Providing one of the most compelling arguments yet against a proposed $70-million drinking water project, a natural resources economist said Tuesday night that the city of Bend stands to save several million dollars annually if it forestalls a planned upgrade to its surface water supply and transfers to an all-groundwater system for the time being.
Bruce Aylward told a standing-room only audience that had gathered at an OSU-Cascades sponsored forum that several of the key assumptions and analysis in a report from the city’s engineering consultant were not credible. Aylward, who runs his own consulting business, Ecosystem Economics, has worked on dozens of water projects around the West and the world, including a trillion dollar dam initiative for the United Nations. On Tuesday, he said he had never seen an economic analysis using the methodology employed by the city’s consultants, Omaha-based HDR. The company referred to it as a cumulative cash flow analysis.
“I’ve never heard of that technique,” said Aylward, who is a former director of the Deschutes River Conservancy in Bend and well versed in the area’s water politics.
Whatever the reason for the approach, Aylward said the effect was to greatly exaggerate the cost of the groundwater option. Aylward said he performed his own analysis, which he summarized for the audience that packed into a small lecture room for the forum that was co-sponsored by COTV’s Talk of the Town television program and will be broadcast Monday, Jan. 31 at 7 and 10 p.m. and available as an On Demand program.
Aylward said he recalculated some of the numbers used in the cost comparison analysis from HDR and came out with very different results. At the very least the options are basically cost neutral, meaning no additional expense to transfer to an all-groundwater option, at least on an interim basis, given the city’s current demand, water rights and pumping capacity. However, once debt service on the almost $60 million upgrade is factored into the equation and the annual operation and maintenance cost of a new surface water plant is accounted for, the cost scenario is reversed. Aylward said he estimates the city would actually save its ratepayers about $2.5 million per year under the groundwater-only scenario, even when additional electricity costs related to pumping are factored into the equation.
The forum, which included representatives from the city, the Oregon Water Resources Department, the Department of Environmental Quality and the Upper Deschutes Watershed Council was the second such public discussion of the city’s proposed project in the past week and comes amid mounting skepticism that the large public works undertaking is necessary.
City councilor Mark Capell defended the city’s work to date and the decision to move forward, even as growth has slowed and other options have been put forward. Capell said that a groundwater option may look attractive and even pencil out in the short term, but the city has an obligation to look at the long-term costs and benefits of a project on the scale of the Bridge Creek upgrade. In that light, the project makes financial sense. While the upfront costs are significant, he said that when the bonds are retired in 20 years, the city would have some of the most affordable water rates in the West. In the meantime, he said the city doesn’t have time to delay any longer on a project that it’s been discussing and studying for more than four years. There are several reasons for that, none of which are related to demand. Capell said the more than 80-year-old delivery system that brings about half of the city’s water supply to town from the Tumalo Creek drainage is on the verge of failing. Pieces of the aging pipe are already showing up in the city’s holding tanks, he said. Because the Forest Service and the county are planning major work on Skyliners Road, now is a good time to coordinate their efforts. There is also a window of opportunity for savings on engineering, construction and materials.
Another factor is a looming drinking water mandate from the Environmental Protection Agency that requires the city to filter all of its surface water by 2014. However, that treatment requirement would not apply to groundwater, something that opponents have latched onto.
City officials conceded that they had not factored in one potentially significant line item in their reams of studies: the value of the water that could be returned, even temporarily, to the stream if the city left its surface water in the river using one of the “instream” leasing programs available. Aylward said the value of that water at the going rate is around $15 million. Even if the city didn’t want to sell that water – which it doesn’t – there are many groups and government programs that would pay the city an annual lease to keep that water in the river. While it’s not clear what the exact environmental benefit would be, it would likely triple river flows in Tumalo Creek below the last irrigation diversion and potentially lower temperatures in both Tumalo Creek and the Middle Deschutes where summer temperatures do not meet the state’s goals for fish and wildlife, according to the Department of Environmental Quality.
This article appears in Jan 27 – Feb 2, 2011.
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I attended the forum and was appalled at Mark Capell’s behavior, who turned red as a beet as he seethed & even stooped to personal insults aimed at his fellow panelists in lieu of answering the thoughful questions posed to him. I find it revealing when a public official is so obviously unwilling to engage in a sincere dialogue with his constituency… particularly when it relates to the public process (or lack thereof) employed in making landmark decisions on behalf of the community. Mark Capell does not pass the red-face test and gets the BOOT from me.
I was present at this forum and have a few questions. Can anyone answer them for me?
1. The City said to not worry about how much they take, because they only divert water a couple of times a day to refill their reservoirs or tanks… If that is true, then how does the hydropower option make money?
2. The City is already also taking almost all they can with their water right according to the Water Resources Department (based on water priority dates). If they are already taking almost all that they can, then they need to use more groundwater anyway… and what about their earlier reports that stated that switching to groundwater would be more cost effective because they could have wells in multiple locations – reducing cost of infrastructure… is added infrastructure calculated into the surface water option?
3. I don’t recall who mentioned this (maybe the city)… that they could not divert more than their water right allows… not completely true. The city could purchase water from the irrigation district to divert for hydro/municipal use. Water that could otherwise be purchased for restoration of streamflows.
4. Take a look at other piped diversions that use hydro… like irrigation districts. Are they taking as much as they can so they can make money off of the hydro? My assumption would be yes. Is that a beneficial use of water that should be left instream? My assumption would be no.
5. What about snowpack and global warming? Wouldn’t it be better to get as much groundwater as they can now, while holding onto – but not necessarily using their surface water.
Any thoughts anyone?
So we should give up our dual sources of water for just one? How much electricity is used and CO2 dumped into the atmoshpere with pumping groundwater from hundreds of feet below the city? That’s a much bigger concern from a global warming standpoint, not to mention it will cost hundreds of thousands of dollars into the future, passed on to us, the ratepayers. And what IF our groundwater DOES have cancer-causing chromium-6 in it? If we abandon the Bridge Creek sourse, we’ll be stuck with cancer-water I guess.
To Concerned’s post I offer “Amen”.
Mr. Cappell’s behavior at the water systems forum largely mirrors how he behaved at the council meeting last week on the issue of the Bend Indoor Market during discussion of the zoning issues associated. He clearly had a burr under his saddle and his comments from the council dias bordered on denigrating the character of the owner of the building in which the Market is held. In addition, he had an angry outburst moment during the council discussion portion of the meeting aimed at a citizen who had earlier in the public comments portion asked councilors a question. Mark’s retort to her was largely this: “YOU have no right to ask US questions.”
How about that? The “YOU” being citizens who councilors are elected to represent, I guess. And the “US” in Mark’s view the Imperial council. It was my observation of Mark’s performance during his first four years on council that he didn’t understand that in representative government model, councilors are elected servants of the public. If he did, his dialogue and demeanor would respect the folks who pay the bills through taxes and fees.
Mark is, in my humble opinion, the worst kind of personal character to have in a representative office. Because he sees himself as Imperial and the role of local government as Imperial. Yet, he was endorsed by The Bulletin and The Source. Go figure.
@saywhat – Regarding energy use in groundwater pumping, you are correct. However our electricity is almost exclusively sourced from the many hydropower utilities throughout the Pacific NW, so the global warming argument is irrelevant. Regarding the Chromium scare, the Environmental Working Group (a wealthy DC NGO) is regarded by most true environmentalists as unreliable headline chasers. To set the record straight: The EPA regulates Chromium-6 at 100 ppB. Europe & Canada have the strictest regulations at 50 ppB. Bend’s water tested at 0.3 ppb & Avion tested at 0.7… These are examples of how the soundbytes being pushed by project proponents can be disproved w/a little homework.
@Bob S. – Latest I can find from the Oregon Dept. of Energy for electrical generation in the state: 39% coal, 38% hydro, 15% natural gas, along with some biomass and wind. Far more coal and natural gas burning than hydro, making the global warming argument very rellevant. Also, from the water forum, but NOT reporter by the Source: the annual cost of pumping wells and not using surface water would equate to putting 12,000 metric tons of carbon dioxide in the atmosphere! And frankly, the city can’t just randomly drill wells anywhere they want to make up for the loss of surface water, there are a myriad of costly water rights and legal issues. Why give up what you already have? It works, its cheaper in the long run that all groundwater, and the new project actually makes creek flows better than the current system.
Also, I keep hearing words like “abandon”, “give up” and “lose” our wonderful surface water supply. It is my understanding that those water rights can be indefinitely leased back to the Creek, generating mitigation credits already needed by the city (for free). If the aquifer ever did get infected/poisoned/terror-bombed, the city could resume use of the surface rights.
In the meantime, the city could score real green points with its citizens. Check out other cities, like Boulder, CO & Bakersfield, CA. They have taken steps to conserve water and even… (gasp) restore streamflows in their waterways. These should serve as shining examples to city staff & elected officials charged with steering our community in a positive direction.
@saywhat – I stand corrected on the energy mix, you are correct. However the entire 39% coal is from Oregon’s sole coal fired plant: Boardman. If you search “Oregon Live Boardman” you’ll find confirmation that Boardman is scheduled to be decommissioned between 2016-2020.
What “Say What”?! Was the carbon footprint based on coal fired power? Did the city factor into the equation how much power it takes to run a surface water filtration system? Does the city’s proposed revenue from hydropower account for only turning on twice per day to fill reservoirs as Mr. Hickman stated that’s all they would do? How can that create enough power to be worthwhile? Does the analysis address how much CO2 or Methane might be released into the atmosphere if our beautiful Tumalo Creek and Bridge Creek are drained dry and the riparian and other vegetation rots? And REALLY… who’s electric bill goes up 6% each year?!? Not mine.
I’m not on Bend water (thank God!), but I’ve lived here for more than 25 years and I do care about the rest of the community and about my friends who are on Bend water. I also care about having a city council that makes sound fiscal decisions, treats others with respect,runs an open process allowing other real experts in the field to comment, and won’t bankrupt our city. I care about our natural resources – wildlife, mountains, rivers, forests, trails, etc, because without them – our region would founder economically. There is only one city council member getting my vote in the future…
Who is asking you to give up surface water completely? I think most people just want to know that the city truly researched ALL options. With groundwater expansion, the city and customers could pay as the city expands… not all up front – and the city would have water in place to account for inevitable loss of snowpack and surface water due to global warming. Unless the city plans to take more surface water than they already do, then they still need more groundwater to account for growth regardless of the surface water issue.
If Bend’s users were half as efficient and conservation minded as Prineville’s (Bend’s per household average use is nearly twice that of Prineville’s), we wouldn’t need to access more water for quite a long, long time. We live in a desert, we shouldn’t expect our water to be FREE! Didn’t you take college economics? “There is no free lunch”.
Too many misreprentation of facts in the above posts to discuss. If you listen to only one side, you get only one view. Too bad. BTW, the city has done numerous studies, by many different engineering firms since 1980 and they all say the same thing. Invest in the surfacewater system, don’t give it up. What’s the definition of insanity? Doing the same thing over and over and expecting a different result. Has anyone here bothered to read the studies themselves? Doubt it.
The current plan has been debated at countless public meetings and in meetings with stakeholders for at least two years. Ironic how these “detractors” show up at the 11th hour. Where was everyone during the past two years? What’s the hidden agenda now?
You can bash the city council all you want, they’re an easy target. But, they sat through countless meetings, studied the facts, and made an informed decision that’s in the best, long-term interest off all residents. That’s there job, not to bow to special interests. Say what you want, but they did their job this time.
Well it’s been a good back & forth @saywhat. My desire to speak out comes from feeling like we (the people) never had a chance to explore alternatives and that the project was spirited through the public process by high level officials in a very sneaky fashion,
I enjoy discussing both sides, as long as it's based on verifiable facts – not Bend’s sound bytes… lightly padded with un-cited & misleading statistics. I don’t have time to read all the studies, but it’s clear from the studies accessible on city’s website (dated August 2010), that they incorporated erroneous assumptions and missed opportunities regarding evaluation of the supply alternatives – it is now clear that the study failed to thoughtfully (or accurately) evaluate the benefits/costs of the so-called “abandonment option” (b/c it was never really on the table?).
After the BAT Bus incident, ADA & other last minute embarrassments, I would respectfully suggest that the “sane” thing to do now is reconsider the basis for this historic decision. Better to be laughing stock of public works conferences? Or in your own city? Let’s figure out exactly what the options are and see how they pencil, b/c I don’t believe a word coming out of public works’ or Capell’s mouths.
(ps – Citizens of Boulder are proud of their city, which donated its surface rights instream in lieu of alternative sources).
Anytime you start involving “consultants” I get really scared.
I have been through several projects for the state that involved the use of “consultants”. they happily throw your money around (remember it is not their money) and when things go wrong they just walk away claiming that they are not responsible. I’ve seen that done on about 325 million dollars worth of projects, funded by the state tax payer.
I don’t have enough knowledge about the whole water issue (I also am out of town so not on the city supply) to make a comment directly related to the pro’s and con’s, but the idea of “consultants” saying go ahead is a little scary when they are spending tax payer money, Juniper Ridge anyone?
@Bob S and Saywhat –
It would be nice to review actual past studies if you didn’t have to use the freedom of information act to get them from the city.
Regarding stakeholder process, allowing the people of Bend to come to a city council meeting and make one comment, but have no discussion is NOT public process.
Let’s just continue to throw more good money after bad. Good examples Bob S. The City still hasn’t answered to where the replacement water would come from if the surface water was not available… take a look at snowpacks in 1977 and 1981…(a fraction of normal snowpack)what happens if our future looks like that? Then what kind of investment has the City made? More good money after bad – go for it! Your name will be behind it, something to be proud of.
Hey saywhat – You sound very informed on this subject… and towing the city's party line word for word… You must be a beneficiary of the project, because the rest of us pee-ons think it's bogus and fishy.
The city says they led an “open” process, but they had to be sued to release the studies? AFTER they started buying materials for the new pipe? And seriously… then councilor Capell claims this is an 11th Hour hippie revolt? Puh-leaze. This was NEVER intended to be discussed at the community level and he's super pissed that he even has to pretend to have done so (love the “red-face test” quip above). Keep throwing punches and sweeping under the rug Mr. Capell.
And how about the $70,000,000 conflict of interest w/HDR? Surprised that those guys think a big new engineering project is cool? Seems they don’t know very much about the groundwater option beyond finding elementary ways to overstate the cost (which explains why studies were so hard to get). I see their nearest office is in Portland… surprised they're not privy to our water issues? Not their fault I suppose, they just did what they were told.
Enough with conspiracy theories though… LET'S JUST ADMIT THAT THE CAT IS OUT OF THE BAG and we're going to have to start over. People care about this stuff and want to know the city's not pulling another fast one. And I agree with “concerned” & “dmr” about Mr. Capell's demeanor & conduct… he is obviously not a very cool person, and trying to protect a career in politics. My advice to YOU, sir, is come clean… and champion a process that doesn't have the whole town up in arms. Then you might have respect and support. Capiche?
All of the “studies” mentioned in the discussion above can be found easily on the City’s website. Having read all of them (1980, 2009 Brown and Caldwell and 2010 HDR) I can say with confidence that they do not represent a case in support of surface water OVER groundwater. The 1980 study (and the numerous “studies” it references) did not actually conduct a comparative analysis of a surface water versus groundwater option. Instead, that analysis (and previous analyses) suggested that the City should continue to rely on surface water but should also investigate its groundwater options. Prior to 1980 little was known about the aquifer, and even then the total quantity of water available was not well understood. Only the 2009 and 2010 analyses directly compared the two options, and those two analyses contained significant flaws.
The main issue here is that a credible analysis of alternatives has not yet been conducted, wherein credibility is judged by use of proper metrics for comparison and a range of alternatives that truly represent different options. Good decision making typically does not involve selecting a preferred course of action and then conducting “studies” to support that approach.
Teleskr73 Please read the 2007 study. It will not be easy to find on the site. It is under maintenance etc…deep inthe site. The above mentioned studies are not full studies, omitting, many costs, such as those of leaving h2o in stream value and value of leasing water rights.
I wasn’t able to attend the meeting. Did the economist take into account the DEQ permitting and regulatory compliance costs to property owners with drywells and drillholes that fall within wellhead protection areas for groundwater wells?
http://www.deq.state.or.us/wq/uic/templates.htm