Tryon Creek Wastewater Treatment Plant Lake Oswego P3 Partnership / - - PowerPoint PPT Presentation

Tryon Creek Wastewater Treatment Plant Lake Oswego P3 Partnership / Interim IGA

Michael Jordan, Director

• B. Jonas Biery, Business Services Manager

City of Portland Environmental Services

SEPTEMBER 2020

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Tryon Creek Wastewater Treatment Plant

• Constructed in 1964
• Built/owned/operated by Portland,

but within Lake Oswego city limits

• Outfalls to Willamette River under

Portland-managed NPDES permit

• Treats wastewater from parts of SW Portland,

unincorporated areas of Multnomah and Clackamas counties, and the City of Lake Oswego

• Managed under 1984 Intergovernmental

Agreement

• Max/peak flow capacity of 37.5 mgd

(compared to 450 mgd at CBWTP)

• Typical flow split is 35% from Portland / 65%

from Lake Oswego

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Current Arrangement

Owns land Operates, maintains, and finances improvements Owns facility and equipment City of Portland (BES)

Bears majority of long-term risk

Pays share of costs (to Portland) City of Lake Oswego Existing IGA (1984) Design and build improvements (via contractors) Holds DEQ permit

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Owns land City of Lake Oswego

Bears majority of long-term risk (and transfers to Private Party)

Owns facilities and equipment Holds DEQ permit City of Portland (BES)

Proposed / Future P3 Arrangement

Operates, maintains, and finances Improvements Pays share of costs (to Lake Oswego) Designs and builds Future IGA) Project Agreement Private Party (DBFOM)

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Potential Benefits to Portland

• Significantly reduces long-term risks:
• Operations and maintenance
• Capital reinvestment
• Regulatory
• Better aligns costs to actual usage of plant capacity
• Improves effluent quality to Willamette River

(pending P3/technology capabilities)

• Supports innovative technology and financial arrangement
• Will be cost neutral – or better – to the City of Portland over the long-term

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Overview of P3 vs. Existing Plant

P3 (Build New) Existing Plant

Rate Impact 0.10% average annual impact (or less) 0.10% average annual impact Operation & Maintenance Operated and maintained by P3 provider Operated and maintained by City of Portland Governance LO owns the Plant & leases to P3 provider for 30 years Portland owns the Plant Technology Updated/new technology (will meet/exceed DEQ standards) Plant built in 1965 requires major maintenance & upgrades to meet DEQ standards Footprint & Aesthetics Estimated at 6 acres and built to fit area Approximately 14 acres

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Alternate / Fall-back Plan

• Return to Existing 1984 IGA
• Potential to re-align cost-share to match current usage of Plant capacity
• Potential to extend term to another 30 years
• Changes would require approval from City Councils (timing TBD, likely calendar 2021)
• Lake Oswego responsible for costs of prior to RFP; costs shared 50/50

during/after RFP and Pre-Dev.

• Continue/update Facilities Planning
• Implement major multi-year reinvestment in existing Plant
• Estimated capital costs of ~$250-350 million over next 30 years
• Costs only partially reflected in current rate forecast
• Will require permit renewals

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Schedule – Interim IGA

MARCH Interim IGA Development Begins MAY/JUNE Council briefings JULY 14 Lake Oswego City Council Study Session SEPT 15 Lake Oswego City Council Action SEPT 16 Approval by Portland City Council SEPT 9 Interim IGA Ordinance to Portland City Council

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Proposed Schedule – RFP & Project Development

SEPT 2020 Request for Proposals to P3 bidders DECEMBER 2020* Selection of P3 provider JANUARY 2021* Approval of Pre-Development Agreement SEPT 2021* Final pricing and approval

• f Project Agreement

FY 2023-24* P3 treatment plant operational TBD Old/existing plant decommissioned

* Tentative/Projected

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• Key provisions in Interim IGA
• Establish roles & responsibilities, process, and off-ramps for RFP and

Pre-Development Agreement

• Cost responsibility shared 50/50 (as Project costs), or if “off-ramp” is used.
• Establish criteria, process and off-ramps for P3 Project Agreement
• Identify key concepts in Future IGA
• Share of capital/operating costs based upon actual flow utilization
• Caps Portland’s maximum annual financial commitment at amount identified as “rate neutral”
• ver the 30-year term.
• Ensures Portland retains compensation for amounts due under 1984/Existing IGA.
• Assets and permit responsibility transferred to Lake Oswego

Proposed Council Action / Ordinance

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Proposed Council Action / Ordinance

RFP & Pre-Dev

Portland participates Continued (minimal) capital investment

Future IGA & Project Agreement Existing/1984 IGA*

Project not feasible Project is feasible Councils approve Either Council disapproves

P3 Build & Transfer Operations (operational in FY2023-24)

1 2 3

Basic Deal Flow Structure

* Potential to renegotiate/modernize

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Council Action (Interim IGA) Off-Ramp Options at Pre-Dev Agreement at 30% Design Council Action (Future IGA)

Decision Points: