Water Environment Services presents $248 million 2025–2030 capital improvement plan; no action taken

Water Environment Services (WES) staff presented a rolling five-year Capital Improvement Plan (CIP) for 2025–2030 to the WES Board of Directors on Jan. 22, 2025, outlining about $247–248 million in proposed wastewater and surface-water projects and a longer-range financial plan for additional surface-water investments.

The presentation, delivered by Ron Waringer, Assistant Director of Water and Environment Services, and Jeff Stallard, Capital Program Manager, highlighted projects the agency says are needed to accommodate growth and maintain existing infrastructure. Waringer called the CIP “a technical document” that identifies what to build, when to build it and how staff plans to pay for it; the formal adoption of the plan was not before the board at this session and will return to a future business meeting for resolution and vote.

The nut graf: The proposed five-year plan schedules roughly $248 million of capital work, with the largest line items focused on capacity to serve growth (including interceptor and force-main expansions and a new outfall) while staff said over half of the plan’s dollars fund reliability and rehabilitation projects to maintain existing facilities. Staff said financing would rely mainly on customer rates and system development charges (SDCs); staff plans a March follow-up session on the SDC methodology that the board must adopt by statute to set SDC rates.

Key projects and status

- Clackamas interceptor and intertie/force-main expansion: WES presented maps showing planned phased expansion of about five miles of the Clackamas interceptor and associated intertie pump-station upgrades to move flows from growing areas, especially Happy Valley, toward facilities with available capacity. Staff said portions of the work are force main (pressurized pipeline) rather than gravity main and that the upgrades are driven by capacity needs rather than environmental compliance alone.

- Kellogg Creek facility and solids handling: Staff said Kellogg Creek in Milwaukie is capacity-limited and cannot expand; proposed projects would redirect some growth-related flow to the Tri-City (Oregon City) facility through expanded pumping and a larger force main. Commissioner Craig Savas urged the agency to accelerate on-site dewatering at Kellogg to reduce truck traffic and odor impacts near Milwaukie Bay Park, saying, “I want to make sure we’re actually doing it, not kicking it.” Waringer and staff said solids handling and sequencing of improvements at Kellogg will be part of future discussions but gave no schedule for dewatering work at Kellogg.

- Clackamole outfall tunnel: WES described construction of a second outfall from the Tri-City treatment facility to the Willamette River. The project combines tunnel boring-machine (TBM) work and trenching; staff reported the TBM (nicknamed “the Clackamole” after a public naming contest) completed tunneling and is staged in the Willamette, with removal and preparations to bring the outfall online expected in late January 2025.

- Tri-City wet-weather expansion: The CIP includes a wet-weather capacity expansion at the Tri-City plant to treat peak storm-driven flows. Staff said the recommended plan meets Oregon Department of Environmental Quality (DEQ) regulatory requirements and that DEQ had signaled likely approval of the broader Willamette facilities plan in the near term.

- 3 Creeks Protected Area stream and floodplain restoration: WES described a nearly 80-acre restoration project near Clackamas Community College’s Harmony campus to improve water quality, reduce downstream flooding and enhance habitat. Staff said the project’s estimated construction cost is about $4 million and that WES received a $620,000 grant from Metro’s Nature in Neighborhoods program; construction is targeted to begin next year.

Costs, finance and SDCs

Staff described long-range financial modeling accompanying the CIP. Waringer said WES models out beyond five years — the agency maintains a 10–11 year industry standard horizon and additional long-range plans — and presented a longer-range surface-water CIP figure of about $405 million that staff said could be financed while holding to a steady 5% annual rate increase in one scenario. Staff repeatedly noted that adopting the CIP and funding it are separate steps: the CIP documents planned work and cost estimates; funding decisions occur later in the annual budget process.

On system development charges, Waringer said staff will report back in March with the SDC methodology the board must adopt by statute. He said the methodology produces a theoretical SDC and the board then determines the policy choice for the charged amount. Waringer previewed that the theoretical SDC under the current plan is higher than the current charge; the current indexed SDC is roughly $9,100, the draft methodology’s theoretical charge is roughly $12,500, and staff estimated the current charge is about 70–75% of the modeled theoretical SDC. Waringer said staff will show modelled rate impacts at different SDC levels when they return.

Asset management and infiltration/inflow (I&I)

Jeff Stallard explained cost-estimate practices and contingencies: planning-level estimates carry contingencies tied to the estimate’s level of design detail and are updated annually as projects advance. Stallard said WES budgets about $800,000 annually for renewal-and-replacement work identified through its asset-management program to avoid running equipment to failure.

Staff described an I&I investigation in the Mt. Scott area that identified an improperly connected service lateral routing stormwater into the sewer; staff said the connection was fixed and that the correction significantly reduced extreme peak flows in that basin. Waringer said investing in targeted I&I reduction can be less costly than building extra treatment capacity, and that prior modeling showed roughly $120 million in savings over building additional plant capacity if I&I is reduced.

Flooding, equity concerns and board comments

Commissioner Savas pressed staff on odor, truck traffic and promises to reduce trucking associated with solids handling near Milwaukie Bay Park; he noted past commitments to reduce truck trips by installing dewatering at Kellogg and requested the agency not “kick the can” on that work. Waringer said staff intends to discuss sequencing of Kellogg improvements and solids handling in future briefings.

On 3 Creeks restoration and downstream neighborhood flooding, Waringer said the project is near 30% design, and hydraulic modeling indicates the restoration approach will lower water-surface elevations for frequent, smaller storms (one- to five-year events) and reduce flooding frequency; staff said the project will not increase flood risk for downstream neighborhoods. Waringer said the county-built detention facility upstream was designed for very large storms but does not improve frequent-event flooding.

Construction costs and schedule

Staff showed a regional construction-cost index noting historic spikes in 2020–21 and more recent stabilization; recent bids have been near or below engineer estimates. Staff said several projects require phased construction, and that schedule and estimates will be refined during design. Waringer said the TBM outfall removal and commissioning actions would occur in late January and that the Aldercrest flooding project remains on track for completion this year.

Process next steps

WES staff characterized the Jan. 22 session as informational. Waringer and Stallard offered to schedule follow-up policy sessions and one-on-one briefings; staff said formal adoption of the CIP will come later via a resolution at a business meeting after additional updates and the March SDC discussion. The board did not take formal action on the CIP at the Jan. 22 session.

Quotes

“We are constructing currently a second outfall to send treated water from our Tri City facility to the Willamette River,” Ron Waringer, Assistant Director of Water and Environment Services, said during the presentation about the Clackamole tunnel.

“I want to make sure we’re actually doing it, not kicking it,” Commissioner Craig Savas said when pressing staff about on-site dewatering and truck traffic at Kellogg and nearby Milwaukie Bay Park.

“Inevitably something will fail, right?” Melissa, board member, asked during discussion of contingencies and asset management; staff said they carry project contingencies tied to design level and maintain an annual renewal-and-replacement budget.

Ending

Staff asked the board for questions and invited follow-up meetings; the CIP will return with additional details — including the SDC methodology and project sequencing for solids handling — before the board considers formal adoption at a future business meeting. No vote was required or taken at this session.