Who'll govern LO-Tigard's water supply in the future?
The long, expensive and often controversial construction phase of the Lake Oswego-Tigard Water Partnership is coming to an end, and elected officials in both cities are celebrating the milestone. But there's a lingering question that must now be addressed: How will the newly minted joint water supply be governed?
Both cities have an ownership stake in the water supply, but Lake Oswego has served as the sole managing agency in charge of the construction phase. Now that the project is up and running, the Tigard City Council is unanimously advocating for a proposed joint governing body to take over management of operations.
"It would take over the supply facilities, as opposed to being a complete water district," says David Powell, Lake Oswego's city attorney. "Both cities would still have their own water departments and deliver their own water, but the supply side of it — the part that was the joint project — would be under a separate entity created by an intergovernmental agreement."
Tigard's councilors say their goal is to make sure their city has a fair say in the control of its water supply, even in the far future. Councilor Jason Snider has taken the lead in calling for joint control, and Mayor John Cook asked him to talk with The Review on Tigard's behalf last week.
"Usually things work pretty well," Snider said, "and this is a huge project that's delivering water to Tigard and Lake Oswego on time and under budget, so it's hard to complain about some of this stuff.
"But when we think about what our children and grandchildren are going to be dealing with 50-100 years from now, that certainly influences our perspective," he added. "We need something that will endure and work through a variety of situations that we can't even imagine right now."
Snider made a similar statement at a joint meeting of the two councils in February, when he read a letter calling for mutual control that was signed by Cook and all four Tigard councilors. But that initial discussion revealed that Lake Oswego and Tigard don't quite see eye-to-eye on the issue.
Lake Oswego Councilor Joe Buck offered cautious support for the idea of a joint board at the meeting, but others were skeptical. Lake Oswego Councilor Jeff Gudman questioned whether there would be any practical difference between a joint board and the project's current joint oversight committee. Lake Oswego Councilor Theresa Kohlhoff also expressed concern about whether a joint board comprised of elected officials would be able to remain politically neutral and avoid gridlock.
And Lake Oswego Mayor Kent Studebaker echoed Gudman's comments about the lack of a distinction.
"I'm kind of wondering what's so wrong with what's going on right now," he said. "Why do we need to change?"
Both groups agreed to table the decision and discuss the matter internally before reconsidering it at a future joint meeting. But Snider says Tigard's elected officials have already discussed the issue extensively and arrived at an internal consensus.
Lake Oswego's position is less clear, and it's something the city's councilors will need to hash out before the next meeting.
"We have been the managing partner with the staff in place, so there's probably been less discussion of it on our side," Lake Oswego Councilor Jackie Manz told The Review. "Tigard obviously has given a lot of thought to what they'd like to see, and I was delighted that they shared their thoughts. I feel very strongly that we should continue to keep the dialog open, and that's the direction we moved in."
Retracing the steps
With more than $250 million spent and the project all but completed, it's a bit awkward for the two councils to find themselves disagreeing about the governing structure. But elected officials in both cities say it made sense to put Lake Oswego in charge of the project up until now — and that the current discussion is happening at the right time.
"I would think it was not discussed (at the start)," says Judy Hammerstad, Lake Oswego's mayor in 2008, "because in general, if you have a governance structure that works, there really isn't a reason to change it."
When the Partnership agreement was drawn up in 2008, Lake Oswego was just starting work on a separate project to replace one of its main sewer pipes. That project was scheduled to be completed by 2012, shortly before the LO-Tigard Partnership construction was scheduled to begin. That meant Lake Oswego would already have staff in place who could be transferred to the second project, instead of having to hire from scratch.
Additionally, the Partnership wasn't building an entirely new system; it was a large-scale upgrade and expansion of Lake Oswego's previous supply infrastructure. Tigard provided more than half of the upgrade funding in exchange for tapping into the system and gaining an ownership stake, but since the predecessor system belonged to Lake Oswego, it was easier for LO to manage the upgrades. That's the perspective that both city councils took back in 2008, and Snider says it was the right call.
"I think what our predecessors were trying to do was create something flexible enough to allow both cities to do what they needed to do in the future, and I think we've just come to the moment now where Tigard and Lake Oswego are having that discussion," he says. "I didn't end up on the (Tigard) council until January 2013, but I think looking back on it even now, it was a logical thing to do at that time."
The current discussion was always part of the plan — the original agreement calls for the cities to decide whether to maintain or alter the management structure once construction is complete. But it's unclear whether the planners expected Lake Oswego and Tigard to find themselves on opposite sides of the issue.
Due to term limits, both city councils have entirely new memberships today. And while the current Tigard council still supports the original decision to name Lake Oswego as the construction manager, Snider says Tigard's experience during the actual construction process convinced its current councilors that a change would need to be made for the project's long-term management.
"There were times in the management of the buildout process where Tigard felt that we didn't have as much say and were not consulted in situations where we probably should have been," he says. "Particularly in the beginning and middle of the project, there was a lot more communication going to the Lake Oswego council than there was to the Tigard council, despite requests that that not happen."
The existing management structure includes an oversight committee composed of the mayor and one councilor from each city — currently Cook, Snider, Studebaker, and Manz. The proposed joint water board would have a similar membership structure, but Snider and other Tigard councilors say the key difference is that the oversight committee has an advisory role rather than direct control; ultimately, the project's staff are employees of Lake Oswego rather than the committee.
"There's some costs in setting up the entity and probably having to do a few additional reports a year, but we're not suggesting that we have a bunch of additional employees," Snider says. "It would be the same people. It's just (a question of) who is formally in charge of them."
Another turning point for Tigard was the 2012 election, Snider says. The project was still in the design phase at the time, and its escalating costs became a major topic of contention among Lake Oswego's mayoral and council candidates, leading to a degree of uncertainty that made Tigard officials nervous.
In Lake Oswego, there were calls for the City to hold off on starting construction until the project could be audited or renegotiated, but Snider says that all of Tigard's candidates fully supported the project. The Tigard council received some public criticism over water rates, he said, but the overall decision to partner with Lake Oswego and build the project "has never been a major political point of issue."
Tigard also faced an impending deadline: its contract to receive water from the City of Portland was going to expire in 2016, and if the project's start had been delayed beyond 2013, it would have been much more difficult and expensive to finish it in time, potentially forcing Tigard to renew its contract before it could switch to the new supply.
"There were political questions in 2012 with the election of new city councilors in Lake Oswego — real questions about whether the project was even going to get built, despite the fact that we had these contracts and everything was ready to go," Snider says. "That was a big eye-opener for us."
In the end, Lake Oswego's new council still voted to authorize the necessary contracts and begin construction in 2013, but Snider says the incident shook Tigard's confidence in the current arrangment. And the project remained controversial during construction. In particular, West Linn residents strongly objected to an expansion of Lake Oswego's water treatment plant, which is located in West Linn but on land owned by Lake Oswego.
"We would have liked to see the neighbor relations issues in West Linn handled very differently than it was, and we made that very clear for a long time," Snider says. "(That's) just an example of something we raised at oversight committee meetings on an ongoing basis that did not result in the kind of action that we would have liked to have seen."
Depending on how strongly the Lake Oswego council advocates for sticking with the current management structure, the control issue could become something of a sticking point in the project moving forward. But officials from both cities are quick to make it clear that the discussions are simply that: discussions, and they do not imperil the overall partnership.
"Our board does not feel a strong desire to form a separate water board," Studebaker told The Review. "But we'll have some discussions. I think what will end up happening, if Tigard continues to feel really strongly, is we'll see what we can do to amend the agreement, and maybe that will be an acceptable solution. We'll see."
The current intergovernmental agreement (IGA) between Lake Oswego and Tigard calls for discussing potential changes to the management of the supply, but if
the discussions don't go anywhere, it appears that the current Lake Oswego-managed structure would simply continue.
"There's not a legal necessity to create a new entity," Powell says. "It's just that the parties agreed that once (construction) is completed, at least the oversight committee would discuss if any (management) changes were needed or desirable. So (the supply) could continue to operate under the current IGA."
Officials are also confident that the two councils will reach an amicable agreement. The discussions are only just beginning, and with the biggest deadline now met and the project online and supplying water to both cities, the two groups will have more time to talk things over.
"I think everything is open to some negotiation, probably on both sides of the coin," Manz says. "The water will flow, regardless. That's the way the structure is set up — no one is not going to get their water. I honestly believe this is a natural outcome of a process, and I think it would have been somewhat surprising if there had not been talks about how to move forward in the future."
"It's not entirely clear exactly what would happen if the councils continue to disagree on this point and can't come to a resolution, but I think cooler heads will prevail," he says. "I think we'll be able to come to something that works for everybody."