Stop the Drain on Bend's Future
The SWIP is not necessary because the City already has the capacity to supply more than 150% of its 2011 peak day demand in wells alone. It also has water rights in hand (a portion still subject to mitigation) of more than 200% of its 2011 peak day demand.
Peak day demand for water in 2011 was 21.94 million gallons per day (mgd) (Source: Public Record Request for Peak Demand Day 2011). The Water Utility Master Plan (2007) shows Bend currently has well capacity of 33 mgd (including 1.8 mgd at Outback VII, which wasn’t hooked up then). The City claims it needs the Tumalo Creek water source for potential growth in water demand, but the City already has a total of 44 mgd of well water rights through certificates or permits.
According to the City’s own reports, we will need to expand well water capacity whether we move forward with the SWIP or not. According to the City’s planning document Optimatics 2011, the limited availability of creek water dictates that growth will largely be dependent on the development of well water capacity under the SWIP. To accommodate growth under the SWIP, investment in well water infrastructure, well water rights and operations and maintenance costs will be necessary.The cost of the SWIP is just an added drag on Bend’s future. For more on this, visit www.bendwater.info/costs.
Initial Cash-Flow Analysis
When the City Council first voted to approve the SWIP in September of 2009, they based their vote on a graph which showed a cumulative cash flow analysis developed by the consulting firm, Brown & Caldwell. The graph, below, shows that maintaining the creek water system and adding a hydropower plant pays off in the long run, while switching to an all well system would put the city in the red in the long run. At the time of the vote, the data behind that graph were not available. The graph also should not have used cumulative cash flow - standard economic practice would be to present the figures in Net Present Value.
When the City eventually did release the spreadsheets in support of the September 2009 presentation, it showed that the cost to the City for the Bridge Creek option was only $24 million, not $68 million as is now believed. Either there was a mistake or the engineers were counting on nearly $50 million in hydroelectric subsidies at that time, virtually all of which no longer exist.
Flawed Cost Comparison Memo
In August of 2010, Councilor Jeff Eager asked staff to put together a memo regarding the relative costs of wells versus the creek water option.
For inexplicable reasons, the City Staff hired HDR, the same engineering firm who already had multi-million dollar contracts to design the creek water option, to do the cost analysis. Following are some critiques of the HDR analysis. An independent economic critique of the memo can be found here
- HDR presentation focuses its presentation on cumulative cash flow rather than net present value, meaning that $1 spent in 2060 appears to be of equal value to $1 spent in 2011.
- HDR assumes electricity rate increases of 6.22% annually for 50 years. This is an extremely high projection that inflates the income of the hydropower plant while also inflating the cost of pumping the wells.
- HDR assumes unrealistic growth rates in water consumption (and corresponding pumping costs). In fact, in 2011, just two years into the projection, HDR is already off by 54%. See graph below.
- HDR assumes minimal operations & maintenance (O&M) for operation of membrane treatment plant.
- HDR fails to address peaking charges in its well model
- HDR model places wells in absurd locations, thereby adding tens of millions in piping and reservoir costs to the well model. (see diagram below, taken from page 2, Appendix B of HDR’s Cost Comparison Memo).
- HDR well model provides 15.1 mgd peak day supply to replace the Creek Water model, which only supplies 7.4 mgd of reliable peak day supply.
Portland is facing the same EPA requirement to filter creek water or surface water that Bend is facing. However, Portland is in a much less fortunate position than Bend is because it relies on surface water for 90-95% of its water needs, while Bend can serve all of its water needs with wells, which have no filtration requirement.
Portland chose a UV filtration system because their studies proved it was the most cost effective system available. Bend chose an expensive membrane filtration system because of the risk of wildfire in the watershed.
The estimated cost for the Portland project is $100 million. For this investment they will serve a system that provides water for a little more than 1 million people with 43.4 billion gallons of water annually.
Bend is proposing to spend at least $72 million for a system that serves 50,000 people and produces 2 billion gallons of water per year.
Bend’s proposed surface water improvement program will cost $1,440 per person while Portland’s program will cost $100 per person. Portland’s program will provide over 20 times more water than Bend’s SWIP at a cost of 14 times less per person. Click here learn more about Portland’s surface water system.