Risky Bussiness | The Source Weekly - Bend, Oregon

Risky Bussiness

Just how big a gamble is the city taking in starting construction on its surface water project?

By Wednesday, the city of Bend hopes a construction crew will begin the heavy work needed to lay a 30-inch pipe across two channels of Tumalo Creek and down Skyliners Road.

It will be the first step in completing the city's controversial surface water improvement project, and one that opponents and many city council candidates running for election this fall say is reckless and could end up costing the city millions of dollars.

City leaders say opponents are wrong.

But in starting the project next week, Bend city councilors and city staff are, indeed, gambling that the two remaining legal challenges to the project will fail. They are gambling that courts won't halt the project while they make a decision on those challenges. They are gambling that the November election won't pack the Bend City Council with people who've said they would stop the nearly $68 million project.

"Regardless of what your position is on whether they ought to build this project, the timing is irresponsible," said Bill Buchanan, a Bend attorney who is opposed to the water project. "Why would you take a 40 percent chance that you are going to win?"

To opponents and numerous city council candidates, the city's decision to move forward now when there are still so many unknowns appears to be a deliberate attempt to prevent a rollback of the project by a new group of city leaders that will take office just months from now.

"From the beginning, council made the decisions they made knowing it was going to be more difficult to [stop the project] if more spikes were driven in the ground," said Doug Knight, who is running for position two on the council this November. "If I get elected, there's a good chance that this pipeline will be a pipeline to nowhere. And it will be a result of [the current city council] not proceeding cautiously and making the decisions that they should have made."

Bend City Manager Eric King said the city is absolutely not attempting to block future councils and, indeed, future councils will still make decisions about what kind of filtration system to build to ensure the city's surface water is clean. Future councils will also decide on whether to build a hydropower plant to capture the energy of water flowing through the pipe.

King added that the city council made the decision to move forward with installing the pipe several months ago but was unable to obtain a special use permit from the Forest Service to begin work until now because of appeals to the project.

"The election cycle is not driving this," said King. "We are not rushing to complete [the project]."

He said that the city has weighed the risks and determined that it could be more expensive to wait to do the project because the city has a contract with a company named Mortenson Construction to lay the pipe for a maximum price now, he said. That maximum price is $23.3 million according to court documents.

"Our job as staff is to analyze risk and present that to council," said King. "If we as staff felt that it was risky, we would say that we felt there was a lot of risk."


The likelihood the project will be stopped by a legal process "seems low," said City Attorney Mary Winters.

Central Oregon Landwatch is currently the sole legal challenger to the project, though others have challenged aspects of it, including Bend resident Bill Smith, who owns the Old Mill and has been adamant about the city's errors in developing the water project. He has said he believes it's not fair to ratepayers who will see a 40 percent increase in water rates over the next five years, in part to help pay for this project.

Landwatch has appealed the city council's approval of the project to the Oregon Land Use Board of Appeals on the grounds that the city did not follow proper process when it approved the project. In late September, Landwatch leaders asked LUBA to grant a stay, which would put the project on hold until LUBA makes a decision on the merits of his appeal arguments. It's unclear when LUBA will rule on the stay, but a decision on the root issue is likely to happen sometime in November, said Kelly Burgess, a paralegal with LUBA.

Landwatch's other legal challenge is a complaint filed last week in U.S. District Court against the Forest Service on the grounds that the agency did not fully vet the water project's negative effects on wetlands and fish in Tumalo Creek before granting the city a permit to begin laying the pipe.

Paul Dewey, the executive director of Landwatch, said the group will likely file a motion soon for a preliminary injunction or restraining order to prevent the city from beginning work on the project until the court can rule on their appeal of the Forest Service's decision.

City Attorney Winters said these challenges are unlikely to prevail.

LUBA rarely grants stays, she said, and special counsel hired by the city believes Landwatch's claims will not meet federal court guidelines on an injunction, she said.

"We don't think they are going to meet the test," she said.

She and other staff have recommended the city go forward with construction for several reasons.

One: the county is hoping to begin repaving Skyliners Road next summer or fall. City staff has told the council that the pipe work must be completed before then, said city staff and city councilors.

Two: stream levels are low in October, giving the city a narrow window of time to finish work in Tumalo Creek, like pouring concrete and laying pipe. If they miss this window it will cost the city between $500,000 and a million dollars because construction crews will have to come back next fall to catch the next low water window, said City Engineer Tom Hickmann.

But one option may not have been fully considered.

The county's road manager Chris Doty said last week that the county could wait for the city to do its work next fall and winter, rather than immediately.

"Delay could be accommodated within the schedule," said Doty.

Doty added that this is not preferred because there is federal money tied to the current timeline of repaving. But Doty also noted that the timeline for the paving was initially sped up at the city's request.

At that time the city thought it had to be done with its surface water improvement project in order to comply with an EPA deadline of this year. The city has now gotten an extension of that deadline to 2014, said King.

Two calls to the Federal Highway Administration, which manages the federal money for the Skyliner Road project, were not returned.

It appears city staff had not been in close contact with the county about whether delaying the project was currently an option.

"I haven't asked them, frankly, specifically, that question," said City Engineer Hickmann.

Hickmann said the current city council had not asked him about whether delay is an option, either, despite the legal challenges.

"No councilor, based on all of this, has asked me 'Should we continue to proceed'," said Hickmann. "That's not happening."


The financial risks to the city in going forward are hard to predict, but there are a few known numbers.

For starters, if the project begins as planned next week but is then stopped temporarily by a legal process, Mortenson Construction will likely charge the city tens of thousands of dollars per day during the work stoppage, said Hickmann in a phone interview last week.

"Worst case scenario, if we essentially said stop—we didn't say demobilize, send home—you are facing $24,000 a day," said Hickmann.

That's $120,000 per week, and nearly half a million per month.

And despite that city officials don't believe the Landwatch appeals have merit, Dewey said they certainly do.

"The Forest Service stated there would be no impact to wetlands," said Dewey. "But we found documents from the department of state lands that there were going to be permanent impacts. They are going to be digging up the wetlands [in Tumalo Creek] and laying pipe underneath them."

Dewey's LUBA appeal may also have merit. LUBA ruled recently that Landwatch had grounds to challenge the city's water project through a water facilities plan, according to language in a LUBA document released in late August.

If Dewey does convince the Oregon District Court or LUBA to stop work until the legal issues can be addressed, it could be weeks, even months before they are resolved, according to Dewey and one Forest Service official.

If work is halted during that time, the city could stand to lose hundreds of thousands of dollars by it's own figures.


Then there is the question of whether a new council will stop the project and scrap the design, the pipe fabricating and construction work that's already occurred.

That could mean millions of dollars lost.

Most of the city council candidates running for election to the four open council seats in November said the argument that too much has been spent already is not a good reason to keep going with the project.

Exceptions to this philosophy include Charles Baer, Kathie Eckman and Mike Roberts.

"It's a really bad policy to chase good money after bad," said Sally Russell, who is running for council.

There are candidates running for every position that believe this, including Wade Fagen, Barb Campbell and Victor Chudowsky who are all running for position one; Doug Knight, who is running for position two; Russell and Ron Boozell, who are running for position three. Jim Clinton, who is running for position four, has consistently voted against the project.

Ed McCoy and Ed Barbeau who are each running for position two did not respond to two requests for comment.

If candidates are elected to each position who wish to halt the project and study alternatives, there is a possibility that the city's current work could be reversed when they take office in January.

Chudowsky did say that if a significant portion of the pipe has been laid by January, when the new council takes office, it will be difficult to vote to stop that part of the water project. But if the construction of the pipe is delayed by the current legal challenges, he would "take the time to examine all the other options and subject them to the same scrutiny as the proposed system."

Dewey said this is the point in the city's current decision to move forward. They are hoping to make significant progress before they can be stopped.

"It's all [an effort] to bind the hands of future city councils," said Dewey.

Whether that's the intention of the current city staff and city council is really not the point for pragmatists like Knight. It's the risk they're willing to take to move forward that has him concerned.

"Let me just say I think they're overcommitted," he said.

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