Transcript
Automatically generated transcript. It may contain errors and includes testimony in languages other than English that is not individually marked up for assistive technology.
Olivia Clark
You're, you're over here.
You're over here, dear.
You're over here.
Loretta Smith
I know, I'm so used to having you right here.
Olivia Clark
You're over here.
Ting Lu
Kind of sad.
Olivia Clark
Uh, good morning everyone.
I call the meeting of the Public Works Committee to order.
It is Tuesday, April the 14th at 9:30 AM.
Diego, will you please call the roll?
Diego
Good morning.
I'm having troubles with my boat tracker, so apologies if this is order— out of order, excuse me.
Kanal?
Koyama Lane?
Tiffany Koyama Lane
Here.
Diego
Smith?
Loretta Smith
Here.
Keelan McClymont
Green?
Mitch Green
Here.
Diego
Clark?
Olivia Clark
Here.
Thank you.
And Claire, can you please read the statement of conduct?
Claire
Good morning and welcome to the meeting of the Public Works Committee.
To testify before this committee in person or virtually, you must sign up in advance on the committee agenda at portland.gov.
/Council/agenda/publicworkscommittee or by calling 311.
Registration for virtual testimony closes 1 hour prior to the meeting.
In-person testifiers must sign up before the agenda item is heard.
Keelan McClymont
If public testimony will be taken on an item, individuals may testify for 3 minutes unless the chair states otherwise.
Your microphone will be muted when your time is over.
The chair preserves order.
Disruptive conduct such as shouting, refusing to conclude your testimony when your time is up, Or interrupting others' testimony or committee deliberations will not be allowed.
If you cause a disruption, a warning will be given.
Further disruption will result in ejection from the meeting.
Anyone who fails to leave once ejected is subject to arrest for trespass.
Additionally, the committee may take a short recess and reconvene virtually.
Your testimony should address the matter being considered.
When testifying, state your name for the record.
If you are a lobbyist, identify the organization you represent.
Claire
And finally, virtual testifiers should unmute themselves when the clerk calls your name.
Olivia Clark
Thank you, Claire.
Colleagues, welcome to the new, the new Public Works Committee with my new vice chair.
I was hoping to welcome our new member, Councilor Kanal, but I think he's, he's joining us a little bit later.
Um, so today I'm looking forward to talking about this new era and where we're going, but first we have a couple of other items we need to take care of today.
We actually have 3.
The first item that we're going to hear is a property rights ordinance from PBOT.
I see them, they're here.
Then we're going to consider the water revenue bonds, which will include a quick update on the Bull Run filtration project.
And we've also invited CA Lee to join us around 10 o'clock in case there are questions about bonding.
Then we'll have a discussion on our committee priorities and look ahead to the rest of this year.
I'm really hoping that we are— even though we have 3 hours, I'm hoping that we don't take or need the whole 3 hours for this agenda today, but we'll play it by ear.
So, um, Diego, can you please read the first item?
Diego
Item 1, authorize the Bureau of Transportation to acquire certain permanent property rights necessary for replacement rockfall mitigation system for the West Burnside Road Southwest Tichenor Drive slide project through the exercise of the city's eminent domain authority.
Olivia Clark
Thank you, Diego.
So we have the team from PBOT here with an ordinance on permanent property rights that are needed to support a rockfall mitigation, which happened in Councilor Green and I's district.
Um, on Titchener.
Uh, it's very familiar to us.
We, we live in a hilly place where there are a lot of rockfalls.
Um, so I'm going to hand it off to the PBOT staff to give us the specifics, and, and then we'll move into a decision.
Thank you, DCA Dhanapal.
Priya Dhanapal
Uh, good morning, Chair Clark and members of the Public Works Committee.
This is Priyadana Pal, um, DCA for Public Works.
I just wanted to take a moment to say that we we are really excited about the new committee, and welcome to the committee in its new form, and also welcome to Councilor Kanal from District 2.
We are thrilled about continuing to work together with this committee and delivering the work that keeps the city moving and functioning every day.
And we're also thrilled that all districts are represented in Public Works Committee right now.
We are here to present an update on the Southwest Ishna Drive landslide response and the associated ordinance with that, I'll pass it on to David from PBOT.
David McEldowney
Thank you very much.
Good morning.
I'm David McEldowney.
I'm PBOT's Real Property Services Division Manager, and today joining me is my colleague.
Michael McGee
My name is Michael McGee.
I'm the interim city engineer for Transportation Bureau and also construction services manager.
Claire
Good morning.
David McEldowney
The item, uh, agenda item before you today is an ordinance of intent necessity surrounding the Tichenor slide, this is an ordinance that we hope that the committee moves forward to the full council with your support for their consideration.
This is something that you've all seen before over the last year several times at council, but this one's going to be a little bit different because typically we bring these to you before we construct a project.
In this particular case, The project has already been constructed, and the property owners are expecting us to come back and acquire the easements.
And with that, I'm going to kick it over to Michael McGee.
Michael McGee
Thank you.
I'm just going to give a little overview and some background and context of the work that was performed that's led us here.
March of last year, we had a landslide at the Titchener and Burnside intersection.
You can see it in the photo.
This is looking westward, if you don't know, March is a common landslide time for us.
We have one in the West Hills at Fairmount currently with the road closure.
So the heavy rains combined with our topography, we end up with these.
Some are smaller.
This is a quite large one.
So you're looking west here and you can see the material that came down on and near the roadway.
What you can't tell very and then we— this road is a main access to Arlington Heights, also for emergency services.
So it became a priority for us also with the springtime and Washington Park and people being interested in there.
Thank you.
And then we— So we worked with a lot of our community partners to get that road closed and make this awareness until we come up with a safe solution.
Just an overview of the work and what it was required.
We had to work with urban forestry to remove the trees at the brow, which is the top edge, which was a contributing factor to some of the issues that we had.
We had to get an emergency declaration put in place with assistance from the deputy city administrators so we could act quickly and get a contractor with the skills in place to perform the work.
It's a specialized skill with certain equipment that they have to use.
They use air tools, hydraulic jacks, specialized safety harnesses.
You can see the large machinery that they have to do.
Then they have to hang the mesh down before the blasting was a consideration that we had in the toolbox.
We were fortunate enough that we didn't have to do that because if we had to blast the road, we would have had to close Burnside for safety.
So it's a pretty significant effort that they make look easy, but it takes quite a bit of skill to get that done.
And you can see a lot of the details, significant, significant amount of material that fell prior to and with the work when they scraped the sides and did their work.
That area that they're working from is where the PBOT maintenance operations stores the sand piles for all of the winter weather operations.
So that way we were fortunate that that's where it landed, but we needed to make sure that we wouldn't proceed further towards into the roadway.
So we were successful in that and reconstructing a new version of essentially what was there before.
And then a quick timeline.
And you can see this is an after photo.
But we— March 29th, that's when the landslide occurred.
We worked to get the emergency declaration in place.
May 15th, we set up some— a web page and did a tremendous amount of outreach, emergency services, the neighborhoods, keep them apprised.
We were— we were still allowing bikes and peds to walk along the sidewalk portion of there.
There's a bus stop at the bottom of the hill, so we wanted to keep that open for them.
We had to get permits of entry so we could get up on the top across some 3 properties.
So right at the top, the leading edge of that, there's 3 properties that Dave is going to talk more about.
But we had to get onto their property so we could assess what was happening and make some judgments and refine our plan of how to approach the situation.
So permits entry.
And then we worked with them all along the way to make them aware of okay.
David McEldowney
Thank you, Michael.
Once again, the purpose here today is to seek the authority from council to begin the negotiations with the property owners and offer just compensation.
Thank you, Councilor.
And if we are unable to reach a resolution with the property owners, then that would give us the ability, or the City Attorney's Office, the ability to condemn property rights through the court system.
We have 3 properties, as Michael mentioned, up on the top of the hill there that we need to acquire easements from.
Excuse me.
There are 3 permanent easements for that rockfall system and then one permanent easement that provides access from Champlain Drive to the site along one of the unimproved properties.
We've been in touch with property owners throughout.
They're invited to the council meeting, and we've had communication with them.
So I'll orientate you to this map that's on the screen now.
At the top of the— this is an overhead view.
At the top of the screen is Burnside, and at the bottom is Champlain Drive.
The 3 properties in question are the yellow parcels, and the green area is that cable mesh net that you saw in the photos earlier.
The triangles represent the anchors that hold that mesh net in place, and you'll see that 9 of those anchors are spread out across those properties.
So what we would be looking to get is the permanent easements that cover the green portion that overlaps the yellow on that map.
Olivia Clark
David, can I interrupt for just a second?
Are those, um, are the property owners losing some of that land to the slide?
And I— it sounds like you're, you're putting anchors into their property.
David McEldowney
Correct.
Um, Michael, do you want to discuss that part of it?
Michael McGee
Yeah, the, the dashed line that you see in there is essentially that top of that brow, and you can see how when there the loose material was removed.
Some of it fell naturally and some of it was taken out by the effort.
It changed that topography.
So that's what that dashed line represents.
It reaches into their properties.
David McEldowney
Yeah, I believe the beforehand situation was already a slope headed down to Burnside.
This just made part of that slope a little more steep.
And essentially, that's what that is.
And that is our presentation.
We're happy to answer any questions that you might have.
Olivia Clark
Thank you so much for the presentation.
It's very clear.
I'm glad that the Arlington Heights neighbors were alerted.
I mean, they must have been scared after their— not their backyard exactly, but was falling down.
And it sounds like they've been very cooperative.
Colleagues, do we have any questions or comments?
Councilor Smith.
Loretta Smith
Thank you.
Thank you for the presentation.
What does something like this cost?
What are we offering the residents?
David McEldowney
Well, typically we come, we wait for the council to approve the ordinance, and then we go out and get appraisals, and then we have a better idea at that point.
Um, so these are permanent easements, but they're not over a large area, and it doesn't really change the use of the property.
Um, so we haven't quantified that amount yet, though.
Loretta Smith
What if I don't like the amount that you're going to offer, and then if we give you permission to do it first?
David McEldowney
I'm, I'm sorry, can you repeat that?
Loretta Smith
I said, what if I don't like what you're offering and we give you permission to do it, and we don't know what we're giving you permission for?
David McEldowney
Well, they— we were in communication with them, so they, they knew what it was for.
They knew what, what we were constructing out there, and they knew that we would come back to them.
Loretta Smith
Um, no, I, I think you're missing what I'm saying.
If you're asking me for permission, and I don't know if I want to give you permission because I don't know how much you're going to ask, that you're going to offer them for the— what we're going to be paying for this easement.
David McEldowney
Yeah.
Eric Zimmerman
Is that a negotiation?
David McEldowney
It is a negotiation.
Okay.
Yeah, I mean, they— we make our offer and it's based on just compensation.
And once just compensation is informed by the appraisal, we make that offer to them.
If they think we're wrong and we've missed something, we're happy to hear what they have to say and we go into a negotiation from there.
And if we're unable to get it settled at some point, then it would go to the City Attorney's Office Um, to, to file for, um, file with the courts for possession.
Loretta Smith
To, to make me more comfortable, because I've been in this before and I've had it done the other way around when I was on the County Commission, that you, you make the offer and then you bring it back to us and then we either approve it or don't.
But if I give you blanket approval right now, I have no idea what I'm approving.
David McEldowney
Well, I mean, that's traditionally the way it's done.
If it's through eminent domain.
That's the route.
Loretta Smith
Oh, so this is eminent domain?
Eric Zimmerman
Yes.
Loretta Smith
Oh, okay.
I see, I see, I see, I see.
David McEldowney
Yeah, if this was like a, you know, Parks or somebody that was acquiring this through a willing seller, willing buyer, that's typically how it goes.
Then we come back with a specific number for you.
But this is eminent domain.
Priya Dhanapal
Yes.
Loretta Smith
And we should have had a conversation prior to this, prior to this hearing, so that we understand what the, the rules of engagement are.
Olivia Clark
Councilor Smith, maybe we can, um, put that on a future agenda to learn.
Ting Lu
It's too late.
Olivia Clark
Well, on this one, um, but we can actually have a, a conversation in the future about how this, uh, process works.
I think it would be— maybe you've already been through it at the county, but the rest of us maybe have not been through it.
Loretta Smith
Right.
Olivia Clark
And I imagine that you— this eminent domain is not used frequently, but when you have to, you use it.
Loretta Smith
Well, so I would've liked to have an executive session where you could have explained to us what the parameters and what we were prepared to do before we have— before we came to this position.
And so you're asking me to do something that I feel uncomfortable with right now.
And I think we should have had an executive session first.
Olivia Clark
Thank you, Councilor Smith.
Do we have any other comments or questions from the other committee members?
Uh, would someone like to make a motion?
I would entertain a motion to send the ordinance document number 2026-133 to the full council with a recommendation to pass.
Mitch Green
So moved.
Muriel Gueza-Teufel
Second.
Olivia Clark
Thank you.
Uh, the, uh, measure has been moved and seconded.
Moved by Councilor Smith, seconded by Councilor Koyama Lane.
Loretta Smith
No, it wasn't moved by me.
Olivia Clark
Oh, I'm sorry, sorry, I said Green.
I'm sorry, misspoke.
Excuse me.
Um, so, uh, if there's no more discussion, uh, can the clerk please call the roll?
Diego
Kanal.
Koyama Lane?
Tiffany Koyama Lane
Aye.
Diego
Smith?
Loretta Smith
No.
Keelan McClymont
Green?
Mitch Green
Aye.
Keelan McClymont
Clark?
Olivia Clark
Aye.
Diego
With 3 ayes, 1 nay, and 1 absent, the motion carries, and the ordinance document number 2026-133 will move to the full council with a recommendation to pass.
Olivia Clark
Thank you, Diego.
Diego, can you please read the next item?
Diego
Item 2, authorize water revenue bonds to finance water system capital improvements for an amount sufficient to produce net proceeds of up to $525 million and to refund outstanding water revenue bonds.
Olivia Clark
Thank you, Diego.
Committee members, we're going to receive some transportation infrastructure-related finance items that previously may have gone to the Finance Committee, but it's come to us today.
Uh, the item is an example of that.
Um, we'd like to authorize the issuance of the water revenue bonds to finance needed capital improvements.
That's what's before us today.
I've also invited, uh, City Administrator Lee to join us for this conversation and perhaps highlight, uh, this kind of practice since some of the— some of us may not be, uh, that versed in it.
And because we have DCA Danipal and the Water Bureau here with us today, I've asked them to first provide us with a very brief update on the Bull Run filtration project and related financing.
So we'll have the staff give us that brief update on, uh, the water filtration system and then pause for any committee questions before we move to the revenue bond issue.
So DCA Danapal, would you like to begin?
Priya Dhanapal
Uh, good morning, Chair Clark and councilors.
Again, for the record, this is Priya Danapal, the Deputy City Administrator for Public Works.
As Councilor Clark mentioned, we will be walking through the Build Run Filtration Project.
Why is it required?
How the project has evolved over the years?
And how are we managing cost, schedule, and risk?
This is a large and complex infrastructure project, and over time, both cost and schedule have changed as the design has advanced and the market conditions have shifted and the permitting processes were completed.
Our focus is treating straightforward, which is to deliver a compliant and reliable system while managing cost and risk with discipline.
Next slide, please.
So today, uh, Public Portland Public Utilities Director Ting Lu will begin with why the filtration is required, followed by the project's evolution.
We will then cover how we are actively managing risk with measures in place to maintain control of cost, schedule, and delivery.
We will also cover how we are ensuring accountability and transparency for the project.
And finally, Matt Gurak, our city's debt manager, will be walking through how the projects— projects like this are funded and the long-term financing approach that supports them.
With that, I'll turn it over to Director Lu.
Ting Lu
Thank you so much, DC Downapark.
Good morning, Chair Clark and Public Works Committee members.
For the record, my name is Ting Lu.
I'm the Public Utilities Director serving both Water Bureau and the BES.
So I'll begin with a brief overview of the Bow Run treatment projects with how they have evolved over time.
Next slide.
Next slide, please.
Since 1895, the Bow Run watershed has been Portland's primary water source.
It has been the backbone for the region's health and economy.
Today, we are required to treat the water to meet federal regulations, and specifically the treatment is for Cryptosporidium.
Since 2017, the city has been under the binding legal agreement with Oregon Health Authority.
That is to establish both the requirement and also the timeline for the treatment.
This agreement explicitly directs the filtration as the type of the treatment.
So this is not optional.
City Council selected filtration as a treatment approach.
UV treatment was considered but was not providing the best defense for increasing risk.
Beyond meeting the regulatory requirement, filtration provides also the long-term resilience necessary to manage the impact of wildfire, extreme storm events, and also earthquakes.
Next slide.
When we talk about the Bull Run Treatment Project, it actually includes 3 components of that.
The first is a filtration facility that is providing the filtered water to meet the regulatory requirement.
The second piece is the 7 miles of a new pipeline that is connecting the filtration facility to the existing water distribution system.
The third is an improved corrosion control facility completed in 2022. to provide immediate lead reduction at the tap.
When the filtration facility goes live, the corrosion control treatment will be integrated as part of the filtration facility.
So together, these 3 components function as one system, and the project costs reflect all 3 together.
Next slide.
This one is a A little bit more complex, but the key takeaway of this slide is that projects progress in multiple stages with the increasing definition of scope and the increasing certainty in cost over the last few years.
In 2017, filtration was selected to meet the regulatory requirement.
At that point, key elements of a project such as site location, facility design, pipeline connections had not yet to be defined.
And then in 2018, Council made the foundational decision on all this additional component, allowing the project to move into design.
By 2021, as a preliminary design was completed, the project reached a more defined scope, and the cost estimate was refined based on the early engineering work.
In 2023 and 2024, as the design advanced and we have reached To the higher level of cost certainty, the city entered into guaranteed maximum price, or GMP, contracts, which established a ceiling price based on the detailed design and contractor bids, providing greater cost certainty moving forward.
And then last year, we all have aware of this required land use approval and also the policy in 2025.
So that's really the pause and the additional associated elements has been impacting the project cost and schedule.
So the land use permitting process has now been resolved with the permitting affirmed and upheld, including the LUBA decision in 2026.
This really provides us a legal ground and certainty for continued construction moving forward.
Priya Dhanapal
Next slide.
Ting Lu
We know it has been a complex project, and I'll walk with you all how the project evolved with respect to budget and schedule, including the transition from early conceptual estimate to greater cost certainty based on advanced design and marketing pricing.
Priya Dhanapal
Next slide.
Ting Lu
So this is our project budget evolution.
So along with the bottom lines are from the year from 2017 to today.
The bars are showing the project cost at each stage.
The labels at the bottom indicate the project phase and level of certainty at the cost estimate for each stage.
As we move from the left to the right, as the project progressed from planning to design to construction, the estimate become more defined and more reliable.
This is typical for large infrastructure projects.
As I mentioned, in 2017, the estimate was really conceptual, and that's about the $500 million under a regulatory timeline.
Thank you.
Timeline before key elements of decision was defined.
As we advance to the design, including early engineering work in 2018 through 2021, the project scope become clear and the estimate was refined to approximately $1.5 billion.
By the time construction contracts were finalized in 2024, costs reflected actual market conditions.
Including labor and material pricing, reached approximately $2.1 billion.
At that stage, the city entered into the second guaranteed maximum pricing contract, which established ceiling price for us.
We then updated cost estimate to $2.6 billion this year.
This reflects the impact of permitting pause and schedule extension, along with updated contingencies for remaining the work.
So in summary, earlier estimates during the planning and early design phases were based on limited information.
And today, as we are moving to the construction phase, it provides a more reliable understanding and high confidence for the remaining costs to complete the project.
Other than major events like force majeure, remaining risks are intended to be managed within the project.
Sameer Kanal
Thank you.
Loretta Smith
Contingencies.
Ting Lu
And this slide shows the, um, tied with our compliance agreement with Oregon Health Authority.
The original completion target was 2027.
As the project moved through the—.
Priya Dhanapal
Sorry, next slide, please.
Ting Lu
Oh, yes.
Thank you.
Um, as the project moved through the permitting, the construction started shifting from 2023 to 2024.
And then in addition, there was a temporary pause due to the land use appeal.
So this total delay resulted in 16 months of delay.
And that process has now been resolved, as I shared earlier.
Based on this impact, we requested and received approval from OHA to extend the completion date by 2 years.
So now it's 2029.
The updated schedule includes not only recovery of the time lost, but also approximately 8 months of contingency to managing remaining construction risk.
So the key point for this slide is that our current schedule is both realistic and achievable.
It ensures we maintain the highest safety standard as well as delivering a high-quality finished product.
Um, so we have looked at how the project has evolved to meet today's market realities and schedule changes.
Now I really want to focus on how we are protecting this investment moving forward.
Our priority is to managing the cost and schedule proactively, and a risk management and mitigation plan is designed to catch any potential issues early, giving us 2 tools to manage the unknowns and stay focused on the safe, successful delivery.
Next slide.
So we're— next slide, please.
We're using a proactive risk management strategy to protect the budget and keep construction moving.
This table shows the top 4 risks that we are actively tracking and managing.
Because of schedule delay, we're now resetting our project baselines to making sure we are holding contractors accountable for their deadlines, ensure every change is negotiated with clarity.
The second is we are analyzing the impact of a contractor's changes to prevent cost duplication and ensure that every firm remains financially responsible for their performance.
We are also optimizing our document and the workflow controls to making sure to manage the scale of this project.
We are preparing for the complex startup and commissioning phase early.
Thank you.
To ensure that the completed facility delivers a high-quality project from day one.
Next slide, please.
So our risk mitigation strategies helps us to manage the unknowns of construction.
These actions are designed to maintain the control of cost and schedule, equally important to ensure visibility into that work and ensure we have accountability and transparency measures for the project.
Thank you.
Now I'll provide our accountability and transparency measures.
So beyond our reporting schedules, we have built in multiple layers of expert oversight to act as a watchdog for our ratepayers.
These are just— these aren't just administrative checks.
They are specialized teams that are designed to challenge our assumptions, finding savings, And ensure every dollar is spent according to the contract.
By bringing in outside eyes and industry experts, we are adding a level of scrutiny that protects both the project future and community's investment.
So these are multiple layers from the early— before the construction starts, value engineering.
We have engaged 17 independent reviewers with industry experts.
Matt Giurach
Wow.
Ting Lu
For the filtration facility.
This work resulting more than $200 million plus in construction savings.
We have also established a Project Delivery Advisory Team, also called PDAT, which included experienced construction managers and members of Portland Utility Board members.
They are helping us to actively evaluating project construction staffing structure, risk communications, and operational readiness, and their findings are incorporated into the continuous improvement also bring to the PAB and the city leadership.
We have also engaged a team of independent claim analysts who scrutinize major change cost proposals, advise us on potential dispute, and ensure that every dollar claimed for change aligns with our contractual agreements.
This kind of expertise is really important to allow us to identify potential risks and prevent our cost overruns.
Right now, for example, the claim analyst team is doing independent assessment of a suspension cost schedule and scope change request to ensure contract compliance and advise on dispute resolution.
In addition, under the DCA's guidance, I have issued a directive to refresh project governance, ensure we have clear reporting and accountability.
Starting in March, these updates included detailed tracking of budget and schedule performance and risk mitigation measures.
I have also initiated a supply chain audit to identify any cost increase.
And in addition, we have the project update as a monthly update for schedule and construction.
Cost.
Um, on top of this, we're also adding another layer of accountability through establishment of independent financial oversight panel to provide truly external review and reinforce financial accountability.
I'll be bringing a draft implementation plan to the city administrator, deputy city administrator, and City Council for feedback with the goal of having the panel in place by summer.
Next slide.
Our commitment to accountability is reflected in a rigorous reporting structure that keeps city leaders, regulatory bodies, and general public informed at every stage of the project.
Since 2018, we have delivered a comprehensive annual report to to the City Council, providing a transparent record of operational progress.
We have also integrated a dedicated project status update to the monthly city update, ensuring council members have real-time visibility into current development since March 2026.
As far as the Public Portland Utility Board, we maintain a regular briefing with the pub members.
Thank you.
Inviting project team members and delivery advisory teams to share updates on a regular basis.
For our communities and public, we have used a variety of traditional prints and also virtual outreach tools to connect with the communities and neighbors.
We have also launched a new website that including additional project information such as the cost, schedule data that will be updated on a monthly basis.
Finally, as a recipient of federal funding, we adhere to reporting requirements with EALONs.
This ensures that our project management meets a high federal standard for compliance and progress.
Together, this effort ensures that the project's actively monitored, transparently reported, and accountable at every stage of the delivery.
With that, I'll turn over back to DC Donapal to wrap us up.
Priya Dhanapal
Thank you, Director Lew.
Director Lew shared today how we are managing this important project end to end by the Water Bureau.
To summarize, we have resolved the permitting challenges and established a clear path forward.
We have a more defined and reliable understanding of the cost, which is grounded in advanced design and market pricing.
We have an updated schedule that reflects both past impacts and a realistic plan for delivery.
And we have strong systems in place for risk management, accountability, and transparency.
And we are definitely operating with a time is money mindset.
Every risk we mitigate is a direct active measure to keep the total cost down.
The key message that we wanted to convey in this discussion today is that the project is now in a more controlled phase with the tools, oversight, and discipline needed to deliver it successfully.
And with that, I'll pass it on to Matt Giurach to walk through how utility infrastructure is financed.
Matt Giurach
Good morning, Public Works Committee.
For the record, I'm Matt Giurach, debt manager in the Office of the CFO.
I'm going to provide a quick overview of infrastructure funding and the bond authorization.
Next slide, please.
Infrastructure is generally funded through current revenues, also known as pay-as-you-go, issuance of revenue bonds for large projects, and also applying for and receiving grant funds.
Depending on the city bureau, the mix of these different sources will vary.
For the water system, the city typically utilizes ratepayer revenues and revenue bonds.
The use of bonds provides the ability to finance large capital projects when immediate cash resources are not available, and also provides intergenerational equity as current ratepayers are not solely— are not solely responsible for funding projects that benefit multiple generations like the water treatment plant.
It's notable that the use of revenue bonds also relies on the use of ratepayer revenues in order to repay the debt and interest, keeping the mix of pay-go funding and bonds at a healthy level is managed through long-term financial planning standards, which I'll discuss further on.
Next slide, please.
Next, I'll go over a little bit more in detail about utility revenue bonds that are typically used to finance water infrastructure.
These are typically viewed as one of the lowest-risk bond investments from the perspective of investors and credit rating agencies because of the essential service nature of the water and sewer assets for livable communities and the financial separation of the ratepayer funds.
Because of this, the bonds are usually in high demand and also benefit from strong credit ratings that reduce ongoing interest costs.
The credit rating analysis of utility bonds also includes an evaluation of the general characteristics of the As you can see in the lower left-hand box, and also financial metrics as shown in the lower right-hand box.
Performance under some of these evaluation factors are directly controlled by the city, most notably the financial metrics of cash on hand and operating income relative to debt service, which is also known as debt service coverage.
Thank you.
In addition, maintaining assets in good working order and minimizing deferred maintenance is a focus of evaluating operational management to ensure reliability and meeting regulatory compliance mandates.
Next slide, please.
This slide provides a summary of the city's water system revenue bonds that are used to finance water infrastructure improvements.
The first lien bonds maintain the second highest possible credit ratings at AA1 and AA+ from Moody's and S&P respectively, and the second lien bonds a standard one notch lower at AA2 and AA, which are considered to be high quality and very low credit risk.
Maintaining these high credit ratings has helped achieve a low interest rate for the water system of approximately 2.6% based on the public bonds currently outstanding.
Utilities like the Portland Water Bureau maintain its credit ratings through long-term planning of water rates that are sufficient to meet its financial planning standards around debt service coverage and cash levels.
The bureau also plans its rates in order to meet legal tests for issuing additional bonds under its existing bond legal documents.
Which require current water system net income to be 110% of the future maximum annual debt service after a bond issuance.
Next slide, please.
The project is funded through a combination of revenue bonds and current revenues and will not entirely be funded with borrowing.
At the newly revised project budget level, a total of roughly $2.
$2.5 billion of bonds will be issued in order to meet project construction requirements and to fund other critical capital work.
The city has already obtained $1 billion of bond funding through the federal WIFIA program, leaving roughly $1.5 billion remaining to be issued, inclusive of the 2026 bonds that we're discussing today.
By 2029, when the project is completed, there will be roughly $2.9 billion of water revenue bonds outstanding, which is equivalent to 7.8 times projected annual water system revenues at that point in time.
While this falls far from the AA median benchmark, credit rating agencies and investors understand that debt levels peak shortly after completing a significantly large project, with the expectation that revenues will continue to grow and debt will normalize over time.
Olivia Clark
Next slide.
Matt Giurach
Next slide.
With the issuance of the project bonds through 2029, debt service paid by the water system is projected to ramp up significantly through fiscal year 2033, when the city's WIFIA bonds will begin to be repaid at that time.
With debt service set to increase roughly threefold in a 7-year time frame, it will require sustained significant water rate increases from the current and future city councils to increase revenues in order to meet legal tests and the city's financial metrics.
Different rate scenarios will result in different outcomes in terms of debt levels, financial metrics, and the pace of system reinvestment.
At the new project budget, the projections will be reviewed by an independent third-party financial feasibility consultant prior to issuing the 2026 bonds to ensure that the projections are sound and the city can meet its obligation— obligations under the assumed water rate schedule.
Next slide.
This slide shows a base case scenario of expected water, sewer stormwater, and combined annual rate increases required to meet the mentioned financial requirements for the bonds and ensuring the Portland Water Bureau and the Bureau of Environmental Services can continue meeting its operating requirements.
Under this scenario, water rates are anticipated to increase by 9.8% annually through fiscal year 2031 and then increase at a more moderate rate of around 6% per year.
Because the sewer system is in a more stable period of capital financing, rate increases are projected to be lower, resulting in an effect— an effective combined utility rate increase of 5% by fiscal year 2032.
Jonas Beery
Next slide.
Matt Giurach
We'll conclude with a brief summary of the upcoming issuance of the 2026 bonds.
The bonds will provide up to $525 million of proceeds for water system capital improvements.
Thank you.
Additionally, subject to market conditions, we'll be evaluating the refinancing of the Series 2016A water bonds for interest savings.
At today's interest rates, the city could realize roughly $4 million of total savings from that refinancing.
However, we will not know what the interest— we will not lock those interest rates until the actual bond sale.
The bonds will be amortized over a 30-year repayment term and structured to satisfy the city's legal requirements for the additional bonds test.
With the inclusion of the feasibility consultant report, the process will take approximately 12 to 16 weeks with an estimated closing of late July or early August.
And that concludes the presentation.
Loretta Smith
Thank you.
Olivia Clark
Thank you, Matt.
Thank you, um, all of you for the presentation.
Um, we've heard some of this before, but we took a little bit of a deeper dive actually today in the bonding.
I would like to invite our City Administrator Lee to make a comment about what we've heard today, if you don't mind.
And I know that this is very common across all local governments, and maybe you could address that.
Thank you.
Lee
Thank you, Vice President Clark.
And I actually appreciate the invite to the conversation today.
We had a great overview of kind of some of the initial thoughts and concepts as it relates to bonding overall.
And I will share this first.
Bonding is not good or bad or indifferent.
I think it's really a tool that we use to really gain capital access to dollars that we need to truly move the city forward in a progressive fashion.
When we're looking at some of the issues that we are faced as a city today, some of the financial issues that we see in our general fund, aging infrastructure as a city, and really trying to determine the long-term strategic direction as a city, bonding is going to be a tool that we use, or we should be using within our toolkit to help advance some of the capital infrastructure issues and challenges we are faced with as a community.
A lot of communities have battled the question, should we do pay-as-you-go or bond?
I think it's really built upon the makeup of the city and where they are financially.
But when you have organizations like ourselves that are complex organizations with multifaceted operational pieces moving, funding becomes more of that, one of those critical tools to use to be able to move things forward.
Keep in mind, there's 2 really main bonding sources that the city can use: revenue bonds, which we are describing today as a source, but also general obligation bonds that are typically paid through general fund revenues, our property taxes, or any other tax that may be coming in that supports our general fund.
And I think when we're looking at this long-term as a city, we have to be strategic in how we build out our long-term capital improvement plan, CIP plan.
And that is going to be a major tool to help guide council in some of the decision-making as we're looking at the different options we have to fund some of our aging infrastructure, but also new infrastructure in our city as our city continues to develop.
So as we continue this conversation, I want to make sure that we're grounded in the work that needs to be done as it relates to building out our long-term capital improvement plan.
And this is a bigger conversation than just water and sewer.
This is also our transportation and PBOT.
This is also looking at some of our environmental things as well.
Also, capital could also be fleet and other equipment.
Michael McGee
Yes.
Lee
That also could be categorized into that equation as well.
We just need to make sure as we are having this conversation that we are looking at all the tools that we have to address these issues, but also that we're doing things that build long-term stability financially and also in our actual hard assets as an organization.
So I'm here for the conversation.
I love to actually have this conversation because I think this is critical in where we are now as an organization and what we're trying to build for future Portland.
Olivia Clark
Thank you so much for that, CA Lee.
I really appreciate the perspective and grounding us, and it has been an excellent overview, excellent presentation.
I have the sense that you didn't use the word asset management, but that's really what we're talking about, and we are very far behind I think in many respects in taking care of what we have across the city, and this is going to be our finance challenge.
I really appreciate that this new form of government, I think there's going to be more accountability around how we do manage our assets and how we protect them and improve them, and new ones included.
Mm-hmm.
I think it's very important, however, that you did mention the independent financial oversight team.
And I appreciate that and all of the other measures that you have put in place to address risk, cost overruns, whatever it is.
I think you've put a very good structure in place.
But I want to ask colleagues, bear with me, and then I'll turn it over to you.
But I had the sense that we needed more than just that panel, that we need an outside independent analysis or audit of, of, uh, the Water Bureau.
And you can, um, give me your feedback on that, particularly the last $450 million bump that which brings us to today.
But I, I appreciate that you have put together an independent financial oversight team.
But tell me, uh, if you think we need an, an outside audit, because I'm, I'm kind of leaning in that direction.
Priya Dhanapal
I think Councilor Clark, that's a good question.
This project has multiple layers of accountability measures in place, and the independent oversight panel will also help.
But the one that you're asking is for an independent consultant to look into the work that we are doing, especially with respect to cost increases.
And I'm assuming it's also for the work that is going to be moving forward.
And typically that work Is done through an owner's advisory consultant who oversees the entire project and, you know, looking over the change orders that happen, reviewing any claims, and advising the city based on that.
I think that is something that would be helpful for us to have, and that's something that we as a, you know, the Water Bureau is looking at it as well.
And we've had conversations with the city administrator on making sure that We look into having an owner's advisory consultant to help us with this project overall.
Lee
And I'd like to share some insight on this.
On any major project of this magnitude, I know we have subject matter expertise that are within our bureaus that have the capability of managing it, but it's always a plus if you have the funding and the resources to have an owner's rep.
Ting Lu
Yes.
Lee
Who is looking at these bills that are coming in, coming through and checking it against what we said we were gonna actually pay for and do.
That's a plus for us in our conversations as it relates to how we manage this project moving forward.
As you look at adding another layer on top of this and looking at a potential audit of funds funds moving forward or going back, that's always something we can evaluate as well if we're seeing discrepancies in the information that we're seeing from the invoices that are coming through or the change orders that are happening as it relates to this project.
And keep in mind, every change order as it relates to this project has to come through my office for my, uh, signature for review and, and consultant before we move forward with any change, uh, of the pricing or work that we say we're going to be performed as a part of this project.
We could evaluate milestones in this as well.
And when I say milestones, once we hit certain milestones, we have an independent review of what's happened and what has taken place during that time frame.
That's something else that has been done previously before in projects of this magnitude and size.
But the owner's rep is a best management practice across the board when it's related to projects of this size and magnitude.
Olivia Clark
Thank you for that.
And so to date, we have not had an owner's rep. We're going to get an owner's rep now?
Priya Dhanapal
We've had multiple, and I'll let Director Lew add to it.
From my understanding, we've had multiple firms working on the project already, um, but, uh, advising us from an ownership capacity, um, but not one holistic consulting firm overlooking the whole project end to end.
And I think that would be beneficial.
We've had multiple teams looking at different sections of the project, but not one independent oversight.
Lee
And that's what I would recommend.
That's one of the first things when I came in I asked as we were looking at this project, do we have an owner's rep that is advising us, that is reviewing our invoices, that are looking at the plans, that are signing off on top of what our team is currently doing, just to provide that extra layer of protection for the city as a whole?
Because in some of these owner reps' contracts, they take on some liability as well.
So all liability is not just solely rested on the city.
Olivia Clark
That's good to hear.
I don't want to put words in your mouth, but I want to see if I understand what you're saying, that when we get— or we have an owner's rep, I think you're suggesting that we wait on an independent financial review until we get the owner's rep and we establish this process.
Mm-hmm.
I think what you're asking for is that we wait on that and that we come back and discuss that at another time.
Lee
Yes, I would always say that's an option that we can keep for us as we have our owner's rep come in and kind of evaluate where we are in the process, really look at things that have taken place.
I would also advise that that owner rep come to meetings like this to kind of talk about the project as well.
And if council and this committee is seeing some discrepancies in the information that they're seeing and what is being reported out, Let's take a deeper dive into it and look at adding a different layer.
Because I don't know currently right now if the project is budgeted for additional oversight over the owner's rep, and we would need to try to allocate some money outside of the project cost or increase the project cost for independent audit of it as well.
Olivia Clark
Well, I just want to express my support for having that independent review, but I'm willing to wait.
I want to hear from the other committee members as But I think we owe it to the public to have an owner's rep, to have very tight controls of this project because of the escalating costs and what that's going to do to our utility rates.
Michael McGee
No doubt.
Olivia Clark
So thank you for that comment.
I hope you will stay while we have this conversation.
I'm going to turn it over now.
Thank you for indulging me, colleagues.
I'm going to turn it over to Councilor Green for his questions and comments.
Mitch Green
Thank you, Councilor Clark.
And I know that we've got— I think we've got a few people up for testimony, so I don't know if you want us to belay our questions until after testimony, or—.
Olivia Clark
We actually haven't gotten to the, um, or actually that was the overview of the bond sale.
I guess we can, um, go into it.
Mitch Green
Um, I'm happy to do it either way you want.
Olivia Clark
Let's go ahead.
And, and I just want to also mention that Councilor, um, Kanal has joined us online, um, and at the perfect timing.
And we do have someone signed up to testify.
Would you Do you want to speak before we have the testimony or have the testimony?
Mitch Green
Maybe I'll just kind of ask some questions and then we can hear testimony and then based upon that, we can have a discussion.
Olivia Clark
Okay, sounds good.
Mitch Green
Thank you, Madam Chair, Madam Vice President, whichever.
Well, you're wearing your chair hat right now.
Thanks so much for the presentation today.
Matt, thank you for your debt service projections.
You know, I like to get into the numbers myself.
I do have a couple questions.
Can you go to, uh, slide 21, please?
Matt Giurach
Thank you.
Mitch Green
So this is a helpful chart, and I just want to make sure I understand it.
So this is a chart that shows on the y-axis the annual debt service?
Okay, that's correct.
And it's the annual debt service from our existing bonds, our future non-WIFIA bonds in green, and then any other WIFIAs we've taken, right?
Matt Giurach
That's correct.
Mitch Green
Okay, so what I'm trying to wrap my mind around is presumably the green series that starts next year is the result of the action we take today.
Is that right?
Matt Giurach
That's correct.
Mitch Green
Okay, and so what I'm seeing is a steady escalation from 2027 through, looks like 2032, and it peaks.
Michael McGee
Is that—.
Matt Giurach
It looks like it goes, So we're trying to make sure it doesn't jump too much in any given year.
So we're kind of smoothing our way up to a debt service level that's manageable.
Mitch Green
So, you know, council would authorize $525 million, but you'd only issue so much over the course of the years to smooth that impact?
Matt Giurach
This issuance would be issued all at once, and then we would be coming back to city council to get the authorization for the remaining billion dollars over time.
Mitch Green
I see.
So this projection actually looks at, it's not just the $525, this is the sort of the full stack given what the GMP2 is and our current estimation.
Like those are all the future bonds we need to issue as well?
Matt Giurach
Correct.
Mitch Green
Okay, so then if you go to the next slide, I'm trying to figure that.
So I'm following what you're saying.
So what you're saying is based upon the assumptions in the previous slide, we know that the water rate needs to be raised on a sustained basis of 9.8% per year through 2031, but then it falls to 6%.
And I'm just having a difficult time sort of marrying that with the escalating debt service that plateaus at 168% on the previous slide.
So can you help me understand how we get from that discontinuity where we go from 9.8% down to 6% in 2031?
Matt Giurach
That's a great question.
Thank you, Councilor Green.
Happy to clarify that.
So on slide 21, that debt service schedule is only So as with the water system, the sewer system, other systems across the whole country, there are periodic issuances that kind of happen kind of continuously.
So on that slide 21, that would be just the issuances through 2029.
In order to just keep up with the cost of projected inflation and then future revenue bonds that will happen over time, we do have to keep up with that.
So that's where rates will continue to need to increase over time to make sure that the water system's fully financially sustainable.
Michael McGee
Okay.
Mitch Green
So this slide that I'm looking at right now, is that just looking at debts issued through 2029, or is this sort of— no, this is what we expect the impact to be through the full array?
Matt Giurach
This would be through 2036.
So this is like just the longer-term projections of the Water Bureau.
So in addition to whatever would be issued through 2029.
So slide 21 is mostly focused on the debt issued to fully fund the project and then the other capital work that occurs through 2029.
This slide is more focused on just the longer-term projections okay.
Mitch Green
So this does have the impact of the Bull Run Filtration Project in it?
Matt Giurach
That's correct.
Mitch Green
Including all the WIFIA balloon stuff that starts in 2035?
Matt Giurach
Correct.
Mitch Green
Okay.
It cuts off at 2035, so I don't know if it goes back up after that.
Matt Giurach
I would have to defer to the Water Bureau finance staff on that one.
Okay.
Thank you.
David McEldowney
Thank you.
Mitch Green
You know, riffing off of something that the city administrator mentioned, you know, it is important that we invest in our assets, and it is a common tool to use debt to do so.
I just, I think the thing that I'm increasingly having a hard time with is just squaring with the cumulative impact on the water bill just from the status quo right now.
And if we issue, if we approve these bills today, we are basically committing to doubling the water bill in under 8 years.
That's the cumulative impact of 9.8% per year.
So if you take the rule of 72, you divide it by 9.8, you get 7.35 years.
And in the work session slides, the average water bill is $72 per month.
So that would mean that 7 and a third years from now, the average water bill is $133 per month.
So that's my math.
That's the math that I think folks in the community might be doing.
I'm not saying that we should defund our Public Works, our Water Bureau.
I'm absolutely not saying that.
But I am cautious to say yes to a $525 million issuance that then locks us into that.
Because what I'm— what I think I'm seeing here is that if we were to— the 9.8% per year is a function of us approving these $525 million.
Today, plus some others in the debt service plan.
So if we did not approve these today, we would not be facing a 9.8% debt service.
I mean, of course we would have other consequences we need to talk through, but that's the way I'm reading it.
Ting Lu
Can I add some clarification here, Councilor Green?
Yeah, so first I want to clarify this chart is showing the rate projections for the current service level, so it's a 9.8%, but if it's— we are going to like a Scenario 2 was the forecasted previous rate, and then the rate will be going down.
So that's the first clarification I want to make.
Tiffany Koyama Lane
Yeah.
Ting Lu
The second clarification for this is the bond is not only for this additional $450 million, but it's for the entire additional cost for the filtration project beyond what the WIFIA loan has provided, plus additional capital project for the Water Bureau.
So that's the whole portfolio of a project.
Obviously, the filtration treatment is a big part of the capital project, but that's the entire 5-year project cost.
Mitch Green
Yeah, I appreciate that.
And that's really important to level set.
That reminds me that I did want to ask, so the title of the bond issuance is really about the, you know, in the sort of term sheet, it says this is for the water filtration plant, but then it also says as refunding action for 2016 bonds.
So is there some part of this that just refinances some previous bonds?
Matt Giurach
That would be connected to this.
So it would be outside of the 525.
The 525 is just for the new money proceeds.
And then the 2016 bonds, those would just be refunded assuming that there's advantageous interest rates that achieve savings at that time.
Mitch Green
Okay, uh, I just wanted to note that in the financial impact statement for the ordinance, it, it reads that, um, and this is important for the transparency to our, to our community, that, um, including all water system debt issuance through fiscal year '29, annual debt service is expected to grow from $55.6 million in fiscal year 2026 to $168 million thank you.
And so not everyone can get that from reading a bar chart like this, but it's something that I don't want us to gloss over as we're having this discussion.
I know that there's people watching us very closely.
Affordability is top of mind.
And so we have to balance, we have to figure out how to balance the investments in our system and ask the questions of whether or not there are alternatives.
With what we are leaving to future councils, future mayors, and our ratepayers.
I have said previously, to be fair, that the way that you grow out of this cost disease is by growing and developing and adding more ratepayers to our region.
That's what we absolutely must do.
Thank you.
Whether or not we can double our residents inside the City of Portland to offset this impact inside of a decade is that remains to be seen.
And that's what we should strive to do every single day.
I just worry that the rate at which we are going to increase the water bill because of this debt service cuts against that.
So there's an interactive effect.
So I think I'll leave my comments there for now.
I'm curious to have this kind of back and forth and then hear from the public.
And then I think we've probably got plenty of time for discussion.
Thank you.
Olivia Clark
Councilor Carmelo, do you mind if I just riff a little bit on Councilor Green?
We are going to be— I think this committee will be confronted at some point with the discussion of the rate increase, and I do not foresee us going to this rate.
I'm just putting a little stake in the ground now.
We're not going this high.
We can't.
And that's going to rework this chart.
So just to presage that, folks, we're going to be discussing the rates at a different maybe I see Jonas in the back.
Tiffany Koyama Lane
I know we're—.
Olivia Clark
We are just nodding yes, we are going to review the rates at some point, and we will have a decision to make, just like this committee did last year as well.
Are you suggesting that the rates are going to go up after 2035, that we should see that?
Mitch Green
Well, I'm suggesting that in the financial impact statement for this ordinance, it says the interest okay.
And so that won't start compounding until that year.
And so you see that actually in the bar chart for the gray series.
I think you see it jump from a pretty de minimis amount to a substantial piece, almost as large as our current debt service.
And so that grows and that doesn't really fall off until 2065.
So that's what I'm saying.
Olivia Clark
I hear you.
Matt Giurach
It's on the prior slide.
Olivia Clark
There are so many unknowns.
We don't know what the bond market will be like then.
We don't know what interest rates will be then.
So it's kind of hard to predict out that far.
But we will come back to the rate discussion at a different time.
Did you want to add a note, Jonas, before we continue our discussion?
Jonas Beery
Thank you, Councilor.
For the record, Jonas Beery, the city's chief financial officer.
Yeah, I just wanted to reinforce yes.
For the public record that yes, there will be a separate rate ordinance that comes back at which council will authorize whatever rate increase you decide for fiscal '26-'27.
If, and maybe when is what I'm hearing, but if that rate projection is lower than what's projected here, then this team, the debt team, will have to manage the issuance, the structure, and the forecast within that rate increase that council authorizes.
So I just wanna be clear about that, that that's not making— that this is not making that rate decision today.
Today, it presages sort of those expectations, but also just acknowledging that they're not— there's some flexibility, right?
That if Council ultimately comes back and approves a different rate that puts this on a different trajectory, that has trade-offs to the amount that maybe can be issued and how that folds through the project and the future impacts and projections.
But it isn't like a hard stop to this authorization.
It would just create a different—.
Muriel Gueza-Teufel
Yeah.
Jonas Beery
Constraint that that issuance would need to work within.
Olivia Clark
All right, thank you, Jonas.
Mitch Green
Wait, because Jonas is up here, can I just follow up?
Sorry, I just want to be clear.
If we approve an action that creates a debt service obligation and then we approve a rate proposal that doesn't validate or meet that debt service obligation, i.e., if we say, well, we're going to limit our rate increase, does that cut against our credit rating?
Because our credit rating is a function of our willingness to raise our rates to satisfy our debts, right?
Jonas Beery
Yeah, Councilor, it's a great question.
I mean, at the end of the day, we, and really Matt Giurach and the debt management team, would manage the issuance to make sure that we're— this is why I say the trade-off would probably be downsizing to make sure that we're not going past a level of prudent management vis-à-vis those rate expectations.
It would be also worth noting that it is, For City of Portland, for all cities that issue this kind of debt, as CA Lee described, that council elected body willingness to increase rates is a large credit positive.
And so that is something that's considered by the rating agencies when they provide that rating is the, you know, in a complex matrix of all the things they consider, including affordability impacts that this council's and ourselves are interested in.
That is part of that matrix as well, is that willingness to increase rates to support the capital needs.
Olivia Clark
It is a bit of a Gordian knot, isn't it, how all these things are connected?
Councilor Koyama Lane.
Priya Dhanapal
Thank you, Chair Clark.
Tiffany Koyama Lane
Thank you everyone for being here.
That was helpful to hear.
I had a question just about the cumulative impact of rate and fee increases.
So appreciate that it's on the radar of many of, of the folks up here.
Um, one of my questions is around grants and if the city's been able to apply for any to offset project costs.
Are we lobbying at all for this at the federal, state level, uh, maybe even with local partners who are in similar positions?
Can anyone speak to that?
Ting Lu
I— yeah, I can speak about that.
That's part of how we manage rates.
So there's multiple ways we're managing rates from cost management, what we talk about the project cost management to CIP project, prioritizing the CIP to really committing to seeking external funding opportunities.
And Councilor, that's what you are asking.
So we have the 2 WIFIA loans and we have also get the grants from Energy Trust of Oregon.
So we are— the funding landscape is not very optimistic right now, but we are continuing exploring and looking to both the federal and state.
Thank you.
Thank you.
Tiffany Koyama Lane
How many— so how many grants has the city applied for specifically?
Are you able to share that for this project?
Ting Lu
I know for the 2 WIFIA loans, and I don't have the number, but happy to follow up with you on the grants part.
Tiffany Koyama Lane
That would be great.
Thank you so much.
Olivia Clark
Thank you, Councilor Koyama Lane.
Councilor Smith, did you have your hand up?
Loretta Smith
Yes, ma'am.
Thank you so much.
Um, I have some of the same concerns that, um, Councilman Green has about putting this extra debt on the ratepayers.
Uh, the other issue I was thinking about when I was reading through your information, you said something about green bonds.
What is that?
Matt Giurach
Thank you, Councilor Smith.
That's a great question.
Green bonds are— it's a marketing tool where some bond investors will prefer to purchase bonds that relate to a project that are, you know, green-focused.
So something that really improves the environment or delivers, you know, quality drinking water Mm-hmm.
So it's a marketing tool that issuers will periodically use.
It's most commonly used for taxable bonds, for taxable projects.
That's where we see like a financial benefit.
Okay.
For tax-exempt bonds like these, there typically is not a financial benefit, but we wanted to kind of leave that option open in case there looks to be some sort of benefit to marketing the bonds as green bonds.
Loretta Smith
The backend stuff to be able to sell the bonds very quickly?
Matt Giurach
It's to increase investor demand potentially.
So if you're able to garner orders from bond funds that specialize in holding green bonds for their investors, perhaps you can get additional orders in that regard.
Olivia Clark
Right.
Loretta Smith
We, me and DCA Priya, Donna Paul talked a little bit about the type of, um, bond companies that we use, and I want to go further, um, um, CA Lee, in regards to creating a minority bond, uh, table.
Uh, we did something like this a little bit at, at the county.
I know we don't have a lot of those companies like they do in Chicago and other places.
But I think as we're talking about using these resources and making sure that— because people, I mean, this is a— in addition to creating this infrastructure, it is people are making money.
And I don't want just minority communities just to make money on construction.
Because there's money on the other side, lots of money on the other side.
And I want us to be just as diligent about working with minority contractors as we are when we contract out our bond companies and who we're talking to and who does that.
Um, I briefly talked to, um, uh, Prosper Portland about this as well because they actually do the same thing too.
So I will double back on this And, um, thank you for engaging me in the conversation this weekend because I, I brought it up to you at an Earth Day event.
So, so thank you a lot.
Um, the other thing is, um, I'm concerned right now.
I'm not troubled, and that's a good thing for everyone.
I'm not troubled, but I am concerned About the type of money that we're bonding out for, for this project.
I was not happy to learn about the $500 million in new, um, uh, uh, uh, expenditure for this project.
And so I'm— when I'm, when I'm looking at this and I was trying to figure out which projects for, for $530 million, it did not, um, desegregate what projects are going to be done within this, um, to, to bind?
What is this $530 million paying for?
Um, I didn't see specifically, you just said the filtration project, so I don't know what in the filtration project are you paying for.
So that would help me get a better idea before I can say, you know, yeah, let's go bond for this, you guys.
I know we did not have, and I agree with the chair, we do need to have an owner's rep.
I know we had an owner's rep on the Sellwood Bridge.
It was a $330 million project, and that went well.
It went under budget, and it was on time.
It was before time.
I still like to take credit for that.
Eric Zimmerman
But—.
Loretta Smith
So it, it's important for me to, to wrap my arms around what this new $530 million is paying for.
Is it like, oh, if this happens, we, we'll have the money on hand and we won't have to come and ask council for new money?
Um, I, I don't know.
Could you give me an idea of what that looks like?
Olivia Clark
Would it be helpful to go back to the slide that shows the 3 different components and then discuss maybe some of the costing, what we attribute the cost increases to.
Would that be possible?
Ting Lu
Yeah, I think that slide, we can go back to that slide and I can add additional details about what is exactly the $450 million include there.
Priya Dhanapal
And I, before you talk about that, one thing I do want to mention to this committee is that the $450 million cost increase, a good majority of it was beyond the control of the city.
It was because of external influences from the remand itself and the land use decisions and the schedule impacts as a result.
And I wanted to make sure that is set on the record.
And I'll pass it on to Director Lu to talk more about the breakdown.
Ting Lu
Yeah, 'cause I had the same question when I first understanding the budget request.
So the $450,000 really break Up into 4 categories.
The first one, like DC Downer-Paul said, is because of the land use-related suspension and all this work that previously has happened.
That's the 5 months of the construction pause, which leads to the 7 months of the delay for the project.
And early on, we also have 9 months of a complex permitting land use late start.
So that's 16 months.
Mm-hmm.
There is a lot of suspension costs because we still have to have the cranes and everything on site.
So that's the big part of the cost increase as part of this for $50 million.
Additionally, the second category is about the support costs related to the suspension costs, including the Bureau additional costs to making sure we can manage this project, as well as like I mentioned about the claim team.
So we are exploring, we are adding the additional independent claim team to look into managing the project.
Change order and everything.
The third one, the category is managing a lot of these contingencies.
It's because we have, with the land use requirement, we can't have everyone to drive to the construction site.
We're doing the busing to group people together.
So that's additional logistic and the project cost that's added.
And then the last category is the, we call it unknown unknowns.
That's the contingency I mentioned.
So that's about $100 million.
Thank you.
For the remaining time till 2029, whether that's extreme weather and other things that we want to make sure we have the contingencies.
So we are intended to managing the project completion within this $450 million, other than like earthquake or major force majeure that we can't control.
I'm happy to—.
Loretta Smith
Yeah, that was what I was gonna ask you.
Do we already have any contingency put aside for this project aside from getting the bonding?
Do we have money that's in a fund that is a contingency pot of about 10% or something?
Priya Dhanapal
8%.
Loretta Smith
It's 8%?
Is it— is, is the 8% coming out of this?
Out of this?
But do we have money right now for this project in contingency?
In a contingency fund?
Because I, I think we should.
Ting Lu
Yeah, we have already previously the— we have the GMP, guaranteed maximum pricing.
So there is already that kind of a project, uh, budget that requested.
Loretta Smith
And so what's, what's the GMP on this, uh, before we even do this extra money?
What, what's the GMP?
Ting Lu
The— that's the previous slide we can go back to.
Loretta Smith
Let's see, it's the, um, guaranteed maximum price for those folks who don't know.
Priya Dhanapal
Slide 9.
Ting Lu
Yeah, uh, for slide 9, so the, the previously the GMP is $2.13 billion, and that's what happened before the remand and everything.
And now we are adding this for $50 million.
Loretta Smith
So it would go up to $2.63 billion?
Ting Lu
Correct.
Loretta Smith
Okay, the new GMP, $2.63 billion.
Priya Dhanapal
Um, Okay.
Loretta Smith
And so the money that we have in contingency right now, the 8%, that, that would just move over and we're gonna add some of the new money to add to the growing price of this filtration project?
Ting Lu
Correct.
Because of the schedule delay and the cost escalation, there's additional uncertainties we want to cover, but we are hoping to really managing that within the budget and, uh, not using all the contingency fund.
Loretta Smith
I, I agree.
Um, I think there's 2 things.
We need to get an owner's rep. We need to have an independent evaluation of the resources in, in the restricted funds.
Um, and we also need to have an outside watchdog, um, on this.
I read an article in the, in the Oregonian a few weeks ago, and there was some talk about a previous council that that had, uh, basically promised a watchdog group of, um, of ratepayers to, to overlook this.
I think we also need that group in addition to our owner's rep because that also keeps us honest on what we're looking at and, and what we're not looking at.
Uh, this is a great opportunity for us as a region to be able to have, um, some of the best water that I know in the country.
And, and I've been all over, and Oregon's water, Portland's water, the Bull Run, it is some good water, and I want to keep it safe.
The other piece is, um, I for— I don't know who said it.
I think it was Koyama Lane who said we, we need to grow our, um, Our revenue.
And we need to go back to those folks like Gresham.
That's a big deal.
We lost a big client.
We need to figure out ways in which to reduce the ratepayer costs, if even if we have to give them a reduced rate.
I don't know if we can do that, but whatever it takes to get our, our, our customers— a good 40% of our customers are not coming with us and and that's why we're having to pay this.
So it's— there's, there's some, there's some there there.
And we talked about this in the Transportation, um, Committee, but that is an issue.
And I'm going to say it again, I, I asked y'all to go talk to the tribes.
The tribes is always running out of water, and, um, maybe they can, um, connect into our, um, our water system.
But, um, it's, it's, it's clear that this is a— this is, this is going to be one, an economic driver for our small businesses.
It is going to be a great opportunity for us to keep a very clean source, safe source of water.
But we're going to have some growing pains getting there.
And, um, many of us up here about the, the price of, of paying for this new system is, is steadily going up.
And I remember last year that the big thing was, oh, we got this federal WIFIA, we don't have to pay the, um, interest on it till later, it's not going to change anybody's bill right now, it's going to be later.
Was it 2035?
And, um, wow, 2035.
Matt Giurach
Yeah.
Loretta Smith
That's, you know, I don't think folks' Social Security checks go up that high every year, 9%.
And so we got to be thinking about how we're paying for this.
I don't know, Jonas, do you know how much money we got in ARPA over the, the, the 2020 to 2023?
Jonas Beery
Uh, Councilor, apologize, I don't know that off the top of my head.
I'm not, um, and I'm not sure any of it was I know.
Loretta Smith
I always like to pay for, for, you know, when we get one-time money, pay for one-time things.
I bet we, we had enough money to pay for, for this new $500 million that we have to bond for.
So that's the other thing.
So what I, what I'm just going back, I wanted to find out, are there any other bonding sources that we have to use other than the revenue bonds?
Is it just the GO bonds that are available?
Jonas Beery
Yeah, Councilor.
So for, yeah, for the water system, typically your options are the revenue bond structure that we've traditionally used and continue to use.
There are local governments that have gone and asked voters for property tax levy increases specific to utility borrowing.
That's not something I think we've pursued at the city, given that that's a tool that's available, an option to fund other needs that don't have revenue sources that the water system and sewer system do have.
Loretta Smith
I mean, this is a smart way.
I mean, it's definitely the smartest way to do it.
It's just going to bring a lot of angst to people who are in my district in particular, because they, The average salary of a family of 4 is $60,000 in District 1.
And so I'm just worried, and I hope that when we have the rate conversation that we also make sure that there is an opportunity for those vulnerable ratepayers who can't afford to pay this new double, um, $150 bill, that, that they have an opportunity to get their bill paid for.
If that's embedded in the system.
Olivia Clark
You, you remember we have a low-income program in the Water Bureau.
Okay.
And, um, we might want to revisit that at some point to see if that's adequate.
Loretta Smith
If that is an adequate amount, because it's— it seems like that, um, in the next 8, 9 years we're going to have a big bump.
So I thank you all for bringing this forward.
I think it's important, and, um, I think I think the entire council needs to have a better understanding of this.
Olivia Clark
Thank you, Councilor Smith.
I just want to add to one of your comments about oversight.
I think that the public— our utility board is made up of citizens, is that right, who we consult on some of these decisions?
We get their input.
Does that— that functions as a community board in some respects?
Ting Lu
Uh, community board as well as they have oversight, so, um, so we provide them the update on our budget and other information as they request.
Thank you.
Olivia Clark
You know, I think we might, in a committee, might want to invite the Public Utility Board people to come in and talk to us at some point, um, down the road.
We can add that to our agenda.
Um, seeing no other hands up right now, um, thank you so much It was a great overview.
Keelan McClymont
We really—.
Olivia Clark
We dug deeper than I thought we would, but it was very valuable.
I appreciate that.
And we will continue our discussion, but we would like to hear from the people who have signed up to testify today on this bond sale matter.
Diego, would you call them up?
Diego
Yes, we have one individual signed up, Samuel Diaz.
And apologies, Samuel, the time the timer in Zoom isn't working, so I'm gonna go the analog route.
I'm gonna play the timer from my phone.
You'll hear the timer ding twice.
Samuel Diaz
We practiced this, we're good.
Diego
Great.
You may begin when you're ready.
Samuel Diaz
Great, thank you.
Good morning, Chair Clark, Vice Chair Smith, and Councilors Koyama Lane, Green, and Kanal.
For the record, my name is Sam Diaz.
I am the Executive Director for 1000 Friends of Oregon.
From Portland for Everyone to Anti-Displacement PDX to the multiple levy and bond measures, 1000 Friends has been proud to fundraise, organize, research, and advocate to bring solutions forward to make Portland a more affordable, beautiful, and prosperous place to live for everyone.
And that may be why today's item feels like a punch to the gut.
This is an alarming setback in fighting for a future Portland that is affordable for everyone.
Quote, it will be $4 billion once they're done, I guarantee it.
The amount of debt that will need to be issued and paid back for the filtration plant will put the city right back in the exact same place as the Bureau of Environmental Services 15, 20 years ago when they worked on Project Big Pipe.
The city will be raising rates at a rate that will drive you nuts, and they will be constraining the operational budget at the same time.
You should be talking to the City Council about this issue.
There is nowhere I could look from the chair I sat in and not see a fiscal problem.
These are the words from Administrator Mike Jordan during a City Club of Portland exit interview just 3 months ago.
Before the City Council authorizes this request and similar requests, this council and the public need answers and names.
Why is the City Council still receiving outdated project cost estimates when former Administrator Mike Jordan is publicly saying the project will cost more than $4 billion?
Why are key staff who pushed for the project while at the city now changing their tune once they leave?
What happens to the projected rate increases when 3 large ratepayer classes leave the system before this project is even built?
Did the City of Portland comply with its comprehensive plan's anti-displacement policy to analyze how many families will experience shutoffs and are priced out of the city altogether?
What about a Title VI impacts analysis and mitigation plan that is required when federal funding like the WIFIA loan is involved?
When I was a City Hall staffer, we had a term and standard for items requested by the bureaus: council ready.
It meant the due diligence, the outreach, the scenarios, and the questions raised by the people who are elected to serve the public was, for the most part, done.
And I will tell you, this item is not council ready.
I urge this committee to ask the Bureau to withdraw the request, brief this committee on contingency plans, and decide the rate increase first.
I also invite each of you to come meet with a group of farmers and local businesses, Portland residents, and community organizations who are more and more concerned with the direct impact of the project and the water rate increases.
It is not too late to adapt.
There are viable, affordable options to proactively plan to treat the water we drink in case of emergencies.
We do not need to price out and force working Portlanders out of this city.
Olivia Clark
Thank you for your testimony.
Diego
That concludes testimony.
Olivia Clark
Thank you, Diego.
Um, interesting, Thousand Friends is doing a lot more than just land use planning these days.
Um, Councilor Smith, is that a legacy hand?
Loretta Smith
Nope, it's a new hand.
Olivia Clark
Go for it.
Thank you.
Loretta Smith
Is, um, is DCA Donapal here?
Thank you.
And am I— I meant to ask this question before.
What happens if we don't approve this today?
What will not get done if we don't pass this today?
Priya Dhanapal
The bond?
Yeah, I, I would like to invite our finance team to answer that question.
Matt Giurach
Uh, uh, for the record, Matt Gearhock, debt manager.
Uh, thank you for the question, uh, Councilor Smith.
Uh, if it does not get approved today, um, the bond sale will have to So the further it gets pushed out, the further we kind of have to push out the financing schedule.
And with the Water Bureau needing to pay its construction bills, they would have to continue to utilize its funding sources.
So WIFIA, And potentially dip into its second WIFIA loan that's already in place that has a higher interest rate.
So we're trying to avoid using that because then we would effectively—.
Loretta Smith
So are you saying we're not gonna be using the WIFIA and this is gonna supplant the WIFIA?
Matt Giurach
No, we're planning on— I'm sorry, we're trying to delay the use of our second WIFIA loan.
So one WIFIA loan has an interest rate of 1.89%.
And that's the one that we've been using.
The second WIFIA loan is a higher interest rate because when we locked in that interest rate, the bond market was in a different state.
So that interest rate is 4.49%.
Loretta Smith
And we haven't used any of it yet.
Matt Giurach
We haven't used any of it yet.
Loretta Smith
So how much is in that one?
Matt Giurach
I believe $319 million.
Okay.
And so we're trying to do defer using that loan because we don't— one, we don't want to compound interest on that loan, and then secondly, there's a one-shot rate reset.
So if we do see a decline in long-term Treasury rates, we could ask the EPA to reset the interest rate on the loan.
If we draw on the loan, then we can't get that benefit of resetting the rate.
Loretta Smith
And so I was saying, so this actually Actually, this is higher.
This bond rate is higher than the 4-point.
Matt Giurach
Currently, it's about the same interest rate.
Another aspect of managing the debt is that we want to mitigate interest rate risk.
So there's always the chance also that interest rates just go up.
So that's one of the cost components of the overall project, We're trying to lock in and mitigate how much interest rate risk.
Loretta Smith
And when are we expected to finish and complete this project?
Matt Giurach
I believe the substantial completion date now is September 2029.
Loretta Smith
September 2029.
Okay.
But your sense is that we have to approve this this month to kind of mitigate maybe future rising rates and not to jump into the second WIFIA loan?
Matt Giurach
That is a risk, yes.
Loretta Smith
Do we have any other sources of income that are in contingency that we can use until we have a real good understanding?
Because see, I, I I heard the testifier talk about what a previous city administrator said about this project.
I don't know if it's true or not, but even if it is, I mean, it's kind of reckless to go back on something that you were responsible for for the last 5 years and say that it's gonna double without giving Um, any level setting of what that— of why that is.
So, I mean, that, that brings me some concern that, that, that maybe someone is saying that who had intimate knowledge of what was going on here and had intimate control over what went on here.
So to have that conversation after they walk out the door, uh, is troubling to me, but it doesn't stop me from wondering why is it being said.
It's based on something, something that we don't know, something that, that we're going to have to pay for that has not been foreseen to the councilors yet.
And I always worry about that.
Whether I agree with what someone is saying or the timing of, of how they say things, that's a whole nother story.
But the fact of the matter is, I know that I'm not privy to every single thing about this project.
I understand that we should have done some things.
We should have filed the right permits or we wouldn't have been in this problem to begin with, and that was our problem.
Priya Dhanapal
Councilor Smith, the issues with respect to permits were external to the city's control, and I cannot speak for the previous city administrator.
Loretta Smith
Right.
Priya Dhanapal
I can speak for what the project team is working on right now.
The conditions right now.
Last year, the year before, there were things that were very uncertain.
The project phase was in a different phase.
Ting Lu
Yeah.
Priya Dhanapal
Right now, the legal complications with respect to the land use is no longer there.
We have, you know, the approval has been upheld by LUBA.
So we have legal certainty moving forward.
And with the cost, we also have certainty with respect to the cost.
We have a, you know, we have an updated cost number based on the remand, and that is also at a higher confidence level.
So this was not there a year or 2 ago.
So aside from force majeure events and the stage at which the project is in right now, we are at 90% design, construction is already beginning, we are at 30% construction.
So the confidence level of the cost estimate is high.
And then we have multiple teams looking at minimizing the risk early and mitigating the risk.
So the confidence level of all of that is higher than how it was a year or 2 ago.
Loretta Smith
But what's the possible risk?
I trust you, Priya.
I mean, I trust you.
But what could the possible risk be?
What else is there risk of?
Priya Dhanapal
Director Liu, you want to speak to that risk?
Ting Lu
Yeah, I mean, there's an extreme like the earthquake or something, that's a risk we're not covering for this $450 million.
But the majority of the things, because we are already in the construction, deep into the construction, and then we have this guaranteed price, maximum pricing.
So the certainty now, it's very different from 2 years ago or 1 year ago.
And then the LUBA remained as We are continuing to conforming and upheld our permit.
This provides a legal ground for us to continue construction.
So all of that is being behind us.
Olivia Clark
Yeah.
Loretta Smith
So the likelihood that this is going to go off at the price point that we are saying it is, is likely, right?
I hope.
You know, when I hear people come up and I didn't— We only had one person testify today, but it concerns me that folks think that this project is gonna bloom to double.
And I'm trying to figure out where could that doubling come from?
Priya Dhanapal
There are things that we, you know, we have accounted for what the known unknowns, there are the unknown unknowns like fuel prices, if there are tariffs that are, Right.
So those are things that we don't know.
Loretta Smith
Right.
Priya Dhanapal
It's difficult to predict the future.
So based on the things that we do know, we are trying to mitigate the risks so far.
And there's a person from the project team here to talk more about that specifically.
Olivia Clark
Colleagues, before we dive any deeper here, I just want to say we only have another 14 minutes before we need to take a break.
And I was really hoping we could get to a decision before we that we could actually take a vote on this and then come back and talk about the committee agendas.
So just a heads up.
So I appreciate your line of questioning, Councilor Smith.
I just wanted to put everybody on notice about the timing.
Loretta Smith
I, I, I, Mr., Mrs. Chairman, I am, I'm trying to get there with you.
Okay.
And I'm not there yet.
And just so you know, I'm trying to be very cognizant confident about this, about this, um, opportunity that's set before us to level set us and make sure that we have the, the, the funding at a particular price.
And I'm also trying to make sure that our ratepayers, even the ones who can pay it, that, that they feel that they're getting a bang for their buck.
I mean, I, I— the water is great and it's good, I'm just trying to be comfortable before I take this vote on, um, what kind of mitigating things that could cause this, this project to, to blossom up to another $2 billion.
And I'm just trying— I, I don't see where that could happen based on what you're telling me, and I'm, I'm just trying to be comfortable in taking this vote.
Um, I, I know the project did you have something to add?
Muriel Gueza-Teufel
I could add something.
So my name is, for the record, my name is Muriel Gueza-Teufel.
I'm the interim chief engineer for the Water Bureau.
I've been in the role officially for about 3 weeks, but I came from the BES side of the city managing larger programs.
So in that respect, I bring that experience, and I think it's great that we could keep it in-house at the city.
To manage megaprojects.
So the remaining risks, to your question, the biggest risk we have now is maintaining schedule.
That's our biggest risk.
Okay.
The cost to keep the machine churning, so to speak, with numerous contractors, trailers, trucks, people on site all the time is our biggest cost risk.
Okay.
Because the construction site has moved out of the ground.
We do have a tunnel underway where we found some things and there's remaining tunneling to do.
That's always a risky area, but I believe that our contingencies are covering for that risk.
So at this point, it's really our ability to control and manage the project within the contingencies and the budget that we're requesting.
And that's our job.
Loretta Smith
Okay, okay, good.
And thank you.
Matt Giurach
I did want to ask or add one additional fact just to make sure.
I did fail to mention that there is a credit facility that the Water Bureau does have that we have as a fallback mechanism.
Essentially, when we were unable to draw on the WIFIA loan during the remand, there is about $260 million that is not drawn on that credit facility.
But drawing on that credit facility essentially locks in the bureau to issue long-term bonds to pay off the credit facility when it expires, uh, in 2028.
So just wanted to clarify.
Loretta Smith
I'm messing with that, right?
Matt Giurach
Uh, prefer not to draw on that.
Loretta Smith
That alone.
I think Jonas is here, but we'll leave that alone, Jonas.
Um, okay, thank you.
I, I appreciate that.
And, um, um, I hadn't thought about the tunneling piece but thank you.
Olivia Clark
Thank you, Councilor Smith.
Uh, great, great questions.
And about the no approval, I really appreciate that because I think it also sends a bad signal to the bond market.
Um, and, uh, I'll just leave it at that.
Councilor Green, you had your hand up.
Mitch Green
Thank you, Madam Chair.
I know you're trying to move us to a vote, but this is a pretty important one, so I'm just gonna, um, state where I'm at right now.
I'm not convinced this is the only way we can address our EPA requirements.
Um, there is room in our, uh, STWA regulations and the EPA regulations for point-of-use and point-of-entry filtration.
It's hard to get the variance, but it is worth pursuing given the cost.
Um, you know, if you put a whole-house water filter on a On a house that ranges between $1,500 and $4,500 all in.
And at the most Cadillac implementation of that, that's $800 million.
Most Cadillac.
At the sort of probably entry-level place, we're looking at $200 million.
And I think that that is worth discussing with our attorneys.
I know that's a change in strategy, but that saves billions of dollars.
And that saves the potential ratepayer considerable money over the course of the next decade.
And so I'm not prepared to vote yes today on this bond.
I think that's the only control I have over the cost of this project.
I'd like to learn more with our city attorney on what precisely is our objective and what are we constrained to.
I mean, I, I have heard from the presentation that we have to do this for regulatory compliance, but I'm, I'm reading the code myself right now and I see other ways to comply.
And I think that if we're not testing the boundaries with unconventional methods, I mean, frankly, I just have to say, I think it's crazy that a centralized plant is more expensive than a distributed water filtration system across 300,000 households.
I think that's wild.
And that just speaks to the inflationary environment we're in right now.
It speaks to the other cost schedule risks that we have.
But I'm a no vote right now on this bond issuance package out of committee.
And we— I'm going to commit to have these conversations inside this building.
But if there's a way for us to get to clean water compliance that saves the ratepayer money, that's what I'm going to work on.
Olivia Clark
So Councilor Green, are you suggesting that we just stop the project altogether?
Mitch Green
I'm suggesting that we need to be in that sort of decisions phase right now.
We need to seriously contemplate that because I think what has happened is a series of decisions have been made for us that put us on a timeline, that put us on a cost trajectory.
And if we operate within the sort of like, well, we have to do this, Then we're stuck on a rate trajectory that I think is unsustainable.
What I haven't seen is a stress test on a legal basis on what our other options are.
Olivia Clark
Okay, so what you're suggesting is that we stop the project, we go and we look at what every single household in Portland can do to ensure they have clean water on their own?
Mitch Green
What I'm saying is that the City of Portland can show some leadership.
This Council can show some leadership and say, here are 2 different ways, or a range of options.
Here's what the all-in cost is to get the same level of outcome.
And so under EPA regulations, you can do a distributed point of entry and point of use system as long as the municipality maintains that system.
And so my understanding is we need to have— if we were to fail to do this, that we would face daily water boil.
Notices.
Um, but if we were to mitigate that with filtration opportunities— and I'm spitballing here— what I'm trying to say is I'm not going to vote yes on $525 million today.
I need a little more time, and I think that there's a different way to pay for this and solve our problems that cost the ratepayers significantly less money.
Olivia Clark
What— and I think what you're suggesting though would require that we go back to the drawing board and completely redesign a system where every single person in Portland would have to buy something for their water filtration.
Mitch Green
Oh, I say we buy it for them.
Olivia Clark
I'm sorry?
Mitch Green
We buy it for them.
So we— you may not like my approach, but I'm just telling you how I'm voting today.
Olivia Clark
I appreciate that, and I'm just wondering how that jives with our federal mandate, with the extension we've been given and that we've worked on from OHA.
I think we're really between a rock and a hard place when it comes to this, so I appreciate your concern for the ratepayer.
I think we all share those concerns.
But I think what you're suggesting is you want more time.
But I think it's also a complete step backwards, back to the Cryptosporidium days, when, when actually this plant is designed to deal with the fact that we have climate change going on and that something that we had not anticipated are forest fires and what that's going to do to our water supply.
In terms of turbidity, in terms of all of the fire ash that's going to come into the system.
And I don't know how every single household in Portland will be able to filter that if we don't have an upstream approach.
So that really concerns me about climate change.
And climate change is costing us all a lot in a variety of different ways.
And I think this was really a silver lining to this plant is that we're getting ahead of that, what could be horrific damage to our very wonderful water supply, which we should be doing a better job marketing our wonderful water.
So I appreciate what you're saying, that you're not willing to vote on that today, but I think we are really taking a real step backward.
So, Councilor Koyama Lane, did you want to make a comment?
Tiffany Koyama Lane
Yeah, I appreciate the conversations.
I agree with a lot of the different things that I'm hearing up I have heard more— I was interested in what Councilor Green was saying about his solution.
I think that in these complex times, we have to throw all those ideas out there.
I've heard more about the idea of, like, UV treatment.
I agree we're in between a rock and a hard place.
One thing is we have this federal mandate.
We have to meet these federal water standards.
I think that's a great idea.
What happens if we don't meet those?
Do we know?
Is it clear?
Ting Lu
We'll be facing daily fines and penalties there.
So we could definitely follow up on some of the additional impact if we don't do this.
What is the cost of that?
But it's a— this is an entering into already a binding agreement here.
Tiffany Koyama Lane
Okay.
And then can someone talk a little bit about specifically the UV treatment?
Because I was looking into that and I saw So that was interesting.
But I also am seeing that the UV— so the big issue is the diarrhea parasite, right, the Cryptosporidium.
So that UV treatment can help with that, but not treat for, like, we're having more wildfires and there's particles coming in, and that's something we need to deal with with our water.
Can we talk about, um, filtration versus UV light in that area?
Ting Lu
Yeah, I see it's really adding that additional long-term resilience because the UV is a point of the technology, but filtration provides more flexibility not only to remove the Cryptosporidium, but it has the flexibility to remove additional emerging contaminants by changing some of the medium and technology.
And UV is just light bulb, you know, there's various Very kind of a straightforward technology to remove this one pathogen.
So what the approach that the team has said is having more long-term resilience, not only on the extreme weather, earthquake, and wildfires, but also for the additional emerging regulation compliance.
We'll have that flexibility to address them in the future as well.
So this is for the generations to come for.
Olivia Clark
Thank you.
Tiffany Koyama Lane
Thank you.
That's all really helpful.
While I agree we're in this hard place, I do think it's important that we are thinking down the road and that we make sure that we have— continue to have good drinking water.
I definitely think we need to be having accountability and oversight.
But yeah, I think this is where we're at.
And I do plan, I think, to support this.
Thank you.
Olivia Clark
Thank you, Councilor Koyama Lane.
Councilor Smith, is that a legacy hand?
Loretta Smith
No, it's a new hand.
And I just want to say we are in between a rock and a hard place, and we have GMP already signed, we have subcontractors already signed, and if we delay those, one of two things is going to have to happen.
You're going to have to put forward the second WIFIA at a higher rate and instead of being able to pay this with, with ratepayers.
So I, um, I will be supporting this going forward, um, Madam Chairwoman.
Olivia Clark
Thank you, Councilor Smith.
Um, I would like to move this item.
Um, we've got a just a minute or so before we have to take a break, so I would like to entertain an ordinance.
I think it's, uh, which one are we at now?
2024-01.
26-134, Is that correct?
To the full council with a recommendation to pass.
I would move that.
Can I get a second?
Loretta Smith
Second.
Second.
Olivia Clark
Thank you, Councilor Smith.
The motion has been moved by myself and a second by Councilor Smith.
I don't think there's any more conversation about this.
So Diego, could you please call the roll?
Diego
Kanal.
Councilor Kanal, if you're still online.
Looks like you might have dropped off.
Um, Koyama Lane?
Tiffany Koyama Lane
Aye.
Diego
Green?
Mitch Green
No.
Diego
Smith?
Loretta Smith
Aye.
Olivia Clark
Clark?
Aye.
Diego
With 3 ayes, 1 nay, and 1 absent, the motion carries, and the ordinance document number 2026-134 We'll move to the full council with a recommendation to pass.
Olivia Clark
Thank you, colleagues.
Thank you, Diego.
Let's take a 10-minute break now, and we'll come back and talk about the committee.
Diego
Councilor Kanal, it looks like you're online.
Sameer Kanal
Yes, I am.
I'm switching over to computer.
Diego
Okay, perfect.
Claire
Thank you.
Olivia Clark
Okay, well, we, we can reconvene and, and the 3 of us can, can start.
Um, the others are just going to miss out on a really fascinating conversation.
About the future of our committee.
Diego, you want to go ahead and call the next item?
Diego
Item 3, Public Works Committee Priorities Discussion.
Michael McGee
Great.
Olivia Clark
Well, what I'd like to do is chat a little bit.
Hello, Councilor Kanal, are you still there?
Is he there?
Sameer Kanal
I am, I am.
Olivia Clark
Great, super, because I want your input on this.
I can hear more voices coming down the hallway.
Okay.
But what I'd like to do is just discuss some of our priorities for the coming year.
And I want to start by talking a little bit about what the old T&I Committee did do before we look ahead at the future.
So let me just share with you some— I think what I think are some of the highlights of what we did in the last year, knowing that all of our issues sort of fall into 3 buckets.
There's the policy bucket.
There's the information items, you know, learning about things, which we did some in the very beginning.
And then there are administrative or executive items that come to us on a regular basis.
So there's kind of 3 categories.
It's hard to believe that we had 22 meetings.
Where does the time go?
And we actually considered and recommended to council 22 legislative items.
Jonas Beery
Wow.
Loretta Smith
Excuse me.
Olivia Clark
Which was a combination of executive and councilor-sponsored or councilor-initiated items.
So some of the highlights from the councilor-sponsored legislation and discussion were asset management, of course my favorite topic, asset management strategy, the PBOT alternative funding strategies, the Vision Zero led by Councilor Craighead, Koyama Lane.
We've affirmed our commitment to the SIP, the sidewalk and street safety through the SIP, and that was led by Councilor Smith.
I just mentioned that you, you led the Vision Zero.
We're talking about last, last year.
And then we also had a resolution directing an investigation of Zenith Energy that was led by Councilor Green and Councilor Murillo.
And we supported the naming of Portland's very own Brooklyn Bridge.
That was led by Councilor Morillo, which was a fun thing.
Mm-hmm.
And then we had a lot of consideration of executive items from that bucket, and those included the 82nd Avenue project with PBOT.
We authorized the sale of the Sailwood Community House to community ownership.
We approved the city's next steps in renaming a portion of Southwest Jackson Street to Southwest Rose Hill Street.
We also monitored the Bull Run project.
We educated ourselves on the city's water management and conservation efforts, solid waste and recycling, innovative traffic safety and public rights-of-way projects.
And we heard from community members who were engaged in a complex of Uh, complex transportation projects, um, including from the city PBOT's modal committees, the Rose Quarter project stakeholders.
We took a tour of the Interstate Bridge project, um, and, uh, yeah, we did that in Washington.
That was interesting.
So looking ahead from now, uh, at least till the end of this year, I guess that's about 8 months or so.
Muriel Gueza-Teufel
8 Months.
Olivia Clark
Um, I— here's what I've got on my list, and I'd like to plan out the next, uh, 8 months as much as possible so we have some predictability.
Um, I'm not a big fan of taking up the full 3 hours if we can avoid it, but, um, but we do have plenty of time.
So of course we're going to follow up on asset management, and we're, we're due to get that report in September, and then the budget amendment said that they would also develop an asset management finance plan, which I know Councilor Green's very interested in, from September to December that we'll want to work on together.
I would like to get an update on the transportation system plan and really get my head around how that works.
We need to do some parks oversight now that parks is more squarely within the scope of this committee here in U.S. Folden into Public Works.
So we need to do some oversight of the, um, the parks levy.
Uh, I know that we are definitely going to consider, uh, and continue to talk about utility rates, and we may want to, um, do a deeper dive into the low-income program, but also in the future the possibility of restructuring the rates as well.
And I know Councilor Green has a strong interest in that.
I'd also like to receive, um, continued updates on the, um, facility, the Bull Run facility, and I'm hopeful that maybe we could take a tour, uh, this summer.
Um, depending on council action this week on the transportation utility fee and the street damage restoration fee, uh, if those pass, we want to closely monitor that and really exercise our oversight, um, because that's a really big deal.
So with that, those are just a few of the things.
I am planning out the next 8 months, so I'd really like to have your input.
And I haven't had the opportunity to share that with our Vice Chair yet, so I haven't gotten her input.
But I would really like to hear from you 3, the 3 of you.
Who wants to go first?
Councilor Green, you want to go first?
Mitch Green
Yeah, thank you.
Thank you, Chair Clark.
I always really appreciate some space for a little bit more of a freeform visioning type of thing so we can not only get on the same page in the light of day, but, you know, share that with the community, you know?
So I think for me, I mean, I like everything that you listed.
I think those are all top priorities.
I think your prioritization is, Is spot on for that work.
I think my focus in the committee for the next year is going to be really on the rate design stuff.
So you hinted at that.
I think that— I don't think this city does rate hearings or rate cases on a very frequent basis the way that other utilities would.
And I'd like to see us mature into that space a little bit.
I know it comes— I know it requires resources of staff time, and there's a lot of public engagement.
But I think, you know, whatever decisions we make on our big infrastructure projects, like, we pay for those through rates.
And so if we can have a steady cadence every 2 years, every 5 years, whatever we think the right cadence is, where we run through a full rate case where we say, here's our costs, here's what our cost of service analysis shows us, here is our risk bands, like, this is our worst case, this is our best case, case, and here's our expectation for median to median.
Also, here were other designs that we could contemplate.
I think that gives the public an opportunity to really understand how it is we pay for infrastructure, but then also stress test to see whether or not there's some different designs that can allocate who pays and in what proportion.
Because I mean, I think that we've got a little room to do on our, at least our water rate.
Yes.
I know we've talked a little bit internally about our BES rates as well.
And so I'd like to have some of those discussions in public.
I think based upon what this council does with the transportation utility fee, you know, I did put an amendment in to sort of explicitly say we should have rate design at least maybe like at least the possibility for it on an annual basis to create space for folks who might be dissatisfied with the proposal as it yes.
I would love for our committee to make some space as soon as practical, probably couldn't be in the middle of budget, but maybe sometime this summer to begin a conversation on what an adjustment on rate design to the TUF might look like after we've adopted what we have on the floor.
I think that could go a long ways to assuaging some of the concerns that are outside this building on that.
And I think our committee should lead that sounds great.
And then, you know, finally, I think strong, strong echo on oversight, but I would extend that to potentially other rate-making bodies in the city that we might have franchise regulation over.
So we might want to have some kind of a hearing to pull in PG and Northwest Natural and the waste haulers to talk about rates with them.
I think that could be really useful.
Again, affordability is top of mind for Portlanders, and just making sure that they see that we are asking questions about their cost of service analysis and how they show up for the communities is also important.
So just some ideas.
Olivia Clark
Would you mind if I— I just want to respond to that.
We can have more of a conversation here today.
I was going to raise the PGE, so I'm really glad you did, that we invite them in or other utilities to talk about their services, how they set their rates, whatever, just to educate ourselves.
I'm really glad you brought that up, and there's no sense in waiting.
I also wondered, you were talking about our own utilities.
You know, other communities have spun these off as independent special districts, like in Oakland.
They have, you know, their water and sewer— I think it's water and sewer.
Water and wastewater.
Is South Bay MUD.
The municipal utility is spun off from the city.
You know, that kind of— those kind of ideas we might want to just look at.
I don't know.
I don't want to scare anybody, but just thinking broadly about our utilities.
So I really appreciate your ideas.
Mitch Green
I mean, that's like, you know, I won't give you any opinion right now on what I think is the right answer for that, but that's exactly the kind of thing we should be talking in public Mm-hmm.
So if we're contemplating creating a different public body, because SMUD, that's another municipal utility.
It's still under public ownership, so I like that.
But if we think that there's this other delivery system where it doesn't fall just on the City of Portland, but maybe it's like, maybe it's something that the consortium might step into to consider, maybe a joint management tenancy, those are conversations that are important to have in public.
Olivia Clark
Cool, that's great.
Um, okay, uh, Councilor Smith, we're just talking now.
We reviewed what we did in the past, and now we're just talking about the things that we want to focus on in the future.
So, Councilor Koyama Lane.
Ting Lu
Thank you.
Tiffany Koyama Lane
First, I want to genuinely say thank you, Chair Clark.
I appreciate how you take time to hear from us and how you're open.
I've shared this before, but I have learned a lot from watching you lead this committee.
Your organization approach, the way you run these meetings, has taught me a lot.
So adding on, I heard this said already, feeling hopeful that the transportation utility fee and the street damage restoration fee will hopefully pass.
And I like the idea of this committee being committed to continuing to hear updates about especially the TUF and including how it's being implemented, how it's What the impacts are to Portlanders.
And I'm interested in more of these conversations that Councilor Green is interested in about rate design.
And I still— I want to continue to explore some of the other transportation and infrastructure funding options.
We started talking about some different ones, and part of the conversation was around EASE and if we were ready to implement some of those, but would love to keep exploring exploring funding options that don't place an additional burden on our residents.
So we had talked about fees on food delivery, package delivery services, different mechanisms that can better align costs with also the corporate use of our roads.
I would like to hear updates on programs like the bike bus programs and Safe Routes to Schools, especially since there have been cuts at the state level that will impact us, and I'd like us to know what those effects are.
Muriel Gueza-Teufel
Let's see.
Tiffany Koyama Lane
Yeah, making sure that we're partnering with schools and community organizations in that area.
I'd like us to talk some more about tactical urbanism and just maybe get some education around that and talk around possibilities, maybe our committee.
Thank you.
Can have a chance to learn a bit more and discuss tactical urbanism.
It's low-cost, quick-build approaches and allows us to test different safety improvements before making permanent investments.
Can help us move faster, figure out what works, engage community in the process.
And we can look to a lot of other cities like Austin, Nashville, Atlanta, and New York City has a notorious example of tactical urbanism in the way that they've transformed Times Square into a pedestrian zone.
So, and I also think about how tactical urbanism can really go hand in hand with conversations that we've had, Chair Clark, about ways to create meaningful hands-on volunteer opportunities and give community members a direct role in the city.
And so, and for this, it can be building safer streets or other opportunities.
And then a big one that I have is I'd like to request a commitment to us getting regular Vision Zero updates at this committee.
And I think I've talked to our citywide Vision Zero lead and saying that maybe the first one can be about 20 minutes, but if she could even be coming ideally every other month or so, we could have 10 to 15 minutes just to ask questions.
And I think that helps with consistency, accountability, keeps the work visible, ensures that we're tracking progress towards eliminating traffic deaths.
And I appreciate how City Administrator Lee is adding a section to his report each month about Vision Zero.
I know that we've been getting regular updates on when there are crashes in our district and also monthly data.
And this is something that I know Mayor Wilson has been talking a lot more about.
Our citywide Vision Zero lead said he consistently is the person that actually emails back when those emails go out about there being fatalities.
And so it's great to hear that more folks are, are really talking about this.
And I think for us to all know too, we have— we're pulled in so many different directions, but that we have a citywide Vision Zero lead who's willing to meet with any councilor, any district, to talk specifically about each of our districts and, um, how we can be making sure that we are tackling traffic fatalities.
Um, so thank you again, Chair Clark, for your leadership, openness, and your support, um, especially around Vision Zero.
And I see you nodding that we can, um, hopefully have an update.
I'm hoping we can bring her maybe before the end of this fiscal year for a short meeting, um, to this committee to come, come meet with us.
And, um, I'll follow up with you and your team.
Olivia Clark
Thank you.
Thank you, Councilor Koyama Lane.
That's a great list.
I really appreciate some of these other ideas I hadn't thought of.
I love what you said too about volunteer opportunities.
Muriel Gueza-Teufel
I—.
Olivia Clark
And I hope you're not talking about pothole vigilantes, are you?
Tiffany Koyama Lane
No, I'm not.
But I do think the more opportunities that we have for community members to be engaged and to be part of the process, The, the more likely that maybe people won't fill potholes, or else if people don't feel like they're part of it, they're going to find some way to be part of it.
Olivia Clark
Thank you so much.
Uh, Councilor Smith.
Loretta Smith
Thank you, uh, Councilor Clark— Chairwoman Clark, Vice President Clark.
Um, I have to give you all your titles.
Um, I, I think this is an excellent opportunity to go back.
I want to go back to something that we started earlier today, and I have to forgive folks, forgive me, to ask for forgiveness because I was not clear on what actually was taking place when we were doing eminent domain.
Mm-hmm.
And so I think we need to come up with some rules of engagement on how our departments bring us eminent domain, because first of all, eminent domain is a real serious thing.
And people need to know first that when you do eminent domain, it's because that's the nuclear option.
There obviously have been, um, conversations with trying to, to, to get the easement without eminent domain.
And so when things don't work, and the public should know that, that's the tool that we use.
And if we're using the tool tool, that tool first without trying to have a conversation with, with getting the easement without eminent domain, there's a problem.
Secondly, and once you decide that this is— this has got— gotten to the point where we need to put that in place, uh, there should be an executive session on eminent domain so that you can discuss, um, the kinds of resources that you're going to need to put forward to be able to do that.
And so for me, that is so important for us to know that first because it just caught me off guard and I had some questions to it and I just thought it was just a regular easement.
I didn't realize it was, and it's right up in the first paragraph, but I was looking at it just a regular easement that we were paying for.
But then when it dawned on me that they were asking for eminent domain, I—.
Thank you.
Initially, I got real concerned.
Not troubled, but I was concerned.
Olivia Clark
Can I just clarify for the public that eminent domain is a takings?
We're taking something, right?
Loretta Smith
Yes.
Yes, ma'am.
And eminent domain is the thing that they took with the Albina descendants, and they did not give them anything for their property at all.
And that's why we had to go back and take care of a historical wrong and make it right.
Uh, this is the other issue too.
Um, if I had to go back again and, and ask some more questions, I probably would have asked some, some other questions.
Because when I looked at our protocol afterwards, I pulled up our protocol for the City of Portland and as it relates to eminent domain, and there is supposed to be a public conversation.
And so I don't know if there was a public conversation with with the residence owners, and they said in front of council.
And I didn't see anybody here who was a resident, and I don't know if they're— and, and it was specific that they have to be in front of council.
And so I think we need to be briefed, um, by the city administrator and the mayors to, to, to let us know about how eminent domain should go.
And I'm willing to, um, to draft with any one of my committee members some, uh, rules of engagement on how we will do that because this came fairly quickly.
But there's another issue too.
The issue is that we don't find out about these things until Friday at noon, that we know what's going to be on the, the physical agenda.
And I find that very— it's hard to plan for.
It is really hard to plan for.
And we didn't do this, and I hate to keep talking about Multnomah County, but we were able to see what was on the agenda further than a week in advance.
And so I could have conversations with people.
And so I'm not able to have that conversation, particularly with this group, is because I only have a day to make those calls.
Mm-hmm.
And we were going over it on Friday in my district office.
And so we were having the conversation.
Thought that it was something different.
Olivia Clark
Can I interrupt you just for a second?
I think, um, you and I will be meeting and sitting down and plotting out— we're going to know in advance, well in advance, what's coming.
Maybe not the absolute specifics about it, but we, we will know what's coming.
Loretta Smith
And so also in the future, I'd like to get more information around road maintenance.
And I'm off the eminent domain, um, road maintenance, uh, Of course, I am so into making sure that potholes and paving and road repairs are things that we do.
And I'm very much in support of SIP and figuring out how to do that and what that looks like.
And as it relates to waste management, I think there calls for some discussions on garbage collection, recycling programs, and litter control.
Uh, water supply and sewage issues related to water, uh, quality.
And I think we, we will be doing a lot of that because of our, um, Bull Run.
We'll be having that plumbing and, and, and all those things.
And parks and recreation, um, there's a lot of opportunity there, uh, the maintenance of our public parks, our playgrounds, and our recreational facilities.
And we do a lot of programming Um, that's paid for outside of the city in our parks.
And, um, I would like you to join me because I'm going to go on a parks tour in my district, and I'm going to go to every single park in District 1.
And, um, whether it be, uh, attending their lunch programs or any other recreational programs, I'm going to know every single park in my district.
And that is, um, it's going to be the Smith that is so cool.
Olivia Clark
You're going to invite all of us?
Loretta Smith
Yeah, I'll invite you.
Olivia Clark
You're going to give us advance notice?
Loretta Smith
I'll give you advance notice.
I'll give you advance notice.
Safety and accessibility, you know, infrastructure.
And when you come back with the asset management report, and I'll be looking through a lens of safety and accessibility to our infrastructure and what that looks like.
I think that pedestrians, cyclists, Cyclists, sidewalks, bike lanes, those kinds of things we need to be clear about.
But we own a lot of assets.
$85 billion.
Keelan McClymont
Oh my God.
Loretta Smith
$85 billion worth of assets.
Yeah.
And just the whole public funding and budgeting and how we allocate the restricted funds and those kinds of things.
And I think we get a, we get a bunch of opportunity when we get these multifaceted, um, uh, ordinances to do things.
It, it crosses a lot of different things.
So we're talking about easements, and then we're talking about eminent domain, and then we're talking about transportation.
So it's, it all comes together.
This is, um, I am so lucky.
I'm, I'm, I'm happy to be sitting in the vice chair to you because you have so much information.
And then I have my finance guru over here sitting to my left, Professor Green.
Oh, oh my, they gave you a different title.
Mitch Green
It's a different day of the week.
Loretta Smith
Yeah, so I, I appreciate you.
And, uh, and, uh, Councilor Koyama Lane, you always bring a community element, asking about how the community, um, really is going to be impacted by things.
And so I really appreciate those kinds of, um, conversations.
And, and I know that, uh, Councilor Kanal— I don't know if he's here—.
Muriel Gueza-Teufel
Yes.
Loretta Smith
But he, um, he also brings that community lens, and he's very technical too.
So we have a good group of people who, who care about the, the public works, uh, side of the city.
And I think this is going to be, uh, Very, very good.
Thank you.
Olivia Clark
Thank you so much, Councilor Smith.
I really appreciate your comments.
Councilor Kanal, great to see you.
And we did mention you at the beginning as our new member.
You weren't here, but we did give you a shout out.
Sameer Kanal
Thank you, Chair Clark.
First, let me say how excited I am to join this committee, even though I can't be there in person due to traveling this week.
But yeah, honored to join it, honored to be District 2's first representative at the table for transportation, infrastructure, utilities.
I think the core thing that I bring to this, and I know it overlaps with many of you, is the things that you directly interact with as a Portlander tangibly.
So I could spend all my time talking about potholes, potholes, and potholes, but I'll probably get to that in future meetings.
And I'll start with some themes of things I'd love to see on the agenda.
First, safety.
Safe routes to school was the first thing on my campaign platform, and I view it as a leading indicator or metric.
The things that you would have to do to make it safe for children to get to and from school also make it safer for everyone to get around regardless of their mode of travel.
We have some work to do because of the state's inaction on this, and I'm excited to get into that.
And I think this is about having a particular focus on vulnerable and historically underserved communities.
Communities.
Infrastructure is pipes and pavement, but it's about people, uh, and ensuring that our systems are reliable, resilient, protective for those who've been historically underserved is a huge part of this.
Uh, second, affordability.
Um, I'm a renter.
I know how utility costs can stretch already tight budgets.
I'm committed to making sure our systems work for everyone, not just those who can most easily afford them.
Um, this isn't just about costs that we directly assess to Portlanders either.
But about the costs we create when we choose not to be involved in something.
My car repair costs are higher in Portland than they have been in any other city I've driven in because of the state of our roads.
And if I knew for certain that a fee that I would pay would help people like me avoid large, unpredictable car repair costs, that would make me overwhelmingly supportive of it.
And it's about making sure that we can guarantee that.
Uh, as part of the process.
And this also applies in the context of fixing our ratio of road users, meaning residents, to road miles.
We're in a structural problem there, um, and I want to talk about how we get out of it because costs are going up, making road miles more and more expensive.
And without the density to make that work, we're going to be constantly falling behind.
Um, 3rd, equity in service delivery.
Um, every Portlander deserving access to fair uh, fair access to essential services.
But I'll also just take a moment to talk about ensuring that District 2 gets the investments it needs for road safety and reducing road deaths.
This happened in 2024 when District 3's deaths declined by over 50% due to investments that occurred there.
It happened in 2025 where District 1's deaths declined by over 50%.
And as the first representative in this committee from District 2, which now has the highest traffic deaths in the city, I want that same level of focus we saw in those other 2 districts in the last 2 years to happen in 2026 in District 2.
Because had they, 10 of my constituents would be alive today that weren't— that didn't make it through 2025.
And the final theme I'll mention is good governance.
So strong oversight, accountability.
And thoughtful management.
I did get to hear the presentation earlier from the Public Works service area about the oversight portion.
I'm excited to get into that conversation as well, and looking forward to the leadership that has been brought by DCA Dunlap on that side, but also by you, Chair Clark.
A couple specific projects I'm interested in, and these— I'm going to use some specific locations, but it's really about the policy.
I look at the folks who live on Trenton or by McCoy Park or by the Montessori School on Lombard and Mississippi, places where schools and students are and the crosswalks aren't, or on MLK where pedestrians have a long and now recent history of trauma from drivers.
And I think about opening the doors to greater levels of painting and repainting crosswalks, which is very cost effective, and then where possible, adding in other crossing safety measures like islands and lighting.
I look at daylighting, which Is to say ensuring visibility at intersections by setting back parking from the corner.
I'm looking at a proposal I've received from community.
These are folks who may at some point become vigilantes, and I hope that we can make them volunteers instead by allowing more people to repaint their corners when the paint there fails.
I look at utility rates.
I agree with everything that Councilor Green said, but I wanted to add in higher unit pricing at the higher usage levels.
Okay.
So that extremely high usage entities like data centers, the type that force investment in expanding production and transmission, are paying their fair share of that required investment with higher per unit rates.
Looking at improving engagement.
So it's not just the people who live on the block, but everyone who uses a road that gets to weigh in on its future.
I'm thinking about the area up by Columbia Park and the Columbia Annex right now on that.
And then, um, I'm excited to discuss parks as well, get to work on ensuring maintenance adherence to the levy.
But I really want to talk about, uh, also the, the work on community centers, protecting and expanding community centers as a public safety investment by giving young people a place to go, but also as a free third space for more and more Portlanders to use.
And I think that this committee can talk about third spaces quite a bit because of community centers, but also because of free plazas and Sunday parkways and a lot of the things that the Public Works service area does to make free and available parts of our city that are historically pay-to-play.
And I'm excited for that going forward.
So thanks.
Olivia Clark
That's terrific.
I really appreciate your list, Councilor Kanal.
We're really happy to have you join us.
As you were talking, I was just thinking that about Vision Zero and bike buses that we used to call, when I was in the environmental field, we used to call salmon the indicator species, that if the water is good for salmon, that it's good for everyone.
And I think that if our streets are safe for children and for the elderly, they're our indicator species for the rest of us, just to use an analogy.
And I also appreciate your comment about vigilantism.
I think we actually could train people to repaint area— their sidewalks or whatever, but I love the idea of expanding that as well.
So great, great list.
Anything else for the good of the order?
We've got quite a lot to do in the next 8 months.
Any other final thoughts before we adjourn?
And I do have a couple of announcements.
Michael McGee
Sure.
Olivia Clark
Yeah, Councilor Green.
Mitch Green
Yeah, I think— thanks so much.
Uh, again, appreciate this discussion.
I think that for us, um, the, the work of this committee is to sort of really remind folks that, you know, good assets require maintenance, but we are taking very seriously the, uh, life cycle costs and the prioritization exercise.
And this is the committee where we want to prioritize that work and make sure that we are giving tools to the city to execute on that and, um, and continuing to sort of invest in our active transportation and, um, you know, link those costs with the benefits that we have is basically what I'm trying to say.
Because if we don't, then we run the risk of, um, our, our community members just sort of not knowing that we're doing great things and that there are opportunities.
Like you mentioned the low-income discount program earlier in the session today.
Like, those things exist and and it's not clear everyone knows about it.
So, um, I'm really excited to be on this committee again.
I'll appreciate, uh, serving with you on, on, on this committee.
So, uh, thanks for having me.
Olivia Clark
Thank you, Councilor Green.
I, I appreciate your comments.
Um, yes, you know, as Councilor Smith said, I think we own about $85 billion of assets, and the majority of those fall under Public Works.
So we do have a real responsibility As a committee.
Okay, so let me just make a couple of announcements and we'll get it out of here before the 3 hours.
Um, because of the budget process that we're beginning to undergo, um, it's going to get really intense.
We're only going to have one meeting of this committee in May.
We've only been given one, so we'll curate that carefully.
But just so you know, we unfortunately will not be meeting again and my gosh, that's well over a month away.
Um, and at that meeting, I was really hoping to have an update of the transportation systems plan and maybe a couple items from Parks.
But what I'll do is take all the input that you have, um, shared, colleagues, and we'll put it in the blender and we'll figure out, um, what goes where.
And I'll do that in conjunction with, um, my vice chair here, Councilor so, um, if there aren't any other comments, I'm going to adjourn the meeting of the— of what's now the Public Works Committee.
Thank you.