Water Bureau seeks interim line of credit to maintain filtration project during land‑use remand

The Portland Finance Committee on March 24 heard an update from the Portland Water Bureau and the city’s finance team about the filtration plant project and an interim borrowing strategy to cover costs while construction is paused under a Multnomah County land‑use remand.

Jonas Beery, deputy city administrator for budget and finance and the city’s chief financial officer, told the committee the city seeks an interim borrowing facility — effectively a tax‑exempt line of credit — to bridge near‑term cash needs until it can regain access to federal WIFIA financing. “Part of the strategy with this interim borrowing is to bridge until we can regain access to that loan, at which point the line of credit would be repaid,” Beery said.

Jody, the Portland Water Bureau’s chief engineer, described the remand process and explained what the pause means for on‑site work. The project entered a pause on Feb. 25; under state guidance the county has 120 days from the remand to act, and staff estimated the pause could run 4 to 6 months depending on evidence in the record and hearings. While major earthmoving and many active construction activities are on hold, the bureau said it must continue daily inspection and repair of erosion control, maintain fencing and 24/7 security, manage delivery and placement of procured equipment, process thousands of submitted design documents and keep critical staff and contractors available to limit re‑mobilization costs.

Jody told the committee the city will face ongoing site, security, consultant and standby costs while the pause continues and said those carrying costs are “about $10 to $20 million per month,” depending on the mix of work authorized. The bureau is evaluating the balance between demobilizing (and incurring termination and re‑mobilization risk) versus keeping contractors and equipment in place to expedite a restart.

Matt Girock, the city’s debt manager, described the proposed interim facility’s likely structure: a variable‑rate, tax‑exempt, interest‑only line with a maximum three‑year term that can be prepaid when lower‑cost resources (such as WIFIA) are available. Girock said market pricing at the briefing would translate to roughly a 4.1% interest rate on drawn funds based on one‑month SOFR at that day’s market; an unused commitment fee on the undrawn line would be about 30 basis points.

Beery and Jody said the city has authority the previous council used to authorize borrowing for this purpose and they brought the item to the new council’s finance committee as an informational check‑in. The committee was not asked to vote on a borrowing measure at the March 24 meeting; staff said they will pursue a negotiated interim facility and return with formal documents as needed.

Councilors asked detailed questions. Councilor Green asked whether the expected near‑term events (May Day, Rose Festival) were the drivers of police or public safety overtime referenced in the budget discussion; staff answered that protests and events are one driver among several, including retirements and vacancies. Councilor Green and others asked whether the bureau had considered alternatives to the filtration project that would avoid land‑use review; Jody said the team had not identified an alternative that would avoid the same land‑use process.

Committee members requested follow‑up detail on the debt terms and timeline. Staff said they expect to document and close a negotiated interim facility within roughly six weeks of receiving authorization to proceed; the stated repayment plan is to prepay the interim facility with proceeds from WIFIA or long‑term municipal bonds once those resources are accessible.

There was no committee vote recorded on the borrowing; staff said they would return if the pause extends or significant changes arise.