Lake Oswego Water Treatment Project Selected To Apply For Loan

LAKE OSWEGO, OR —The city of Lake Oswego announced Monday that the Environmental Protection Agency (EPA) has selected its Lake Oswego Wastewater Treatment Facility Project to apply for a low-cost, long-term Water Infrastructure Finance and Innovation Act (WIFIA) loan.

The project is one of four in Oregon invited to apply for WIFIA funding this year. According to those familiar with the program, $140 million in loans has been dedicated to the Oregon projects, $76 million of which is expected to be used for the Lake Oswego facility.

The state-of-the-art treatment facility project is a public-private partnership between Lake Oswego and Arizona-based EPCOR Foothills Water Partners Inc., and it is expected to replace the Tryon Creek Wastewater Treatment Plant, which was built in 1964.

The Tryon Creek facility, which is owned and operated by the City of Portland Bureau of Environmental Services (BES), serves Lake Oswego and parts of Southwest Portland.

Under the Agreement, the EPCOR Foothills will design, build, finance, operate and maintain the new wastewater treatment facility, while Lake Oswego will own the facility. EPCOR Foothills will be the borrower of the loan, organizers of the project said.

According to those familiar with the loan, the project's selection is just the first step in the application process.

The next stage includes a detailed financial and engineering review of the project, mutual negotiation of a loan agreement and financial close.

"This is exciting news and a positive step towards building a modern wastewater treatment facility that provides more environmentally sustainable wastewater services for the people we serve," Lake Oswego Mayor Joe Buck said in a statement. "I want to thank the EPA for selecting this project to proceed. It's a real validation of the hard work that has gone into this project to-date and will help ensure the proposed new facility is cost-effective for the people of Lake Oswego and Portland."

According to Lake Oswego officials, the Tryon Creek facility is aging and parts of the plant are at the end of their useful lifecycle. The facility needs significant investment in order to meet Oregon Department of Environmental Quality (ODEQ) permit requirements.

This is why Lake Oswego and Portland are exploring whether a new, wastewater treatment facility can be built at a cost similar to or less than the costs of upgrading, modifying and operating the existing facility, which officials believe will be the case.

"This is good news for our communities and ratepayers and one more innovative step in helping to make this critical infrastructure project more affordable," said Mike Jordan, director of the Portland BES, said about the loan. "Our goal is to provide the best essential services to our communities and be good stewards of ratepayer dollars.”

If the project goes ahead, the WIFIA loan will play a significant role in its financing. The program was established in 2014 and aims to accelerate investment in the nation's water infrastructure by providing, long-term, low-cost supplemental credit assistance for regionally and nationally significant programs, according to those familiar with the program