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Water Supply Plan Update - October 1994:';',,,,:',..!1'..; aa. Y, :-.''.,''',.•'':'..-,,,, � :. ` v .. .. + • 1 • , r , , , , .:1 ..'; : ' .', , , ,. ''', ' 1' '''' ''' '' :'''. '':• • • • • • 1. Murray,Smith&Associates,Inc. Engineers/Planners il,r 121 S ,Salmon,Suite 1020 • Portland,Oregon 97204 ■ PH0NE 503.225.9010 • FAX 503.225.9022 October 14, 1994 City of Tigard City Council Intergovernmental Water Board 13125 SW Hall Blvd. Tigard, OR 97223 Dear Council and Board Members: Murray, Smith & Associates Inc., is pleased to submit this Water Supply Plan Update for the City of Tigard. We would like to express our thanks to the City Council and w. Intergovernmental Water Board for their input and support throughout the development of this document. Additionally, we would like to thank city staff for the outstanding assistance they provided to us through the course of this project. We appreciated this opportunity to provide our services to the citizens of Tigard. Sincerely, MURRAY, SMITH & ASSOCIATES, INC. Harold R. Murray, P.E. President, Project Manager •. Chris H Uber, P.E. Associate, Project Engineer NW .. ,i„ CHU:chu Irl. rrr City of Tigard City Council John Schwartz - Mayor SO Wendi Conover Hawley Paul Hunt Bob Rohlf Ken Scheckla ie Intergovernmental Water Board ur Peggy Manning - Board Chairperson Lynda Jenkins George Morgan t.r Bill Scheiderich John Schwartz err err NO ow gni es FORWARD MO A draft of this Water Supply Plan Update was published in August 1994. The City of Tigard City Council formally adopted this plan on September 27, 1994, under City of I's Tigard Resolution 94-45. A copy of this resolution is included as Appendix D of this document. me a. am top ow Oil SO NMI +r. .r Ilii 93-0292.101 i imp WATER SUPPLY PLAN UPDATE FOR THE vo CITY OF TIGARD, OREGON •• OCTOBER 1994 sir C* 4°' 15039 4'.P ✓ V OREGON „ 414 25 ,E0 "P/S/OPHER — EXPIRES 12/31/94 MP Prepared by: MURRAY, SMITH & ASSOCIATES, INC. Engineers/Planners ,r„ 121 SW Salmon, Suite 1020 Portland, Oregon 97204 93-0292.101 rra - TABLE OF CONTENTS Chanter Title Rut EXECUTIVE SUMMARY General E - 1 .. Water Demands Estimates E - 1 Evaluation of Alternatives E - 2 Recommendations E - 3 NW 1 INTRODUCTION General 1 - 1 NO Purpose and Authorization 1 - 1 Scope 1 - 2 2 EXISTING WATER SYSTEM AND WATER DEMANDS General 2 - 1 rr Existing Water System 2 - 1 Water Demand Estimates 2 - 3 Conclusion 2 - 5 .w 3 SUPPLY ALTERNATIVES of General 3 - 1 City of Lake Oswego Supply 3 - 6 City of Portland Supply 3 - 10 City of Tualatin Supply 3 - 14 Hillsboro-Forest Grove-Beaverton-Tualatin Valley 3 - 14 Water District Joint Water Commission (JWC) Supply NNI South Fork Water Board (SFWB) Supply 3 - 15 Tualatin Valley Water District (TVWD) Supply 3 - 15 Willamette River Supply 3 - 16 "" Conclusion 3 - 22 4 EVALUATION OF ALTERNATIVES General 4 - 1 Ranking of Alternatives 4 - 1 ws Opportunity for City Ownership of Treatment 4 - 1 and Supply Facilities Water Supply Agreements and Contract Provisions 4 - 2 .. 93-0292.101 - -r. rr Required Improvements and Estimated Project Costs 4 - 3 Estimated Cost of Water 4 - 4 Water Rights 4 - 5 Water Quality 4 - 6 Supply Implementation Timing 4 - 6 Certainty of Supply 4 - 6 .r Ranking Summary and Conclusion 4 - 7 5 CONCLUSIONS AND RECOMMENDATIONS 10 Conclusions 5 - 1 Recommendations 5 - 1 APPENDICES A. References B. Final Report for Evaluation of Water Service With and "` Without Tigard, CH2M Hill, July 1994. C. City of Portland Response to Tigard Water Supply Request D. City of Tigard, Oregon, Resolution No. 94-45 LIST OF TABLES Table No. Page 2-1 Summary of Estimated Population and 2-5 Water Demands .. 3-1 Project Cost Estimates for Lake Oswego Supply 3-8 Improvements (City of Tigard Costs Only) 3-2 City of Lake Oswego Supply Estimated Cost of Water 3-9 3-3 City of Tigard Improvements for City of Portland 3-12 ,• Supply 3-4 Willamette River Supply City of Tigard Supply 3-19 r. System - 20 mgd Treatment Facility Project Cost Estimate 3-5 Willamette River Supply Regional Supply 3-20 System - 100 mgd Project Cost Estimate 3-6 Willamette River Supply City of Tigard Supply 3-21 "' System - 20 mgd Estimated Cost of Water Summary .r 93-0292.101 - ii - +rr es LIST OF TABLES (cont.) �• Table No. But 3-7 Willamette River Supply Regional Supply 3-21 „r, System - 100 mgd Estimated Cost of Water Summary 4-1 Summary of Evaluation Criteria and Tabulation of 4-8 ,o Rankings +rr LIST OF FIGURES lure No. Page 2-1 Existing Facilities Plan Map 2-2 2-2 Water System Hydraulic Profile 2-4 3-1 Tigard Water Service Area and Supply Alternatives 3-2 3-2 Hydraulic Profile of Alternatives 3-3 ism 3-3 Hydraulic Profile of Alternatives 3-4 +rr 3-4 Willamette River Supply Facilities Plan 3-18 .r. eta 93-0292.101 - iii - t1 , _ •-L . , _ - _ c IT • e . „ • E L E -L. . . - . •L L EXECUTIVE SUMMARY ast vi. EXECUTIVE SUMMARY �.. General This document is an update of a water supply plan prepared for the Tigard Water District in 1990. This update includes an evaluation of seven long term water supply alternatives. These alternatives are: 1. City of Lake Oswego Supply (Clackamas River) urn 2. City of Portland Supply (Bull Run River and Columbia River Well Fields) 3. City of Tualatin Supply (Bull Run River and Columbia River Well Fields) 4. Hillsboro-Forest Grove-Beaverton-Tualatin Valley Water District-Joint Water Commission Supply (Tualatin and Trask Rivers) 5. South Fork Water Board Supply (Clackamas River) 6. Tualatin Valley Water District Supply (Bull Run River, Columbia River 91 Well Fields and the Tualatin and Trask Rivers) 7. Willamette River Supply above Wilsonville Water Demand Estimates Estimated water demands for the water service area were developed using City of u• Tigard population estimates for the years 2000, 2010, and 2020. Also developed were estimates of anticipated 1994 demands and a 1994 population estimate. Tigard's year 1990 population of 30,800 is included as a base line year. Population estimates and ,,. water demand estimates are summarized in the following table. Summary of Estimated Population and Water Demands }r!%r,•'!'A!,!',{fya.•;/`i`! fry%J!fy.b{:+.irf�'.v';/r,';Fr'!{':f•,•'fr�•`!.¢ !rr�•.3;'•.:_r;••r'•,i:> r.',i>:!•Ig' /r �y/r!;';:'f�! n. .+r�{•`�'.';.'.+.',.:/r!v+i,!,:,'!:•'•:•'sn;,,%.:f3},.r;•f,:;:•l.,5f:,v`}•.!.f'o.•;j�• wr ;r !•� {fI1 } ! i1 f:! ' ' .r ryx J2 ; r,,�! % ll ' red x/ ! < !ggs,'?.:! . + 4:0 r11r . �orr! tV • vym; % /?y / . gf:tm n!{4iji 1990 30,800 4.6 10.6 1994 33,500 5.0 11.5 2000 39,700 6.0 13.8 2010 45,500 6.8 15.7 2020 51,700 7.8 17.9 AV AIN 93-0292.101 E-1 Evaluation of Alternatives ars Discussions were held with purveyors of each developed water source. Of those providers under consideration, only the City of Lake Oswego and the City of Portland provide Tigard the potential for a long range supply of water from an existing supply system. A long range supply of water could be obtained from the Willamette River through a city-owned or a jointly owned supply system. These four alternatives were •• evaluated under a set of eight criteria and ranked in comparison each other. The eight criteria are: 1. Opportunity for City Ownership of Supply System 2. Water Supply Agreements and Contract Provisions 3. Required Improvements and Estimated Project Costs ,,,,, 4. Estimated Cost of Water 5. Water Rights 6. Water Quality 7. Supply Implementation Timing 'Y` 8. Certainty of Supply A tabulation of the evaluation and ranking results is presented in the following table. Summary of Evaluation Criteria and Tabulation of Rankings ....ley.::: Opportunity for City Ownership 1 2 1 1 of Supply System Water Supply Agreements and 1 2 1 1 Contract Provisions Required Improvements and 2 1 4 3 Estimated Project Costs Estimated Cost of Water 1 1 3 2 Water Rights 1 2 4 2 Water Quality 1 1 1 1 Supply Implementation Timing 2 1 4 3 Certainty of Supply 1 2 4 3 I Total Points I 10 I 12 I 22 I 16 I Final Ranking I 1 I 2 I 4 I 3 93-0292.101 E-2 Recommendations The recommended alternative for Tigard's long term water supply is the Lake Oswego supply alternative. Tigard should proceed immediately with the steps needed to develop this supply. Interim water supplies are needed to supplement existing supplies as the recommended supply alternative is developed. Discussions should be held with Portland and the Tualatin Valley Water District for these interim water supply needs. It is recommended that Tigard proceed with the following items. Items 1 through 11 should proceed immediately and concurrently and be concluded in approximately one year. Items 12 and 14 should proceed immediately and continue indefinitely. 1. Formally adopt this plan and recommendations. Note: The City of Tigard City Council formally adopted this plan on September 27, 1994, under City of Tigard Resolution No. 94-45. A copy of this resolution is included as Appendix D of this document. This final Water Supply Plan Update includes minor modifications of the draft document. 2. Incorporate this plan into the City's Comprehensive Plan. 3. Proceed with negotiations with the City of Lake Oswego to develop a long term supply of water. The negotiations should consider institutional, financial, operational and other relevant matters. 4. Develop and execute agreements with Lake Oswego upon successful completion of negotiations. 5. Prepare a comprehensive water system master plan update. The plan will identify those system improvements required for implementation of the Lake Oswego supply as well as internal system improvement requirements. Data from this plan will be used in the fmancial plan. 6. Prepare a financial plan for the city water system considering the financial requirements of the Lake Oswego supply, interim water supply costs from Portland and the Tualatin Valley Water District until completion of the Lake Oswego supply expansion, internal system capital improvement requirements, operations and maintenance costs, and other items as appropriate. 7. Proceed with the recommendations of the financial plan including authorization for and sale of bonds and water rate adjustments. 8. Review existing operational conditions with Lake Oswego to establish •• arrangements that allow Tigard and Lake Oswego to maximize the available water supply prior to the completion of the proposed supply expansion. 93-0292.101 E-3 9. Review with Portland Tigard's interim water supply needs during the period that the recommended long term supply alternative is being developed. These discussions should include: A. An immediate review of transmission piping configuration and capacities to confirm the actual capacity of the Bradley Corner connection. B. A review of water use patterns and system operations to provide the most economical supply of water. C. A further review of the impacts on anticipated water costs from variations in system operations. D. A review of the existing agreement for water service. This review should include a discussion of the potential cost impacts of an interim supply arrangement and the potential benefit to Portland for Tigard's ultimate reduction in Portland water use. 10. Review with the Tualatin Valley Water District Tigard's interim water supply a* needs. The discussions should include: A. Review the potential for an agreement for water service that +. provides Tigard the opportunity to purchase surplus water to supplement existing supplies while the recommended long term supply alternative is developed. B. Determine the need for improvements to provide an adequate interim water supply while the Lake Oswego supply is developed. C. Review potential connection configurations of this interim supply in addition to pressure, flow, supply and the cost of service associated with such an arrangement. D. Review the costs associated with the development of this interim supply and assess its further consideration. 11. Maximize the use and capacity of City of Tigard ground water well supplies. These supplies are limited, however, additional well capacity may be available to supplement existing supplies as the recommended long term supply alternative is developed. 12. Participate in the current regional water supply planning efforts, the Phase 2 Regional Water Supply Plan, and in the subsequent implementation of that plan and other plans that may provide for Tigard's water supply needs beyond •• the year 2020. r. 93-0292.101 E-4 .w 13. Participate in discussions of water supply issues with entities interested in the potential long term development of the Willamette River as a regional water supply. 14. Periodically review the findings and conclusions of this supply plan update to provide guidance for the supply of water to the city beyond the year 2020. NW as .r ONI ON WO rr MIN .w WS 93-0292.101 E-5 L L L t L L L L L L L L L. CHAPTER 1 i i M1 CHAPTER 1 INTRODUCTION IMP General eio The City of Tigard annually receives over 90 percent of its potable water supply from the City of Lake Oswego. Tigard also receives water from the City of Portland and pumps from its own ground water wells. Lake Oswego owns and operates a river water intake near the City of Gladstone and a water treatment facility in the City of West Linn. Tigard has an agreement with Lake Oswego for the purchase of surplus '• water produced by these facilities. In recent years, including 1994, during peak demand periods, Lake Oswego has been unable to supply the total needs of both communities. In order for Lake Oswego to continue meet its own water needs and the needs of Tigard, major capital improvements to the Lake Oswego facilities are required to expand their capacity. A study completed for the former Tigard Water District, now the City of Tigard Water Department, titled Water Supply and Water Distribution for the Tigard Water District, (EES, May 1990) presented four options for future water supplies. These alternatives included the following: 1. City of Lake Oswego (Clackamas and Willamette Rivers) 2. City of Portland (Bull Run River and Columbia River Well Fields) 3. Hillsboro-Forest Grove-Beaverton Joint Water Commission (Tualatin and Trask Rivers) 4. Development of a water supply from the Willamette River above Wilsonville The May 1990 study also developed projected water demands in addition to potential capital improvements, project cost estimates and estimates of water costs for each supply alternative. No recommendations were made for a preferred long term water supply option for Tigard. Since 1990 water demands of both cities have continued to .. increase to the point where water supply to Tigard has been curtailed by Lake Oswego during peak use periods. In addition to the 1990 alternatives, Tigard is now considering potential supply source options that include the South Fork Water Board, the City of Tualatin, and the Tualatin Valley Water District. .,. Purpose and Authorization The purpose of this study is to update the May 1990 report, expand the consideration of potential supply sources, and make recommendations to provide a reliable long term water supply for the City of Tigard. On December 8, 1993 the firm of Murray, Smith and Associates Inc., was authorized to complete this study for the City of Tigard. 93-0292.101 1-1 t M 4. Scope The scope of work includes the following: ow • Gather and review documents, studies and plans relevant to potential water ••• supply sources. These water supply source options include: 1. City of Lake Oswego Supply (Clackamas River) 2. City of Portland Supply (Bull Run River and Columbia River Well Fields) 3. City of Tualatin Supply (Bull Run River and Columbia River Well Fields) 4. Hillsboro-Forest Grove-Beaverton-Tualatin Valley Water District-Joint Water Commission Supply (Tualatin and Trask Rivers) '" 5. South Fork Water Board Supply (Clackamas River) 6. Tualatin Valley Water District Supply (Bull Run River, Columbia River Well Fields and the Tualatin and Trask Rivers) s' 7. Willamette River Supply above Wilsonville • Coordinate and review population data prepared by the city for the years 2000, or 2010 and 2020. • Based on the population data developed in Task 2, prepare water demand projections for the years 2000, 2010 and 2020. • Using the supply data and demand data, develop supply alternative options. „• Develop estimates of probable project costs and prepare a comparison of the advantages and disadvantages of each option. • Prepare a document that describes and summarizes the results of this study. we am as tor MO MO 4111 93-0292.101 1-2 o• L L L L L L L L L L l L L CHAPTER 2 CHAPTER 2 EXISTING WATER SYSTEM AND WATER DEMANDS General The supply alternatives under consideration for the long term supply of water to Tigard may require modifications and improvements to Tigard's existing water supply system. A description and discussion of these potential improvements are provided within the Chapter 3 presentation and discussion of each alternative. This chapter generally describes Tigard's existing water supply facilities in addition to providing a general summary description of the water system's pumping and storage facilities. sir Also presented are estimates of population and future water demands. Existing Water System General The City of Tigard water service area includes the Cities of Durham and King City in addition to unincorporated areas outside the city limits. The city presently purchases approximately 93 percent of its water under agreement from the City of Lake Oswego. The remaining 7 percent is supplied by the City of Portland and Tigard's own ground water wells. The agreement with Lake Oswego allows Tigard to purchase surplus water produced by Lake Oswego's treatment facilities. In 1990 this amounted to approximately 1,500 million gallons. During high demand periods this supply has been subject to curtailment. A plan map of Tigard's water system illustrating major facilities and supply connections is presented in Figure 2-1. Supply Connections Tigard's primary water supply from the City of Lake Oswego is provided through the Bonita Road Pump Station near the intersection of Bonita Road and I-5. This station is located downstream of Tigard's metered supply connection from the Lake Oswego water distribution system and houses three pump units. The pump station has a total pumping capacity of approximately 8.0 million gallons per day (mgd) and provides a static lift of approximately 90 feet. The station's firm pumping capacity is approximately 5.3 mgd. Firm pumping capacity is the station's pumping capacity with the largest pump out of service. Supply to Tigard from the City of Portland is provided at a connection at Bradley Corner. Pressure reducing valves (PRVs) at the end of the 16-inch diameter connection from the Bradley Corner supply connection, reduce the water pressure from Portland's system to levels acceptable within Tigard's distribution grid. Both supply connections provide water to Tigard's 410-foot service level. Service Levels Tigard's water system includes three service levels. These are the 410-foot, 470-foot r and 713-foot service levels. The largest of the service levels is the 410-foot service 93-0292.101 2-1 OM 4 r (I l N------...„„NNt 00.Ne I' ��w , elyon c ••/ / 1 6 .2� o`` / \ i I CIT 0 IGAR i .OJT R' "' i LI- ( WATER RV - AREA . CORNER ''LY METER r -9 I, Cooper 4 (C • PORTLAND SUPPLY) ) — I ,=-.a / '/ Ic,c.?r i R� u '7 j.:=-::17.1- =itt4*@`i „,,,13,--‘'S —- = BAYLOR STREET RESERVOIRS re �CSv '_ _ 14 14=- 1.0OE:416' N0. 2 RESERVOI: s =- - - _ 1.00E.:416' 600 10.014 OE47• =``- _= rim►" RF kD 02EMG . P5:2.9M4D e:24,1.- - - -- -- x -rrr Buil_ - ..SCMtn -- - ----_-- _ - __ \ BONRA ROAD PS i HIGH-tOR ' -_ _- r�` (CITY OF LAKEOSWE40/S SUPPLY) 1.111iG=i7E7i3` ,- _ __-__-__- t . al _ _ _ Pj� _ _ WO._4 ' :4-931,16-044147'.:7-_=__ -s -=:____-_- 9-977. • <z64 --_ ---_ _- _ =__= / - SMFRWOOC RD - _ TUALATIN MS / / RD = 1 ~'" Tualatin % TuQ�atin Q I oma/ /, f"-A° / l @SAiiii ND RD �Qi She od T A •T j / ;-705 ,/s\ / f2) , / )c,...cp,,,, '7 1 / c5 Zj in 1 / / / t N W / \ dm ~/ 7 7 99, NMI SCALE:1"=7500' Wilsonvill; um LEGEND • RESERVOIR WILSONVILLE RD CAPACITY IN MIWON GALLONS (MG) r Figure 2-1 OCTOBER 1994 r OVERFLOW ELEVATION IN FEET METER EXISTING FACILITIES /� 7----jPLAN MAP • PUMP STATION / imill CAPACITY IN MIWON GALLO R DAY -(MGD) CITY OF TIGARD - WATER SUPPLY PLAN UPDATE — PIPEUNE /�' SIZE IN INCHES __-- 93-0292.101 level. A hydraulic profile of Tigard's storage and supply facilities is illustrated in Figure 2-2. Storage Reservoirs The City of Tigard water system contains twelve storage reservoirs with a total combined capacity of approximately 20.88 million gallons (mg). The largest storage reservoir is located west of Highway 99W on Bull Mountain. This reservoir has a capacity of 10.0 mg and an approximate overflow elevation of 470 feet. The 410-foot w service level contains eight reservoirs with a total combined capacity of approximately 8.58 mg and overflow elevations ranging from 410 feet to 416 feet. The city's highest service level, with a hydraulic grade of approximately 713 feet, contains three storage reservoirs with a combined capacity of approximately 2.3 mg. Pump Stations In addition to the Bonita Road Pump Station, Tigard's water system contains three other pump stations. Pump Station No. 2 contains two pump units. One unit pumps water from the 410-foot service level to the 713-foot service level and the second two pumps water from the 410-foot service level to the 10 mg reservoir in the 470-foot service level. These pumps have capacities of approximately 2.0 mgd and 2.9 mgd respectively. The Transfer Pump Station pumps water from the 10 mg reservoir to the 713-foot service level. This station contains one pump with a capacity of approximately 2.9 mgd. The 132nd Street Pump Station pumps water from the 410- foot service level to the 713-foot service level. The station houses two pumps with a combined capacity of approximately 1.0 mgd. Water Demand Estimates General taw Estimated water demands for the water service area were developed using City of Tigard population estimates for the years 2000, 2010, and 2020. Also included are estimates of anticipated 1994 demands and a 1994 population estimate. Tigard's year 1990 population of 30,800 is included as a base line year. Tigard's average daily 1110 water use in 1990 was approximately 4.6 mgd. This results in an average daily per capita use of approximately 146 gallons per capita per day (gpcd). For the purposes of this study, a per capita use of 150 gpcd will be used to estimate future water demands. Average Day and Maximum Day Demands Water demands can vary widely from year to year depending on climatic conditions. Water use also varies throughout the year. Typically water use increases during .� warmer, summer months. The maximum water use occurring within a 24-hour period during the year is typically referred to as the maximum day demand. This is the demand that is required to be met by the water source or sources. The ratio of r. average daily demand and the maximum day demand is defined as the peaking factor. 93-0292.101 2-3 I -1000 I _900 I - I =800 f HIGH TOR RESERVOIRS .2MG 713' - 1.0MG 1.1MG I I 700 I I I I 0 IFROM PORTLAND :7I I 10 MILLION SITE I RESERVOIR I � 500 I 1 41a I NO. 2 NO. 3 NO. 4 NO. 1 0 10.0MG NO. 2 (RESERVOIR RESERVOIRS RESERVOIR RESERVOIRS BAYLOR STREET ER I M I 4 I r 2.9MGD S PUMP STATION 413' 412' 4T1� 410' 416' TRANSFER * - - _ J .28MG 2.5MG 1.OMG 1.0MG 1.0MG I.OMG 1.0MG -400 0 0 l l ( .8MG ll I PUMP STATION A► .9MGD AI►2.OMGD I O---1>Q-' - a r 1.OMOD —*--r _ I I I I 1 H FROM PRY # 132ND ST PUMP STATION A PRY -300 I LAIc� J OSWEGO I I M ' - rB.OMGD L_ - - - - - -200 BONITA ROAD _ GROUND WATER WELLS I I PUMP STATION I 100 i = ITY I OP TIGAD WATER SYSTEM c -0 I I i Figure 2-2 OCTOBER 1994 WATER SYSTEM HYDRAULIC PROFILE ICITY OF TIGARD - WATER SUPPLY PLAN UPDATE 1 93-0292.101 -=°=.= ""' Tigard's historical peaking factor has been estimated at approximately 2.10. For the purposes of this study this peaking factor is used and a 10 percent peaking factor contingency is added to allow for potential future uncertainties. A resulting peaking factor of 2.3 has been applied to the estimated average day demands to estimate projected maximum day demands. +. Population and Water Demand Estimates Population and water demand estimates are summarized and presented in Table 2-1. •i• The population and water demand estimates suggest that between 1990 and the year 2020 Tigard's population and water usage will increase by almost 75 percent. By the year 2020 Tigard's estimated population will be 51,700 people, with an average day demand of approximately 7.8 mgd and a peak day demand of approximately 17.9 mgd. Table 2-1 Summary of Estimated Population and Water Demands :F::t:•.;•iy:.iii 'i1Sr:•::i:::•::•:Y:•i'ri',.•.•.:•.•...•..••. es Inaggiin 1990 30,800 4.6 10.6 ONO 1994 33,500 5.0 11.5 2000 39,700 6.0 13.8 2010 45,500 6.8 15.7 2020 51,700 7.8 17.9 N. Conclusion Recent growth in Tigard and Lake Oswego have resulted in total maximum day demands of both communities exceeding Lake Oswego's treatment plant capacity. — The population projections show that the City of Tigard can anticipate continued growth. The population and demand projections confirm the need for Tigard to secure a reliable, long term water supply. Chapter 3 of this study presents seven supply alternatives under consideration for the long term supply of water to Tigard. Chapters 4 presents the criteria by which each alternative is evaluated and an evaluation of each alternative based on these criteria in addition to the selection of a preferred alternative. Recommendations are presented in Chapter 5. These recommendations N. describe the actions necessary to implement the preferred long term supply alternative. 93-0292.101 2-5 L L L L L L L L L L L L L - _ - • . - - C CHAPTER 3 CHAPTER 3 SUPPLY ALTERNATIVES General Seven supply alternatives are considered for evaluation as a long term water supply source for the City of Tigard. The alternatives include the following: 1. City of Lake Oswego Supply (Clackamas River) 2. City of Portland Supply (Bull Run River and Columbia River Well Fields) 3. City of Tualatin Supply (Bull Run River and Columbia River Well Fields) 4. Hillsboro-Forest Grove-Beaverton-Tualatin Valley Water District-Joint Water Commission Supply (Tualatin and Trask Rivers) 5. South Fork Water Board Supply (Clackamas River) •• 6. Tualatin Valley Water District Supply (Bull Run River, Columbia River Well Fields and the Tualatin and Trask Rivers) 7. Willamette River Supply above Wilsonville IMP Alternatives 1 through 6 are existing, developed, potable water supplies from the sources indicated. A developed source has transmission and treatment facilities in place for the production and delivery of water. Alternative 7, the Willamette River at Wilsonville, is not presently a developed source. Figure 3-1 illustrates Tigard's water service area and the location of each supply alternative. A description of each supply alternative is also presented, including a discussion of source, existing treatment and transmission facilities, existing connections to Tigard's water system, and estimates of available supply quantities. Hydraulic profiles of each alternative are illustrated on Figures 3-2 and 3-3. Discussions were held with the purveyor of each developed source. The issues discussed at these meetings included the amount of water Tigard could anticipate receiving from the purveyor, required system improvements (for both systems), the potential for negotiating an acceptable, long term supply agreement and other issues relevant to the particular supply alternative. Tigard's estimated water demands, as developed in Chapter 2, were discussed with the purveyors of developed sources and presented to those providers potentially capable of providing Tigard a long term water supply. Project Cost Estimates Improvements required for an existing or new source to provide water service to Tigard are identified and discussed. Estimated project costs are presented for potential improvements to the provider's system and for improvements required to Tigard's system. These costs include construction costs, contingencies, engineering, administration and other project related costs. All costs presented should be considered as opinions of probable costs. Final costs will be dependent upon final 93-0292.101 3-1 • Banksyo -------'-'-'----------1------' �� —�� L <� ,n y i " °j" dei1�°� � �' Washougal River \ North R' r is./.,, - � � \ '''°'"a �' PORTLAND l''''',,., P rtwee - R4.4.-----,.,� COLUMBIA RIVER a `' �\\\: _;;� a�« ,: _ GROUND WATER WELLS \ 5T nm en ! vrxaOOPT ; '?Klancswaell - --- r'� . '' - - - _ - P y \ aha _ _ _ - \ `f J— C 4f / alp \� - _ / __� aro _ _ - ---------/ ---- ,,,,„ ! ) Grays 1 It1 111411, HYlabo \ ---✓'�J+�-1 / 9.Mn,l// . " - �r ur n Fa ... —�w armerr 1 I ) Forest ICornelius wwq. TUALATIN VALLEY " ° t Portland WATER DISTRICT _H _.�_� 7� if ' `\, 1' ver 1 . _ n Y_ omx p --aotly�_ �=\ .— _ __- C creahan BEF1M ` b`� - - - Powell \ Po JOINT WATER (-------- ~ = \ a.�. . COMMISSION WATER g 5 1 PORTLAND SUPPLY `<eeK TREATMENT PLANT ,,� I CITY OF TIGARD -_ .., SaLL e WATER SERVICE AREA '�'• �, K.— 1. — i L I �-° LLAKE 1. g Be.,� � SUPPLY \ LAKE OSWEGO / Loks �- WATER TREATMENT `--\ ../ 4, I ) , bSCROLLS 41„: AO 3 - - sorsa„ \ Tuafatin a ci;�% eexax PORTLAND BULL if Gladstone � �a RUN WATERSHED —� SOUTH FORK WATER i CITY OF TUALATIN1'l BOARD TREATMENT \ a �PLANT i\ . / ii 3 s wast Li a I / WILLAMETTE RIVER AT WILSONVILLE • waa«,�n r. N..,ba� o I /' r � o \__1` Estacado I. u b SCALE:1 =15000' aN°` - 0 o Canby Bar/ PFigure 3-1 OCTOBER 1994 TIGARD WATER SERVICE AREA AND SUPPLY ALTERNATIVES CCITY OF TIGARD — WATER SUPPLY PLAN UPDATE WATER TREATMENT 1,11.1U14° PLANT 1' i 1 93-0292.101 M I -_1000 I _900 I -800 J I -7: ® I 0 =600 W 1 [ _500 FERN HLL I RESERVOIR - 400 420' LAKE OSWEGO Q I 20 oMG319' WALUGA RESERVOIR 320' E SOUTH FORK 1 4.0MG 1 -300 I t WATER BOARD TREAD PLANT, - TO TIGARD'S BOMTA CAPACITY-20MGaD 4 ROAD PUMP STATION: i �- =200 TUALATIN RIVER t CLACKAMAS LAKE OSWEGO AT GASTON JOINT WATT 1 RIVER AT I _=r_. COMMISSION WATER _ J WILLAMETTE RIVER GLADSTONE �- — WATER TREATMENT =100 TREAT ENT ►�� O AT WILSONVILLE AND AT PLANT, .--_- r 40MGD CAPACITY-40MC�D SOUTH FORK 1-205 CAPACITY-1G.1IGD I - - - _-- - LAKE OSWEGR� WATER BOARD CLACKAMAS RIVER CLACKAMAS RIVERINTAKE =0 I INTAKE I I Figure 3-2 OCTOBER 1994 HYDRAULIC PROFILE - OF ALTERNATIVES ( CITY OF TIGARD - WATER SUPPLY PLAN UPDATE [ 93-0292.101 I -1o00 I • _900 I 1 1 =800 PORTLAND BURUNCiAME PORTLAND WESTWOOD - J -700 rYORS RESERVOIR I .38M0IL38M0IL36MGht0M0J W PowELL BUTTE -fi00 W TO TIGARD'S BRADLEYI RESERVOIR77 CORNER SUPPLY FROM BULL RUN a- -1 53r WATERSHED =500 I TUALATIN VALLEY WATER DISTRICT (MWD) 50. _ PI TZGER AREA rrc. r ORS �. / = Z J0.5MGII0.5MGI H2.1MG1 4261 / 400 I t I I IA I I CITY OF PORTLAND -300 1 TO TVWD INGLEWOOD FULTON AND CAROLINA RESERVOIR AND PUMP STATIONS POWER GENERATION - = STATION Iiib. 8.7MOD = 200 PORTLAND - r 9.2ltAGD - O _45MGD GROUND WATER COLUMBIA RIVER 100- r TO CITY OF.. WILLAMETTE RIVER •WASHINGTON WELLS I TUALATIN AT PORTLAND COUNTY WASHINGTON COUNTY SUPPLY LIEa._.. _._. V - _-___.,. LL SIMPLY LICE =0 I I I Figure 3-3 OCTOBER 1994 HYDRAULIC PROFILE OF ALTERNATIVES CITY OF TICARD - WATER SUPPLY PLAN UPDATE 1 93-0292.101 Wr project scope and design and construction and other costs. The American Association of Cost Engineers (AACE) categorizes cost estimates as order-of-magnitude estimates, r.. budget estimates and definitive estimates. The estimated costs presented in this report will be identified as budget (planning) cost estimates or order-of-magnitude costs depending on the source of the cost estimating data. Other improvements to ,,,. Tigard's transmission and distribution systems beyond those identified in this study may be needed. A comprehensive review of these facilities is beyond the scope of this study. Estimated Annual Cost of Water ,y. The annual cost of water for each alternative may include the following components: 1. Debt service for financing capital improvements 2. Operation and maintenance cost 3. Return on investment (when applicable) 4. Depreciation allowance (when applicable) Each alternative presented requires that Tigard make some initial capital expenditure. The amount of the expenditure varies depending on the alternative. A common method of financing large capital projects is through the issuance or selling of bonds. The cost for the capital improvement is then spread over a set interval. Bond sales allow the public entity a method of financing that does not require large sums of money be paid all at once and offers a way to incorporate the payment for large capital .p projects on an incremental basis. For the purposes of this study, it is assumed that capital improvements, whose costs exceed the city's normal capital improvements budget, will be paid for through the sale of bonds. The cost of bond repayment, called debt service, can then be considered an annual cost. For this study it is assumed that bonds will be for a term of 20-years at an interest rate of 7.0 percent. r. Operation and maintenance costs include, among other things, labor costs, power and chemical costs for pumping and water treatment facilities. A depreciation allowance is provided for the rehabilitation or replacement of existing facilities as they approach the limits of their design life. There may be a rate of return component for Tigard's use of existing providers' facilities. The rate of return component will only be applied to facilities not owned, in part or in total, by Tigard. The annual cost of water for each alternative is presented following the discussion of required improvements and project ill"' cost estimates. Estimated annual costs are distributed over the total average yearly water consumption and presented as the cost per 100 cubic feet (ccf) of water. In order to provide a consistent comparison of estimated costs of water, the 1994 average aro daily demand of approximately 5.0 mgd (2,440,000 ccf) will be used as a basis for determination of the cost of water for alternatives capable of providing a long term water supply. All cost estimates of water costs are opinions of probable costs and are based on available information. Final costs will depend on the final scope and design and r. 93-0292.101 3-5 r. row construction costs of the required improvements, contractual arrangements, debt fmancing costs and other conditions not presently known. City of Lake Oswego Supply rr The City of Lake Oswego owns and operates a water treatment plant in West Linn. Clackamas River water is pumped from a raw water intake near Gladstone, through a „•• 27-inch diameter transmission main to the treatment plant. The raw water transmission main crosses the Willamette River near Mary S. Young State Park. Lake Oswego's treatment plant is a direct filtration type plant originally constructed in MD 1968. The intake, raw water transmission main, and the treatment plant have a design capacity of approximately 16.1 mgd. The treatment plant can be expanded to an ultimate capacity of approximately 37 mgd. Finished water is pumped from the treatment plant into Lake Oswego's water distribution system. Lake Oswego's "" distribution system contains ten service levels, including the Waluga/Tenth Street service level with an approximate static hydraulic grade line (HGL) of 320 feet. Tigard's supply connection to the Lake Oswego system is to this service level near va Lake Oswego's Waluga reservoir on the westerly limits of the Lake Oswego system. Tigard's Bonita Road Pump Station pumps water from this connection into Tigard's 410-foot service level. 0. Supply Connection .. Tigard's supply connection to the Lake Oswego distribution system is a metered connection at the Bonita Road Pump Station. This pump station has a total pumping capacity of approximately 8.0 mgd and provides a static lift of approximately 90 feet. r. Water is transmitted from the pump station into the 410-foot service zone through 16- inch and 24-inch diameter piping. op Available Supply Lake Oswego's river intake, raw water transmission piping, water treatment plant, and finished water transmission piping have a design capacity of approximately 16.1 mgd. ap Lake Oswego's and Tigard's recent combined peak usages have exceeded the treatment plant's and transmission system's capacity. Lake Oswego's Water System Master Plan, completed in June 1988, developed water demand projections and or presented recommended improvements under two demand scenarios. Scenario 1 developed improvements required to serve just the City of Lake Oswego. Scenario 2 developed improvements required to serve Lake Oswego and Tigard. The master plan °"" found that significant capital improvements are needed to continue service to both cities. Completion of these improvements would eventually provide a supply of approximately 37.0 mgd from Lake Oswego's treatment and supply facilities. r. WO iiii 93-0292.101 3-6 OW .„ Existing Supply Agreements Tigard and Lake Oswego have an existing agreement for water service under which Tigard is entitled to purchase surplus water from Lake Oswego. The agreement was y` signed in 1983 and renewed for a five-year term in 1993. The agreement has subsequently been modified and is now set to expire at the end of 1994. The agreement allows Lake Oswego to establish and adjust water supply rates at their "" discretion. Lake Oswego has established a base rate of$0.57 per ccf of water and may impose an additional rate (surcharge) of$0.28 per ccf between June 1 and September 30. The agreement also allows Lake Oswego to curtail or limit its supply of ""' surplus water to Tigard. Curtailment occurred most recently in the summers of 1992 and 1994. ow As a result of discussions with, and in response to Tigard's request for information, Lake Oswego has completed an analysis of supply of water to Tigard. The document titled "Evaluation of Water Service With and Without Tigard", CH2M HILL, July 1994, ., examined two supply scenarios for Lake Oswego's water system, Scenario 1, Lake Oswego alone, and Scenario 2, Lake Oswego and Tigard. A copy of this document has been included as Appendix B of this report. The purpose of the analysis was to review ,,,,, water demand projections, develop capital cost estimates for improvements under Scenarios 1 and 2, and to complete an allocation of estimated costs under Scenario 2. The analysis also noted that should Lake Oswego and Tigard join together to expand Lake Oswego's existing treatment facilities, consideration should be given to forming a water authority or similar entity established by an intergovernmental agreement and that Tigard become an equal partner in the management of the water supply and imp treatment facilities. Required Improvements and Project Cost Estimates As previously discussed, Lake Oswego's raw water transmission, treatment, and finished water transmission facilities require major improvements to meet the demand "" needs of both cities. Tigard's Bonita Road Pump Station will also require expansion as the city's water demands increase. ow The July 1994, Lake Oswego analysis confirmed that for Lake Oswego facilities to supply the water needs of both cities, immediate expansion of these facilities to a capacity of 32 mgd is required. The total estimated project cost for Lake Oswego •• improvements is approximately $30,936,000. The analysis estimated Tigard's share of these improvement costs at approximately $15,400,000. The analysis identified these improvements for the years 1996, 2003 and 2009. The expansion of the Bonita Road Pump Station to a firm pumping capacity of approximately 14 mgd when expanded treatment facilities are in service would provide „i, adequate pumping capacity to meet estimated peak day demands through the year 2002. Firm pumping capacity is the station's pumping capacity with the largest pump out of service. Initial expansion of the pump station would include the addition 93-0292.101 3-7 wr of three pumps, each with a capacity of approximately 3.0 mgd. The estimated cost of this expansion is approximately $630,000. This estimate assumes that the existing pump station site is large enough to accommodate this initial expansion. Ultimately, 1110 the station should be expanded further to provide a firm pumping capacity of approximately 18.5 mgd, or approximately half of Lake Oswego's ultimate treatment plant capacity of approximately 37 mgd, the estimated ultimate capacity of this supply. The Lake Oswego analysis estimated the cost of immediate supply, treatment and ,,,r, transmission improvements at approximately $24,200,000 and estimated Tigard's share of these improvement costs is approximately $12,100,000. Additional capital improvements are required in the year 2003 and 2009 for the expansion of Lake Oswego facilities to meet increasing demands. The Lake Oswego analysis estimates Tigard's share of these improvement costs at approximately $535,000 and $2,850,000 respectively. The estimated project cost to expand the Bonita Road Pump Station to an ultimate firm pumping capacity of 18.5 mgd is approximately $260,000. The expansion of the pump station should be timed to occur when estimated maximum day demands approach the station's capacity. For the purposes of this analysis this is estimated to occur in the year 2003. Mr Table 3-1 Project Cost Estimates for Lake Oswego Supply Improvements (City of Tigard Costs Only) City of Lake Oswego Supply, Treatment and Transmission $12,100,000 535,000 2,850,000 Facilities Expansion Bonita Road Pump Station 630,000 260,000 -- Expansion +. 1TOTAL PROJECT COST $12,730,000 $795,000 $ 2,850,000 ESTIMATES The costs presented in Table 3-1 are classified as budget estimates and should be considered accurate within plus 30 percent to minus 15 percent. This range should +.o be considered a statistical confidence limit and not a contingency. The costs presented are based on an Engineering News Record Seattle Construction Cost Index of 5747. A 35 percent contingency, administration and engineering factor is included ,,. in the estimated project costs. 93-0292.101 3-8 err �. The total estimated project cost for this supply alternative is approximately $16,375,000. The estimated project costs identified for the Lake Oswego supply alternative do not include piping or other distribution system or transmission system O. improvements beyond the Bonita Road Pump Station. Estimated Cost of Water .t Estimates of water costs from the Lake Oswego supply include debt service for the large capital expenditures required, operation and maintenance (0 & M) costs, a buy- in charge based on Lake Oswego's estimation of the value of existing facilities and a um depreciation allowance. The buy-in charge, a one time payment, provides for the purchase of the existing supply facilities based upon estimated depreciated replacement costs as developed in the Lake Oswego analysis. While it is anticipated that the improvements identified in Table 3-1 may take years to implement and complete, for cost comparison purposes, funding for these improvements is assumed to begin in 1994. For the purposes of this study it is assumed that the 1994 capital costs presented in Table 3-1, will be financed by bonding for 20 years at an interest rate of 7.0 percent beginning in 1994. Annual debt service on this bonded amount is approximately $1,202,000. Lake Oswego estimates Tigard's share of 1994 annual 0 & M costs at approximately $515,173. Lake Oswego estimates the value of its existing facilities at i•• approximately $13,106,860 and estimates Tigard's buy-in charge at approximately $6,514,598. Annual debt service on the buy-in charge is approximately $615,000. The annual depreciation allowance of Tigard's estimated share of this alternative is approximately $246,000. Table 3-2 presents a summary of these estimated costs. The 1994 estimated cost of water for this alternative is approximately $1.06, based on 1994 annual water consumption of approximately 2,440,000 ccf. imp Table 3-2 City of Lake Oswego Supply NWEstimated Cost of Water ... ........................ .... .. Debt service on capital costs $ 1,202,000 Operation and maintenance costs 515,173 Debt service on buy-in charge 615,000 Depreciation allowance 246,000 I TOTAL ESTIMATED ANNUAL COST $ 2,578,173 Jf 1994 Estimated cost per ccf of water I $1.06 93-0292.101 3-9 i The estimated cost per ccf of water will vary over time. The water demand estimates presented in Chapter 2 indicate that Tigard's water demands will increase. As water consumption increases, the cost of debt service per ccf will fall. Also, the cost of debt service is only carried for the life of the bond, or, for this analysis, 20 years. 0 & M costs are estimated to rise proportionately as water production increases. Supply Implementation Timing It is anticipated that actual implementation of funding mechanisms, institutional arrangements and improvement scheduling could occur within 1 to 3 years and that a new supply could be operational in 3 to 5 years. City of Portland Supply The City of Portland is supplied water from the Bull Run Watershed and ground water wells along the Columbia River in northeast Portland. The Bull Run supply has a capacity of approximately 225 mgd. Treatment of this water source presently consists of chemical disinfection. The City of Portland's water system is the largest in the metropolitan area and supplies water to a number of wholesale customers outside of the Portland city limits. �. Supply Connection The City of Portland can supply water to Tigard through a metered connection at the intersection of SW Hall Blvd., Oleson Road, and Greenburg Road, referred to as Bradley Corner. Portland supplies water to this location through a 24-inch diameter main from the Burlingame and Westwood Reservoirs in Portland's west hills. These reservoirs have overflow elevations between approximately 644 and 653 feet and are supplied through the Carolina and Fulton Pump Stations in southwest Portland near the Willamette River. The pump stations have a combined total capacity of approximately 32.4 mgd and are supplied water through transmission piping .� connected to Conduit No. 3 near Mount Tabor in southeast Portland. Conduit No. 3 is one of three supply conduits that transmit water from the Bull Run Watershed to the Portland area. 02. Tigard has a 16-inch diameter transmission main that connects Bradley Corner to the city's 410-foot service level near the intersection of SW North Dakota St. and SW Greenburg Rd., referred to as Tiedeman Corner. Water pressures are reduced to acceptable levels through pressure reduction facilities located at the connection of the 16-inch diameter transmission main to the distribution system. Existing transmission piping and valving also allows this supply to be directed to the 10 mg reservoir in the 470-foot service level. Nei 93-0292.101 3-10 �.. Available Supply Discussions with the City of Portland Bureau of Water Works and past use of the ,,, Bradley Corner connection revealed that Portland can supply Tigard approximately 8.0 mgd. Recent attempts by Portland to supply this amount and by Tigard to take this quantity of water have shown that the connection can presently supply only approximately 5.0 mgd to Tigard. The reasons for this reduction in capacity are not sup presently known. In order for Portland to supply water beyond 5.0 or 8.0 mgd, additional transmission facilities are required from the Burlingame Reservoirs to the Bradley Corner connection. ars There is concern within the City of Portland Bureau of Water Works over the Bureau's ability to provide a long term supply to Tigard. It is anticipated that some of these concerns will be addressed when the Phase 2 Regional Water Supply Plan is completed. A copy of Portland's response to Tigard's presentation of its estimated water demands and to Tigard's request for increased use of the Portland supply is presented as Appendix C of this report. Existing Supply Agreements Tigard and Portland have an existing agreement for water service under which Tigard is entitled to purchase surplus water from the City of Portland. The agreement is a cost of service contract that became effective in July 1982 and has a term of 25 years. The agreement allows Tigard to purchase water from Portland at an annually adjusted rate. Certain provisions of the agreement have been altered and others added through Nipnegotiations between Portland and its wholesale customers. For example, Portland may assess a peaking charge on water supplied to Tigard and other wholesale users at certain hours and days during the high water use months. This charge will vary depending on the ratio of the average annual flow to the peak flow volumes. The agreement also penalizes users who take less water than their historical five year average use. The results of the Phase 2 Plan may prompt an examination of the existing agreement. Required Improvements and. Cost Estimates As described, Portland can supply approximately 5.0 to 8.0 mgd to the Bradley Corner connection through existing City of Portland piping. Tigard's existing 16-inch diameter piping between Bradley Corner and Tiedeman Corner has historically had adequate capacity to carry these flows, however, Tigard has planned the construction of a parallel 24-inch diameter transmission main to increase capacity and improve reliability. Increased use of the Portland supply will require the construction of this te. piping. Pipe sizing should be confirmed prior to construction. For cost estimation purposes, it is assumed that 24-inch diameter piping is adequate. In addition to piping improvements, additional telemetry and flow control facilities will be required to allow more precise monitoring and flow control of the Portland supply. Present operations rely on the manual operation of valves to activate and control the 93-0292.101 3-11 r.. amount of water taken from the Portland supply into the 470-foot service level. The 410-foot service level presently is automatically controlled. Automated control of the Portland supply is required to increase control flexibility over the Portland supply and ,�. allow for more economical system operations. Automatic control to the 470-foot service level should be accomplished by the installation of an automatically controlled valve near Tiedeman Corner. Arrangements could be made with Portland to share •• telemetered flow data that is currently collected by Portland at the Bradley Corner connection. In addition to system improvements, a hydraulic analysis of transmission system capacities from the Burlingame Reservoirs to Tigard's 410-foot service level connection and the 10-mg reservoir should be completed. This analysis would confirm the existing capacity of the supply and confirm transmission pipe sizing assumptions. Portland estimates that it can supply an additional 11.5 mgd to Tigard with the installation of approximately 28,000 feet of 24-inch diameter piping from the r. Burlingame Reservoirs to Bradley Corner. This results in a total supply capacity of approximately 19.5 mgd from Portland which would be adequate to meet Tigard's water supply needs beyond the year 2020. The City of Portland estimates the cost of •• this improvement at approximately $5,000,000. Table 3-3 summarizes estimated City of Tigard improvement costs for the City of .. Portland supply alternative. The estimates assume that Tigard's existing telemetry and control systems can be readily expanded to allow for automatic control of the Portland supply. The costs presented should be considered opinions of probable costs and should be considered as budget level estimates. Table 3-3 City of Tigard Improvements for City of Portland Supply Hydraulic analysis of City of Portland Supply $ 15,000 Transmission main - 900,000 From Bradley Corner to Tiedeman Corner (4,350 If of 24-inch diameter main - including Hwy 217 Undercrossing) Installation of flow control valve and vault - 135,000 W (Includes vault, valve and vault piping) Transmission main - 5,000,000 From Burlingame Reservoirs to Bradley Corner — (28,000 If of 24 inch diameter main) TOTAL ESTIMATED PROJECT COST I $ 6,050,000 93-0292.101 3-12 w ■r. As Tigard has identified the construction of the 24-inch diameter main in its existing capital improvements program, it is assumed that this improvement, the installation of the flow control valve and vault and the hydraulic analysis could be funded through that program and not require bonding. It is anticipated that Portland would install the transmission main from the Burlingame Reservoirs to Bradley Corner and that Tigard would compensate Portland for its use. For the purposes of this study, it is assumed that Portland would be ■• reimbursed for the entire cost of this improvement through annual payments from Tigard. Considering this improvement as funded through debt service would result in annual payments of approximately $472,000 for 20 years. The total estimated project cost for this alternative, for service to the year 2020 is approximately $6,050,000 in 1994 dollars. Additional improvements may also be r"' required within Tigard's transmission and distribution. Determination of these improvements is beyond the scope of this study. .. Estimated Annual Cost of Water Portland sets water rates for wholesale customers through calculations with multiple a,. variables. The variables include a five year average of annual water usage, the ratios of hourly and daily usage to the average annual use, whether Portland must pump the supplied water and the water use patterns of other wholesale users. Portland developed estimates of probable base water costs for this study using a computerized rate model that can estimate water costs five years into the future. The estimates are variable and dependant on a number of conditions not presently known. The estimates do, however, provide a range of probable costs. These base costs are between approximately $0.60 and $0.85 per ccf. Water costs in the lower end of this range are achieved through operational procedures that reduce peak day and peak or hour use ratios. The construction of the 24-inch transmission main from Burlingame Reservoirs to Bradley corner could result in additional costs of approximately $0.20 per ccf assuming annual payments of approximately $472,000 and an average annual consumption of approximately 2,440,000 ccf or 5.0 mgd. Portland has indicated a willingness to negotiate a payment amount and payment schedule for this improvement. It is estimated that the cost of water from a Portland supply is between approximately $0.80 and $1.05 per ccf. The City of Portland rate estimation model can estimate water costs up to five years into the future. Portland water cost estimates beyond the year 1999 are not available. It is anticipated that the Phase 2 Plan will provide Portland direction on future water supply improvements and related costs. r 93-0292.101 3-13 • Supply Implementation Timing It is anticipated that a City of Portland supply of Tigard's total water needs could be r+. operational in one to three years. ,,. City of Tualatin Supply The City of Tualatin relies on the City of Portland for its water supply. The city is NWsupplied water from Portland's 50 mg Powell Butte Reservoir through the Washington County Supply Line. The supply line has a capacity of approximately 64 to 60 mgd of which approximately 5 to 7 mgd is available to the city. A 48-inch and 36-inch diameter transmission main extending south from the intersection of SW Beaverton/Hillsdale Hwy. and Oleson Road south, through Tigard, serves the City of Tualatin. "" Supply Connection The Cities of Tigard and Tualatin have existing emergency supply connections that "" allow flow from Tigard to Tualatin. Available Supply Discussions with Tualatin indicate that it could not provide a long term water supply to the City of Tigard. Following these discussions, this alternative was not considered for further evaluation. Hillsboro - Forest Grove - Beaverton - Tualatin Valley Water District - Joint Water Commission (JWC) Supply The Hillsboro, Forest Grove, Beaverton, Tualatin Valley Water District JWC supplies water to its member entities from a water treatment plant located on the Tualatin River southeast of Forest Grove. The treatment plant can be supplied raw water from the Tualatin and Trask Rivers. The treatment plant is a conventional type with an intake structure located north of the treatment plant on the Tualatin River. The treatment plant, raw water intake facility, and raw water transmission main have an existing capacity of approximately 40 mgd. The treatment plant can be expanded to an ultimate capacity of approximately 60 mgd. Finished water from the treatment plant is pumped to the Fern Hill Reservoir located just east of the treatment plant on Fern Hill. The reservoir has a capacity of 20 mg and an overflow elevation of approximately 520 feet. Approximately 20 miles of transmission piping carries water from the reservoir to the Cities of Hillsboro and Beaverton and the Tualatin Valley Water District. Supply Connection The JWC and the Tigard water system are not presently connected. 93-0292.101 3-14 if/ Available Supply Discussion with the JWC revealed that the JWC cannot provide any short term or long ""' term water supplies to Tigard. While the JWC is presently considering the expansion of its treatment facilities, the additional supplies are needed by the member entities. Following these discussions, this alternative is not considered for further evaluation. South Fork Water Board (SFWB) Supply Oregon City, West Linn and the Clairmont Water District are supplied treated Clackamas River water through the SFWB's water treatment plant that is jointly ,,,r, owned by the cities of Oregon City and West Linn. The river intake is located on the lower Clackamas River, east of the I-205 freeway. The intake facility, transmission piping, and the treatment plant have a capacity of 20 mgd. The treatment plant is located in Park Place The SFWB is presently conducting engineering studies to .. provide for the expansion of the intake and treatment facilities. Transmission Piping Treated water flows by gravity from the treatment plant through a 30-inch diameter pipeline to the Division Street Pump Station in Oregon City. From the pump station the water is pumped through a 24-inch diameter transmission main to the 10.5 mg Mountain View Reservoir and through another 24-inch diameter transmission main across the I-205 Willamette River Bridge into the City of West Linn's water system. The City of Lake Oswego's water system is intertied to the West Linn 24-inch diameter transmission main through an 18-inch diameter pipeline along Highway 43. It is estimated that this intertie can supply up to 5.0 mgd to Lake Oswego, however, due to hydraulic conditions, this intertie cannot provide this volume when Lake Oswego's treatment plant is operating at or near its present maximum capacity. Supply Connection The SFWB and the Tigard water system are not presently connected. Available Supply Discussions with the SFWB revealed that the SFWB cannot provide any short term or long term water supplies to Tigard. While the SFWB is presently considering the expansion of its treatment facilities, the additional supplies are needed by the member cities and the Clairmont Water District. Following these discussions, this alternative is not considered for further evaluation. Tualatin Valley Water District (TVWD) Supply The TVWD is the largest water provider in Washington County. The District relies on the City of Portland for its water supply. The District recently joined the JWC and will w 93-0292.101 3-15 also receive water from the Trask and Tualatin River sources. Water from Portland is supplied to the District from Portland's 50 mg Powell Butte Reservoir through the Washington County Supply Line which ranges from 60-inches to 84-inches in diameter. The supply line has a capacity of approximately 60 to 64 mgd of which approximately 52.8 mgd is available to the District. A 48-inch diameter transmission main extending south from the intersection of SW Beaverton/Hillsdale Hwy. and Oleson Road serves the Metzger area of the District. The Metzger portion of the TVWD (formerly the Metzger Water District) bounds the City of Tigard along Tigard's northeast boundary. Supply Connection The TVWD and the Tigard water system are not presently connected. .r. Available Supply Discussions with TVWD found that it could supply Tigard in the short term with its existing supply through the Washington County Supply Line and through additional supplies it anticipates receiving through its recent joining of the JWC. The District ,,.,, estimates it can provide water in varying amounts, depending on its own supply, to Tigard in the short term, from one to five years. Existing Supply Agreements The TVWD and Tigard presently have no existing supply agreements. Required Improvements and Project Cost Estimates As the TVWD cannot supply water to Tigard in quantities needed to meet Tigard's long "' term needs, no improvements or project cost estimates were developed for this alternative. Recommendations for potential interim water supply arrangements between TVWD and Tigard are presented in Chapter 5, Conclusion and "" Recommendations. Willamette River Supply Presently no Portland metropolitan area water provider uses the Willamette River as a -• raw water supply. Several area providers hold water use permits on the Willamette River near Wilsonville. A small scale pilot filter plant is presently being operated there by the TVWD and the City of Portland to study the treatability of the water. Two options are available for Tigard's consideration for the use of the Willamette River as a long term supply source. Tigard can construct and operate its own water supply system or become a participant in a regional supply system. The study of a regional water treatment facility on the Willamette River near Wilsonville is included as part of the Phase 2 Regional Water Supply Plan currently underway for 27 regional water 93-0292.101 3-16 providers. Preparation of the Phase 2 Plan includes the development of technical memorandum on a number of plan elements. Data developed as part of these technical memorandum is used to develop cost estimates for the regional treatment +.. facility alternative. A discussion of both Willamette River supply alternatives is presented. The location of .. a potential Willamette River water treatment facility and transmission main alignment alternative are illustrated on Figure 3-4. Supply Connection The development of any Willamette River supply source for Tigard will require the construction of transmission and pumping facilities for the delivery of water to Tigard's distribution system. A discussion of these facilities is included as part of the required improvements identified below. Available Supply It is anticipated that the development of any Willamette River supply for the City of Tigard will provide a supply adequate to meet all of Tigard's estimated water needs through the year 2020. �+ Existing Supply Agreements Tigard currently has no agreements for direct supply from a potential Willamette River supply. Required Improvements and Cost Estimates ei For Tigard to develop a Willamette River supply on its own or jointly requires the construction of a raw water intake, treatment plant, and associated pumping facilities. Raw water and finished water transmission piping is also required to carry water between the facilities and to Tigard's and/or other regional distribution systems. City of Tigard Supply System ass Table 3-4 presents estimated project costs for a city-owned water treatment and transmission facilities with a capacity of approximately 20 mgd. Development of this alternative may include additional costs related to the potential need to purchase raw water from US Army Corps of Engineers (COE) storage facilities upstream of the proposed treatment facility. The total estimated project cost for a City of Tigard " Willamette River supply alternative is approximately $35.0 million. 93-0292.101 3-17 // Aft! y ex Z w i /11 { B \ `max 5;'e W e � STEELE DAVISso a( I Q ( ! ,:§,,- > 4w,.\�� _ ) I \ 7j � B - '� �S RD � (ALLEN \ BL4D ,,,,,•2`'1„, aI "—ti-� � \ \ I VERMONT ST_. a _. .-. 1 ,J.:.m• A m O/I l Irr ¢ I 4/ o v e.v\ 1\ �I --'-'1'---: WI M--' _ HART RD �;�� �/ n a I GARDEN I �� "=ry m� > .zr _�. ,.,HOME c._,..------- ,Q Ct Q RG CIT g.a IGA -,r 9P�e.�� �1 :� OW WATER .44t. A =•mow 2 a =—moi / FERRY RD lit p al WEIR RD a _ z W; a NI - t MN I OAK ST iPOMONA S _ \J�� 1 / Is-EpHE �Er� x tir 5 \'P �� r 5G•° -:..., .,„- $- "'�` 1 S A 0°� CALE:1"�7 OO' R A O 0 O`' RD .s# �-..E :-�- - .,'.' - .-':, L�'� j--TI419ER � \t L'i I )-. P.1- 1..1 '_ .T--':—at,:. +-= -`A '. IF BERG /1 O' z `1 \leiJ� L ke Oswe t . � �: ,. KRJcE ,,,j_____,....,.... f 6OURTNEN r•'� .�.•'_. - -- -'- . ..al -• a-.scs" as, ;.;/r_� OAK Gk "ems x..zS �N 'C..° -'i .. _ m --::::':"T:- i.., 7 01'E��; NW .5.--,.:r.: - R t. , '3�.•,..-'i y� Fes.. G�/ \ mom;' ::x'r. S ' _ x BL'v'D \ '• w;S1.--�' `r-"ems .K +e. .. rte' -� O "' %i4C� I .•Wn -=ex �f - ;-L s,. rs �" -' F + - �� _ OLtTN- S▪ HO -. \ \ a , . >' - -x"_"• ._ :1's:,, °O 0 0 REEN (TREE p'. \` Imo' O -_,,,,,..:-.-.27,--- .o- ,r. _ �. : �` '^�S: •�^^ a- _?.q,•: Is m= 0_\� ��.y rq 1) BERGtS RD \x TIGARD W ORAGE AND / TUALATiN x L. e� ale DISTRIBUTION _ RD V I a � F� 1 T'� FACT ;� H,LDS 1© �' °Sc �\ : CITIES �m:ti NO" � Tualatin ru91q40 Rivet.-,R\_/ � �� `� Z �`�°°4 /SAGERT/PD N Rivergrove �� I. AVERY ST / / z EDY TD ,2pS - \.n m DISTRIB . STORAGE AND Q AUG ENT ALTERNA W a magi a IB N FACILITIES x FOR OF TIGARD g \ Aq °° \ OR GIONAL WA ` } % FR Ro IRAN MISSION MI i \° - T :/.""' I BLVDco % \ \ West Lin( ‘ P / T0 > ^7 Ro .- NW a h/ 1 �0 \ 1 CMN (9464 / ELLIGSEN RD j Ro •; ni TOOZE o La \ ,;s RDI Si P; (/-, / 7 -...6/,r ? La a ?� — �-- t BOECKMAN RD ADVANCE RD 1 \*\ e£ Er( pp�: LOCATION / Wilsonville J �`�; ° 50 OF 0 TIGARD / .: 'fa )OR R' 10 WATER _�' -� z TREA , 1 CILRIES RD / �„�oN'"��=C .aO Y Figure 3-4.. OCTOBER 1994 "` -, :kir- --,:+.6",...", ..-:Az'''' WILLAMETTE RIVER SUPPLY�., � . 4 .. FACILITIES PLAN MAP F ., G •w /J.,..,,,1;.,,d2:4-'s' CITY OF TIGARD — WATER SUPPLY PLAN UPDATE ...1.. rliQoMe 1 / I 93-0292.101 Table 3-4 Willamette River Supply .. City of Tigard Supply System - 20 mgd Project Cost Estimate River Intake, Water Treatment Plant and High $ 24,000,000 err Service Pump Station Raw water and finished water transmission main 11,000,000 (60,000 if of 36-inch diameter) TOTAL ESTIMATED PROJECT COST I $ 35,000,000 Regional Supply System As an alternative to Tigard constructing its own water treatment plant on the Willamette River, a second option was considered. This option would require that Tigard reach an agreement with other water providers for the construction and operation of a larger, regional treatment and transmission system. The Draft Phase 2 Plan has included an evaluation of Willamette River treatment facilities as one of its source options. The analysis included the development of project cost estimates for a Willamette River treatment plant with peak capacities between 100 mgd and 500 mgd. For the purposes of this study it will be assumed that Tigard would participate in the construction and operation of a regional treatment facility with a peak capacity of approximately 100 mgd. The facility would have an average production capacity of approximately 50 mgd. For the purposes of this report, all assumptions are based on the Willamette River source option identified as Alternative 1 in the Task 7 Technical Memorandum of the Draft Phase 2 Plan. The costs for a regional treatment facility include a river intake facility, a conventional water treatment plant with ozonation, a finished water pumping station, and raw and finished water transmission piping. The Draft Phase 2 Plan cost estimates are based on the assumption that the finished water may ultimately be transmitted to potential regional storage facilities. The cost of regional storage facilities is not include in this -r analysis. The costs estimates developed for the Draft Phase 2 Plan are considered planning level awe or "reconnaissance-grade order of magnitude" costs as defined by AACE. Estimated project costs include a 25 percent contingency factor and a 20 percent allowance for administration and engineering. The accuracy of these cost estimates is plus 50 percent to minus 30 percent. The costs are based on an ENR Seattle CCI index of 5,600. 93-0292.101 3-19 'i• The total estimated project cost for a 100 mgd regional treatment facility is approximately $18.2 million. The project cost estimate includes construction cost estimates of a river intake, a water treatment plant and a finished water pump station. Development of this alternative may include additional costs related to the potential need to purchase raw water from COE storage facilities upstream of the proposed facilities. A summary of estimated project costs is presented in Table 3-5. Table 3-5 Willamette River Supply Regional Supply System - 100 mgd Project Cost Estimate >::>::>::>:<>:>;::::<:>::»::::>:::>::>:«:::>::::>::>::::>:<:»:>::::>: ::••;:..•.:::::>::::<::>::>::::::::::::::::><»::>::>::::>:::«:::>::>::»»>:<:: m ad:::iKt0.5 • ,.. River intake, water treatment plant and finished $ 85,500,000 water pump station Raw water and finished water transmission main 40,000,000 (89,500 If of 72-inch diameter) Estimated construction cost - subtotal I $ 125,500,000 eat 45% Contingency, Administration, and Engineering I 56,500,000 I TOTAL ESTIMATED PROJECT COST I $ 182,000,000 Based on an average daily water treatment plant production of approximately 50 mgd and Tigard's 1994 average daily demand of 5.0 mgd, Tigard's estimated share of these estimated project costs is approximately 10 percent of the total estimated project cost or approximately $18.2 million. Estimated Cost of Water The estimated costs for both Willamette River supply options are calculated with debt service, operation and maintenance costs and a depreciation allowance. City of Tigard Supply System - 20 mgd The cost of debt service to finance the capital improvements identified in Table 3-4 is ul• approximately $3,300,000 annually. Operation and maintenance costs are estimated at approximately 3 percent of capital costs, equalling approximately $1,050,000 annually. As Tigard will own all the facilities no rate of return component is included. errA depreciation allowance of 1.5 percent of capital costs results in an annual depreciation allowance of approximately $530,000. NIP 93-0292.101 3-20 "' The total annual estimated cost for this alternative is approximately $4,880,000. Based on an average daily consumption of approximately 5.0 mgd (2,440,000 ccf), the estimated cost of water for this alternative is approximately $2.00 per ccf. A ime summary of the estimated annual cost of water for this alternative is presented in Table 3-6. Table 3-6 Willamette River Supply City of Tigard Supply System - 20 mgd — Estimated Cost of Water Summary Debt service on capital costs $ 3,300,000 Operation and maintenance costs I 1,050,000 Depreciation allowance I 530,000 TOTAL ESTIMATED ANNUAL COST $ 4,880,000 OW 111994 Estimated cost per ccf of water I $2.00 I� Regional Supply System .. The cost of debt service to finance a 100 mgd regional supply system is approximately $17,181,000. Operation and maintenance costs are estimated at approximately $6,440,000. The annual depreciation allowance is approximately $2,730,000. erg The total estimated annual costs for this alternative is approximately $26,351,000. A summary of estimated annual costs for a 100 mgd regional treatment facility is presented in Table 3-7. The estimated cost of water from the regional supply system is approximately $1.08 per ccf. These cost of water estimates are based on an average daily production of approximately 50 mgd (24,400,000 ccf). Using the demand data presented in Chapter 2, the estimated cost of water for a 20 mgd water treatment facility may decline as the demand increases. Estimated future costs of water of a regional treatment facility are not evaluated as no demand data was available to support usage variations. Supply Implementation Timing It is anticipated that a City of Tigard water treatment facility and supply system could be operational in approximately seven to twelve years and a regional treatment and supply system could be operational in approximately five to ten years assuming that water rights, water availability and other issues can be successfully resolved. ,r. 93-0292.101 3-21 WO WO Table 3-7 Willamette River Supply Regional Supply System - 100 mgd Estimated Cost of Water Summary .. ........ Debt service on capital costs $ 17,181,000 Operation and maintenance costs I 6,440,000 Depreciation allowance I 2,730,000 TOTAL ESTIMATED ANNUAL COST $ 26,351,000 wis 111994 Estimated cost per ccf of water I $1.08 if Conclusion Of the seven alternatives under consideration, four offer the City of Tigard the potential for a long range supply of water. These alternatives are: 1. City of Lake Oswego Supply (Clackamas River) 2. The City Portland Supply (Bull Run River and Columbia River Well Field) 3. City of Tigard Supply (Willamette River ) 4. Regional Supply (Willamette River) An evaluation of each supply alternative is presented in Chapter 4. Each alternative IMOis ranked under the evaluation criteria and a recommended alternative is selected. so 93-0292.101 3-22 t l l L t L l L L L CHAPTER 4 • CHAPTER 4 EVALUATION OF ALTERNATIVES w. General Each of the supply alternatives presented in Chapter 3 have advantages and disadvantages for Tigard. To quantify and assess these qualities, criteria must be established by which each alternative can be evaluated. A wide range of criteria can be used to evaluate the alternatives. This chapter presents eight criteria by which each alternative is evaluated and ranked in comparison to the other alternatives. These criteria are as follows: 1. Opportunity for City Ownership of Supply System 2. Water Supply Agreements and Contract Provisions 3. Required Improvements and Estimated Project Costs 4. Estimated Cost of Water 5. Water Rights 6. Water Quality 7. Supply Implementation Timing 8. Certainty of Supply WA Ranking of Alternatives sr A brief discussion of each alternative is presented for the individual criteria. Each alternative receives a ranking for the criteria. The ranking ranges from 1 to 4, with 1 being the highest ranking and a 4 the lowest ranking. The ranking is relative and some alternatives can receive an equal ranking for the same criteria. r,,,, Opportunity for City Ownership of Treatment and Supply Facilities Certain supply alternatives give Tigard the opportunity for an ownership interest in the supply system. It is of benefit to Tigard to gain an equity interest in its water .r supply, treatment and delivery systems. Each alternative will be rated on whether Tigard has the opportunity to gain ownership or an equity interest in an alternative. City of Lake Oswego Supply The City of Lake Oswego has indicated a willingness to discuss the potential formation of a water authority or similar entity with Tigard. It is anticipated that such an institutional arrangement would allow Tigard the opportunity for ownership of its water supply, treatment and delivery systems. This alternative receives a ranking of Y- 1. 93-0292.101 4-1 s• City of Portland Supply It is anticipated that prior to the completion of the Phase 2 Plan Portland will not consider changes in the present ownership arrangements of its water supply system. There is presently no opportunity for acquiring an equity interest in the Portland system. Portland has indicated that its consideration of long term supply arrangements will rely on the results of the Phase 2 Plan. Whether Portland will accept joint ownership of its water supply system by others is not known. This alternative receives a ranking of 2. Willamette River Supply City of Tigard System w. A City of Tigard supply system would be owned by the citizens of Tigard. This alternative receives a ranking of 1. rrr Regional Supply System ,,,,, It is anticipated that the development of a regional supply system will provide Tigard the opportunity for ownership of these facilities. This alternative receives a ranking of 1. Water Supply Agreements and Contract Provisions rr Tigard has existing water service agreements with Lake Oswego and Portland. A general description of these agreements is presented in Chapter 3. It is to Tigard's advantage to pursue and enter into a water service contract that provides the city and 0.1 a potential provider with the fairest contract provisions. Each alternative is ranked on the existing contract and the potential for renegotiation of the existing agreement with more equitable terms. The highest ranked alternatives are those that provide Tigard the opportunity to enter into a new agreement for water service that, among other things, establishes the amount of water to be supplied, provides the potential for the most equitable contract provisions and provides the potential for Tigard to have direct """ and substantive input into the rate setting process. City of Lake Oswego Supply rr. The existing agreement for water service between Lake Oswego and Tigard allows Tigard to purchase surplus water, allows Lake Oswego to unilaterally establish the +r cost of water and allows the supply of water to be reduced at Lake Oswego's discretion. Lake Oswego has presented a framework for discussions of a new institutional arrangement by which Tigard can gain water service through ownership p,,,, of facilities. It is anticipated that such an arrangement will provide Tigard the opportunity to share in water supply and cost decisions through the potential creation of a water supply authority or similar entity. This arrangement provides Tigard the 93-0292.101 4-2 VW opportunity to pursue a favorable water supply agreement. This alternative receives a ranking of 1. City of Portland Supply The existing agreement for water service between Portland and Tigard allows Tigard to purchase surplus water at rates established by Portland. While this contract is utility •• based, water rates are established through calculations based on an average annual water use and peaking factors of past water use periods. Application of certain provisions of this agreement result in variability of water rates and can cause significant changes in these rates from year to year. While Portland has indicated that there is a potential for a renegotiation of the existing contract, or any subsequent contract, there are no indications of anticipated contractual provisions. This alternative receives a ranking of 2. Willamette River Supply City of Tigard System 1111 A city owned supply and treatment system would require no contract for service. This alternative receives a ranking of 1. Regional Supply System It is anticipated that a regional supply system would allow Tigard the opportunity to participate in the development of agreements for water service. Through this process it would be expected that Tigard could secure a contractual framework that provides water to Tigard on a cost of service basis. This alternative receives a ranking of 1. 0111 Required Improvements and Estimated Project Costs "" For each alternative under consideration required improvements have been identified and estimated project costs developed. Project cost estimates include the cost of treatment facilities, pumping facilities, transmission mains and any cost related to the - construction of new facilities required to bring a long term supply of water to the city. These costs also include costs that Tigard must pay to other providers for water. The estimated project costs for each alternative are presented and discussed in Chapter 3, Supply Alternatives. Each alternative is ranked according to the estimated costs of implementing the supply alternative. All project cost estimates are in 1994 dollars and include the estimated cost of improvements through the year 2020. City of Lake Oswego Supply Y. It is estimated that the project cost of a Lake Oswego supply for Tigard will be approximately $16.4 million. A summary of these costs is presented in Table 3-1. This alternative receives a ranking of 2. 93-0292.101 4-3 ,,,• City of Portland Supply It is estimated that the project cost of a Portland supply for Tigard will be approximately $6.05 million. This alternative receives a ranking of 1. Willamette River Supply City of Tigard System The estimated project cost of a City of Tigard Willamette River water supply system is approximately $35.0 million. This alternative receives a ranking of 4. Regional Supply System The estimated project cost of a regional Willamette River water supply system is approximately $182.0 million. Tigard's estimated share of this cost is approximately rrr $18.2 million. This alternative receives a ranking of 3. Estimated Cost of Water The cost of water has been estimated for each alternative. As presented in Chapter 3, ,W these costs may include operation and maintenance costs, debt service for the repayment of bonds used to finance initial capital improvements, depreciation costs and/or a return on investment cost. These costs are presented in the cost per ccf of water and represent the estimated cost of water in 1994 dollars. If possible, consideration is also given to the estimate cost of water to the year 2020. Each alternative is ranked according to its estimated costs of water. City of Lake Oswego Supply The estimated cost of water for the Lake Oswego supply is approximately $1.06 per so ccf. Based on the estimates presented in Chapter 3, the estimated cost of water may decline over time as the user base expands and debts are retired. This alternative receives a ranking of 1. ■. City of Portland Supply The estimated cost of water for the Portland supply is variable. It may range from approximately $0.80 to $1.05 per ccf. No determination of water costs beyond 1999 have been made. While the lower limit of this cost range is the lowest estimate of viii probable water costs, the potential for variability of costs and the uncertainty of future water costs raises the relative ranking of the other alternatives. This alternative receives a ranking of 1. IMP 93-0292.101 4-4 i y Willamette River Supply City of Tigard System The estimated cost of water from a Willamette River supply owned by Tigard is approximately $2.00. This alternative receives a ranking of 3. Regional Supply System r r, The estimated cost of water from a regional Willamette River supply is approximately $1.08 This alternative receives a ranking of 2. Water Rights Each alternative has water rights issues associated with the delivery of water to ""' Tigard. The inability to use or acquire water rights may make an alternative unfeasible. Should Tigard develop a new water supply independently, water rights issues become very important. When purchasing water from other water purveyors, the water rights issues become a matter of evaluating the providers ability to meet the contractual obligations to Tigard. Each alternative will be ranked on this issue when comparing water supply alternatives. City of Lake Oswego Supply ..r The City of Lake Oswego has water rights on the Clackamas and Willamette Rivers. Lake Oswego has used these rights to supply surplus water to Tigard. Lake Oswego has indicated the willingness to consider the potential of allowing these rights to be used by an institutional entity comprised of Lake Oswego and Tigard in a water supply authority or similar entity. This alternative receives a ranking of 1. City of Portland Supply The City of Portland has exclusive water rights to the Bull Run Watershed and +rr additional rights for the Columbia River Ground Water Well Field. Portland has used these rights to supply water to wholesale users. Portland is awaiting the outcome of the Phase 2 Plan prior to action on the further use of these rights or acquisition of •r new rights such as on the Columbia River. This alternative receives a ranking of 2. Willamette River Supply IMO City of Tigard System aim The City of Tigard has no water rights on the Willamette River. This alternative receives a ranking of 4. 93-0292.101 4-5 Regional Supply System The Tualatin Valley Water District has water use permits on the Willamette River that could potentially be used as a source for a regional treatment and supply system. Tigard may gain access to these rights through participation in a regional water supply entity. There are some issues related to the ability to use these rights that remain unresolved. This alternative receives a ranking of 2. Water Quality imi All of the existing developed supply alternatives presently meet existing State and Federal water quality requirements and would be expected to meet any future 1 111 requirements. Any development of a new Willamette River source will also meet water quality requirements. All of the alternatives receive a ranking of 1. Supply Implementation Timing eta City of Lake Oswego Supply It is estimated that this supply alternative could be operational in approximately 3 to 5 years. This alternative receives a ranking of 2. City of Portland Supply rrr It is estimated that this supply alternative could be operational in approximately 1 to 3 years. This alternative receives a ranking of 1. NO Willamette River Supply City of Tigard System 1110 It is estimated that this supply alternative could be operational in approximately 7 to 12 years. This alternative receives a ranking of 4. d Regional Supply System It is estimated that this alternative could be operational in approximately 5 to 10 years. This alternative receives a ranking of 3. "' Certainty of Supply Each alternative is capable of providing of water to Tigard to meet its estimated 2020 needs with varying degrees of certainty. A discussion of the quantity of available supply and conditions of this supply is presented with the description of each alternative presented in Chapter 3. Each supply alternative is ranked on its relative 93-0292.101 4-6 SIM certainty of meeting Tigard's water needs as presented in Chapter 2. For developed systems, certainty of supply is the provider's expressed willingness to work with Tigard in developing a firm long term water supply for the city. Alternatives with the • greatest potential to provide a firm long term water supply to Tigard rank the highest. For undeveloped supplies, certainty of supply relates to the potential for successful development of the supply. Alternatives with the greatest potential for providing our Tigard certainty of supply are ranked the highest. City of Lake Oswego Supply The Lake Oswego analysis of water service to Tigard concluded that expanded Lake Oswego facilities would have adequate capacity to supply both cities to the year 2020. The analysis also presented a documentation of required improvements and provided a framework for discussions that offer Tigard control of its water supply availability. This alternative receives a ranking of 1. ••• City of Portland Supply The City of Portland has not indicated a firm commitment to supply water to Tigard. "" This alternative receives a ranking of 2. Willamette River Supply o w City of Tigard System - A City of Tigard treatment facility on the Willamette would be designed to provide adequate supplies to meet Tigard's 2020 estimated peak day demands. Issues related to raw water availability reduce the ranking of this alternative. This alternative receives a ranking of 4. Regional Supply System A regional supply system on the Willamette would be designed provide adequate supplies to meet Tigard's 2020 peak day demands. The certainty of this supply is less r then for developed supply systems. The availability of existing water use permits, however, improves the ranking of this alternative. This alternative receives a ranking of 3. Ranking Summary and Conclusion A summary of the evaluation criteria and a tabulation of the evaluation ranking of each alternative is presented in Table 4-1. The City of Lake Oswego supply alternative receives the highest total final ranking. The City of Portland supply alternative ranks "" second. A regional supply system on the Willamette River is ranked third and a City of Tigard treatment facility on the Willamette ranks fourth. Recommendations for the implementation of the Lake Oswego supply alternative are presented in Chapter 5. 93-0292.101 4-7 WW um Table 4-1 Summary of Evaluation Criteria ,,,, and Tabulation of Rankings ?A1C.11'lll...e: ::::>:.<.>:>;:.;:::.......::: ;:::><::>::>:«<:>::;:......:.: elp <:«:::::::::<�>::: i»::>:::: :: gN:::>::::>::::>:� ..............iiiiiNg .. d:>:::Wile tti:::Riv. .:<... : : .. ..::.::.: NW Opportunity for City Ownership 1 2 1 1 of Supply System up Water Supply Agreements and 1 2 1 1 Contract Provisions i. Required Improvements and 2 1 4 3 Estimated Project Costs Estimated Cost of Water 1 1 3 2 es Water Rights 1 2 4 2 •• Water Quality 1 1 1 1 Supply Implementation Timing 2 l 1 4 3 WOCertainty of Supply 1 I 2 4 3 Total Points I 10 I 12 I 22 I 16 no I Final Ranking 1 I 2 4 3 I ow or mg ist es is 93-0292.101 4-8 t t t t c t 1 t 1. CHAPTER 5 E aii rr CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS me Conclusions It is recommended that Tigard select the Lake Oswego supply alternative as Tigard's long term water supply. Tigard should proceed immediately with the steps needed to develop this supply. Negotiations should begin immediately with Lake Oswego to develop agreements. Tigard's water system master plan should be updated and a financial plan prepared concurrently with these negotiations. Interim water supplies are needed to supplement existing supplies as the recommended supply alternative is or. developed. Discussions should be held with Portland and the Tualatin Valley Water District for these interim water supply needs. Recommendations It is recommended that Tigard proceed with the following items. Items 1 through 11 should proceed immediately and concurrently and be concluded in approximately one year. Items 12 and 14 should proceed immediately and continue indefinitely. 1. Formally adopt this plan and recommendations. Note: The City of Tigard City Council formally adopted this plan on September 27, 1994, under City of Tigard Resolution No. 94-45. A copy of this resolution is included as Appendix D of this document. This final Water Supply Plan Update includes minor modifications of the draft document. 2. Incorporate this plan into the City's Comprehensive Plan. rr► 3. Proceed with negotiations with the City of Lake Oswego to develop a long term supply of water. The negotiations should consider institutional, financial, operational and other relevant matters. 4. Develop and execute agreements with Lake Oswego upon successful completion of negotiations. 5. Prepare a comprehensive water system master plan update. The plan will rrr identify those system improvements required for implementation of the Lake Oswego supply as well as internal system improvement requirements. Data from this plan will be used in the financial plan. +rr 6. Prepare a financial plan for the City water system considering the financial requirements of the Lake Oswego supply, interim water supply costs from Portland and the Tualatin Valley Water District until completion of the Lake Oswego supply expansion, internal system capital improvement requirements, operations and maintenance costs, and other items as appropriate. rr 7. Proceed with the recommendations of the financial plan including authorization for and sale of bonds and water rate adjustments. 93-0292.101 5-1 m• r 8. Review existing operational conditions with Lake Oswego to establish arrangements that allow Tigard and Lake Oswego to maximize the available water supply prior to the completion of the proposed supply expansion. 9. Review with Portland Tigard's interim water supply needs during the period that the recommended long term supply alternative is being developed. These discussions should include: A. An immediate review of transmission piping configuration and capacities to confirm the actual capacity of the Bradley Corner si connection. B. A review of water use patterns and system operations to provide in the most economical supply of water. C. A further review of the impacts on anticipated water costs from variations in system operations. D. A review of the existing agreement for water service. This review .r► should include a discussion of the potential cost impacts of an interim supply arrangement and the potential benefit to Portland for Tigard's ultimate reduction in Portland water use. 10. Review with the Tualatin Valley Water District Tigard's interim water supply needs. The discussions should include: sr A. Review the potential for an agreement for water service that provides Tigard the opportunity to purchase surplus water to supplement existing supplies while the recommended long term supply alternative is developed. B. Determine the need for improvements to provide an adequate interim water supply while the Lake Oswego supply is developed. C. Review potential connection configurations of this interim supply sof in addition to pressure, flow, supply and the cost of service associated with such an arrangement. D. Review the costs associated with the development of this interim supply and assess its further consideration. 11. Maximize the use and capacity of City of Tigard ground water well supplies. These supplies are limited, however, additional well capacity may be available to supplement existing supplies as the recommended long term supply alternative is developed. 12. Participate in the current regional water supply planning efforts, the Phase 2 .�► Regional Water Supply Plan, and in the subsequent implementation of that plan and other plans that may provide for Tigard's water supply needs beyond the year 2020. 93-0292.101 5-2 ow 13. Participate in discussions of water supply issues with entities interested in the potential long term development of the Willamette River as a regional water taa supply. 14. Periodically review the findings and conclusions of this supply plan update to r�. provide guidance for the supply of water to the City beyond the year 2020. OW arr +rr NW +r rr OW 00 93-0292.101 5-3 1 t t t t t i t c c c E APPENDIX A irr REFERENCES City of Beaverton, Water System Facility Plan, Brown and Caldwell, April 1991. wo City of Lake Oswego, Water System Master Plan and Executive Summary, CH2M Hill, June 1988. so Draft Task 7 Technical Memorandum, Phase 2 Regional Supply Plan, Montgomery Watson, February 1994. too Estimating Water Treatment Costs Volume 2. Cost Curves Applicable to 1 to 200 mgd Treatment Plants, Culp/Wesner/Culp, August 1979. ow Tigard Water District 5-Year C1P, EES, June 1993. o„ Tigard Water District and City of Lake Oswego, Agreement for Water Service, July 1983. Tigard Water District and City of Portland, Agreement for Water Service, February or 1983. Washington County Supply Line; Capacity Studies for the Tualatin Valley Water District, EES, September 1993. Water Source Options Study-City of Portland Bureau of Water Works, CH2M Hill, February 1992. Water Supply for Bull Mountain Area, Gil Meigs, September 1986. err Water Supply & Water Distribution for Tigard Water District, EES, May 1990. Ira Wolf Creek Highway Water District Facilities Plan, EES, October 1990. err ow ow ow r. 93-0292.101 A-1 l L L L C L C L L L L E L t L APPENDIX B • 40 ,Report final -. fog , out 'tigd , h and Slit/ • tout . mates Service 1 �v �atlosi of "° 4 N k 1110 =r. Prepped tot CO ofLage Oswego ,, . :tom I- by NO• 2L or CK IuIY 1994 to 041 • 41. Contents eraPage Summary Report S-1 Introduction S-1 Summary of TM-1 S-1 General S-1 Population S-2 Water Demand S-2 Summary of TM-2 S-6 us General S-6 Schedule for Improvements S-6 Cost Estimates S-9 +rr Summary of TM-3 S-11 General S-11 Operations and Maintenance (O&M) Costs S-11 wr Capital Costs S-11 Cost Comparison S-16 • Technical Memorandum No. 1 1-1 Introduction 1-1 Population 1-1 Water Demand 1-2 Technical Memorandum No. 2 2-1 Introduction 2-1 Schedule for Improvements 2-1 Cost Estimates 2-5 Scenario 1 2-5 Scenario 2 2-8 • as Technical Memorandum No. 3 3-1 Introduction 3-1 Operation and Maintenance (O&M) Costs 3-1 Allocation of O&M Costs for Scenario 2 3-2 Estimated Value of Existing Capital 3-6 Allocation of Existing Capital 3-11 Allocation of New Capital for Scenario 2 3-13 Cost Comparison 3-13 Initial Rate Impacts 3-18 Summary and Conclusions 3-24 i i s Tables 1110 Number Page g Summary Report 1-1 Population Projections for Lake Oswego and Tigard S-3 1-2 Water Demand Projections for Lake Oswego and Tigard S-5 2-1 Revised Capital Costs for Scenario 1—Lake Oswego Only S-10 2-2 Revised Capital Costs for Scenario 2—Lake Oswego plus Tigard S-12 3-1 Estimated Annual 0 and M Costs, Scenario 1—Lake Oswego Only S-13 3-2 Estimated 0 and M Costs, Scenario 2—Lake Oswego plus Tigard S-14 3-4 Allocation of 0 and M Costs to Lake Oswego and Tigard Scenario 2—Lake Oswego plus Tigard S-15 3-6 Allocation of Existing Capital, Scenario 2—Lake Oswego plus Tigard S-17 r• 3-7 Allocation of New Capital, Scenario 2—Lake Oswego plus Tigard S-18 3-10 Present Worth Costs of Water Supply Scenarios, Lake Oswego and Tigard• S-19 3-15 Comparison of Residential Customer Water Rates for Regional Providers S-23 Technical Memorandum No. 1 1-1 Population Projections for Lake Oswego and Tigard 1-3 """ 1-2 Water Demand Projections for Lake Oswego and Tigard 1-5 Technical Memorandum No. 2 • 2-1 Revised Capital Costs for Scenario 1, Lake Oswego Only 2-6 2-2 Revised Capital Costs for Scenario 2, Lake Oswego plus Tigard 2-9 Technical Memorandum No. 3 3-1 Estimated Annual 0 and M Costs, Scenario 1—Lake Oswego Only 3-3 3-2 Estimated 0 and M Costs, Scenario 2—Lake Oswego plus Tigard 3-4 3-3 Allocation of 0 and M Costs to Base and Maximum Day . Scenario 2—Lake Oswego plus Tigard 3-5 3-4 Allocation of 0 and M Costs to Lake Oswego and Tigard up Scenario 2—Lake Oswego plus Tigard 3-7 3-5 Estimated Depreciated Replacement Cost of Existing Capital Scenario 2—Lake Oswego plus Tigard 3-8 3-6 Allocation of Existing Capital, Scenario 2—Lake Oswego plus Tigard 3-12 3-7 Allocation of New Capital, Scenario 2—Lake Oswego plus Tigard 3-14 3-8 Present Worth of New Capital, Scenario 1—Lake Oswego Only 3-15 3-9 Present Worth of New Capital, Scenario 2—Lake Oswego plus Tigard 3-16 .3-10 Present Worth of Water Supply Scenarios, Lake Oswego and Tigard 3-17 .• 3-11 Impacts of Interest Rate and Escalation Factor On Present Worth Costs for Lake Oswego 3-19 3-12 Estimated Rate Increases for Lake Oswego, Scenario 1—Lake Oswego Only 3-20 ii rr Tables (cont.) Number Page 3-13 Estimated Rate Increases for Lake Oswego, Scenario 2- o,„ Lake Oswego plus Tigard (20-year Buy-In) 3-21 3-14 Estimated Rate Increases for Lake Oswego, Scenario 2— Lake Oswego plus Tigard (Lump Sum Buy-In) 3-23 3-15 Comparison of Residential Customer Water Rates for Regional Providers 3-25 Figures Number Page Summary Report 1-1 Master Plan (1988) and Revised (1994) Population Projections S-4 2-1 Water Treatment Plant Capacity Requirements—Scenario 1 (Lake Oswego only) . S-7 2-2 Water Treatment Plant Capacity Requirements—Scenario 2 • (Lake Oswego plus Tigard) S-8 S-1 Projected Rate Impacts for Lake Oswego (20-year Buy-In) S-21 S-2 Projected Rate Impacts for Lake Oswego (Lump-Sum Buy-In) S-22 Technical Memorandum No. 1 1-1 Master Plan (1988) and Revised (1994) Population Projections 1-4 NIP Technical Memorandum No. 2 2-1 Water Treatment Plant Capacity Requirements—Scenario 1 (Lake Oswego only) . . 2-2 2-2 Water Treatment Plant Capacity Requirements—Scenario 2 (Lake Oswego plus Tigard) 2-4 low iii ... V •r t Y VW I 4 • Vi 411 sem ' ras "1 1O 140. Summary Report Tigard i er Service With and Without 9 �' Evaluation of Wat lir ...1 1 i i 7 Summary Report Introduction `• The purpose of this report is to summarize the results of three technical memoran- dums that collectively present the evaluation of water service with and without Tigard. The subjects of the three technical memorandums are as follows: ' • Technical Memorandum No. 1 — Revised Population and Water De- mand Projections for City of Lake Oswego and Tigard • Technical Memorandum No. 2 — Revised Capital Costs for Water Supply, Treatment, Pumping and Transmission, Water System Master Plan Scenarios 1 and 2 • Technical Memorandum No. 3 — Cost Analysis of Water Supply Sce- narios This report provides a brief summary of each technical memorandum (TM). Addi- tional details and information can be found in the TMs. The two water supply alter- natives evaluated are the two alternatives developed in the City of Lake Oswego 1988 .. Water System Master Plan. The two water supply alternatives are defined as Scenar- _. io 1—Lake Oswego Only, and Scenario 2—Lake Oswego plus Tigard. Scenario 1 assumes water service to Tigard is discontinued immediately. Scenario 2 assumes +� facilities are expanded to serve all of Tigard's water needs through the year 2020. The table and figure numbers referenced in this summary report are the same as the numbers used in the technical memorandums to provide easy reference to the more detailed information found in the technical memorandums. Therefore, the table and figure numbers used in this summary report are not in numerical sequence. SO Summary of TM-1 Air General -. The purpose of TM-1 is to present updated population and water demand projections ire for the City of Lake Oswego and Tigard. The updated projections will be used in this project for determining both the timing and capacity requirements of capital improve- ments. Demand projections will be utilized to estimate future operation and mainte- S-1 `rr City of Lake Oswego July 29, 1994 Summary Report Evaluation of Water Service With and Without Tigard - nance requirements and to allocate costs of improvements-to Lake Oswego and Tigard for Scenario 2. Population Population projections for the City of Lake Oswego's Urban Service Boundary (USB) and Tigard have been updated since completion of the Water System Master Plan in - 1988. Population projections for the area within the City of Lake Oswego's USB have been updated by Metro and are presented in Table 1-1. Population projections for Tigard's water service area have been recently updated by Murray Smith & Asso- -No dates and are shown in Table 1-1 also. The City of Lake Oswego's USB includes several independent water districts'and areas outside the current City Limits which are served directly by Lake Oswego, buy - water from Lake Oswego or have another source of supply. The population estimates for Lake Oswego include all area within the USB and therefore include population 'y"' within the other water districts and areas outside the current City Limits but within the USB. The 1988 Water System Master Plan assumed Lake Oswego would even- tually supply all the water requirements for the area within the USB, including the water requirements of the independent water districts. The combined population for Lake Oswego and Tigard in the year 2020 is projected ""' to be 101,328. The 1988 Water System Master Plan presented a combined population of 100,533 in the year 2012. The revised population estimates indicate a lower pro- jected growth rate over the next 25 years. The revised year 2020 population projec- ``� tion of 49,628 for Lake Oswego is consistent with previous estimates of the ultimate population within the USB (approximately 50,000). The year 2020 population for Tigard most likely does not represent ultimate values since the Tigard service area could potentially grow beyond existing boundaries. The population projections are • presented graphically in Figure 1-1. - Water Demand Water demand projections for Tigard have been updated by Murray Smith & Associ- ates and are presented in Table 1-2. Water demand projections for Lake Oswego are also presented in Table 1-2. The Lake Oswego projections are based on the per capita demand projections and peaking factors utilized in the 1988 Water System Master Plan. 4.0 S-2 is ,, Table 1-1 Population Projections for Lake Oswego and Tigard '.r Population 1988 Estimates.K • 1994 Estimates Year Lake Oswego Tigard Total Lake Oswego Tigard Total irr 1987 29,342 24,050 53,392 1989 31,334 26,936 58,271 35,725 1992 34,323 31,266 65,589 37,260 - ,,� 1994 36,298 32,785 69,083 38,283 33,500 71,783 1995 37,286 33,545 70,831 38,795 34,533 73,328 2000 42,225 37,342 79,567 40,988 39,700 80,688 NW2005 47,163 41,140 88,303 43,181 42,600 85,781 2006 48,151 41,899 90,050 43,620 43,180 86,800 2010 52,102 44,937 97,039 45,374 45,500 90,874 2012 54,077 46,456 100,533 46,286 46,740 93,026 2015 47,219 48,600 95,819 2020 49,628 51,700 101,328 Legend: Lake Oswego-Area within Urban Services Boundary Tigard - Tigard Water District ""' Total - Lake Oswego plus Tigard 1988 Estimate-Source: 1988 Water System Master Plan 1994 Estimate-Sources: Metro Estimates for Lake Oswego Murray Smith & Associates Estimates for Tigard r. , WS SO _I nr OW S-3 S Figure 1-1 Master Plan (1988) and Revised (1994) Population Projections 120,000 . 100,000 ' • J� 80,000 —f—Lake Oswego-1988 • --o—Lake Oswego+Tigard-1988 • • 1994 Projections —Lake Oswego-1994 • ■ —Lake Oswego+Tigard-1994 — 60.000 4/3- -- lop a 40,000 - 20,000 0 1985 1990 1995 2000 2005 2010 2015 2020 Year • S-4 7/28/94 or Table 1-2 Water Demand Projections for Lake Oswego and Tigard es 1994 Estimate 1988 Estimate Tigard Lake Oswego Total Total Year ADD MDD ADD MDD ADD MDD MDD my 1987 19.5 1989 5.64 13.0 5.6 13.0 21.3 1992 5.89 13.6 5.9 13.6- 23.9 +W 1994 5.00 11.5 6.05 14.0 11.0 25.5 25.2 1995 5.17 11.9 6.13 142 11.3 26.0 25.9 2000 6.00 13.8 6.48 15.0 12.5 28.8 29.0 as 2005 6.40 14.8 6.82 15.8 13.2 30.5 32.2 2010 6.80 15.7 7.17 16.6 14.0 32.3 35.4 2012 7.03 162 7.31 16.9 14.3 33.1 36.7 NW 2015 7.30 16.8 7.46 172 14.8 34.0 2020 7.80 17.9 7.84 18.1 15.6 36.0 as Notes: ADD-Average Day Demand(mgd) • - : MDD-Maximum Day Demand (mgd) _ Source: up Tigard-Murray, Smith&Associates • Lake Oswego- 1988 Master Plan per capita demands IS as as 'ar lar a■ • -, 'gm , irr um' •' S-5 City of Lake Oswego July 29, 1994 Summary Report Evaluation of Water Service With and Without Tigard w The information presented in Table 1-2 indicates the ultimate demand projection of 36 million gallons per day (mgd) is nearly the same as was used in the 1988 Water Sys- tem Master Plan. However, the ultimate water demand is not projected to occur until the year 2020, a lag of 8 years compared to the 1988 Water System Master Plan projections. In the context of this study the term ultimate demand applies only to the year 2020 demand since population projections for Lake Oswego and Tigard do not extend beyond that date. • Summary of TM-2 +rr General NW • The purpose of TM-2 is to present revised capital costs and schedules for water sup- ply, treatment, pumping and transmission improvements for the alternatives presented • "" in the 1988 Water System Master Plan: Scenario 1 (Lake Oswego only) and Scenario 2 (Lake Oswego plus Tigard). The revised capital costs and schedule will be used to develop the economic comparison of the two scenarios. The capital costs presented in '°r' • this TM include only the water supply, treatment, pumping and transmission compo- nents of the original 1988 Master Plan, and do not include all components of the City of Lake Oswego's Capital Improvement Program. The capital costs shown are for ""' only those components that will be impacted by not continuing full service to Tigard (Scenario 1) or by continuedservice to Tigard (Scenario 2). Schedule for Improvements The population and water demand projections presented in TM-1 were used to update the schedule for proposed improvements to expand water supply capacity. Figures 2- ' - 1 and 2-2 present the updated water demand projections and the proposed timing for capacity expansions. Figure 2-1 presents the water treatment plant capacity requirements for Scenario 1, Lake Oswego only. As shown in Figure 2-1, the water treatment plant and associated facilities will require expansion in the year 2010 based on a current capacity of 16.1 mgd. An expansion of the water treatment plant will increase the capacity of the - plant by an increment of 5.4 mgd, or a total capacity of 21.5 mgd. •-a Figure 2-2 presents the water treatment plant capacity requirements for Scenario 2, Lake Oswego plus Tigard. For Scenario 2, the water treatment plant and associated facilities will require expansion immediately to begin providing all the needs of both S-6 rr NW r ) 11 ! t 1 ! Figure 2-1 Water Treatment Plant Capacity Requirements - Scenario 1 (Lake Oswego only) 40 • 35 0.0a- 30 • rn E • i 25 WTP Expansion aLake Oswego 20 41) 5 - -Lake Oswego +Tigard WTP Capacity z 15 - E a 2 10 La'ce Oswego 5 0 1985 '1990 1995 2000 2005 2010 2015 2020 Year S-7 6/2as4 IT J I I . I :. I I . S' I I ; I I . [ I I I I • I • I ' I Figure 2-2 Water Treatment Plant Capacity Requirements - Scenario 2 (Lake Oswego plus Tigard) 40 5-mgd Expansion >. r '/ J\ • i • 30 .--- V ' cx .00 E ...b. Lake Oswego+Tigard 0 25 ' o E / - 16 mgd Expansion 0 0Gt 20 � of Ex Isting WTP ` Lake Oswego 3 — —Lake Oswego +Tigard E " ' I WTP Capacity 3 15 - E g 2 10 5 0 1985 1990 1995 2000 2005 2010 2015 2020 Year • S-8 6/10/94 um City of Lake Oswego July 29, 1994 Summary Report Evaluation of Water Service With and Without Tigard Lake Oswego and Tigard. The proposed expansion would increase the capacity of the existing water treatment plant to 32 mgd, its original maximum design capacity. As discussed in the 1988 Water System Master Plan, 32 mgd is equal to the maximum water withdrawal amount allowed in Lake Oswego's water right permit on the Clackamas River. In the year 2009 the MDD will exceed 32 mgd and additional capacity will be required. As presented in the 1988 Water System Master Plan, a 5- mgd expansion to treat Willamette River water is assumed to provide peak water +.. needs beyond 32 mgd. The expansion proposed for the year 2009 was assumed to be 5-mgd to allow direct use of information developed during the 1988 Water System Master Plan regarding pumping and transmission. Cost Estimates Cost estimates were developed using the information in the 1988 Water System Mas- - . ter Plan. Where applicable, cost estimates were adjusted using the Engineering News Record Construction Cost Index for Seattle of 5747 (May 1994). Cost estimates for — raw water intakes, pump stations and water treatment were revised based on new assumptions resulting from changes since the 1988 Water System Master Plan was completed. Changes to the 1988 Water System Master Plan recommendations includ- e, ed updating river intake construction costs to account for more stringent fish screen requirements; improvements at the water treatment plant to provide additional clearwell storage to meet more stringent disinfection contact time requirements; im- provements at the water treatment plant to store and feed chemicals for control of lead and copper corrosion in building plumbing; and a revised water treatment process for treating Willamette River water during the summer and fall of the year. Revised cost estimates are presented for the following cost components: • Pipeline Improvements for Finished Water Transmission • Pipeline Improvements for Raw Water Transmission • Finished Water Pump Station Improvements ,■, • Raw Water Pump Station Improvements • Water Treatment Plant Improvements ale Scenario 1 — Lake Oswego Only Scenario 1 assumes Lake Oswego will not supply all of Tigard's water needs and will expand to meet only the projected water requirements for the area within the urban services boundary (USB). Table 2-1 presents the revised capital costs for Scenario 1. The "project numbers" shown in Table 2-1 coincide with the project numbers used in the 1988 Water System Master Plan for Scenario 1. One new project has been added to Scenario 1, improvements for sludge handling, chemical feed and storage, and S-9 J wie Table 2-1 Revised Capital Costs for Scenario 1 Lake Oswego Only PROJECT COST NO. PROJECT DESCRIPTION YEAR ($) rr Pipeline Im)rovements for Finished Water Transmission: 9 12,000 LF of 24-inch; Lake Oswego WTP to Pacific Hwy.and Laurel St., 2010 1,705,000 parallel to exst. 24-inch or Pipeline Im)rovements for Raw Water Transmission: 13,600 LF of 24-inch; Exst. Clackamas River Intake& P.S.to Lake it 11 Oswego WTP, including Willamette River crossing and 500 LF of 24-inch; 2010 3,433,000 New Intake and P.S.to Exst. Raw Water Pipeline Finished Water Pump Station Improvements: 13 WTP High Service Pumps;4-600 hp-4,730 gpm capacity pumps 2010 1,164,000 Raw Water Pump Station Improvements: 18 New Clackamas R. Intake and P.S.; 14.1-mgd capacity 2010 2,700,000 -or Water Trea'ment Plant Improvements: wr new Improvements for Sludge Handling, Chemical Feed and Storage,and 1996 1,594,000 . . Clearwell Baffles to increase CT " 19 Expend Exst.WTP to 21.5 mgd capacity 2010 2,045,000 TOTAL-SCENARIO 1 12,641,000 Vr NOTES: - :Wr (1) Project numbers are from the 1988 Water System Master Plan. (2) ENR CCI 5747(Seattle Area), May 1994 (3) Project Cost=Construction, Contingencies, Engineering and Administration -ow vi,,, =wr `- S-10 7 City of Lake Oswego July 29, 1994 n„ Summary Report Evaluation of Water Service With and Without Tigard clearwell baffles for CT. This new project and the others listed in Table 2-1 are described in more detail in TM-2. The total cost of improvements required for Sce- nario 1 is estimated to be $12,641,000. The costs shown in Table 2-1 include 35- percent for engineering, contingencies, and administrative costs. Scenario 2 — Lake Oswego plus Tigard 11' Scenario 2 assumes Lake Oswego will supply all of Tigard's water and will expand facilities to meet the combined or total demands of the two service areas. Table 2-2 presents the revised capital costs for Scenario 2. The project numbers shown in Table 2-2 coincide with the project numbers used in the 1988 Water System Master Plan for Scenario 2. The projects listed in Table 2-2 are described in more detail in TM-2. The total cost of improvements required for Scenario 2 is estimated to be $30,936,000. The costs presented in Table 2-2 include 35-percent for engineering, contingencies, and administrative costs. The total costs for Scenario 2 would be .+r shared by Lake Oswego and Tigard. • Summary of TM-3 General The purpose of TM-3 is to present the costs to Lake Oswego customers for each of r�r the two alternative supply scenarios and to evaluate whether potential investments by the City to serve Tigard are of net benefit to the City. The revised capital costs and schedules developed in TM-2 were used for developing the economic comparison of the two supply scenarios. Operation and Maintenance (O&M) Costs Operation and maintenance costs were estimated for each water supply scenario, the O&M costs for Scenario 2 were allocated to Lake Oswego and Tigard using a cost of service approach, and the present worth cost of the O&M was calculated. Tables 3-1 and 3-2 present the estimated O&M costs for the two scenarios. Table 3-4 summariz- es the allocation of Scenario 2 O&M costs to Lake Oswego and Tigard. Capital Costs The value of existing capital assets was estimated using the depreciated replacement value method. The depreciated replacement cost for existing capital assets was then to allocated to Lake Oswego and Tigard using a cost of service approach. The amount S-11 Table 2-2 Revised Capital Costs for Scenario 2- Lake Lake Oswego plus Tigard PROJECT COST NO. PROJECT DESCRIPTION YEAR ($) +r. Pipeline Im)rovements for Finished Water Transmission: ,,r„ 9 12,000 LF of 36-inch; Lake Oswego WTP to Pacific Hwy.and Laurel St., 1996 3,291,000 parallel to exst.24-inch 2,600 LF of 30-inch; Pacific Hwy. and Laurel St. to State and Ladd St.; parallel to exst.24-inch 800 LF of 24-inch;Quarry Rd. -Lower Boones Ferry Rd.to Douglas Way �• 10 6,100 LF of 30-inch; North Shore Rd., Middle Crest Rd.,and State St.- 2003 1,072,000 from State St. and Ladd St. to Iron Mtn. Blvd.and Fairway Rd. 'r" Pipeline Im)rovements for Raw Water Transmission: • 13,600 LF of 30-inch; New Clackamas River Intake& P.S.to Lake 12 Oswego WTP, including Willamette River crossing,and 500 LF of 30- 1996 4,035,000 inch; New Intake and P.S.to Exst. Raw Water Pipeline wr 13 4,000 LF of 16-inch; new Willamette R. Intake and P.S.to exst. WTP site 2009 583,000 Finished Water Pump Station Improvements: 13 New WTP High Service Pump Station; 37-mgd capacity 1996 2,880,000 Raw Water Pump Station Improvements: 21 New Clackamas R. Intake and P.S.; 25.1-mgd capacity 1996 3,659,000 23 New 5-mgd capacity Willamette R. Intake and P.S. 2009 1,755,000 • Water Trea ment Plant Improvements: 24 Expand Exst.WTP to 32 mgd capacity 1996 10,321,000 25 New 5-mgd capacity WTP expansion for Willamette R. water 2009 3,340,000 TOTAL-SCENARIO 2 30,936,000 NOTES: (1) Project numbers are from the 1988 Water System Master Plan. (2) ENR CCI 5747 (Seattle Area) May 1994 (3)Cost=Construction, Contingencies, Engineering and Administration •ti S-12 ar Table 3-1 Estimated Annual 0 and M Costs Scenario 1 -Lake Oswego Only 1994 2,020 • Estimated Estimated O&M O&M SO O&M Item ($) ($) River Intake& P.S. w Electrical 113,328 146,911 Maintenance 4,706 12,200 Pump Maintenance 13,840 17,941 Raw Water Pipeline 5,100 6,611 Water Treatment 613,466 770,882 ar Sludge Handling& Disposal 15,142. 19,629 High Service Pumping 'M'' Electrical 188,228 244,005 Maintenance 4,745 6,152 Finished Water Pipeline 4,745 6,152 Storage Reservoir 2,500 2,500 TOTAL ANNUAL O&M 965,801 1,232,982 _tug Note: O&M Costs are 1994 Dollars VIM S-13 7/15/94 . ry Table 3-2 Estimated 0 and M Costs • Scenario 2-Lake Oswego plus Tigard wr 1994 2009 2010 2020 Estimated Estimated Estimated Estimated O&M Cost O&M Cost O&M Cost O&M Cost O&M Item ($) ($) ($) ($) �„ River Intake& P.S. Electrical 207,007 258,925 261,722 293,050 Maintenance 5,522 6,907 11,482 12,318 Pump Maintenance 16,242 20,315 20,535 22,992 Raw Water Pipeline 5,985 7,486 7,567 8,472 Water Treatment Clackamas R. WTP 522,118 639,614 690,127 732,848 Willamette R. WTP 57,100 57,100 Sludge Handling& Disposal 27,658 34,595 34,968 39,154 High Service Pumping Electrical 343,820 430,050 434,696 486,729 Maintenance 5,569 6,966 7,041 7,884 Finished Water Pipeline 2,913 3,644 3,683 4,124 Storage Reservoir 2,500 2,500 2,500 2,500 TOTAL ANNUAL O&M 1,139,334 1,411,001 1,531,421 1,667,170 Note: O&M Costs are 1994 Dollars wr ale IMO wir S-14 7/15/94 } eI Table 3-4. Allocation of 0 and M Costs to Lake Oswego and Tigard Scenario 2-Lake Oswego plus Tigard Allocated Costs Annual O&M I Maximum I Total Allocation Year 1994$ Base Day Total Lake Oswego I Tigard I Total 1994 1,139,334 917,674 221,661 1,139,334 624,162 515,173 1,139,334 2009 1,411,001 1,134,104 276,898 1,411,001 724,993 686,008 1,411,001 2010 1,531,421 1,191,896 339,526 1,531,421 786,018 745,403 1,531,421 2020 1,667,170 1,294,314 372,856 1,667,170 836,862 830,308 1,667,170 Note: Costs are in 1994 dollars. .r . . r.r S. w. ... . +.. .r -r. +r. aS. S-15 City of Lake Oswego July 29. 1994 Ar. Summary Report Evaluation of Water Service With and Without Tigard allocated to Tigard was assumed to be the amount Tigard would have to pay Lake Oswego to purchase or buy Tigard's share of the existing facilities. Table 3-6 sum- marizes the allocation of the depreciated replacement value of existing capital to Lake Oswego and Tigard. Table 3-7 presents a summary of the allocation of new capital •• costs for Scenario 2. The allocation of capital costs and O&M cost to the two entities was based on a cost of service approach; costs were allocated to base and maximum day followed by allocation of the base costs and maximum day costs to each entity based on projected average day and maximum day demands. Cost Comparison NW Present Worth Cost Analysis Present worth costs were calculated using both a nominal interest rate and an escala- tion factor. The salvage value of new capital was determined and used in the calcula- tion of present worth. The results of the present worth analysis (see Table 3-10) indicate that Scenario 2 has a lower total present worth cost for Lake Oswego assuming a buy-in amount from Tigard equal to its allocated share of existing capital. Without the assumed buy-in amount, Lake Oswego's total present worth cost of Scenario 2 ranges from 2.9% less to 7.0% greater than the total present worth of Scenario 1, assuming an escalation factor range of 3.00% to 4.00% per year and a nominal interest rate range from 6.50% to 8.00% per year. Water Rate Impact Analysis The initial impacts to Lake Oswego's water rates will be a significant increases for either scenario. The estimated rate increase in fiscal year 1995-96 for Scenario 1 is 54% followed by a 7% rate increase in fiscal year 1996-97. The 54% rate increase in 1995-96 will be required because of the loss of revenue from water sales to Tigard and the 7% rate increase in 1996-97 will be required to fund debt service on revenue bonds required to fund capital improvements at the water treatment plant. It is likely .'" that the initial rate impacts of Scenario 1 could be dampened if Lake Oswego could continue to sell water to Tigard for the next few years with annual rate increases designed to offset the eventual loss of sales to Tigard. The impacts on Lake Oswego's water rates for Scenario 2 are dependent on both the amount of buy-in by Tigard and how the buy-in amount is financed. If Lake Oswego financed the buy-in by Tigard over a 20-year payment period, the estimated rate 111 S-16 A 1110 Table 3-6 Allocation of Existing Capital Scenario 2-Lake Oswego plus Tigard yip Total Allocation Capital Item Lake Oswego I Tigard I Total wr Clackamas R. Intake and P.S. TOTAL-Intake and P.S. 290,145 286,727 576,872 27-inch Raw Water Pipeline 838,921 829,038 1,667,959 am Water Treatment Plant 11. TOTAL-Water Treatment 2,647,990 2,616,793 5,264,783 IMO Finished Water Transmission ++�• TOTAL-Finished Water Transmission .1,614,036 1,595,021 3,209,057 _s,. Storage TOTAL-Storage 822,439 812,750 1,635,190 Clackamas R. Water Rights, 50cfs _ 378,731 374,269 753,000 ;.rrr TOTAL-Existing Capital 6,592,262 6,514,598 13,106,860 ter. Orr WOO ,,, S-17 Olt Table 3-7 Allocation of New Capital Scenario 2-Lake Oswego plus Tigard Total Allocation Capital Item Lake Oswego I Tigard I Total api Pipeline Improvements for Finished Water Transmission 12,000 LF of 36';2,600 LF of 30";800 LF of 24' 1,655,250 1,635,750 3,291,000 WO 6,100 LF of 30' 539,176 532,824 1,072,000 "" Pipeline Improvements for Raw Water Transmission 13,600 LF of 30';500 LF of 30" 2,029,455 2,005,545 4,035,000 4,000 LF of 16" 293,227 289,773 583,000 Finished Water Pump Station Improvements ._ea New WTP High Service P.S., 37 mgd 1,448,533 1,431,467 2,880,000 Raw Water Pump Station Improvements Clackamas R.,25.1 mgd _ 1,840,341 1,818,659 3,659,000 wr Willamette R., 5-mgd 882,700 872,300 1,755,000 Water Treatment Plant Improvements Expand Exst.WTP to 32 mgd 5,191,078 5,129,922 10,321,000 'rrr Willamette R.expansion,5 mgd 1,679,896 1,660,104 3,340,000 Io TOTAL-SCENARIO 2 15,559,655 15,376,345 30,936,000 S-18 +r+ Table 3-10 Present Worth Costs of Water Supply Scenarios Lake Oswego and Tigard ,ear Base Year: 1994 Escalation Factor: 3.00% Nominal Interest Rate: 7.00% Present Worth Scenario 1 Scenario 2 .r+. Item Lake Oswego Lake Oswego Tigard Existing Capital $0 ($6,514,598) $6,514,598 Proposed Capital $3,949,799 $10,396,794 $10,274,308 O&M $18,494,685 $12,695,332 $10,631,685 TOTAL, with Existing Capital $22,444,484 $16,577,527 $27,420,591 - TOTAL, without Existing Capital $22,444,484 $23,092,125 $27,420,591 err 110 WM Iva S-19 City of Lake Oswego July 29, 1994 ow Summary Report Evaluation of Water Service With and Without Tigard increase in fiscal year 1995-96 for Scenario 2 is 69% assuming receiving an annual reimbursement from Tigard for the assumed buy-in to the existing system. The initial 69% rate increase projected for Scenario 2 could be reduced if Tigard were to pay Lake Oswego a lump sum buy-in amount and Lake Oswego utilized the buy-in .� amount to reduce potential rate increases over the first few years. If it was assumed that $2 million of the initial $6.5 million buy-in amount would be placed in reserve for future capital requirements (present worth cost of improvements required in the years 2003 and 2009), and $4.5 million was used during the period FY1995-96 through FY 1998-99 to reduce annual rate increases and spread the total rate increase required over a longer time period, initial rate increases would be less than 24% per year. Figures S-1 and S-2 present a comparison of projected annual rate increases for Scenarios 1 and 2 assuming a 20-year buy-in period and a lump sum buy-in by Tigard, respectively. Table 3-15 presents a comparison of residential customer water rates for regional water providers. Lake Oswego's current rates are lower than those of surrounding "" water providers. With the rate increases proposed for either scenario, Lake Oswego's residential customer rates would continue to be equal to or less than most of the regional providers. ow It is doubtful that Tigard would buy-in to Lake Oswego's existing system without becoming an equal partner in the management of the water supply and treatment facilities. This would require Lake Oswego to join with Tigard to form a water supply authority or similar entity established by an intergovernmental agreement; each entity would retain local control of its distribution system and customer billing. Based on the results of the present worth analysis there are long term benefits to Lake Oswego if Scenario 2 were implemented. Operation and maintenance costs are re- aw duced on a per unit of production basis and the costs to customers over the next 26 years will be less for Scenario 2 than for Scenario 1. Construction of the transmis- sion pipelines required to implement Scenario 2 will cause disruption and inconve- niences on local streets and highways. Permitting requirements for a new intake and raw water transmission pipeline crossing of the Willamette may also be difficult, but 114 will be required.for either Scenario. Based on changes over the last 10 years, it may be more difficult to obtain permits for the river intake and pipeline crossing in the year 2010 (Scenario 1) compared to permitting for improvements with the next few �•: years (Scenario 2). wt woe S-20 J a i Figure S-1 Projected Rate Impacts for Lake Oswego (20-year Buy-In) 69.2% 70.0% 60.0% 54.3% 50.0% 40.0% O Scenario 1 d Scenario 2 cc 30.0% - c m m a 20.0% - 10.0% - 6.8% 2.4% 2.0% 1.7% 0.9% 0.5% ( MIN 0.0% 0.0% 0.0% I I I r—L� I i FY 1994-95 FY 1995-96 FY 1996-97 FY 1997-98 FY 1998-99 FY 1999-00 S-21 7/28/94 Figure S-2 Projected Rate Impacts for Lake Oswego (Lump-Sum Buy-In) 60.0% 54.3% 50.0% 40.0% 0 Scenario 1 ®Scenario 2 c 30.0% d Q 23.5% 23.6% p. a 20.0% 12.1% 10.0% 6.8% 2.9% 2.0% 1.8% 0.9% 0.0% i I I I I I 0.0%ri FY 1994-95 FY 1995-96 FY 1996-97 FY 1997-98 FY 1998-99 FY 1999-00 S-22 7/28194 I. Table 3-15 Comparison of Residential Customer Water Rates for Regional Providers Yrr Volume Rate Water Provider Basic Customer Charge ($/ccf) Oregon City $12/2 months $1.00 City of West Linn $19/2 months ($19 includes 14 ccf) $1.10 >14 ccf/2 months Clackamas Water District $3.50/month $0.90 0-4 ccf $1.00 >4-12 ccf $125 >12 ccf City of Tualatin $6.90/month $0.95 City of Beaverton $5.57/month $1.31 City of Portland $13/3 months $0.825 <36 ccf/3 months $0.995 >36-60 ccf/3 months +.. $1235 >60 ccf/3 months City of Lake Oswego Current rates $7.65/month $0.50 Scenario 1 -projected 1996/97 $12.61 $0.824 Scenario 2-projected 1996/97 $13.26 $0.866 (20-year Buy-In) INS . Notes: All rates are current as of 8/1/94,and are for residential customers with 3/4-inch meters. rrr ccf=hundred cubic feet=748 gallons -No • AO *ter 4110 '' S-23 7/29/94 w. Poo 11. • Alo Ale e� 4110 NO Technical Memorandum No. 1 Revised Population and Water Demand Projections for City of Lake Oswego and Tigard TECHNICAL MEMORANDUM NO. 1 Cell HILL PREPARED FOR: City of Lake Oswego lar PREPARED BY: Phillip Butterfield, CH2M HILL DATE: June 7, 1994 SUBJECT: Revised Population and Water Demand Projections for City of Lake •.• Oswego and Tigard PROJECT: OPW37635.A0.01 yr Introduction This document is the first technical memorandum for the study of the costs of water "' service both with and without service to Tigard. The purpose of this technical memoran- dum is to present updated population and water demand projections for the City of Lake Oswego and Tigard. The updated projections will be used in this project for determining both the timing and capacity requirement of capital improvements. or Population Population projections for the City of Lake Oswego's Urban Service Boundary (USB) and Tigard have been updated since completion of the Water System Master Plan in 1988. ,s Population projections for the area within the City of Lake Oswego's USB have been made by-Metro and are presented in Table 1-1. Population projections for Tigard's service area have been recently updated by Murray Smith & Associates and are also Arno shown in Table 1-1. Metro population projections for the USB do not go beyond the year 2010. Based on information from the City of Lake Oswego's planning staff, popula- tion for the area within the USB has been estimated to the year 2020 using a 1 percent per year growth factor beyond the year 2010. The City of Lake Oswego's USB includes several independent water districts and areas ' ' outside the current City Limits which are served directly by Lake Oswego, buy water from Lake Oswego or have another source of supply. The population estimates for Lake Oswego include all area within the USB and therefore include population within the other water districts and areas outside the current City Limits but within the USB. The 1988 Water System Master Plan assumed Lake Oswego would eventually supply all the water requirements for the area within the USB, including the water requirements of the inde- pendent water districts. or 1-1 rrr City of Lake Oswego June 7, 1994 Technical Memorandum No. 1 Revised Population and Water Demand r ' The combined population for Lake Oswego and Tigard in the year 2020 is projected to be 101,328. The 1988 Water System Master Plan presented a combined population of 100,533 in the year 2012. The revised population estimates indicate a slightly lower projected growth rate over the next 25 years. The 1994 estimate of the year 2020 total tom population for Lake Oswego and Tigard is essentially the same as the 1988 Water System Master Plan estimate for the year 2012. The population projections are presented graphi- cally in Figure 1-1. Water Demand Water demand projections for Tigard have been updated by Murray Smith & Associates and are presented in Table 1-2. Water demand projections for Lake Oswego are also presented in Table 1-2. The Lake Oswego projections are based on the per capita de- „s, mand projections utilized in the 1988 Water System Master Plan. The per capita average day demand (ADD) is 158 gallons per day, and the per capita maximum day demand (MDD) is 365 gallons per day. The information presented in Table 1-2 indicates the ultimate demand projection of 36 million gallons per day (mgd) is nearly the same as was used in the 1988 Water System Master Plan. However, the ultimate water demand will not occur until the year 2020, a lag of 8 years compared to the 1988 Water System Master Plan projections. In the con- text of this study the term ultimate demand applies only to the year 2020 demand since �• population projections for Lake Oswego and Tigard do not extend beyond that date. The year 2020 population projection of 49,628 for Lake Oswego is consistent with previous estimates of the ultimate population within the USB (approximately 50,000). The year +i 2020 population, and water demand, for Tigard most likely does not represent ultimate values since the service area could potentially grow beyond existing boundaries. IP .1r ar ir ow 1-2 Table 1-1 Population Projections for Lake Oswego and Tigard Population 1988 Estimates 1994 Estimates Year Lake Oswego Tigard Total Lake Oswego Tigard Total 1987 29,342 24,050 53,392 1989 31,334 26,936 58,271 35,725 1992 34,323 31,266 65,589 37,260 1994 36,298 32,785 69,083 38,283 33,500 71,783 1995 37,286 33,545 70,831 38,795 34,533 73,328 2000 42,225 37,342 79,567 40,988 39,700 80,688 ++� 2005 47,163 41,140 88,303 43,181 42,600 85,781 2006 48,151 41,899 90,050 43,620 43,180 86,800 • 2010 52,102 44,937 97,039 45,374 45,500 90,874 2012 54,077 46,456 100,533 46,286 46,740 93,026 2015 47,219 48,600 95,819 2020 49,628 51,700 101,328 .r Legend: Lake Oswego-Area within Urban Services Boundary . ar Tigard - Tigard Water District Total - Lake Oswego plus Tigard 1988 Estimate-Source: 1988 Water System Master Plan 1994 Estimate-Sources: Metro Estimates for Lake Oswego Murray Smith&Associates Estimates for Tigard rrr -rrr wmai rre -- Technical Memorandum No. 1 . 1-3 6/22/94 f l 1 I' , 1 : I I . I t ie 1 1 I 1 1 , 1 [ ' . ' I Figure]-1 Master Plan (1988) and Revised (1994) Population Projections 120,000 . 100,000 j • .00 • MI 80,000 • —0—Lake Oswego-1988 • y —0—Lake Oswego+Tigard-1988 1994 Projections S—Lake Oswego-1994 • ° Lake Oswego+11gard-1994 t \o- .... ....40 . 60,000 7 a ao 40,000 20,000 0 , 1985 1990 1995 2000 2005 2010 2015 2020 Year Technical Memorandum No. 1 1-4 7/19/94 1 WI Table 1-2 Water Demand Projections for Lake Oswego and Tigard r 1994 Estimate 1988 Estimate Tigard Lake Oswego Total Total aw Year ADD MDD ADD MDD ADD MDD MDD 1987 19.5 1989 5.64 13.0 5.6 13.0 21.3 1992 5.89 13.6 5.9 13.6 23.9 ow 1994 5.00 11.5 6.05 14.0 11.0 25.5 25.2 1995 5.17 11.9 6.13 142 11.3 26.0 25.9 2000 6.00 13.8 6.48 15.0 12.5 28.8 29.0 aso 2005 6.40 14.8 6.82 15.8 13.2 30.5 32.2 2010 6.80 15.7 7.17 16.6 14.0 32.3 35.4 2012 7.03 16.2 7.31 16.9 14.3 33.1 36.7 "" 2015 7.30 16.8 7.46 172 14.8 34.0 2020 7.80 17.9 7.84 18.1 15.6 36.0 ar Notes: ADD-Average Day Demand (mgd) . MDD- Maximum Day Demand (mgd) „,r Source: Tigard-Murray, Smith&Associates Lake Oswego- 1988 Master Plan per capita demands • irr NW WI • WO St MY IP • +! I Technical Memorandum No. 1 1-5 6/22/94 rrr +rr ree rrr •r ars it ar s. Technical Memorandum No.. 2 Revised Capital Costs for Water Supply, Treatment, Pumping and Transmission, Water System Master Plan Scenarios. 1 and 2 J TECHNICAL MEMORANDUM NO. 2 CHWIHILL PREPARED FOR: City of Lake Oswego PREPARED BY: Phillip Butterfield, CH2M HILL em, DATE: June 20, 1994 SUBJECT: Revised Capital Costs for Water Supply, Treatment, Pumping and Transmission, Water System Master Plan Scenarios 1 and 2 PROJECT: OPW37635.A0.02 Nap Introduction This document is the second technical memorandum (TM) for the study of the costs of water service both with and without service to Tigard. The purpose of this technical memorandum is to present revised capital costs and schedule for water supply, treatment, pumping and transmission for the 1988 Water System Master Plan Scenario 1 (Lake Os- lo. wego only) and Scenario 2 (Lake Oswego plus Tigard). The revised capital costs and schedule will be used in this project for developing the economic comparison of the two scenarios. The capital costs presented in this TM include only the water supply, treat- y""' ment, pumping and transmission components of the original 1988 Water System Master Plan, and do not include all components of the City of Lake Oswego's Capital Improve- ment Program. The capital costs shown are for only those components that will be im- ap pacted by not continuing full service to Tigard (Scenario 1) or by continued service to Tigard (Scenario 2). Schedule for Improvements The population and water demand projections presented in Technical Memorandum No. 1 (TM-1) were used to update the schedule for proposed improvements to expand capacity. Figures 2-1 and 2-2 present the updated water demand projections and the proposed tim- ing for capacity expansions. Figure 2-1 presents the water treatment plant capacity requirements for Scenario 1, Lake Oswego only. The water demand projections for Scenario 1, based on the information in TM-1, are as follows: *10up 2-1 2 its - L*- 4 4 11 H r ' t 1 IIf t 1 Figure 2-1 Water Treatment Plant Capacity Requirements - Scenario 1 (Lake Oswego only) • 40 35 -- — OW° 30 '� E 00 25 WTP Expansion 0 oLake Oswego 20 - -Lake Oswego +Tigard E WTP Capacity 15 - E 0 2 10 • �s ce Oswego 5 0 • 1985 1990 1995 2000 2005 2010 2015 2020 Year • Technical Memorandum No.2 2-2 6/20/94 or City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs wr 1994 ADD = 6.05 mgd 1994 MDD = 14.0 mgd 2020 ADD = 7.84 mgd 2020 MDD = 18.1 mgd The year 2020 maximum day demand (MDD) projection for Lake Oswego only is 1.7 million gallons per day (mgd) less than the 1988 Water System Master Plan (Master Plan) projection for ultimate MDD. As shown in Figure 2-1, the water treatment plant will require expansion in the year 2010 based on a current capacity of 16.1 mgd. An expansion of the water treatment plant will require the addition of another contact basin and two filters, increasing the capacity of the plant by an increment of 5.4 mgd, or a .. total capacity of 21.5 mgd. Figure 2-2 presents the water treatment plant capacity requirements for Scenario 2, Lake • Oswego plus Tigard. The water demand projections for Scenario 2, based on the infor- m. mation in TM-1, are as follows: 000 1994 ADD = 11.0 mgd 1994 MDD = 25.5 mgd " 2020 ADD = 15.6 mgd 2020 MDD = 36.0 mgd The year 2020 maximum day demand (MDD) projection for Lake Oswego plus Tigard is • 0.7 million gallons per day (mgd) less than the Master Plan projection for ultimate MDD. rr. As shown in Figure 2-2, the water treatment plant will require expansion immediately to begin providing all the needs of both Lake Oswego and Tigard. The proposed expansion • would increase the capacity of the existing water treatment plant to 32 mgd. As dis- ;. cussed in the Master Plan, 32 mgd is equal to the amount allowed in Lake Oswego's water right permit on the Clackamas River. The 32 mgd water right permit has priority over instream minimum flow rights and is therefore a firm water right even during river low flow times. In the year 2009 the MDD will exceed 32 mgd and additional treatment capacity will be required. As presented in the Master Plan, a 5-mgd expansion to treat Willamette River water is planned to provide peak water needs beyond 32 mgd. The capacity of the expansion proposed for the year 2009 was assumed to be 5-mgd to allow direct use of information developed during the Master Plan regarding pumping and trans- mission. I 2-3 X ,.._ II_ it tit ` I ii , 4 f 't `1 1 .1 I .. I I I I i i • • Figure 2-2 Water Treatment Plant Capacity Requirements - Scenario 2 (Lake Oswego plus Tigard) 40 5-mgd Expansion ). 35 I �— :i r r �' 30 V co E / 01. Lake Oswego+Tigard c 25 o 0E 16 mil Expansion p of Ex sting WTP • rs Lake Oswego — — 3 Lake Oswego +Tigard E15 WTP Capacity E 2 10 5 0 1985 1990 1995 2000 2005 2010 2015 2020 Year • Technical Memorandum No.2 2-4 6/20/94 City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs ow Cost Estimates Cost estimates were developed using the information in the Master Plan. Where applica- ble, cost estimates were adjusted using the Engineering News Record Construction Cost �► Index for Seattle of 5747 (May 1994). Cost estimates for raw water intakes, pump sta- tions and water treatment were revised based on new assumptions resulting from changes since the Master Plan was completed in 1988. Revised cost estimates are presented for the following cost components: • Pipeline Improvements for Finished Water Transmission NW • Pipeline Improvements for Raw Water Transmission • , Finished Water Pump Station Improvements • Raw Water Pump Station Improvements • Water Treatment Plant Improvements .• Scenario 1 ..r Scenario 1 assumes Lake Oswego will not supply all of Tigard's water needs and will expand to meet only the projected water requirements for the area within the urban ser- `,,� vices boundary (USB). Table 2-1 presents the revised capital costs for Scenario 1. The "project numbers" shown in Table 2-1 coincide with the project numbers used in the Master Plan for Scenario 1. One new project has been added to Scenario 1, improve- ments for sludge handling, chemical feed and storage, and clearwell baffles for improved disinfection. This new project and the others listed in Table 2-1 are described in more detail below. Pipeline Improvements for Finished Water Transmission The Master Plan recommended the addition of 12,000 lineal feet of 24-inch pipeline for finished water transmission improvements. The estimated cost for this improvement was determined by updating the Master Plan cost using the ENR index. Pipeline Improvements for Raw Water Transmission The Master Plan recommended the addition of 13,600 lineal feet of 24-inch pipeline be- tween the existing raw water pump station and the water treatment plant. As will be discussed below, a new raw water intake will be required for Scenario 1 and 500 lineal feet of 24-inch pipeline was assumed to connect the new intake pump station with the existing raw water transmission pipeline. The estimated cost for this improvement was determined by updating the pipeline costs in the Master Plan using the ENR index. 2-5 Table 2-1 Revised Capital Costs for Scenario 1 Lake Oswego Only PROJECT COST NO. PROJECT DESCRIPTION YEAR ($) Pipeline Im)rovements for Finished Water Transmission: 12,000 LF of 24-inch; Lake Oswego WTP to Pacific Hwy. and Laurel St., 9 2010 1,705,000 parallel to exst.24-inch "' Pipeline Improvements for Raw Water Transmission: 13,600 LF of 24-inch; Exst. Clackamas River Intake& P.S.to Lake 11 Oswego WTP, including Willamette River crossing and 500 LF of 24-inch; 2010 3,433,000 New Intake and P.S. to Exst. Raw Water Pipeline irr Finished Water Pump Station Improvements: • 13 WTP High Service Pumps;4-600 hp-4,730 gpm capacity pumps 2010 1,164,000 Raw Water Pump Station Improvements: 18 New Clackamas R. Intake and P.S.; 14.1-mgd capacity 2010 2,700,000 Water Treatment Plant Improvements: new Improvements for Sludge Handling, Chemical Feed and Storage,and 1996 1594,000 Clearwell Baffles to increase CT 19 Expand Exst. WTP to 21.5 mgd capacity 2010 2,045,000 TOTAL-SCENARIO 1 12,641,000 rrr I • NOTES: - +�+ (1) Project numbers are from the 1988 Water System Master Plan. (2) ENR CCI 5747 (Seattle Area), May 1994 (3) Project Cost=Construction,Contingencies, Engineering and Administration ■r 2-6 us City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs trr Finished Water Pump Station Improvements • The Master Plan recommended installation of four new pumps (replacing three existing pumps and adding one new pump) to bring the capacity of the existing finished water pump station at the water treatment plant to 21.5 mgd. The estimated cost for this hu- ms provement was determined by updating the costs in the Master Plan using the ENR index. Raw Water Pump Station Improvements The capacity of the existing raw water intake is limited by the size of the intake screen. The existing intake screen is 6-feet wide. Based on observations by water treatment plant operators, the low river water level is only 5.5-feet above the bottom of the screen, resulting in an effective screen area of 33 square feet at low river levels. Current Oregon Department of Fish and Wildlife regulations for fish screens on the Clackamas River limit the approach velocity to 0.4 feet per second (fps). The approach velocity is deter- mined by dividing the flow rate in cubic feet per second (cfs) by the screen area in square feet measured below the water surface. Current regulations also require a screen area of 2.5 square feet per cubic foot per second of water being drawn through the screen. Therefore, due to limitations in the screen area at low water levels, the capacity of the 10 existing screen is 13.2 cubic feet per second (cfs) or 8.5 mgd. Since low river water levels can coincide with maximum day water demands, the maximum capacity of the existing intake is 8.5 mgd based on screen area limitations. At higher river water levels Irle the capacity of the screen can be determined by multiplying the water depth above the bottom of the screen in feet by 1.55 mgd per foot of water depth. The required total capacity of the raw water intakes for Scenario 1 is 22.6 mgd based on a desired plant capacity of 21.5 mgd and an allowance of 5-percent for water required for backwash and plant uses. The estimated capacity of a new raw water intake and pump vi• station is 14.1 mgd assuming the capacity of the existing intake is 8.5 mgd. The cost estimates for raw water intakes and pump stations presented in the Master Plan were based on the costs for the existing intake: Because of the new screening requirements the cost of the raw water intake and pump station was revised to account for the new require- ments. The estimated cost for a new 14.1 mgd capacity raw water intake and pump sta- tion is $2.7 million. It is assumed the new intake would be required when the plant ex- pansion is constructed in the year 2010. This study did not evaluate alternatives to modi- fy the existing intake by adding new screening facilities that met current requirements for protection of fish. Water Treatment Plant Improvements 41' Costs for expanding the existing plant to a capacity of 21.5 mgd and making other im- provements are presented in Table 2-1. Expansion of the existing plant will not be re- quired until the year 2010. However, in the interim there are certain improvements that are required or recommended. The interim improvements are: J 2-7 a am City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs • Sludge Handling—cost estimates for new sludge handling and disposal facilities are based on the costs presented in the Water Treatment Plant Study (Black & Veatch, April 1994). The facilities include new lagoons for sludge dewatering and storage and sludge drying beds. The facilities were assumed to handle the sludge production from a treatment plant with a maximum capacity of 21.5 mgd. The costs presented in the Water Treat- ment Plant Study were prorated based on annual sludge production for Scenario 1. • Clearwell Baffles—cost estimates were provided by the treatment plant operators for the addition of baffles in the existing clearwell to increase •" detention time for meeting disinfection requirements. • Chemical Storage and Feed—cost estimates were based on costs presented se in the Water Treatment Plant Study for improvements to existing chemical feed and storage facilities. The improvements would increase the capacity aar of the storage and feeding systems for lime, required to raise the pH of the finished water to meet the Lead and Copper Rule for corrosion of lead and copper. The improvements would add new chlorine storage and feed tiefacilities, including an emergency chlorine leak scrubber system. In the year 2010 the plant wouldbe expanded from 16.1 mgd to 21.5 mgd with the addi- tion of another contact basin and two additional filters. With the addition of another contact basin, the new 24-inch finished water transmission pipeline, and continued prechlorination, disinfection requirements can be met during the winter (flow assumed to • not be greater than 70-percent of the maximum day flows). Total Cost for Scenario 1 The total cost of improvements required for Scenario 1 is estimated to be $12,641,000. The costs shown in Table 2-1 include 35-percent for engineering, contingencies, and ad- ministrative costs. 'r" Scenario 2 Scenario 2 assumes Lake Oswego will supply all of Tigard's water and will expand facili- ties to meet the combined or total demands of the two service areas. Table 2-2 presents the revised capital costs for Scenario 2. The project numbers shown in Table 2-2 coin- Ir cide with the project numbers used in the Master Plan for Scenario 2. The projects listed in Table 2-2 are described in more detail below. 5 2-8 3 �• Table 2-2 Revised Capital Costs for Scenario 2 Lake Oswego plus Tigard PROJECT COST NO. PROJECT DESCRIPTION YEAR ($) Pipeline Improvements for Finished Water Transmission: 12,000 LF of 36-inch; Lake Oswego WTP to Pacific Hwy. and Laurel St., 9 1996 3,291,000 parallel to exst. 24-inch 2,600 LF of 30-inch; Pacific Hwy. and Laurel St. to State and Ladd St.; parallel to exst.24-inch . 800 LF of 24-inch; Quarry Rd.-Lower Boones Ferry Rd.to Douglas Way ' 10 6,100 LF of 30-inch; North Shore Rd., Middle Crest Rd.,and State St.- 2003 1,072,000 from State St. and Ladd St. to Iron Mtn. Blvd.and Fairway Rd. Pipeline Improvements for Raw Water Transmission: • 13,600 LF of 30-inch; New Clackamas River Intake& P.S.to Lake .;100 12 Oswego WTP, including Willamette River crossing,and 500 LF of 30- 1996 4,035,000 inch; New Intake and P.S.to Exst. Raw Water Pipeline 13 4,000 LF of 16-inch; new Willamette R. Intake and P.S.to exst.WTP site 2009 583,000 Finished Water Pump Station Improvements: vait 13 New WTP High Service Pump Station; 37-mgd capacity 1996 2,880,000 Raw Water Pump Station Improvements: • 21 New Clackamas R. Intake and P.S.;25.1-mgd capacity 1996 3,659,000 her 23 New 5-mgd capacity Willamette R. Intake and P.S. 2009 1,755,000 >. + Water Treatment Plant Improvements: 24 Expand Exst. WTP to 32 mgd capacity 1996 10,321,000 25 New 5-mgd capacity WTP expansion for Willamette R. water 2009 3,340,000 vf TOTAL-SCENARIO 2 30,936,000 NOTES: (1) Project numbers are from the 1988 Water System Master Plan. (2) ENR CCI 5747 (Seattle Area) May 1994 (3)Cost=Construction, Contingencies, Engineering and Administration 2-9 wn City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs ail Pipeline Improvements for Finished Water Transmission The Master Plan recommended the addition of 12,000 lineal feet of 33-inch, 8,700 lineal feet of 30-inch, and 800 lineal feet of 24-inch pipeline for finished water transmission improvements. Since the Master Plan was completed the size of the initial 33-inch pipe- '""' line has been recommended to be 36-inch based on revised pumping requirements. The 30-inch pipeline is proposed in two phases, similar to the Master Plan, with the first phase consisting of 2,600 lineal feet. The estimated costs for these improvements were determined by updating the Master Plan costs using the ENR index. vo, Pipeline Improvements for Raw Water Transmission The Master Plan recommended the addition of 13,600 lineal feet of 30-inch pipeline be- tween the existing raw water pump station and the water treatment plant. A new raw water intake will be required for Scenario 2 and 500 lineal feet of 30-inch pipeline was assumed to connect the new intake pump station with the existing raw water transmission pipeline. Additional capacity will be required by the year 2009 and an intake, pump station and pipeline to supply water from the Willamette River will be required. As pre- sented in the Master Plan, 4,000 lineal feet of 16-inch pipeline will be required. The estimated costs for these improvements were determined by updating the pipeline costs in the Master Plan using the ENR index. Finished Water Pump Station Improvements A new finished water pump station was assumed for the expanded plant based on the requirement for a new, larger clearwell as discussed below. The pump station would have a capacity of 37 mgd and would be constructed over the proposed new clearwell. The existing surge control system would be expanded and upgraded. Cost estimates .P preparedfor the Master Plan were used to estimate the cost of the new pump station. Raw Water Pump Station Improvements It was assumed the existing raw water intake and pump station would remain in service but would be limited to a maximum day capacity of 8.5 mgd. A new raw water intake and pump station was assumed to be constructed on the Clackamas River with a capacity of 25.1 mgd based on a desired plant capacity of 32 mgd and an allowance of 5-percent r for water required for backwash and plant uses. • The cost estimates for raw water intakes and pump stations presented in the Master Plan were based on the costs for the existing intake. Because of the new screening require- ments the cost of the raw water intake and pump station was revised to account for the new requirements. The estimated cost for a new 25.1 mgd capacity raw water intake and pump station is $3.659 million. The new intake would be required immediately so the year 1996 was assumed to be the earliest the improvement could be constructed. 2-10 rr City of Lake Oswego June 20, 1994 Technical Memorandum No. 2 Revised Capital Costs wr ' Water Treatment Plant Improvements +es Costs for expanding the existing plant to a capacity of 32 mgd are presented in Table 2-2. Expansion of the existing plant will be required immediately so the year 1996 was as- sumed to be the earliest the expansion could be constructed. The plant expansion would include the following components: • Sludge Handling—cost estimates for new sludge handling and disposal `u facilities are based on the costs presented in the Water Treatment Plant Study. The facilities include new lagoons for sludge dewatering and storage and sludge drying beds. The facilities were assumed to handle the •. sludge production from a treatment plant with a maximum capacity of 37 mgd. The costs presented in the Water Treatment Plant Study were prorat- ed based on annual sludge production for Scenario 2. • Chemical Storage and Feed—cost estimates were based on costs presented •r in the Water Treatment Plant Study for improvements to construct new chemical feed and storage facilities for lime and chlorine. The improve- ments would increase the capacity of the storage and feeding systems for ,,,,,� lime, required to raise the pH of the finished water to meet the Lead and Copper Rule for corrosion of lead and copper. The improvements would add new chlorine storage and feed facilities, including an emergency chlo- ••• rine leak scrubber system. • New Clearwell—cost estimates are based on a new below-ground concrete ei clearwell sized to meet the disinfection requirements. A 725,000-gallon clearwell was estimated based on the following criteria: . �• — Winter disinfection criteria and a winter maximum flow of 26 mgd (70-percent of the maximum day flow) — 5,500 feet of 36-inch and 24-inch transmission pipeline for e contact time prior to the first customer — Clearwell drawdown of 50-percent of the total water depth at 26 mgd flow '"' — Three additional contact basins and continued prechlorination — Clearwell detention time equal to 70-percent of the theoreti- cal detention time (Tio:Tteor=0.7) • The plant expansion would consist of the addition of 3 new contact basins and 6 additional filters, increasing the capacity of the original plant to its planned maximum capacity of 32 mgd. • An allowance of $250,000 for the purchase of additional land for the ex- `7 panded facilities 2-11 a i n SW City of Lake Oswego lune 20, 1994 Technical Memorandum No. 2 Revised Capital Costs MO In the year 2009 the plant would be expanded from 32 mgd to 37 mgd with the addition of a 5 mgd facility to treat Willamette River water. The Master Plan assumed a com- a,, pletely separate 5 mgd treatment plant to be built on the site of the existing plant, with common clearwell, finished water pumping, and sludge handling facilities. The Master Plan proposed the 5-mgd plant's treatment process consist of a conventional treatment plant (chemical addition, flocculation, sedimentation, and filtration) followed by filtration using granular activated carbon contactors. Pilot work performed during the fall of 1993 on Clackamas River water included testing a combined process called upflow carbon contact adsorption, a process that combines flocculation, particulate removal and carbon contacting in a single process; the process assumed for pretreatment of Willamette River water in this study. The upflow GAC process for Willamette River water was assumed to consist of 5-foot deep beds of granular activated carbon (GAC) operated in an upflow mode at a hydraulic loading rate of 3 gallons per minute per square foot of contactor area. The carbon - contactors are backwashed with a combined air-water system and the waste backwash water would go to a backwash pond similar to the ponds at the existing plant. Treated water from the GAC units would go to gravity mixed-media filters identical to those used at the existing plant. Because operation of the 5-mgd plant would only be required dur- ing the peak water demand season, it was assumed it would be used for 4 months per year. Willamette River water quality during the peak demand period is usually better than during the winter months, allowing the application of the upflow GAC contactor treatment process. The cost estimates for the 5-mgd expansion assume the use of this technology for particulate removal and carbon contacting. Total Cost for Scenario 2 The total cost of improvements required for Scenario 2 is estimated to be $30,936,000. The costs presented in Table 2-2 include 35-percent for engineering, contingencies, and administrative costs. p 2-12 ,lr eft i - eft 1 Jew �.1 .7 Technical Memorandum No. 3 Cost Analysis of Water Supply Scenarios +r TECHNICAL MEMORANDUM NO. 3 CHACILL PREPARED FOR: City of Lake Oswego PREPARED BY: Phillip Butterfield, CH2M HILL DATE: July 28, 1994 SUBJECT: Cost Analysis of Water Supply Scenarios •• PROJECT: OPW37635.A0.03 Introduction • This document is the third and last technical memorandum (TM) for the study of the costs of water service both with and without service to Tigard. The purpose of this •• technical memorandum is to present the costs to City customers for each of the two alternative supply scenarios and to evaluate whether potential investments by the City to serve Tigard are of net benefit to the City. The revised capital costs and schedules devel- .•• oped in TM No. 2 were used for developing the economic comparison of the two supply scenarios. The supply scenarios referenced in this TM are the same two presented in the 1988 Water System Master Plan and in TM No. 2: Scenario 1 — Lake Oswego Only, and Scenario 2 — Lake Oswego Plus Tigard. This TM is organized under the following major headings: • Operation and Maintenance (O&M) Costs • Allocation of O&M Costs for Scenario 2 • • . Estimated Value of Existing Capital • Allocation of Existing Capital • Allocation of New Capital for Scenario 2 ;go • Cost Comparison • Initial Rate Impacts • Summary and Conclusions Operation and Maintenance (O&M) Costs Annual O&M costs for each supply scenario were estimated using data and estimates provided by the City of Lake Oswego. The last three years of O&M costs for the water treatment department were used to estimate costs for the two scenarios. The City's water +yr treatment department total O&M costs include costs for operation and maintenance of the City's distribution pump stations and storage reservoirs, or "outplant" O&M. The City's 3-1 MP rw City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios .rr operations staff first determined the estimated O&M costs without "outplant" costs, providing a.cost for only the water supply and treatment portions of the annual O&M budget. The annual O&M budget for the last three years of complete record was then broken down by the City into components to provide a more accurate estimate upon which to base future costs. The City's operations staff was also able to determine the immediate O&M cost savings if no water was produced for Tigard and total annual production was reduced. Initially the estimated cost savings are primarily for electric energy related to pumping and chemicals for treatment. No significant labor cost savings tau are projected for the scenario without water sales to Tigard. In addition to using the data for the last three years of complete record for the water treatment department, projected O&M costs for fiscal year 1994-1995 were taken into account to reflect projected cost increases in treatment plant operation and maintenance. Estimated annual O&M costs for Scenario 1 are presented in Table 3-1 for the years 1994 and 2020. The total annual O&M cost was broken down into the components provided by the City's operations staff. An additional component, "sludge handling and disposal" too was included to account for projected new sludge related facilities and disposal costs. Annual O&M costs between the years 1994 and 2020 are anticipated to increase at a con- stant rate within the 26-year time frame. Estimated annual O&M costs for Scenario 2, Lake Oswego plus Tigard, are presented in Table 3-2 for the years 1994, 2009, 2010 and 2020. Cost estimates are presented for the years 2009 and 2010 to reflect the anticipated change in annual O&M costs when treat- ment plant facilities are added to treat Willamette River water, projected to be required in the year 2010. The year 2009 O&M costs do not include Willamette River water treatment and the year 2010 costs do include Willamette River water treatment O&M • costs. Sludge handling and disposal costs are also included in the break down of cost components. ,• Allocation of O&M Costs for Scenario 2 The estimated annual O&M costs for Scenario 2 were allocated to Lake Oswego and Tigard. The base—extra capacity method (Water Rates, American Water Works Associa- tion, Manual M1, 1991) was utilized to allocate O&M cost components to base and maxi- mum day cost categories. Table 3-3 presents the allocation of the annual O&M costs for Scenario 2 to base and maximum day categories for each of the four years of estimated costs previously shown in Table 3-2. Costs were allocated to base and maximum day .000 based upon how each O&M item wasinfluenced by the peak day of production compared to the average day. For example, electrical energy and chemical costs were allocated to base since these costs depend primarily on the total volume of water treated and not on the peak rate of production. A maximum day to average day peaking factor ratio of 2.31 �wr 3-2 „r Table 3-1 Estimated Annual 0 and M Costs Scenario 1 -Lake Oswego Only 6` 1994 2,020 Estimated Estimated O&M O&M O&M Item ($) ($) River Intake& P.S. wr Electrical 113,328 146,911 Maintenance 4,706 12,200 Pump Maintenance 13,840 17,941 Raw Water Pipeline 5,100 6,611 `r Water Treatment 613,466 770,882 Sludge Handling& Disposal 15,142 19,629 rr High Service Pumping Electrical 188,228 244,005 Maintenance 4,745 6,152 Finished Water Pipeline 4,745 6,152 Storage Reservoir 2,500 2,500 TOTAL ANNUAL O&M 965,801 1,232,982 err • Note: O&M Costs are 1994 Dollars 90 go tap r p mr . Technical Memorandum No.3 3-3 7/15/94 a err► Table 3-2 Estimated 0 and M Costs Scenario 2-Lake Oswego plus Tigard ,r. 1994 2009 2010 2020 Estimated Estimated Estimated Estimated O&M Cost O&M Cost O&M Cost O&M Cost O&M Item ($) ($) ($) ($) River Intake& P.S. Electrical 207,007 258,925 261,722 293,050 Maintenance 5,522 6,907 11,482 12,318 Pump Maintenance 16,242 20,315 20,535 22,992 Raw Water Pipeline 5,985 7,486 7,567 8,472 err Water Treatment Clackamas R. WTP 522,118 639,614 690,127 732,848 Willamette R.WTP 57,100 57,100 Sludge Handling& Disposal 27,658 34,595 34,968 39,154 air High Service Pumping Electrical 343,820 430,050 434,696 486,729 Maintenance 5,569 6,966 7,041 7,884 10 Finished Water Pipeline 2,913 3,644 3,683 4,124 Storage Reservoir 2,500 2,500 2,500 2,500 TOTAL ANNUAL O&M 1,139,334 1,411,001 1,531,421 1,667,170 Note: O&M Costs are 1994 Dollars two Technical Memorandum No.3 3-4 7/15/94 rlr I I • Taule 3-3 Allocation of 0 and M Costs to Base and Maximum Day Scenario 2-Lake Oswego plus Tigard 1994 1994 1994 2009 2009 2010 2010 2020 2020 Estimated Allocation Factors Allocated Costs Estimated Allocated Costs Estimated Allocated Costs Estimated Allocated Costs O&M Cost Maximum Maximum O&M Cost Maximum O&M Cost Maximum O&M Cost Maximum O&M Item iEl Base Dev Base Day (S) Base I Day ($) Base I Day ($) Base I Day River Intake&P.S. Electrical 207,007 1.0000 0.0000 207,007 0 258,925 258,925 0 261,722 261,722 0 293,050 293,050 0 Maintenance 5,522 0.4329 0.5671 2,391 3,132 6,907 2,990 3,917 11,482 4,970 6,511 12,318 5,332 6,985 Pump Maintenance 16,242 0.4329 0.5671 7,031 9,211 20,315 8,794 11,521 20,535 8,889 11,645 22,992 9,953 13,039 Raw Water Pipeline 5,985 0.4329 0.5671 2,591 3,394 7,486 3,241 4,245 7,567 3,276 4,291 8,472 3,668 4,805 Water Treatment Clackamas R.WTP 522,118 0.6175 0.3825 322,421 199,896 639,614 389,834 249,780 690,127 437,649 252,479 732,848 450,148 282,700 Willamette R.WTP 0 0.0000 1.0000 0 57,100 0 57,100 57,100 0 57,100 Sludge Handling&Disposal 27,658 1.0000 0.0000 27,658 0 34,595 34,595 0 34,968 34,968 0 39,154 39,154 0 High Service Pumping Electrical 343,820 1.0000 0.0000 343,820 0 430,050 430,050 0 434,696 434,696 0 486,729 486,729 0 Maintenance 5,569 0.4329 0.5671 2,411 3,158 8,966 3,015 3,950 7,041 3,048 3,993 7,884 3,413 4,471 Finished Water Pipeline 2,913 0.4329 0.5671 1,261 1,652 3,644 1,577 2,066 3,683 1,594 2,089 4,124 1,785 2,339 Storage Reservoir 2,500 0.4329 0.5671 1,082 1,418 2,500 1,082 1,418 2,500 1,082 1,418 2,500 1,082 1,418 TOTAL ANNUAL O&M 1,139,334 0.8054 0.1946 917,674 221,661 1,411,001 1,134,104 276,898 1,531,421 1,191,896 339,526 1,667,170 1,294,314 372,856 Note: O&M Costs are 1994 Dollars • • Technical Memorandum No.3 3-5 7/14/94 w City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios a was utilized for determining the allocation factors. The maximum day peaking factor of 2.31 is consistent with the maximum day demand projections for both Lake Oswego and Tigard. The Clackamas River water treatment plant (WTP) costs shown in Table 3-3 • were adjusted each year to reflect the changing allocation of costs due to chemical use and other base related costs. The Willamette River WTP costs were allocated to maxi- mum day because it was assumed the facility would be operated only during the peak use months of the year and its purpose is to meet maximum day demands. Following the allocation of estimated O&M costs to base and maximum day, the annual O&M costs were estimated for all years of the analysis and allocated to Lake Oswego and Tigard. The allocation of base costs to each entity was based on the ratio of the entity's projected average day demand to the total average day demand. The allocation to maximum day was based on the ratio of the difference between average day and maximum day demands for the entity to the difference between the total maximum day and average day demands. Demand projections for each year were used for the allocation of costs to each entity. Table 3-4 presents the allocation of annual O&M costs to each of the two entities, Lake Oswego and Tigard, for the years of analysis. Estimated Value of Existing Capital „O The City of Lake Oswego has invested significant capital in its water supply and treat- ment facilities. The primary construction of the existing facilities took place during the years 1968 through 1970 when the water treatment plant was constructed. The 1968-70 projects included the raw water intake and pump station on the Clackamas River, a 27- inch diameter raw water transmission pipeline from the intake pump station to the water treatment plant, a 10.7-million-gallons-per-day (mgd) water treatment plant and finished water pump station (designed to be expanded to 32 mgd), and 24-inch and 18-inch diameter finished water transmission pipelines that extend from the water treatment plant (WTP) to Waluga Park. The raw water pump station, water treatment plant and finished water pump station were expanded in 1980 to a capacity of 16.1 mgd. In 1985 a 24-inch diameter finished water transmission pipeline was constructed as part of the transmission pipelines serving Tigard and the west side of Lake Oswego's service area. The existing Waluga Reservoir has been included in the existing capital serving Tigard since this reservoir serves as the terminus for pumping from the water treatment plant and as stor- age for Tigard's pump station. The value of Lake Oswego's existing water supply and treatment facilities was deter- mined using the estimated depreciated replacement value of the existing assets. Table 3-5 "w presents the data used to determine the estimated depreciated replacement value of existing assets. The original service life (in years) and the remaining useful life were estimated for each asset. The remaining useful life of the asset was estimated taking into account the maintenance and replacement that has been performed on existing facilities 3-6 ti It L Li ' .:i f `1 - .. .,+ _ ... f Taule 3-4 Allocation of 0 and M Costs to Lake Oswego and Tigard Scenario 2-Lake Oswego plus Tigard f Allocation Factors Allocated Costs I Annual O&M I I Maximum I , I Maximum I Base Allocation Maximum Day Allocation Total Allocation Year 1994$ Base Day Base Day Total Lake Oswego I Tigard I Total lake Oswego I Tigard I Total Lake Oswego I Tigard I Total I Year 1994 1,139,334 0.8054 0.1946 917,874 221,661 1,139,334 502,390 415,283 917,674 121,771 99,889 221,661 624,162 515,173 1,139,334 1994 2009 1,411,001 0.8038 0.1962 1,134,104 276,898 1,411,001 , 582,636 551,468 1,134,104 142,357 134,540 276,898 724,993 686,008 • 1,411,001 2009 2010 1,531,421 0.7783 0.2217 1,191,896 339,526 1,531,421 611,694 580,202 1,191,896 174,324 165,201 339,526 786,018 745,403 1,531,421 2010 2020 1,667,170 0.7764 0.2236 1,294,314 372,856 1,667,170 648,860 645,454 1,294,314 188,001 184,855 372,856 836,862 830,308 1,667,170 2020 Note: Costs are In 1994 dollars. • • Technical Memorandum No.3 3-7 7/15/94 1_.,e 3-5 Estimated Depreciated Replacement Cost of Existing Capital Scenario 2-Lake Oswego plus Tigard Remaining Revised Estimated Estimated Estimated Original Cost Estm.Deprec. Acquisition Acquistition Service Years In Useful Estimated Annual Accumulated Book Escalation Replacement Capital Item Date Amount Life Service Life Life Depreciation Depreciation Value Factor Cost Clackamas R.Intake and P.S. Original Facility(estimated components): 6/30/68 Structure(60%) 121,980 75 26 50 76 1,605 41,730 80,250 5.2341 420,033 Pumps and Equipment(25%) 50,825 20 26 5 31 1,640 42,627 8,198 5.2341 42,907 Piping and Valves(10%) 20,330 50 26 25 51 399 10,364 9,966 5.2341 52,161 Electrical,l&C,HVAC(5%) 10,165 20 26 5 31 328 8,525 1,640 5.2341 8,581 Subtotal 203,300 3,971 103,247 100,053 523,682 1980 Improvements: 6/30/80 Pump 40,000 20 14 10 24 1,667 23,333 16,667 1.6336 27,227 Piping and valves 10,000 50 14 35 49 204 2,857 7,143 1.6336 11,669 Electrical and l&C 21,000 20 14 10 24 875 12,250 8,750 1.6336 14,294 Subtotal 71,000 2,746 38,440 32,560 53,189 TOTAL-Intake and P.S. 576,872 27-inch Raw Water Pipeline 6/30/71 590,137 50 23 27 50 11,803 271,463 318,674 5.2341 1,667,959 Water Treatment Plant Original WTP(estimated components): 6/30/71 • Sitework(13%) 155,915 75 23 50 73 2,136 49,124 106,791 5.2341 558,951 Concrete and buildings(40%) 479,739 75 23 50 73 6,572 151,151 328,588 5.2341 1,719,850 Pumps(3.5%) 41,977 20 23 10 33 1,272 29,257 12,720 5.2341 66,579 Mechanical equipment(10.5%) 125,931 20 23 5 28 4,498 103,444 22,488 5.2341 117,702 Piping&valves(16%) 191,895 50 23 25 48 3,998 91,950 99,946 5.2341 523,121 Electrical,I&C,HVAC(18%) 191,895 20 23 5 28 6,853 157,628 34,267 5.2341 179,356 Miscellaneous(1%) 11,993 75 23 50 73 164 3,779 8,215 5.2341 42,996 Subtotal 1,199,347 25,493 586,332 613,015 3,208,556 Technical Memorandum No.3 3-8 7/14/94 i 1 e..te 3-5 Estimated Depreciated Replacement Cost of Existing Capital Scenario 2-Lake Oswego plus Tigard ' Remaining Revised Estimated Estimated Estimated Original Cost Estm.Deprec. Acquisition Acquistition Service Years In Useful Estimated Annual Accumulated Book Escalation Replacement Capital Item Date Amount Life Service Life Life Depreciation Depreciation Value Factor Cost WTP Land: Original plant 6/30/68 83,797 N/A N/A N/A N/A N/A N/A N/A 5.2341 438,599 R Land acquisition 6/30/90 200,243 N/A N/A N/A N/A N/A N/A N/A 1.1650 233,285 Subtotal 284,040 671,884 1980 Expansion: 6/30/81 Sitework(8.5%) 80,221 75 13 60 73 1,099 14,286 65,935 1.6336 107,711 Concrete and buildings(27%) 333,224 75 13 60 73 4,565 59,341 273,883 1.6336 447,415 Pumps(7%) 86,391 20 13 10 23 3,756 48,830 37,562 1.6336 61,360 Mechanical equipment(5.5%) 67,879 20 13 10 23 2,951 38,366 29,513 1.6336 48,212 Piping&valves(29%) 357,908 50 13 35 48 7,456 96,933 260,974 1.6336 426,327 Electrical,l&C,HVAC(14.5%) 178,954 20 13 10 23 7,781 101,148 77,806 1.6336 127,104 Filter Media and Underdrains(6.8%) 83,923 50 13 35 46 1,748 22,729 61,194 1.6336 99,966 Miscellaneous(3.7%) 45,664 75 13 60 73 626 8,132 37,532 1.6336 61,312 Subtotal 1,234,164 29,982 389,766 844,398 1,379,408 Chlorinator Improvements 6/30/86 6,158 20 8 12 20 308 2,463 3,695 1.3356 4,935 TOTAL-Water Treatment 2,723,709 55,783 978,561 1,461,108 5,264,783 Finished Water Transmission 24-inch Finished Water Pipeline(14,628 LF) 6/30/71 473,456 50 23 27 50 9,469 217,790 255,666 5.2341 1,338,172 WTP Transmission Main 6/30/93 42,618 50 1 49 50 852 852 41,766 1.0417 43,507 North Shore-Iron Mtn.Pipelines 6/30/70 534,142 50 24 26 50 10,683 258,388 277,754 4.0817 1,133,700 Upper Dr.-Iron Mtn.24'Pipeline 6/30/85 575,398 50 9 41 50 11,508 103,572 471,826 1.4702 693,678 TOTAL-Flnished Water Transmission 1,625,613 32,512 578,602 1,047,012 3,209,057 • Technical Memorandum No.3 3-9 7/14/94 1.....43 3-5 Estimated Depreciated Replacement Cost of Existing Capital Scenario 2-Lake Oswego plus Tigard Remaining Revised Estimated Estimated Estimated Original Cost Estm.Deprec. • Acquisition Acquistition Service Years In Useful Estimated Annual Accumulated Book Escalation Replacement Capital Item Date Amount Life Service Life Life Depreciation Depreciation Value Factor Cost Storage • Waluga Reservoir 3/30/83 1,281,427 75 11 64 64 20,022 220,245 1,061,182 1.2800 1,358,265 Waluga Reservoir Lend 6/30/80 8,417 N/A N/A N/A N/A N/A N/A N/A 1.4702 12,375 Waluga Reservoir Repairs 6/30/91 253,962 75 3 72 72 3,527 10,582 243,380 1.0417 264,550 TOTAL-Storage 1,543,806 1,635,190 Clackamas R.Water Rights,50cfs 1967 N/A N/A N/A N/A N/A N/A N/A N/A . N/A 753,000 TOTAL-Existing Capital 13,106,860 Technical Memorandum No.3 3-10 7/14/94 City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios irr since they were originally constructed. As an example, the City has replaced several of the original.finished water pumps at the WTP over the last few years, extending the remaining useful life of those assets. Estimated depreciation was determined based on the revised estimated life (sum of the years in service and remaining useful life). The estimated accumulated depreciation, based on the estimated annual depreciation and years in service, was subtracted from the acquisition cost to determine the estimated book value. The estimated book value was then escalated to 1994 dollars using the Engineer- ing News Record Construction Cost Index values. The May 1994 ENR CCI index for aro Seattle of 5747 was used for the escalation of costs. • The City of Lake Oswego has a 50 cubic feet per second (32 mgd) water right on the "' Clackamas River with a priority date senior to instream flow rights. It is difficult to estimate the value of this water right primarily because current Oregon water law does not allow cities to sell water rights. Lake Oswego's water right does have value, ""' particularly given the fact that no additional municipal water is available for appropriation in the Clackamas River during the summer low-flow months, the time when the greatest diversions are required for municipal uses. The availability of summer diversion rights on the Willamette River above the falls at Oregon City is also questionable due to potential pre-1909 water rights with seniority over newer, junior water rights. If storage rights could be purchased from the Willamette River reservoirs, the estimated costs are extremely high, possibly in the range of $1,500 or more per acre foot. Run-of-river water does not appear available from the Willamette River during the period from July through November, therefore stored water rights may be required for up to five months of the year. Based on the historical water use characteristics for Lake Oswego, a 32 mgd maximum diversion right would equate to approximately 7,531 acre feet over a five month period from July to November. If the avoided cost of $1,500 per acre foot were used, then the value of the water right would be over $11 million. A value of $11 million would greatly skew this analysis towards Scenario 2, assuming Tigard would be willing to pay • for their share of the water right value. Therefore, this analysis applies a value of $100 per acre foot for the existing 32 mgd water right. This assumption places some value on the City's existing water right without skewing the present worth cost analysis towards Scenario 2. A value of $100 per acre foot may be more in line with the value of irrigation water rights in the Willamette Valley (the difference in the value of land with and without irrigation water). Allocation of Existing Capital Existing capital was allocated to Lake Oswego and Tigard based on the assumption that Tigard would share in the costs based on the projected year 2020 water demands. Table 3-6 presents the estimated allocation of existing capital to the two entities for Scenario 2. 3-11 as .e 3-6 Allocation of Existing Capital Scenario 2-Lake Oswego plus Tigard Estm.Degree. Allocation Factors Allocated Costs Base Allocation Maximum Day Allocation Total Allocation Capital item Replacement 1Base I Maximum Base I M D y�I Total Lake Oswano I Tigard I Total Lake Oswego I Tigard I Total Lake Oswego' Tigard I Total Clackamas R.Intake and P.B. TOTAL-Intake and P.S. 578.872 0.4329 0.5871 249,728 327,144 678,872 126,193 124,535 249,728 184,952 182,191 327,144 290,146 288,727 578,872 27-inch Raw Water Pipeine 1,887,959 0.4329 0.5871 722,060 945,899 1,887,959 381,980 380,080 722,080 478,941 488,968 945,899 838,921 829,038 1,887,959 Water Treatment Plant TOTAL-WaterTrsatmsnt 6,284,783 0.4329 0.5871 2,279,127 2,985,868 6,284,783 1,142,583 1,138,684 2,279,127 1,506,427 1,480,229 2,986,868 2,847,990 2,818,793 5,264,783 Finished Water Transmission TOTAL-Finished Water Transmission 3,209,057 0.4329 0.5871 1,389,202 1,819,855 3,209,057 898,429 592,773 1,389,202 917,607 902,248 1,819,865 1,814,038 1,695,021 3,209,057 Storage TOTAL-Storage 1,836,190 0.4329 0.5871 707,874 927,316 1,835,190 354,889 353,008 707,874 487,571 469,745 927,316 822,439 812,750 1,835,190 Clackamas R.Water Rights,60cfs 753,000 0.4329 0.6871 325,974 427,028 753,000 183,418 182,668 325,974 216,316 211,711 427,028 378,731 374,289 763,000 TOTAL-Existing Capital 13,108,860 0.4329 0.5871 5,873,985 7,432,895 13,108,860 2,844,450 2,829,518 5,873,985 3,747,812 3.885,082 7,432,896 1,592,262 6,514,596 13,108,860 Technical Memorandum No.3 3-12 • 7/15A94 City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios ire All of the capital items were allocated to base and/or maximum day based on the maxi- mum day peaking factor of 2.31 and the assumption that all capital items were construct- ed to meet maximum day demands. Once capital costs were allocated to the base and maximum day components, they were allocated to the two entities using the same • methodology described above for O&M costs, but using year 2020 projected average day "'r' and maximum day water demands. Allocation of New Capital for Scenario 2 New capital requirements for Scenario 2 were presented and discussed in TM No. 2. The estimated new capital costs for Scenario 2 were allocated to the two entities using the Si same methodology as was used for the allocation of existing capital. Table 3-7 presents the estimated allocation of new capital to Lake Oswego and Tigard. Cost Comparison A present worth analysis was performed to estimate which supply scenario had the least cost over the analysis period (1994 to 2020). Present worth values of both capital and !� O&M were determined using a nominal interest rate and an escalation factor. Capital and O&M costs were escalated in value to the year the cost occurred using a constant • escalation factor. Salvage values were estimated based on an assumed service life and straight-line depreciation of the original value of the asset, escalated to the year 2020. The present worth of both capital and O&M was calculated using the nominal interest rate and the escalated cost values. .r, Table 3-8 presents the present worth analysis for new capital for Scenario 1, Lake Oswe- go Only, using an escalation factor of 3.00% per year and a nominal interest rate of 7.00% per year. Table 3-9 presents the same analysis for the Scenario 2 new capital costs as allocated to Lake Oswego and Tigard in Table 3-7. The total present worth of the two scenarios is presented in Table 3-10. Total present worth represents the total cost of a scenario over the period of analysis, and is presented in terms of 1994 dollars. For Scenario 2, the present worth costs for both Lake Oswego • and Tigard are shown. The total present worth costs for Scenario 2 assume Tigard's buy-in amount is equal to the amount of existing capital allocated to Tigard (refer to Table 3-6). Tigard's buy-in amount would add to the present worth cost of Scenario 2 for Tigard, and reduce the present worth cost of Scenario 2 for Lake Oswego. Without the reduction of Lake Oswego's total present worth cost of Scenario 2 by an amount equal to Tigard's share of existing capital, the total present worth of Scenario 2 for Lake Oswego would be $23,092,125, making the total present worth cost of Scenario 2 close to that of Scenario 1 ($22,444,484). The total present worth cost of Scenario 2 will be 3-13 a 111 • 41'f ' Et l.W 41 tit I -1 . 1 1 t g t a a a f L. .a 3-7 Allocation of New Capital Scenario 2-Lake Oswego plus Tigard Estimated Allocation Factors Allocated Cost Cost I MaximumMaximumBase Allocation Maximum Day Allocation Total Allocation Cacital Item (199411 Bass Day Base I Day I Total Lake Oswego I Tigard I Total Lake Oswego I Tigard I Total Lake Oswego! Tigard I Total Pipeline Improvement for Finished Water Transmission 12,000 LF of 38';2,800 LF of 30';800 LF of 24 3,291,000 0.4329 0.6871 1,424,876 1,888,325 3,291,000 714,213 710,483 1,424,676 941,038 926,287 1.888,325 1,655,250 1,835,750 3,291,000 8,100 LF of 3O' 1,072,000 0.4329 0.5871 484,089 807,931 1.072.000 232,845 231,424 484,089 308,631 301,400 807,931 539,178 632,824 1,072,000 Pipeline Improvements for Raw Water Transmission 13,800 LF of 30';600 IF of 30' 4,036,000 0.4329 0.5871 1,748,763 2,288,247 4,036,000 876,876 871,078 1,748,753 1,153,779 1,134,488 2,288,247 2,029,455 2,006,545 4,035,000 4,000 LF of 18' 583,000 0.4329 0.5871 252,381 330,819 583,000 128,623 125,858 252,381 188,706 183,914 330,819 293,227 289,773 583,000 Finished Water Pump Station Improvements New WTP High Service P.S.,37 mgd 2,880,000 0.4329 0.6871 1,248,763 1,833,247 2,880,000 825,017 821,738 1,248,753 823,615 809,731 1,833,247 1,448,633 1,431,487 2,880,000 Raw Water Pump Station Improvements Clackamas R.,25.1 mgd 3,859,000 0.4329 0.5871 1,683,983 2,075,017 3,859,000 794,078 789,907 1,583,983 1,048,285 1,028,763 2,076,017 1,840,341 1,818,859 3,859,000 Willamette R.,5-mgd 1,756,000 0.4329 0.6871 759,740 996,280 1,766,000 380,870 378,870. 759,740 601,830 493,430 995,260 882,700 872„300 1,755,000 Water Treatment Plant Improvement Expand Exist.WTP to 32 mgd 10,321,000 0.4329 0.5871 4,487,985 5,853,035 10,321,000 2,239,883 2,228,103 4,487,985 2,951,218 2,901,819 5,853,035 5,191,078 5,129,922 10,321,000 Willamette R.expansion,6 mgd 3,340.000 0.4329 0.6871 1,445,887 1.894.113 3.340.000 724.847 721.041 1.446.887 956,049 939,084 1,894.113 1.879.898 1.880.104 3.340,000 TOTAL-SCENARIO 2 30,936,000 0.4329 0.5871 13,392,208 17,643,792 30,938,000 8,713,728 8,678,480 13,392,208 8,846,927 8,897,886 17,643,792 15,569,666 16,376,346 30,936,000 Technical Memorandum No.3 3-14 7/18/94 LI 1 Li ' *I I.. iI 1 I .. 1 t Ta—e 3-8 Present Worth of New Capital Scenario 1 -Lake Oswego Only PRESENT PRESENT TOTAL ESCALATED USEFUL SALVAGE VALUE WORTH WORTH PRESENT PROJECT COST COST LIFE YEAR 2020 CAPITAL SALVAGE WORTH NO. PROJECT DESCRIPTION YEAR ($) ($) (yr) ($) (1994$) (1994$) (1994$) Pipeline Im movements for Finished Water Transmission: 9 12,000 LF of 24-inch;Lake Oswego WTP to Pacific Hwy.and Laurel St., parallel to exst.24-Inch 2010 1,705,000 2,736,024 50 (2,941,590) 926,786 (506,529) 420,258 Pipeline Im)rovements for Raw Water Transmission: 13,600 LF of 24-inch;Exst.Clackamas River Intake&P.S.to Lake 11 Oswego WTP,Including Willamette River crossing and 500 LF of 24- Inch;New Intake and P.S.to Exst.Raw Water Pipeline 2010 3,433,000 5,508,957 50 (5,922,862) 1,866,074 (1,019,890) 846,184 Finished Water Pump Station Improvements: 13 WTP High Service Pumps;4-600 hp-4,730 gpm capacity pumps 2010 1,164,000 1,867,878 30 (1,673,515) 632,715 (288,172) 344,543 Raw Water Pump Station Improvements: 18 1 New Clackamas R.Intake and P.S.;14.1-mgd capacity 2010 2,700,000 4,332,707 50 (4,658,237) 1,467,638 (802,127) 665,510 Water Treatment Plant Improvements: new Improvements for Sludge Handling,Chemical Feed and Storage,and Clearwell Baffles to increase CT 1996 1,594,000. 1,691,075 50 (1,787,555) 1,477,050 (307,809) 1,169,241 19 Expand Exst.WTP to 21.5 mgd capacity 2010 2,045,000 3,281,625 50 (3,528,183) 1,111,600 (607,537) 504,063 TOTAL-SCENARIO 1 12,641,000 7,481,863 (3,532,064) 3,949,799 Notes: Escalation Factor= 3.00% Nominal Interest Rate= 7.00% • Technical Memorandum No.3 3-15 7Y14/94 Iti 1 rule 3-9 Present Worth of New Capital Scenario 2-Lake Oswego plus Tigard LAKE 08WEOO TIGARD PRESEN PRESENT TOTAL TOTAL CBoiW 8"m Date Estunated Lake Osw"ool Hoard I Total ESCALATED USEFUL SALVAGE VALUE (WORTIIT ( PRESENTESCALATED USEFUL(SALVAGE VALUE WORTH PRESENT WORTH PREF Cost Total A8onlbn COST LIFE YEAR 2020 CAPITAL SALVAGE WORTH COST LIFE YEAR 2020 CAPITAL SALVAGE WORTH Plpgka(mmovema is for Finished Water Treravi"ebn 12,000 LF of 38';2,800 LF of 3D';800 LF of 24' 1988 3,291,000 1,855,250 1,635,750 3,291,000 1,758,055 50 (1,858.243) 1,533207 (319,837) 1,214,170 1,736,387 50 (1,834,375) 1,515,737 (315,871) 1,199,866 6,100LFoI30' 2003 1,072,000 536178 632.624 1,072,000 703,602 50 (787,138) 382266 (132,118) 260,610 886,211 50 (768,386) 378,151 (130,682) 217,558 Pipeline Improvements lot Raw Watt Treraeie"lon 13,800 LF 0130';600 LF o130' 1988 4,036,000 2,028,456 2,006,646 4,035,000 2,153,048 60 (2,276.888) 1,880,568 (301,897) 1,488,868 2,127,883 50 (2,248,074) 1,858,401 (387,280) 1,471,120 4,000 LF of ir 2009 583,000 293,227 288,773 683,000 468,830 50 (403,260) 186,579 (34,936) 80,844 451,468 60 (467,438) 183,829 (93,935) 79,804 Finished Water Pump Statin I pwwrriy New WTP High Semlos P.S.,37 mod 1908 2,680,000 1,448,633 1,431.467 2,880,000 1,638,748 30 (624,779) 1,342,256 (107,584) 1,234271 1,516,644 30 (617,418) 1,328,442 (108,317) 1,220,128 Revs Wake Pump Wagon Inpvrumsn u CYdames R.,26.1 mod 1088 3,668,000 1,840,341, 1,818,860 3,650,000 1262,417 60 (2.083,809) 1,705,317 (356,379) 1.318.938 1.928.118 50 (2.038.185) 1.885228 (351.182) 1.334.035 1618rnalteR..6mod 2009 1,756,000 882,700 872,300 1,756,000 1,375217 50 (1,464,526) 498,442 (266,680) 242,762 1,360,018 60 (1.467,332) 402,570 (252,888) 239.902 Water Trenener5 Pleat bpw,mw88 Ostend East.WTPlo32mpd 1903 10,321,000 6,191,078 6,129,922 10,321,000 5,507.615 40 (4,479,014) 4,810215 (771,094) 4,030,121 6,442,334 40 (4,425,253) 4,753,545 (782,009) 3,001,538 WBWnNN R."'pension,5 mgd 2009 3,340,000 1,679,808 1.880.104 3.340.000 2.617,222 40 (2,828266) 048.602 (452.2031 408.319 2,566.380 40 (2,505,821) 937.428 (445,954) 490.472 TOTAL-SCENARIO 2 30,886,860 16,666,666 11,376,348 70,936,000 13287,432 (2,670,638)10,398,794 13,111,127 (2,836,818) 10,274,306 Now: EBoewon Factor. 3.00% Nominal Internal Ride. 7.00% • Technical M6monlndum No.3 3-16 7/28/94 Table 3-10 Present Worth Costs of Water Supply Scenarios Lake Oswego and Tigard rrr Base Year: 1994 Escalation Factor: 3.00% Nominal Interest Rate: 7.00% rr Present Worth Scenario 1 Scenario 2 w Item Lake Oswego Lake Oswego Tigard Existing Capital $0 ($6,514,598) $6,514,598 Proposed Capital $3,949,799 $10,396,794 $10,274,308 O&M $18,494,685 $12,695,332 $10,631,685 TOTAL,with Existing Capital $22,444,484 $16,577,527 $27,420,591 • TOTAL, without Existing Capital $22,444,484 $23,092,125 $20,905,993 , +rr rrr ar r 4110 �.s Oa j Technical Memorandum No.3 3-17 7/15/94 S City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios mos less than the total present worth cost for Scenario 1 if there is a buy-in amount received from Tigard for a share of the existing capital assets. The impacts of both the escalation factor and nominal interest rate on the total present worth cost estimates are shown in Table 3-11. The total present worth cost for Scenario " 2 assumes a buy-in amount from Tigard equal to the amount shown in Table 3-10. An increase in the escalation factor increases the difference between the total present worth • cost estimates. An increase in nominal interest rate decreases the difference between the total present worth cost estimates. As the nominal interest rate increases, the amount of buy-in from Tigard must be greater if the two scenarios are to have an equal total present worth cost. At the buy-in amount estimated and assumed in this analysis, Scenario 2 would always be the least cost alternative for Lake Oswego over the period of analysis. Without any buy-in amount, the total present worth of Scenario 1 is close in value to the total present worth for Scenario 2. In Table 3-11, the total present worth cost of Scenario 2, without an assumed buy-in value, ranges from 2.9% less to 7.0% greater than the total present worth cost of Scenario 1 when evaluated over a range of escalation factors and interest rates. These percent differences in total present worth costs may not be great enough to be certain one scenario is more cost effective than the other given the accuracy of the estimates. �• Initial Rate Impacts An analysis was performed to determine the initial water rate impacts for each of the two water supply scenarios. Lake Oswego's water fund budgets were used as the basis for estimating future revenue requirements and projected revenues. Tables 3-12 and 3-13 present the data used to estimate rate impacts for Scenarios 1 and 2, respectively. Tables 3-12 and 3-13 show water fund revenues and revenue requirements from Lake Oswego's budget for the last three fiscal years (1992-93 through 1994-95) and projected revenues ""' and revenue requirements for the next five fiscal years (1995-96 through 1999-00). The projected 1994-95 budget items that are not directly impacted by the proposed chang- es in water production amounts or new facilities were escalated by a factor of 3.00% per year to determine future budget numbers. Budget items that will be directly impacted by the proposed new improvements and water production amount changes were adjusted to reflect the same assumptions as made in estimating annual O&M costs for the present worth analysis. For example, the "materials and services" budget for water treatment was adjusted to reflect electrical energy and chemical cost savings for Scenario 1 and estimated O&M costs for sludge handling and disposal. New capital improvements were assumed to be funded using revenue bonds with the initial debt service requirements beginning in the year projected for construction of the capital improvement. The size of revenue bond issues included issuance costs, discount costs, and one year's debt service 3-18 2 Table 3-11 Impacts of Interest Rate and Escalation Factor On Present Worth Costs for Lake Oswego ar Nominal Escalation Factor Interest 3.00% 3.50% I 4.00% Rate Scenario 1 Scenario 2 Difference Scenario 1 Scenario 2 Difference Scenario 1 Scenario 2 Difference 6.50% 23,484,143 17,163,943 6,320,200 24,622,267 17,793,006 6,829,261 25,821,698 18,441,762 7,379,936 7.00% 22,444,484 16,577,527 5,866,957 23,520,665 17,184,526 6,336,139 24,665,310 17,811,265 6,854,045 7.50% 21,466,210 16,014,813 5,451,397 22,483,729 16,600,061 5,883,668 23,556,914 17,204,938 6,351,976 air 8.00% 20,545,700 15,475,163 5,070,537 21,507,730 16,039,092 5,468,638 22,522,692 16,622,412 5,900,280 Notes: Present Worth Costs are in 1994 Dollars. Assumed Tigard Buy-In Amount= $6,514,598 as �r. r r° or +rr 7 .111 • I Technical Memorandum No.3 3-19 7/18/94 i" Table 3-12 Estimated Rate Increases for Lake Oswego Scenario 1 -Lake Oswego Only cera I Item I 1992-93 ual I E1993-94 ted 11994-95 111995-96 jected I Projected96-97 I 11997-98 ed I Projected98-9I Projected1999-00 REVENUE REQUIREMENTS(Escalated) am WATER TREATMENT Personal Services 325,029 351,000 364,550 375,487 386,751 398,354 410,304 422,613 Materials&Services 613,006 756,350 898,400 762,161 804,286 831,896 860,439 889,946 ON Transfers To Other Funds 16,888 17,212 23,000 23,690 24,401 25,133 25,887 26,663 Capital Outlay 700 15,000 32,500 33,475 34,479 35,514 36,579 37,676 Subtotal-Water Treatment 955,623 1,139,562 1,318,450 1,194,812 1,249,917 1,290,896 1,333,209 1,376,899 its NONDEPARTMENTAL Materials&Services 79,414 182,787 262,100 269,963 278,062 286,404 294,996 303,846 so Other Financing Uses 3,173,670 650,000 0 0 0 0 0 0 Debt Service: Existing 653,275 628,103 653,200 610,590 634,425 605,005 624,155 0 } New 0 0 0 0 185,949 185,949 185,949 185,949 Subtotal-Debt Service 653,275 628,103. 653,200 610,590 820,374 790,954 810,104 185,949 Transfer to Other Funds 936,853 977,788 1,065,409 1,097,371 1;130,292 1,164,201 1,199,127 1,235,101 Capital Outlay(Rate Funded) 886,448 1,099,500 3,604,800 1,184,953 1,220,502 1,257,117 1,294,830 1,333,675 Contingency 0 0 75,182 77,437 79,761 82,153 84,618 87,157 Unappropriated Ending Fund Balance 2,951,775 2,350,041 0 0 0 0 0 0 aw Subtotal-Nondepartrnental 8,681,435 5,888,219 5,660,691 3,240,315 3,528,990 3,580,829 3,683,675 3,145,727 TOTAL WATER FUND REVENUE REOUIREMENTS 9,637,058 7,027,781 6,979,141 4,435,127 4,778,907 4,871,725 5,016,884 4,522,626 t rr Less: OTHER REVENUES(Without Tigard) Beginning Fund Balance 2,864,239 2,951,775 2,350,041 0 0 0 0 0 tees 0 0 0 0 0 0 0 0 ,syr ales&Services: Meter Installations 79,265 89,000 92,200 93,125 94,059 95,003 95,956 96,918 interest Income 141,008 127,427 110,000 0 0 0 0 0 Reimbursements 333 504 0 0 0 0 0 0 Other Revenues 7,394 10,575 3,000 3,000 3,000 3,000 3,000 3,000 .orOther Financing Sources 3,210,000 0 667,000 0 0 0 0 0 TOTAL OTHER REVENUES - 6,302,239 3,179,281 3,222,241 96,125 97,059 98,003 98,956 99,918 . NET REQUIRED REVENUES FROM RATES 3,334,819 3,848,500 3,756,900 4,339,002 4,681,848 4,773,722 4,917,928 4,422,708 10 ` FORECAST REVENUES FROM RATES Sales&Services(includes growth&rate increases) - ea Consumer 2,366,536 2,467,000 2,713,600 2,740,823 4,270,858 4,608,320 4,698,751 4,840,693 Rs Bulk Water Sales ' 968,283 1,381,500 1,043,300 71,666 111,673 120,496 122,861 126,572 Subtotal-Forecast Revenues from Rates 3,334,819 3,848,500 3,756,900 2,812,489 4,382,531 4,728,816 4,821,612 4,967,265 o rREVENUE SURPLUS/DEFICIT(-) 0 0 0 -1,526,513 -299,317 -44,906 -96,316 '544,557 DEBT SERVICE COVERAGE irr Total Revenues 4,778,907 4,871,725 5,016,884 5,067,184 Operating Expenses 2,623,792 2,705,987 2,790,753 2,878,169 Net Operating its 2,155,115 2,165,738 2,226,131 2,189,014 Total Annual Debt Service(Revenue Bonds) 185,949. 185,949 185,949 185,949 �, Actual Debt Service Coverage Ratio 11.59 11.65 11.97 11.77 J. Required Debt Service Coverage Ratio 1.25 1.25 125 1.25 Revenue Surplus/Delktlt(-)with Coverage 0 0 0 0 x REQUIRED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 5428% 6.83% 0.95% 2.00% 0.00% `3 PLANNED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 54.28% 6.83% 0.95% 2.00% 0.00% sir Technical Memorandum No.3 3-20 7/28/94 'S IMO Table 3-13 Estimated Rate Increases for Lake Oswego Scenario 2-Lake Oswego plus Tigard , „ (20-year Buy-In) Item I 1992 93 Actual 11993-94 imated I Proposed1994- I 1995-96 rojected I P1996-97 jected I P1997-98 jected I 1998-99 Projected I Projected1999-00 Ow REVENUE REQUIREMENTS(Escalated) WATER TREATMENT Personal Services 325,029 351,000 364,550 375,487 386,751 398,354 410,304 422,613 err Materials&Services 613,006 756,350 898,400 935,488 1,003,331 1,044,800 1,087,855 1,132,552 Transfers To Other Funds 16,888 17,212 23,000 23,690 24,401 25,133 25,887 26,663 Capital Outlay 700 15,000 32,500 33,475 34,479 35,514 38,579 37,676 ser Subtotal-Water Treatment 955,623 1,139,562 1,318,450 1,368,137 1,448,962 1,503,800 1,560,625 1,619,505 NONDEPARTMENTAL • Materials&Services 79,414 182,787 262,100 289,963 278,082 286,404 294,996 303,846 MP Other Financing Uses 3,173,670 650,000 0 0 0 0 0 0 Debt Service: Existing 653,275 628,103 653,200 810,590 634,425 605,005 624,155 0 New 0 0 0 1,364233 1,384233 1,364233 1,364,233 1,364,233 Subtotal-Debt Service 653275 628,103 653200 1,974,823 1,998,658 1,969238 1,988,388 1,364,233 ear' Transfer to Other Funds 936,853 977,788 1,065,409 1,097,371 1,130292 1,164,201 1,199,127 1,235,101 Capital Outlay(Rate Funded) 886,448 •1,099,500 3,604,800 1,184,953 1,220,502 1,257,117 '1,294,830 1,333,675 Contingency 0 0 75,182 77,437 79,761 82,153 84,618 87,157 Unappropriated Ending Fund Balance 2,951,775 2,350,041 0 0 0 0 0 0 Or " Subtotal-Nondepartmental 8,681,435 5,888,219 5,660,691 4,604,548 4,707,275 4,759,113 4,861,960 4,324,012 TOTAL WATER FUND REVENUE REQUIREMENTS 9,637,058 7,027,781 6,979,141 5,972,686 6,156,237 6262,914 6,422,584 5,943,517 Aro Less: OTHER REVENUES(With Tigard) Beginning Fund Balance 2,864239 2,951,775 2,350,041 0 0 0 0 0 Fees 0 0 0 0 0 0 0 0 Sales&Services: Meter Installations 79265 89,000 92,200 93,125 94,059 95,003 95,956 96,918 Ow Tigard O&M Share 0 0 502,863 521,431 553,916 574,481 595,767 Interest Income 141,008 127,427 110,000 0 0 0 0 0 Reimbursements 333 504 0 614,932 614,932 614,932 614,932 614,932 . Other Revenues 7,394 10,575 3,000 3,000 3,000 3,000 3,000 3,000 Other Financing Sources 3210,000 0 667,000 0 0 0 0 0 • TOTAL OTHER REVENUES 6,302239 3,179,281 3,222,241 1,213,920 1,233,423 1268,851 1,288,369 1,310,618 NET REQUIRED REVENUES FROM RATES 3,334,819 3,848,500 3,756,900 4,758,766 4,922,815 4,996,063 5,134,215 4,632,899 • fila FORECAST REVENUES FROM RATES Sales&Services(includes growth&rate Increases) - Consumer 2,366,536 2,467,000 2,713,600 2,740,823 4,684,030 4,845,502 4,917,600 5,053,583 Bulk Water Sales 968283 1,381,500 1,043,300 71,666 122,478 128,698 128,583 132,139 Subtotal-Forecast Revenues from Rates 3,334,819 3,848,500 3,756,900 2,812,489 4,806,506 4,972,200 5,046,183 5.185,722 REVENUE SURPLUS/DEFICIT(-) 0 0 0 -1,948,277 -116,308 -23,862 -88,032 552,823 DEBT SERVICE COVERAGE: Tatal Revenues 5,972.686 6,158,237 6,262,914 6,422,584 6,496,340 -fle Operating Expenses 2,701,997 2,822,837 2,918,892 3,018,169 3,120.776 Net Operating Costs 3270,689 3,333,400 3,344,022 3,404,416 3,375.564 Total Annual Debt Service(Revenue Bonds) 1,364,233 1,364,233 1,364,233 1,364233 1,364,233 Actual Debt Service Coverage Ratio 2.40 2.44 2.45 2.50 2.47 Required Debt Service Coverage Ratio 1.25 1.25 1.25 1.25 1.25 air Revenue Surplus/Dsficit(-)with Coverage 0 0 0 0 0 REQUIRED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 69.20% 2.42% 0.48% 1.74% 0.00% Ids PLANNED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 69.20% 2.42% 0.48% 1.74% 0.00% V . Technical Memorandum No.3 3-21 7/28/94 V illy err City of lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios payment for reserves. Budgets for capital outlays funded by rates were based on the adopted 1993-94 budget, escalated to future years. The contingency shown in the •• projected 1994-95 budget was also escalated to future years. In the water fund revenues budget, the beginning fund balance was set to zero based on the City's 1994-95 budget. Revenues from meter sales were projected to increase at the same rate as the projected rate of population growth for Lake Oswego. Interest income was projected based on the "unrestricted" amount in the beginning fund balance. Other smaller revenue amounts were held constant over the years of projection. Consumer water sales were projected to increase at a rate equal to the rate of projected population growth for Lake Oswego. For Scenario 1 the bulk water sales were adjusted to reflect no "" sales to Tigard. For Scenario 2 the bulk water sales were adjusted to reflect no revenue from Tigard, however Tigard's share of annual O&M for water supply and treatment was included as a nonrate revenue source. In Table 3-13, Scenario 2 revenues also included a •" reimbursement from Tigard based on payment of the buy-in amount to Lake Oswego over a 20 year period assuming an interest rate of 7.00% per year. • The results of the rate impact analysis show that the initial impacts on rates for Scenario 1, Lake Oswego Only, would be an approximate 54% increase in water rates for fiscal ••• • year 1995-96. An approximate rate increase of 7% would be required for the year 1996- 97 to cover increased debt service for revenue bonds to fund proposed capital improvements. Scenario 2 would require a 69% rate increase initially in the year 1995- 00 96 to cover the new debt service for revenue bonds required to fund the major capital ' improvements required for Scenario 2. Most of the debt service requirements would be offset by reduced O&M costs and Tigard's buy-in amount. However, a lower buy-in ,,O amount from Tigard would increase the initial rate impact to Lake Oswego for Scenario 2. As with the present worth analysis, the actual buy-in amount is critical to the outcome of the analysis. The initial 69% rate increase projected for Scenario 2 could be reduced if Tigard were to pay Lake Oswego a lump sum buy-in amount and Lake Oswego utilized the buy-in yrM° amount to reduce potential rate increases over the first few years. Table 3-14 shows the estimated rate increases for Scenario 2 assuming a lump sum buy-in by Tigard. For the option shown in Table 3-14 it was assumed that $2 million of the initial $6.5 million buy- in amount would be placed in reserve for future capital requirements in the years 2003 and 2009, and $4.5 million would be used during the period FY1995-96 through FY 1998-99 to reduce annual rate increases and spread the total rate increase required over a longer time period. This option would minimize rate increases to less than 24% per year. JI° In fiscal year 1999-2000 the general obligation bond debt service will end. Although this analysis did not extend beyond the year 1999-2000 fiscal year, the revenue requirements will be reduced by approximately $550,000 per year, an amount that could be used to build a reserve to fund future capital improvements and/or minimize future rate increases. 3-22 Is Table 3-14 Estimated Rate Increases for Lake Oswego Scenario 2-Lake Oswego plus Tigard „re (Lump Sum Buy-In) Item rojected I I 1992-93 Actual I 993 94 ted 11994--95 roposed 11995--96 rojected 11996-97 jected 11997-98 jected 11998-99 jected 11999-00 ea REVENUE REQUIREMENTS(Escalated) WATER TREATMENT Personal Services 325,029 351,000 364,550 375,487 386,751 398,354 410,304 422,613 eat Materials&Services 613,006 756,350 898,400 935,486 1,003,331 1,044,800 1,087,855 1,132,552 Transfers To Other Funds 16,888 17,212 23,000 23,690 24,401 25,133 25,887 26,663 Capital Outlay 700 15,000 32,500 33,475 34,479 35,514 36,579 37,676 1 es Subtotal-Water Treatment 955,623 1,139,562 1,318,450 1,368,137 1,448,962 1,503,800 1,560,625 1,619,505 NONDEPARTMENTAL Materials&Services 79,414 182,787 262,100 269,963 278,062 286,404 294,996 303,846 'sr Other Financing Uses 3,173,670 650,000 0 0 0 0 0 0 Debt Service: Ewing 653,275 628,103 653200 610,590 634,425 605,005 624,155 0 New o 0 0 1,364233 1,364,233 1,364,233 1,364,233 1,364,233 Subtotal-Debt Service 653,275 628,103 653200 1,974,823 1,998,658 1,969,238 1,988,388 1,364,233 loW J Transfer to Other Funds 936,853 977,788 1,065,409 1,097,371 1,130,292 1,164201 1,199,127 1,235,101 Capital Outlay(Rate Funded) 886,448 1,099,500 3,604,800 1,184,953 1,220,502 1,257,117 1,294,830 1,333,675 Contingency 0 0 75,182 77,437 79,761 82,153 84,618 87,157 7, Unappropriated Ending Fund Balance 2,951,775 2,350,041 0 0 0 0 0 0 AV i Subtotal-Nondepartmental • 8,681,435 5,888,219 5,660,691 4,604,548 4,707,275 4,759,113 4,861,960 4,324,012 r TOTAL WATER FUND REVENUE REQUIREMENTS 9,637,058 7,027,781 6,979,141 5,972,686 8,156,237 6,262,914 6,422,584 5,943,517 nas Less: OTHER REVENUES(With Tigard) Beginning Fund Balance 2,864,239 2,951,775 2,350,041 0 0 0 0 0 Fees 0 0 0 0 0 0 0 0 Yaa Sales 8 Services: Meter Installations 79,265 89,000 92200 93,125 94,059 96,003 95,956 96,918 r Tigard O&M Share 0 0 502,863 521,431 553,918 574,481 595,767 Interest Income 141,008 127,427 110,000 0 0 0 0 0 Reimbursements 333 504 0 1,900,000 1,200,000 700.000 700,000 0 Other Revenues 7,394 10,575 3,000 3,000 3,000 3,000 3,000 3,000 NW Other Financing Sources 3,210,000 0 667,000 0 0 0 0 0 TOTAL OTHER REVENUES 6,302239 3,179,281 3,222,241 2,498,988 1,818,491 1,351,919 1,373,437 695,686 NET REQUIRED REVENUES FROM RATES 3,334,819 3,848,500 3,756,900 3,473,698 4,337,746 4,910,995 5,049,147 5,247,831 FORECAST REVENUES FROM RATES Sales&Services(Includes growth&rate increases) - Consumer 2,386,536 2,467,000 2,713,600 2,740,823 3,419,144 4269,623 4,833,868 4,969,851 els :» Bulk Water Sales 968,283 1,381,500 1,043,300 71,666 89,402 111,640 126,394 129,950 Subtotal-Forecast Revenues from Rates 3,334,819 3,848,500 3,756,900 2,812,489 3,508,546 4,381,263 4,960,262 5,099,801 rrga REVENUE SURPLUS/DEFICIT(-) 0 0 0 -661,209 -829,200 -529,732 -88,885 -148,031 DEBT SERVICE COVERAGE: Total Revenues 5,972,686 6,156,237 6,262,914 6,422,584 5,943,517 Is mating 2,701,997 2,822,837 2,918,892 3,018,169 3,120,776 Net Operating Costs 3,270,689 3,333,400 3,344,022 3,404,416 2,822,741 Total Annual Debt Service(Revenue Bonds) 1,364,233 1,364233 1,384,233 1,364,233 1,364,233 Actual Debt Service Coverage Ratio 2.40 2.44 2.45 2.50 2.07 r, Required Debt Service Coverage Ratio 1.25 1.25 1.25 1.25 1.25 Revenue Surplus/Deficit(-)with Coverage 0 0 0 0 0 REQUIRED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 23.51% 23.63% 12.09% 1.79% 2.90% PLANNED PERCENTAGE INCREASE IN RATES 0.00% 0.00% 0.00% 23.51% 23.63% 12.09% 1.79% 2.90% 1111 . • • Technical Memorandum No.3 3-23 7/28/94 I l nr City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios Table 3-15 presents a comparison of residential customer water rates for regional water providers. Lake Oswego's current rates are lower than those of surrounding water providers. With the rate increases proposed for either scenario, Lake Oswego's • residential customer rates would continue to be equal to or less than most of the regional providers. Summary and Conclusions se .. This technical memorandum presents the results of the cost comparison between the two water supply options: Scenario 1 — Lake Oswego only, and Scenario 2 — Lake Oswego plus Tigard. Operation and maintenance costs were estimated for each scenario, the „s„ O&M costs for Scenario 2 were allocated to Lake Oswego and Tigard, and the present worth of the O&M costs was calculated. The value of existing capital assets was estimated using the depreciated replacement value method. The depreciated replacement cost for existing capital assets was then allocated to Lake Oswego and Tigard. The amount allocated to Tigard was assumed to be the amount Tigard would have to pay Lake Oswego to purchase or buy Tigard's share of the existing facilities. New capital costs for VWScenario 2 were allocated to Lake Oswego and Tigard. The allocation of capital costs and O&M cost to the two entities was made using a cost of service approach: costs were allocated to base and maximum day followed by allocation of the base costs and maximum day costs to each entity based on projected average day and maximum day demands. Present worth costs were calculated using both a nominal interest rate and an escalation factor. The salvage value of new capital was determined and used in the calculation of present worth. The results of the present worth analysis indicate that Scenario 2 has a lower total present :to worth cost for Lake Oswego assuming a buy-in amount from Tigard equal to its allocated share of existing capital assets. Without the assumed buy-in amount, Lake Oswego's total present worth cost of Scenario 2 ranges from 2.9% less to 7.0% greater than the total present worth of Scenario 1 when evaluated over a range of escalation factors and interest rates. The initial impacts to Lake Oswego's water rates may be a significant increase in the year 1995-96 for either Scenario. The estimated rate increase in fiscal year 1995-96 for Scenario 1 is 54%. The estimated rate increase in fiscal year 1995-96 for Scenario 2 is ► 69% assuming receiving an annual reimbursement from Tigard for the assumed buy-in to the existing system. With the proposed rate increases required for either Scenario 1 or Scenario 2, Lake Oswego's residential customer water rates would be equal to or less than rates charged by other regional providers. ,,, The initial rate impacts of Scenario 1 could be reduced �if Lake Oswego could continue to sell water to Tigard for the next few.years with annual rate increases designed to offset the eventual loss of sales to Tigard. If the City of Lake Oswego selected Scenario 1, it is 3-24 „g, Table 3-15 Comparison of Residential Customer Water Rates for Regional Providers Volume Rate Water Provider Basic Customer Charge ($/ccf) Q on City . $12/2 months $1.00 City of West Linn $19/2 months ($19 includes 14 ccf) $1.10 >14 ccf/2 months Clackamas Water District $3.50/month $0.90 0-4 ccf $1.00 >4-12 ccf • $1.25 >12 ccf City of Tualatin $6.90/month $0.95 City of Beaverton $5.57/month $1.31 City of Portland $13/3 months $0.825 <36 ccf/3 months $0.995 >36-60 ccf/3 months $1.235 >60 ccf/3 months NW City of Lake Oswego Current rates - $7.65/month $0.50 Scenario 1 -projected 1996/97 $12.61 $0.824 Scenario 2-projected 1996/97 $13.26 $0.866 (20-year Buy-In) _ere Notes: All rates are current as of 8/1/94, and are for residential customers with 3/4-inch meters. ccf=hundred cubic feet=748 Gallons wr rr N VW Technical Memorandum No.3 3-25 7/28/94 i rrr City of Lake Oswego July 28, 1994 Technical Memorandum No. 3 Cost Analysis of Scenarios NW likely that Tigard will continue to purchase some water from Lake Oswego until another source of supply is secured. The initial 69% rate increase projected for Scenario 2 assuming a 20-year buy-in period could be reduced if Tigard were to pay Lake Oswego a lump sum buy-in amount and Lake Oswego utilized the buy-in amount to reduce potential rate increases over the first few years. as It is doubtful that Tigard would buy-in to Lake Oswego's existing system without becoming an equal partner in the management of the water supply and treatment facilities. This would require Lake Oswego to join with Tigard to form a water supply `� authority or similar entity established by an intergovernmental agreement; each entity would retain local control of its distribution system and customer billing. ••• Based on the results of the present worth analysis there are long term benefits to Lake Oswego if Scenario 2 were implemented. Operation and maintenance costs are reduced on a per unit of production basis and the costs to customers over the next 26 years will be less than for Scenario 1. Construction of the transmission pipelines required to implement Scenario 2 will cause disruption and inconveniences on local streets and highways. Permitting requirements for a new intake and raw water transmission pipeline crossing of the Willamette may also be difficult, but will be required for either Scenario and may be easier to obtain within the next few years (Scenario 2) when compared to permitting in the year 2010 (Scenario 1). Ara s Poo loy 3-26 L L L L L L E G L APPENDIX C +rr pF�TLANO .o�Q . o��: CITY OF ,a Mike Lindberg,Commissioner es (41%>4 Michael F.Rosenberger,Administrator PORTLAND OREGON 1120 S.W.5th Avenue Portland,Oregon 972041926 ``\; * '`j' BUREAU OF WATER WORKS Information(503)823-7404 rr RECEIVED July 20, 1994 I 1 Mr. Mike Miller - City of Tigard MURRAY,SMITH&ASSOCIATES,Mi( 13125 S.W. Hall Blvd. Tigard, Ore. 97223 ms Dear Mr. Miller: I am writing in response to your inquiries about the City of Tigard increasing its level of water purchases from the City of Portland. Our analysis of the District contract is that it is probably assignable under the facts as we know them. The issue of whether the contract has actually been assigned is not quite as clear although the intent to do so is expressed in your joint intergovernmental agreements with the District, King City, and Durham. We would suggest that you make this clear by taking whatever actions are called for in the intergovernmental agreements. In addition, it is our understanding that, assuming an assignment has taken place, that our existing contractual obligation to provide water to the District is completely extinguished and we are dealing with the City of Tigard based upon that understanding. In other words, our contractual obligation under the District's original agreement, now runs to the City of Tigard only. Your intergovernmental agreements would seem to have contemplated this fact by to transferring the obligations to provide water to the City of Tigard. to We would like to meet with the appropriate representatives from the City of Tigard to discuss two issues related to increases in the amount of water historically taken by the District. Your relatively recent interest in greatly r,,, increasing the historical amounts of water taken from Portland is of interest to us and something we wish to discuss further. In this regard we would like to meet to discuss the City of Tigard's growing reliance on Portland water and its la commensurate decrease in reliance on Lake Oswego water. We are interested in supplying the City of Tigard but must keep in mind other existing contractual obligations. We would like to discuss the relationship of your demands to both to our system and the Lake Oswego system and possible actions to reduce your total demand through conservation and pricing so that we can assure all of our customers that we are minimizing the extent of any increased risk of shortfall as �. much as possible. The second issue is that we want to be clear about the relationship of any increased reliance on the Portland system and the outcomes irr +rr of the Phase 2 Regional Water Supply Plan. We want to have a clear understanding that long term supply decisions might require either a renegotiation of the current contract or a different perspective on the negotiation of any subsequent contractual relationship. I hope that this approach meets your needs. Please contact Bob Rieck (823-7454) or Jim Doane (823-7505) at your earliest convenience about a follow-up meeting. Sincerely Yours, 40 • Michael Rosenberger, Administrator Bureau of Water Works cc: Tigard Water District Mike Miller Bureau staff rr NW 1,‘ G L APPENDIX D E +irr CITY OF TIGARD, OREGON +or RESOLUTION NO. 94-415- A 4-41A RESOLUTION ADOPTING THE WATER SUPPLY PLAN UPDATE BY MURRAY SMITH AND ASSOCIATES, AUGUST 1994 . WHEREAS, the City of Tigard commissioned Murray Smith and Associates to wer prepare a Water Supply Plan Update for the Tigard Water Service Area, and OWWHEREAS, the City of Tigard has responsibility for the operations and supply of water for the Tigard Water Service Area, and WHEREAS, the Intergovernmental Water Board, as outlined in the IGA us referring the delivery of water services dated December 23 , 1993, held an annual meeting on September 14, 1994 with all participating jurisdictions notified, and WHEREAS, the Intergovernmental Water Board recommended to the City of Tigard, the acceptance and approval of the Murray Smith and Associates, Water Supply Plan Update. NOW, THEREFORE, BE IT RESOLVED by the Tigard City Council that: «r. 1. The Murray Smith and Associates Water Supply Plan Update on August, 1994 is designated as the City of Tigard's approved plan for water supply; and 2. The City of Tigard approves and authorizes the City Administrator and staff to begin negotiations with the City of Lake Oswego CA a long term water supply partnership; and 3. The City of Tigard authorizes the Maintenance Services Director to continue to work closely with the Intergovernmental Water Board W,,, and other jurisdictions within the water service area, keeping all parties informed as to the progress of the Water Supply Agreement. """ PASSED: This oZ bh day of _21994 ■r �1 A Ma r - City of-Tigard ATTEST: - 6W rFa City Recorder - City lot Tigard OW OW 47 RESOLUTION NO. 94- - Page 3 um