JOBS  |  MAPS  |  CONNECT  |  FORMS  |  CONTACT US
search
  • Water Partnership

Lake Oswego • Tigard

Water Partnership

Photo Shows Water Treatment Plant Progress
The treatment plant in West Linn is the heart of the Lake Oswego-Tigard water system, receiving water from the Clackamas River and treating it to exceed safe drinking water standards before being distributed to Lake Oswego and Tigard customers. View information about the facility, or read about construction progress.

PW Updates

On June 9, 2016, City of Tigard switched over to its new water source that provides safe, clean, dependable drinking water to more than 60,000 residential and business customers in the Tigard Water Service Area. The city’s new drinking water is drawn from the Clackamas River, one of the state’s cleanest water sources. The change marks the first time in the city’s history that Tigard owns and controls its own high-quality water supply, no longer purchasing water from the City of Portland.

The introduction of Tigard’s new drinking water is another milestone in the Lake Oswego Tigard Water Partnership. The $254 million project upgrades and increases system capacity to deliver high-quality drinking water from the Clackamas River to the communities of Lake Oswego and Tigard.

 

Starting in 2008, the city partnered with Lake Oswego to build a new water system. Most new major facilities are complete, including a river intake pump station in Gladstone, a water reservoir in Lake Oswego, a pump station in Tigard and more than 10 miles of pipeline connecting these facilities. Construction at the water treatment plant in West Linn will be complete in early 2017.

The new system also enhances emergency water supply reliability regionally by providing access to Lake Oswego’s and Tigard’s combined storage as well as other supply sources. The new water system will supply Tigard water customers with up to 18 million gallons of water per day. That is enough water to meet the community’s water needs for decades to come.

The Tigard Water Service Area includes the communities of the City of King City, City of Durham, two-thirds of the City of Tigard, and the unincorporated area of Bull Mountain.   

Water Rights

The City of Lake Oswego was granted rights, by the State of Oregon, to use water from the Clackamas River for municipal purposes. Those rights are documented in two water right permits, one issued in 1967 for 32 million gallons per day (mgd) and one issued in 1973 for 6 mgd. Half of the 1967 water right is certificated – meaning Lake Oswego has demonstrated beneficial use of the water and has completed the state required claim process. Once certificated, a water right is considered a property right which cannot be revoked. The undeveloped portions of the permits will remain in permit status until the City can demonstrate beneficial use and completes a second claim process.

The new water supply system was designed for the ultimate supply of up to 38 million gallons per day (mgd), but currently is limited to a maximum delivery capacity of 32 mgd. Combined demands of the two cities during a typical summer season is anticipated to be 20-26 mgd. Lake Oswego's Clackamas River water rights provide enough water to meet Lake Oswego's needs for the foreseeable future and Tigard's needs for the next 20 years.

For more background on the Partnership’s water rights and recent developments, please consult the city’s water rights background page and the Partnership’s frequently asked questions page.

 

Six things to know about your new drinking water system

  1. Clean drinking water is vital to the health and economy of our communities. It is easy to take water for granted. Every day we turn on our taps and get clean, safe water. We don't often think about the infrastructure that treats and delivers water to our homes and businesses year-round, 24 hours a day.
     
  2. Most major facilities are completed and operational for Lake Oswego's and Tigard's new water system. You can see progress on new facilities in Gladstone, West Linn, Lake Oswego and Tigard. Starting on June 9, 2016, our new source of high quality drinking water is being delivered to homes and businesses in the Tigard Water Service Area.
     
  3. Our new water system will provide reliable, consistently high quality drinking water—all for a few cents per gallon. The new ozone treatment system will use less chlorine for disinfection and remove more impurities from our drinking water. It also ensures your water tastes great-year round.
     
  4. The Partnership approach is saving millions of dollars for customers. The new water system upgrades and expands Lake Oswego's aging facilities to serve both communities. Lake Oswego has a cost-sharing partner for the needed upgrades and joint operations. For the first time, Tigard will own its own water supply.
     
  5. The new water treatment plant and major pipelines are resilient—the first in Oregon designed and constructed to withstand major earthquakes. The Partnership also expands a network of interconnected water systems-increasing water reliability for Lake Oswego, Tigard, West Linn and communities across the region.
     
  6. Building the new drinking water system means more jobs. The project has provided and is still providing jobs for local contractors and suppliers, helping the region's economy. By the time the project is completed in 2017, it will have created and preserved more than 2,200 jobs and 90% of those workers live in our metro area.

Water: The Price of Ownership

Tigard’s Drinking Water Dilemma: Price of Ownership
Tigard and Lake Oswego joined forces in 2008 to upgrade and expand Lake Oswego’s existing water facilities to serve customers in both communities. After searching for more than a decade, Tigard will finally own a share of a drinking water supply.

The partnership plan comes at a cost. In order to build the necessary water system improvements by the end of June 2016 (when Tigard’s current supply contract with the City of Portland expired,) Tigard Water Service Area customers have seen their water rates significantly increase since January 2011.

Tigard’s Share of the Project Costs
More than $140 million is financed through the sale of water revenue bonds to be repaid over 30 years. Water rates must rise to offset the cost of borrowing. Why? Municipal bond markets have significantly changed over the last five years.

In the early stages of the last economic downturn, bondholders stopped lending to cities altogether. When credit markets resumed, bondholders were more cautious than ever. That extra caution means municipal borrowers like us, have higher initial costs than previously because we are now required to:

  • Set aside a reserve equal to one full year of debt service (principal and interest) payments.
  • Collect more revenues than needed to pay ongoing costs plus debt service, assuring bondholders of adequate “coverage.”
  • Adopt higher fixed rate increases (customer charge) necessary to repay the debt before all the bonds are issued.

These requirements mean that significant rate increases are necessary while constructing the water supply project.
 
The Silver Lining
Rate increases may seem financially painful, but there is a bit of good news. Interest rates on highly rated municipal bonds are very favorable. Construction bids are also competitive, as contractors sharpen their pencils to participate in the project. By breaking ground on the partnership project now, we stand to save some money through reduced costs.
 
Delivery Costs Are A Few Cents Per Gallon
Tigard’s 2014 water rate for a typical household was $42 per month. That is about $1.40 per day to meet all your family’s water needs delivered to your home.  We understand current economic conditions are challenging for local families and business. The city recognizes that raising rates to this extent is difficult for our customers. However, these increases will allow Tigard water customers to have the safety and security of owning a source of drinking water. Water for the community is a good investment. It adds value to the community.

Starting on June 9, 2016, more than 60,000 Tigard Water Service Area customers have been receiving high-quality drinking water from the Clackamas River. Tigard is no longer reliant on Portland for this essential service. Tigard customers will have access to millions of gallons of water each day. That is more than adequate to meet current and future water needs for a very long time.

For more information, visit the Lake Oswego • Tigard Water Partnership web page at www.lotigardwater.org.

Water Financial Plan Q&A

Tigard is formulating a long-term water financial plan to provide funding for the Lake Oswego Tigard Water Partnership. This joint water supply project will serve customers in Tigard, Durham, King City and Tigard Water District (Tigard Water Service Area or TWSA). Significant water rate increases are projected for TWSA customers over the next three years, along with increases in systems development charges paid by new development. 

Who sets water rates for Tigard Water Service Area’s (TWSA) customers?
Water rates are established annually through a vote of the community’s elected leaders, the Tigard City Council. The Intergovernmental Water Board serves as an advisor to Tigard City Council. The City of Tigard is the managing authority for the TWSA.

Why are water rates being increased?
The City’s water financial plan shows additional revenues are needed to support TWSA’s purchase of an ownership share in its own water source. The rate increases will help repay funds borrowed to construct the Lake Oswego Tigard joint water supply project. Water rates and systems development charges – rather than property taxes – are the proper funding mechanisms for this water infrastructure project.

Is this the least expensive option?
Yes. Over the past 10 years, Tigard investigated four water supply options including continuing to purchase water from the City of Portland. The Lake Oswego Tigard Water Partnership offers the most beneficial option at the least cost. Tigard customers will save millions of dollars over the long term and gain an ownership share in a local high quality drinking water source.

Are there other benefits of the Partnership approach?
Yes. In addition to saving money over the long term and gaining an ownership share in a water source, TWSA customers will also receive very high quality drinking water. Currently, Portland water is unfiltered, which can cause discoloration and sediment buildup in pipes and fixtures. Over the years, Tigard has heard numerous complaints from TWSA customers about the effects of unfiltered water. The Clackamas River is a high quality water source, and the upgrade and expansion of the Lake Oswego’s water treatment plant will include state-of-art treatment methods to ensure safe, pleasant tasting water year-round.

Why can’t we wait or delay the joint water supply project?
The TWSA had previously bought most of its drinking water from Portland. The City of Portland contract ended in June 2016, when the city made the transition to its new water source to serve the TWSA. Also, construction costs and bond interest rates are favorable now. Water supply infrastructure can be constructed for less money, with construction dollars spent locally to boost the local economy.

Can Tigard phase-in these water rate increases over a longer time period?
That’s not possible. The revenues are needed now in order to give Tigard the financial capacity to borrow and repay bonds. Restrictive lending practices and changes in the amount of money that must be held in reserve have increased the revenue requirements. Collecting more revenues over the next three years will allow Tigard to borrow money at the lowest interest rate, then repay the bonds with revenues collected over 20 years. There is no way to meet the water supply completion target of 2016 without borrowing construction funds now.

What happens after the water rate increases through 2015?
The rate increases will be phased-in over a five-year period to allow the costs of construction and conveyance to be financed over a 25-year period. After the first five years of rate increases, overall costs will stabilize. Future water rate increases will be sustained at a level close to TWSA’s traditional rate trends.

Will growth pay its fair share of water system costs?
Systems development charges (SDCs) are calculated so that development contributes a proportionate share to pay for facilities that can be attributed to future growth. This financial plan has future development paying back 30% of the project cost over the next 20 years as a reimbursement.

How will TWSA’s water rates compare with other cities?
Current estimates show that by 2016 the average water customer in the Tigard Water Service Area will pay around $60 per 6,700 gallons of water used. Other communities are facing similar challenges as they upgrade and expand their water infrastructure. Tigard may be one of the first to raise rates and SDCs within the TWSA, and its rates will be higher than average for the early years. But the long-term financial picture will improve by avoiding the higher costs of purchasing water from Portland.

Can Tigard delay other projects to reduce the amount of money needed now?
Yes. The City is delaying capital projects not associated with the new water supply until after 2017. Staffing levels and expenditures have been carefully controlled, and the City is committed to continue providing great customer service. All of the increased revenues will be spent to service the debt of the water supply project, which will finally give TWSA rate payers ownership of a drinking water supply.

How is the City of Lake Oswego allowed to use water from a resource owned by the public?
The City of Lake Oswego was granted rights, by the State of Oregon, to use water from the Clackamas River for municipal purposes. Those rights are documented in two water right permits, one issued in 1967 for 32 million gallons per day (mgd) and one issued in 1973 for 6 mgd. Half of the 1967 water right is certificated – meaning Lake Oswego has demonstrated beneficial use of the water and has completed the state required claim process. Once certificated, a water right is considered a property right which cannot be revoked. The undeveloped portions of the permits will remain in permit status until the City can demonstrate beneficial use and completes a second claim process.

The new water supply system was designed for the ultimate supply of up to 38 million gallons per day (mgd), but currently is limited to a maximum delivery capacity of 32 mgd. Combined demands of the two cities during a typical summer season is anticipated to be 20-26 mgd. Lake Oswego's Clackamas River water rights provide enough water to meet Lake Oswego's needs for the foreseeable future and Tigard's needs for the next 20 years.
 

 

Contact
John Goodrich
Division Manager
503-718-2609 | Email

Water Partnership Logo

Related Links
» Tigard Water Information
» Water Rights Background
A Water Partnership Built to Last
A Partnership Built to Last
Request email notification when page changes Email Me