thursday at noon at Bend City Hall. They claim the new pipeline could have a negative impact on Tumalo Creek, something the city strongly disputes.

They plan to present the city with a 20-foot-long scroll of the 1,000- petition signatures.Former mayors Bruce Abernethy, Terry Blackwell, Allan Bruckner and Ruth Berleigh are among those expected to be there

.For more information, visit bendwater.info or http://www.ci.bend.or.us/