The record · Transcript

Council session — 2026-02-23

Transcript from the session's official auto-captions (17,606 words), shown in readable case and split into speaker turns. Speakers are AI-suggested and editor-reviewed (low confidence — auto-captions garble names); each color marks a speaker.

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Loretta Smith: Chairwoman? Clark, are you there? Chairwoman Clark? Do I see you? Keelan, this is councilor Smith.

Loretta Smith: Confirm.

Thank you.

Can you hear us online? Councilor Smith.

Loretta Smith: I can hear you now.

Thank you.

Good morning everyone. I call the meeting of the transportation and infrastructure committee to order. It is Monday, February 23rd at 9:30 a.m. Diego, can you please call the roll?

Good morning.

Smith here.

Koyama Lane here. Morillo here.

Green here.

Clark here. And, claire, can you please read the statement of conduct?

Good morning, and welcome to the meeting of the transportation and infrastructure committee. To testify before this committee in person or virtually. You must sign up in advance on the committee agenda at Portland council agenda slash transportation and infrastructure committee, or by calling 311. Registration for virtual testimony closes one hour prior to the meeting. In person. Testifiers must sign up before the agenda item is heard. If public testimony will be taken on an item. Individuals may testify for three 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 deliberations will not be allowed. If you cause a disruption, a warning will be 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, please state your name for the record. If you are a lobbyist, identify the organization you represent. And finally, virtual testifiers should unmute themselves when the clerk calls your name. Thank you.

Thank you. Claire. Colleagues, we have two main items on our agenda today. They're long presentations, so buckle up. First is on asset management. As you recall we passed an asset management resolution sometime back. We're going to get a quarterly report from thate. And well I'm sure we'll have questions about that. And then we're going to have the Portland water bureau give us an update on the bull run filtration project. They had a press conference last week. There's been lots of coverage. And so I'm sure we'll have questions about that. But first we have to adopt our committee minutes for the month of January. Any changes to the minutes, any concerns.

We're satisfied with minutes okay.

I'm really happy to hear that. So can I just say the minutes are approved by unanimous consent? No objections. Great. Minutes are approved. So, diego, can you read the first item today?

Item two asset management status update.

Colleagues, you know, this has been a priority for me. And I think for some of the rest of you, and we started to work on a citywide strategy. We we passed a budget resolution, I think, or budget amendment way back when, as well as a resolution last August, and that directed the city administrator to develop this asset management strategy. And the that should be completed by September. But we've asked to be here today to kind of give us an update on how it's going. So tate white is here to give us this update. And I'll note that tate, I think some of you may already know this. She's transitioned to a new role in the city, but she's sharing this work with her and a team. And I'm sure you can talk a little bit more about that. So without further ado, tate, why don't you take it away?

Thank you. I want to make sure this is on. Can you all hear me? Okay, okay.

You pull a little bit closer. You're pretty. Pretty soft.

All right. Is that better? All right. Good morning. Good morning. Chair Clark. Vice chair Morillo, councilor, Smith Green and Koyama Lane. It's a pleasure to be here. My name is tate white. I use she they pronouns. And I'm the deputy director of the bureau of planning and sustainability. That is a new role. And today I will be speaking more to work I have done with city operations, and I'll be continuing to support momentum as as we figure out resourcing this effort moving forward. I do want to take a moment to acknowledge that there are dozens of people across the city, especially many asset managers, that have contributed to the work that I will present today. If we had everyone up here, we wouldn't have enough room. And so I am really the messenger. All right. So given that we have members of the audience that might be tuning in to this topic for the first time, I'm going to briefly go over some background and context, and then I'll move on to overview, the cross service area workshops that we've been doing over the past several months. We will focus on key outcomes from those workshops, including a governance framework and a recommended roadmap to develop a citywide asset management strategy internally with existing resources. We will end with next steps in time for questions and discussion. So the definition of asset management really varies depending on the context and audience. Our own asset management policy was developed by our city asset managers group, sometimes called camg, for short back in 2020 I believe, or 2021. Key to highlight is that asset management is really an umbrella concept that guides decision making and functions across the organization. It's really focused on optimizing value and minimizing risks from public assets, as well as building systems and frameworks to support data informed decision making. By its nature, asset management can get a little wonky and technical, but ultimately it is about being responsible stewards of public assets to better serve our community and future generations. I share this tin box model from the institute of asset management frequently because it's really visual and it shows the different functions and components of a high functioning, comprehensive asset management system. As a city with bureau specific asset management programs at varying levels of maturity, we have elements of these capabilities in place, including some exceptional ones, but we lack a complete understanding of that landscape and a plan for how these asset management functions work together to support our priorities as a city. Lastly, I also show this as a way to emphasize that asset management is something that all city employees and leadership participate in. I cannot think of any role at the city that does not touch at least one of these functions. And I also want to acknowledge that asset management is not new to Portland. It started being discussed at a citywide level in the early 2000. Bureau asset managers started meeting and formed the camg group. At that time, programs embedded in bureaus continue to develop at different rates based on stable funding and the size of their portfolios. In 2021, camg developed that asset management policy that was adopted by council at the time, and the coordinated an initial round of infrastructure tours with leadership that built knowledge around asset management and how it can address challenges that were shown on the ground. In 2022, a project manager worked with camg to complete a citywide asset management, maturity and infrastructure funding assessments. These culminated in recommendations that were provided to council in a rather successful workshop. It was a nice collaborative and educational moment and there has been progress made on some of these recommendations, but implementation was largely thank you was largely overshadowed by the charter transition, and only one of those elected officials is still seated. In 2024, camg proposed a centralized, dedicated citywide asset management office to carry this work forward and take advantage of the new form of government. It was approved with original city organizational proposals to align with the transition, but has not yet been funded. We will talk more about last year's audit and the council resolution in the following slides. And then later I'll present on the roadmap. The April 2025 audit recommended the development of a citywide asset management strategy to help improve coordination across the city, to provide a complete picture of asset classes, owners and managers, an asset management governance structure, citywide infrastructure decision making processes, a long term approach for meeting funding and capacity needs, and steps designed to promote buy in from the public and leadership. A city council resolution strengthened the audit's recommendation by requiring the city administrator to develop a citywide asset management strategy to establish priorities and practices to address asset management maturity and financial planning gaps. This slide shows some language from the council resolution that outlines scope elements. The council is expecting to be a part of the strategy. Thank you to chair and vice president Clark for sponsoring this resolution, and to the rest of you for supporting it. Chair Clark also generously provided funds from her own office budget for a small procurement to bring in an outside facilitator with asset management expertise to help us build a strong foundation for the asset management strategy development. The successful consultants stantec functioned as a neutral facilitator to help us arrive upon a shared understanding of the benefits of of of a citywide asset management strategy agreement on terms and concepts for shared use, a governance framework for strategy development, and potential long term implementation, and a roadmap for internal city led strategy development that integrates industry best practices and standards. Attendance at these workshops ranged from 25 to 40 people. Representing the various functions that I showed on the colorful box model before. I won't be going into detail about these workshops. We'll provide some highlights. The lead facilitator, scott bash, has been consulting and asset management since 1992. He's led strategies for more than 25 organizations across australia, asia, europe and north America. On the screen, you can see one of stan tech's slides, and it shows the recommended planning and policy framework to promote line of sight across our organization. As you are aware, we do not have a current citywide strategic plan, but we do have city core values to which we can continue to link asset management. We can also update any strategies in the future to better align with future strategic plans. We have a well-regarded asset management policy that kmg developed under the commission form of government. Through strategy, development or implementation. We have the opportunity to update this policy. A citywide asset management strategy bridges between those citywide elements and more bureau and portfolio specific plans that currently only our most mature bureaus have in place. One of the biggest gaps highlighted by past past assessments, the audit and these workshops is a lack of clear governance. Stantec underlines this as one of the most important steps for us to clarify to support strategy development and continued iteration for implementation. Before we look at the roadmap, it will be helpful to understand the governance recommendation that was collaboratively developed through these workshops, and it's in the process of being refined and endorsed by our city leadership team. One of the biggest areas of agreement among workshop participants and stantec was the need for a clear executive sponsor, with citywide representation and accessibility to the city administrator. While many governance models have an executive sponsor and a steering committee, we wanted to avoid creating unnecessary decision making, decision making layers. Given our time constraints. The city leadership team has listened to these requests and they've provided a hybrid approach to ensure there is a citywide representation. The dca's of city operations, public works, community and economic development, as well as the cfo, will provide an executive steering committee with dca warren, the dca of city operations, as the lead, ensuring that the city administrator is updated through the development process. There is a common desire for the core group to be deeply knowledgeable about asset management and city operations, and we anticipate that group to be made up of camg members who are generally asset managers or something equivalent. The need to have financial or other enabling functions represented on this core group and the working groups is also recognized. Due to the technical nature of this work, as well as our limited timeline and resources, there is a desire to give a certain level of decision making authority to this core group. So with stantec support, we have drafted a draft governance charter that city leadership will review and edit to confirm or delegate these decision making authorities. Participants talked about multiple working groups throughout this process, and with stantec help, we narrowed it down to three groups of subject matter experts to develop realistic recommendations with the core group. The core group will be made up of leaders in the city's asset management practice, including asset managers and staff overseeing enabling functions throughout the roadmap effort. The core group provides strategic direction and finalization of deliverables for the citywide asset management strategy. It ensures that the work remains aligned with the council resolution, the audit, and the city's organizational realities. This group will be responsible for how technical decisions are made, as well as identifying who is accountable and whether the city has the capacity to execute. Working group one will define how the city evaluates, prioritizes, and invests in assets over their full life cycle, including integrating risk, climate, and resilience into decision making. Working group two improves the process for how asset management decisions are driven by service outcomes, equity and community trust. Working group three will define the data, systems and digital capabilities required to support all other asset management functions. Now I'm going to run through five slides that summarize the proposed roadmap to develop an initial strategy. These are visual. I will run through them rather quickly and have a lot of time for questions and discussion. So with the support of stantec, the roadmap has gone through several rounds of collaborative editing to represent what workshop participants think is feasible for September 2026. Given acknowledging that we're constrained with resources and have a lot of competing priorities, we will start with the first phase mobilizing governance. And that's what we're currently in, and we're already kind of midway through this phase, thanks to the support of the city leadership team, we have confirmed an approach for the executive sponsorship, which I discussed earlier. Requests will be going out soon to the dcas and directors for the appropriate staff to participate in the core and working groups, and we have a draft governance charter that will be going to the executive steering committee to review, and it's anticipated to be finalized by mid-march. Workshop outcomes have provided valuable content for the final two bullets, which we will which will be drafted and shared with participants with from the workshops for review. Phase two will focus on documenting existing work and highlighting gaps in existing asset management practices, plans, data and systems. Participating staff will consider the draft vision and objectives from phase one and identify constraints to achieving that vision and those objectives. These findings will be synthesized into a clear baseline. Phase three will focus on standards and frameworks, including finalizing a comprehensive glossary started through the workshops, as well as clarifying decisions as recommended to be made citywide versus at a service area or bureau level. The work to date and the phases I just reviewed are really critical inputs and represent the bulk of the work to get to a strategy. That being said, phase four is where we will really start to assemble all those pieces into a cohesive strategy document according to best practices and industry standards. The format of the citywide asset management strategy will largely be a vision and ten or less objectives to achieve that vision. Those will help us prioritize, and then actions will be defined to achieve those objectives. This will make priorities and next steps clearer and ideally include performance metrics with a monitoring and reporting approach. I hope that the strategy itself is clear enough to be considered accessible to the public, but there is an intent, an intent to create a public facing summary as needed. All of this work is anticipated to help define an ongoing governance framework for the citywide asset management work. The first version of the roadmap stantec provided was rigorous and something all participants agreed with. If we had infinite time and resources, significant thought has gone into being realistic about what we can accomplish this year through intense efforts and prioritizing this work. Once we have an approved strategy, it will help us identify the resources required to implement, as well as to establish clear roles and responsibilities to support ongoing governance and implementation, including aligning with budget, capital and workforce planning. The strategy will be a momentous step to help the city prioritize its resources to really move the needle on advancing the practice of asset management to benefit portlanders now and future generations. So here's the last slide on key next steps. The city leadership team will review and edit a draft governance charter for strategy development. Members will be identified and confirmed for the core and working groups. City administrator lee is actively exploring building this critical capacity, and there is a lot of work to be done to mobilize and complete this roadmap. If we can continue the current momentum. We look forward to updating you on progress in the late spring or early summer as you desire. And with that, thank you all so much for your time and attention. I'd love to open it up to questions.

Thank you so much, tate. You really brought the slides alive. I know I told you, I thought there were a lot of slides, but you really brought them, really brought them alive. I would just want to kick this off. This discussion is just recognizing my own very simplistic view of asset management. I think when I first got my head around this, having read the auditor's report, not just the most current auditor's report, but past auditor's report, really not castigating, but getting on the city council. Why are you chasing shiny objects and you're not taking care of the fundamentals, taking care of what you have? I thought I had a pretty simplistic view that, oh, this is just a matter of putting a list together and then figuring out how we're going to attack or fix the problems that exist, especially those that are at risk of failure right now. But what you've outlined is a much more complex planning strategy, and I'm anxious to get to action. But I understand that we need a unified citywide approach to asset management, which was embodied in our resolution. So I admit, a little bit of impatience in wanting to get to the fix it part. I did have a couple of questions on the three work groups. Have you identified who you want on those groups?

That's really part of the next step. I think the workshop participant list that we pulled together for these, there were four workshops total that we held over the last several months. I think some of them are represented there, but we also don't know what we don't know. Right. And so that's part of that call. We're really going to define what we are looking for for those work groups and really defer to dcas and directors to help us fill that out.

And if you had to prioritize the work groups, what would be your top priority?

Ooh.

That's a hard question.

I can tell you what mine would be.

I mean, I think the core group is really key here. I think what's important with the working groups is we understand that the bureau of technology services, for example, is both an asset owner and often is an acknowledged as one, but they're also a huge enabling function by really creating and managing and supporting us and all the systems that make any of these functions work. And so I do think that's a really I think that's the third working group that looks at that. That's a really important group for us to get together.

That's the number three group. Yes. Okay. I was going to prioritize number one because I think that's where the list is.

I think.

They're all we used to have like seven working groups. So I think we've really these are three really necessary ones.

Before I turn this over to councilor Green who has his hand up, I just wanted to also you mentioned executive sponsor and that there's an executive team, but can you talk a little bit about where this might be housed, this and who has responsibility for it?

I know dca is here and might want to talk to that.

I just think that's really important that we're if we're going to get citywide buy in to asset management, that we have a very powerful executive team.

Thank you, councilor Clark. For the record, my name is the dca for public works city. Thank you for your feedback to city administrator lee. He is definitely interested in housing, the asset management leadership in the city administrative space, possibly reporting to somebody in his office. He understands the need for citywide, you know, view of the asset management strategy. And he's hoping to elevate the current role into a management role so they can oversee the work overall across the city.

Terrific. Thank you for that response I appreciate that. I have to just admit one more time that I'm really anxious about getting to that list because we continue to see emergencies around town. We see water main breaks that we have to address, and we really need to get ahead of the game here ahead of asset management. So I'm a little impatient and anxious, and I know that we have a propensity in the city to plan, but I want to I really am anxious to get to action. So, councilor Green, you have your hand up.

Thank you, chair clarke. Thank you, tate, for for giving us this update. I've also been sort of anxious to see it. I have a number of questions, but I think I just want to start broadly with just a comment on. I share that. I don't know if it's impatience is the right word, but you know, when you go out into the community, you talk to your constituents and they hear about a planning process. They kind of grown a little bit. But I think this is really important to recognize that asset management is about enabling our other planning processes. And so if we don't do it right, we're going to continue to validate this sort of plan. It's on a shelf plan. It's on a shelf. And so sometimes you got to, you know, invest a while to to yield benefits. You know, when I was at bonneville, I think we spent years trying to develop our asset management strategy. And it wasn't because we didn't take it seriously. It was just because billions of dollars in assets, and you have to have all the right stakeholders there, and you have to kind of do it. Right. So so what I'm what I'm seeing in terms of the governance strategy makes a lot of sense to me. I like the three working groups. I do want to note that it looks like on slide 16. Let's see here phase one, the timeline here. The timeline runs from January through March, but it looks like just the first step has been done to date. So do you. Do you think you'll actually get the rest of those items done in phase one by by the by the balance of March? Or is this more of a fluid kind of fuzzy set of of overlapping phases?

The the times noted on these are a little moveable and they also are overlapping. This work can happen in that way. But I will say for phase one, something that was very important to happen was confirming that executive sponsorship. And so now that we have that, I would say, and that we have sort of the draft governance charter that represents the next two bullets. And then I think we're not far from doing the rest. And with that, I also want to acknowledge the the impatience, because I there's already great conversations happening with camg members where they're already thinking of draft vision and objectives, and they're thinking of this is really hard work. You've acknowledged it's really organizational. It's about building systems. It's about continuous improvement. And so they're thinking about that, but they're also thinking what are the quick wins we can get out of this. And so we we get it. And and it was really important for us to be able to build this strong foundation and governance. And I think we're going to really be able to build off of some of the existing work we've done in the last years.

That makes sense, and I appreciate that. I did want to ask a question about the engagement expectations. This is very much this is an executive process. And, you know, council has adopted a resolution to provide guidance. But really we're not, you know, micromanage the work. But is there an engagement expectation for any council committees or I mean, I would I would imagine that the carrier of the resolution wants to be engaged on this. I'm curious how you see that going.

We we really look to chair Clark to help direct that. I believe you've asked for quarterly updates. And so we we can commit to continuing to meet that.

Great. I think the other piece I want to elevate is recently we adopted an ordinance to create a data governance office. That, to me seems like that's squarely connected to workgroup three. Are are you all kind of contemplating the interconnectedness there? Like is the draft strategy going to sort of maybe speak to the importance of hiring that data governance officer? Because that's typically what that function does is also engage in it asset management.

It's a great question, and I would love for that to also be a priority of this office. You know, I recently became the deputy director of bureau of planning and sustainability, which is where a lot of the citywide data governance work has happened. Congrats by the past. Thank you. And so I have been connecting with leaders in that space within my bureau and understanding it. The city wide office you all are creating seems a little bit to be a little more privacy focused, and that's really a priority for many reasons right now. And so I think we're going to be exploring how we can make sure this remains a priority and is either happening in that office or wherever is the best place, depending on capacity and expertise. But but very happy to hear your direction and feedback on that.

Yeah, I mean, I think when I was consuming the the language of that ordinance, I saw the data governance office is more than just privacy. I thought about sort of providing a modernization approach to how we approach these systems. So there may be an opportunity there. On the work. Work groups themselves. Are you is has there been any discussion about maybe having external sort of almost peer review stakeholders on these work groups? Because, I mean, I think that's a pretty common practice, especially when you the issues that we're facing are not unique to us. And so if that's something you've talked about, I'd love to hear about it. But if not, I think maybe something you should consider.

Yeah, that. Thank you for that. Councilor Green, stakeholders in the workshops have really. Been nervous. Like there's so much to get together internally. We kind of have to get our ducks in a row internally. And so I think we're seeing this as an internal exercise that really helps us be able to connect and reach out more and involve the community more, especially in capital planning. But I will say over the last year, a lot of the work I've been doing is connecting with the institute of asset management and leaders across north America related to this work. So I think we've embedded that in sort of preparing for this. But I don't know if in the timeline we're trying to deliver for you what we can do, but we can explore that more and happy to hear what you think that could look like.

Yeah, I appreciate that. I mean, there's always a trade off between timeline execution and like how much you engage. And I just want to be clear, I'm not I'm not suggesting it's like a bunch of community engagement with anyone who's interested in the question. It's very much like I or people who are other public works directors at other cities, maybe thinking about creating some opportunities for subgroups or external. Sort of peer review opportunities, because I know that some of our, our directors continue to be engaged in that kind of national level community of practice could, could really sort of help us actually accelerate the rate at which we do this work.

Absolutely. No, you're totally right on that. And I just wanted to acknowledge you. We use some of the funding we got from chair Clark. I went to the institute of asset management conference in September in montreal and connected with a lot of professionals at that time who are really excited that we're doing this. And then I want to acknowledge that other members of camg have done have have significant asset management experience and have those connections that they're pulling on as well.

Thank you. Well, I'm going to stop talking because I clearly have a a nerdy level of interest in the subject. So thanks a lot.

Councilor Green. I love that nerdiness about you. I think we share some of that. I have just a couple more questions and we'll let you go. Tate, there's a missing piece, I think, on your chart, your timeline. And that is the last piece of the resolution addressed the finance plan. And I think there's an expectation that when you deliver your final product in September, that then the either the executive steering committee, along with jonas biery, will be working up some sort of asset management finance plan. Is there a reason you left that off, or can you add that?

Yeah. Which where are you talking about specifically.

The roadmap on the strategy? I think there's a last piece that's the the finance side of this. And I know that's controversial, but I think it needs to be addressed is how once we've identified where the risks are among different assets, how are we going to approach financing their improvement. And I think that was the last piece of the resolution.

Absolutely. And we invited the cfo biery attended the first kickoff workshop. His time is limited. And then the debt manager and the city treasurer attended many of them. Our city comptroller. We definitely tried to involve our our finance colleagues in this work, and that is definitely something we want to deliver on. It's been tough to get as much of their time to build into this. So I think we're that's exactly what we're building towards and noted, okay. We understand that as a priority.

We may need to add that in the next in the spring presentation. One last question is, and I know this might be difficult to answer, I don't want to put you on the spot, but across the board, when you're going through these facilitated workshops and developing the roadmap, where is there resistance? Is there resistance in certain bureaus or where are you having a great cooperation across the board, or is there a any a drag on this process?

I think there is a lot of enthusiasm for this. It's just there's so much change happening right now. So everyone's really overwhelmed. And I think that's one reason these workshops have been really useful, because it's kind of a change management best practice to get everyone sort of on board and feel like they've had a say in mapping out this roadmap. And so I think it's understandable. I think people are overwhelmed. They're worried about having the capacity to deliver on this since they all have, you know, already overtaxed to their bureau jobs and thinking about these huge, gnarly problems at a citywide level can be hard for them, but everyone's really looking forward to it, I think.

Great, I appreciate that answer, and I appreciate the fact that there is a lot of anxiety about the kinds of changes that we're going through in this new form of government. So thank you, colleagues. Any other questions or comments? Councilor Smith, I can't see if you have your hand up. I just want to check in and make sure you don't have any questions.

She does not.

She's not okay. Anything else? Well thank you. We really appreciate the update. Appreciate all the work. A lot of tedium as well as excitement around those facilitated workshops. Really glad you were able to put that money to good use, and we'll look forward to having you back in the new what's going to become, I believe, the public works committee in the spring. So thank you so much and congratulations again, and hopefully you'll be the person coming back. We don't know. Thanks.

We'll see. I'll definitely continue to be part of the work in some way.

That's great.

Thank you all so much.

Thank you tate great presentation. Yeah. Diego, can I ask you now to read the next agenda item, item.

Item three bull run filtration project update.

Great. We have a whole team here from the Portland water bureau to give us an update on the status and the timeline and the implementation of the bull run filtration project. I know there's been quite a delay, and the project has become more expensive. Well, I tell people often is that the project is more important than ever, given the threat of forest fires and the potential for particulate in our water. Due to that, I see now that it's not just cryptosporidium, that there's a much greater value to what we're investing in here. So with that, we'll let dca kick it off and welcome everyone.

Thank you chair Clark. Good morning everyone and good morning members of the committee I'm priya paul and I serve as dca for public works. Every household, business, hospital and school in this region depends on drinking water every single day. Reliable, clean drinking water is essential to the health, safety and economic vitality of our region, and our region has trusted its water for over a century, and the filtration project is how we protect that trust for the next century. This project is a long term investment in how we protect public health, strengthen our system's resilience and secure our water supply in this region for generations to come. This project affects every person in the region who turns on a tap, and so the public deserves clear and timely information about where it stands today, and we have a responsibility to provide it. And so I thank you, chair Clark, for allowing us to come to your committee to share an update. And today's update reflects our commitment to transparency, accountability and responsible stewardship of public resources. We want council and our community to understand where this project stands, why schedule and budget adjustments are necessary, and how we will deliver this critical infrastructure safely and responsibly. I want to flag that major infrastructure projects across the country face the same headwinds, with legal challenges, permitting complexities and construction costs rising faster than inflation. And the bull, the bull run filtration project is not immune to any of those. And so with that I want to next slide please. So we want to talk through today's agenda. We will begin with the project purpose. Public utilities director ting liu will outline why this project is essential to protecting public health and ensuring long term system resilience. And then our water chief engineer will provide a project update where we showing where we are today and what remains ahead. This will include cost and schedule changes, as well as steps we are taking to ensure we can finish this project strong, including project communications. And finally, we will close with what is the steps that are looking ahead and we will be available to answer any questions. With that, I'll turn it over to director liu.

Thank you so much, dc. Good morning, council vice president Clark and also councilors. My name is ting liu. I'm the public utilities director for the city of Portland. I would like to provide you a first project. Purpose and overview. Next slide. So the primary source of supply for the water bureau is the surface water source located in the bull run watershed, approximately 30 miles east of Portland. And this has been a source of excellent water since 1895. I have frequently heard compliments from visitors and tourists talking about exceptional taste and quality of our water. And also, I'm hearing some of the younger generations and who have to relocate for college and universities to other cities, and they talk about how much they miss our water here. So we currently serve almost a million people, including 19 wholesaler customers. The filtration facility is located between the watershed and the city. Here in the the gray area here. And some of the large wholesaler customer will be off our system when the facility is online. But 14 wholesalers around the region will continue to depend on our water moving forward. Next slide. When we talk about the bull run treatment project, I want to refer to this. There are actually three projects all together. There's a drinking water filtration facility that is providing the treatment for this brown water. And there are also seven new miles of pipelines that will connect the facility to our water system and also bring water back to town and completed with the third corrosion control facility, too. So those are the three elements of the projects. The filtration facility will have the capacity to treat 135 million gallons per day. It will be located in unincorporated Multnomah county, near the city of sandy, on a 95 acre parcel of land that has been owned by the water bureau since 1975. The pipeline will connect to our existing system to bring raw water to the facility for treatment, and then taking the treated water and putting back into our existing systems. The pipeline will be replacing a 68 miles of of our existing pipe that range in the age from 60 to 115 years old. So lots of aging infrastructures already, which is in poor conditions or in risky positions from a seismic standpoint, the new pipelines will be more robust and built to current seismic standards. And these pipelines are replacing approximately 15% of our existing conduit systems. And this is consistent with our plans to make our conduit system more resilient. Overall. A small but important piece of the project is our corrosion control treatment, which came online in 2022. This is on time and on budget, and significantly reduced lead at the top for customers who have lead solder in their private plumbing. So the community is already see some of the benefit for the project. Next slide. And I want to also just highlight, as a councilor Clark, you mentioned earlier. So the why filtration. So like you shared earlier, it's first it's removing cryptosporidium. But it takes a lot more for this project. It reduces additional disinfection byproduct, which means we can use less chlorine as a chemical for disinfect. And and it's also leaves less chlorine byproduct, which is really not a good health perspective. And most importantly, we see the effect of the climate change all around us for the last few years. And for instance, in 2017, we had experienced the eagle creek fire, which was right on the edge of the watershed. And since then we also had the camp creek fire, which was actually right at the heart of the watershed. So we are so lucky the fire wasn't get worse, and that had amazing support in protecting our watershed. So filtration will make us sleep much better at night. And also it's a future proofing as the redundant and reliable water source for whether it's extreme weather conditions or landslide or fires. For the next time. With that, I will turn it over to our chief engineer to talk about the construction project status.

Good morning council. My name is ken ackerman. I'm the chief engineer at the water bureau. So we've been in construction for about two years, coming up on two years and just quickly get to the next slide. But just this one has a background of go back. So we're digging two tunnels that are about 1200 feet long each. And that photo had the the first tunnel piece going in. You can see it. It's about nine foot diameter. So you can see we started in June of 2024. That's the first month we started construction. We had beautiful weather. We moved 800,000 yards of dirt to dig it all out. They dug that out very, very quickly. The contractors were on top of it. They had all the equipment ready to go, so they moved all that dirt. They did not move it offsite. They moved it on site because we had some road improvements. That was a condition of approval that we do before we hauled the dirt off site. So they moved it. They had a very good plan. And you can see the picture of the site as of about a month ago, lots of activity going on, lots of big holes in the ground. That's so we can continue to flow by gravity. So next slide. So we've completed the excavation that all that material is actually hauled off at this point was actually done ahead of schedule. We've completed about 5000 yards of concrete pours. Some of those are concrete pours for the clearwell which is concrete that will be touching the water. It's a little bit different concrete because it has to meet drinking water standards. Some of it's for foundations, for the buildings that will be out there. We've had about 500,000 work hours completed by all the different crews on site, and we've installed about 7000ft of new mains. Some of that's our pipe, some of it is the local water district that's out there that we had to relocate, because we're taking up almost all the right of way with our new pipes. Next slide. So again, 7000ft of new pipe has gone in. So we've the tunnel again. Here's a picture of it. They're actually digging from both directions. They're digging from the bottom into the tunnel, while they're also digging down from where the shaft will come out of the ground. We've got actually updated number 218ft as of Friday afternoon. Dug into the tunnel. That's the first tunnel. Both tunnels will be about 1200 feet long. So it's pretty slow going. And then the tunnel, the shaft will drop 240ft, and there are 130ft down. So slow going while we're out there, we're the local water district is pleasanton water district. We're working directly with them. They're actually providing we're required to have fire protection water on site while they're doing construction. So they're actually the Green tanks. And one of the pictures is actually their facility. So they're actually providing all of our fire protection water. And then we're working with the city of sandy. They actually get half of their water from us. And ultimately they will have a pump station that pumps from our facility to the city of sandy. Next slide. So one of the conditions, conditions of approval we'll talk about in our land use section is we can only work 7 a.m. To 6 p.m. Even though the county's hours allow longer. That was one of the conditions is we only worked till 6 p.m. Instead of 10 p.m. Currently, we've got about 300 workers on site every day. Later on this summer, the schedule show we're going to have about 460. One of the conditions of of approval is we have a very limited amount of trips we can do down carpenter Lane every day. So we're actually having to bus folks in, have them park offsite, put them in busses and and bus them in. The contractors also working on vanpools and getting vanpools. So they're coordinating those off site to try to reduce the number of trips. So far, 20% of the jobs have been apprenticeship jobs. So talking with labor, even last week, one of the things about this project is it's long enough for people to be able to complete their apprenticeships, and we've got pretty much every trade you can do on a construction site there, which is kind of a unique. Project. We've got 10,000 labor labor folks out there available. So we've we've got a lot of labor looking to come out there. Next slide. So now we'll talk about our land use permitting. It's been a challenge. We can go to the next slide. We've been in this process for about three years. We submitted our first app or our application to Multnomah county in October of 2022. We had to wait till that point in time, till our design was complete, to have all the answers, to be able to get the permit to be deemed complete or the application to be deemed complete in January. Then we applied for Clackamas county. Our project is right on the county line. This the southern property line of our project is the county line, and we have an emergency access that goes into Clackamas county. So we had to do a land use application for them. In November of 23, we got approval from both counties. In April. It took us until April of 24 to get our final permits to be able to start construction. So they June. Then they started work in January of last year. In 2025, it had been appealed to luba. We got to stop work order, so we had to remand. We actually paused. It actually came from the county. In February. We stopped work. We got reapproved in June of 20, late June of 2025, we started back up, took the contractor a couple months to get wrapped back up. But in July of 2025 we got approval. They've been back out there working. It's pretty extensive record. We did get appealed to luba on the second decision. And with where that's at in the next steps, I will turn doctor. Doctor lu.

Thank you ken. Yes. So it's definitely being a complex permitting process for this project. And good news is on February 11th, we received our affirmation from luba on our second appeal. Our permit has been approved and upheld three times, confirming the legal ground for continue moving forward with our construction project. I want to share that there is a potential that opponents have the option to appeal this luba decision to the Oregon court of appeals. However, court of appeals standard of review typically upheld the luba analysis on many issues presented, and we are committed to finish the project strong. With that next slide, we'll share with you some of the schedule and the budget updates. I'll first turn it over to ken.

Thank you. Next slide. So as I said at the beginning, we were originally delayed by nine months getting started. The first time they moved very quickly, but then we got shut down for the seven months total. We have limited ability to speed up construction because of the amount of traffic we can have on the roads. There's also restrictions on how many roads we can be putting pipe in at the same time. So there's one intersection that we can only have open in October of each year to not impact farms. That's so that was we had an extensive study done, and that was the only month of the year. We did have some concerns about that last year, because we actually found some archeological finds. They were 40s and 50s bottles and we were shut down for those. We called in some favors with shippo, and actually they typically just wait the 30 days out and just say, because it's not concerning to them, but the 30 days, our time frame would have been gone and we wouldn't have been able to do the work we needed to do. So we actually had some favors with them, and they came out and said, yes, we agree this is not a significant find and gave us permission to go, and we got the work done that was scheduled to get done within the 30 days.

Do you mind explaining to everyone what shippo is?

I'm sorry. State historic preservation office and they control. We have federal funds and the feds actually defer to them. Sorry. Use acronyms a lot, but we do have limited abilities with the 7 a.m. To 6 p.m. Work to actually make up schedule throughout the project with that, and then getting the vehicles on site, like pouring concrete and those kinds of things, you limited by how many trucks can come down the roads. So we have at this time asked oha, Oregon health authority. They are who our compliance agreement is with for additional time. We've given them a formal request for two additional years. Next slide. So we do have a bilateral compliance agreement with Oregon health authority to complete the project. It was negotiated September 30th, 2027. Originally we had been asking for additional time beyond that, and they believed that ten years was enough time from the original agreement. So here we are. We've asked them now for more time, because we do not believe we can complete it with a contractor. We've been working with a contractor. There's just not enough time left in the days that they have. One of the conditions of approval is we couldn't ask for more time for cost, but we've shown them that it's not due to cost. It's due to the land use process in Oregon, which is unique. So next slide. So we've had 16 months in total delays. And we did ask for the two years to allow for contingencies. So we don't have to go back to them. We have the contractor is seeing this. We know that the contractor still has to prove every day of delay, and we are holding them to proving it. We're not automatically giving them 16 months. They have to prove to us why there's delays. We have a group looking at every day that they're asking for and seeing whether it was on the critical path, if there's other things that were holding up work other than the fact that we had to remand that they have all their submittals in, did they have all their paperwork in to do to do the work? So every day they're asking for is we're looking to see whether they get it, regardless of the additional time granted by oha. Next slide. So costs. I'm just going to start. We were at the $2.134 billion. We are now looking at another 450 million. It is in our budget request, and I know that there will likely be conversations about that. But we can. Our finance director is not here today. She's actually on vacation, so I know there will be some additional conversations about that at a later date. We can go to the next slide. What makes up that $450 million. So what to do? The contractor. We know that we actually shut down work. He has costs associated with that. We have a large number of cranes on site. We did pay for those cranes to stay there so that when we started back up, we didn't have to go find cranes again, and we could actually get back to work quicker. We we do know he's due some other money for work during the shutdown, so we know that's the first category of cost. We have added support costs. We have added staff to the project. We've also added. A claims contract or claims consultant. We went out during the remand and found a claims consultant to help support us in that, to review the claims. They're national experts and they're digging in and there are a lot of support. We also have risks, known unknowns. So what's the difference between a known unknown and an unknown unknown. So one of the things is the bussing costs. How much bussing are we going to have to do. That's a known unknown. We know we're going to have to do it. We don't know to what extent we're going to have to do it. So that's something we know we're going to have to pay, but we don't know what the costs are yet. The unknown unknowns are things like in the tunnel, we're finding some boulders more than we expected. We dug a bunch of geotech, but they were limited spaces we could limit or do our geotech work due to environmental zones, so we couldn't drill on the whole hillside. So we we only had a limited number of holes in the contractors finding a few more boulders. We're evaluating those, whether they're slowing them down or not. But those are the unknown unknowns and any other archeological finds that we find. Every place we did geotech work, we had an archeologist out there when we were doing that during the design phase. But you only drill so many holes. So those are kind of the four categories we put it in to come up with that $450 million. So next slide. So we did do value engineering during the design. We cut out significant amounts of pipe. We cut out. We actually raised the facility. We actually reduced the capacity of the facility. We originally designed it for 145. We dropped it 10 million gallons a day because the need wasn't there. So we've also now gone back through our ten year capital plan and looked at projects we can move out. And I know you were the previous presentation was about asset management. We are trying to balance that line between where rates are and the absolute need to get things done, and our need to get this project done. We do still have two wifia loans. We will be looking potentially at a third wifia loan for the additional money, and our two wifia loans that we currently have are very favorable rates. The first one is at 1.89%. So our finance director can get into more of how we're paying for all of this. Next slide.

I will just add on to the previous slides too. Yeah. So the we are taking a holistic approach really to reducing the actual project cost as well as overall the filtration projects, part of our overall cip project for the water bureau. So that's what we are prioritizing based on the risk based approach for the ten year cip project, we are actively seeking additional external funding opportunities. Besides a third wifia loan we are exploring, we are also looking to additional low interest loans and and even the grants from the energy trust of Oregon. So how we can look into additional funding source. And last piece, I really want to underscore the robust financial assistance and affordability program. We're continuing to look into the financial assistance program, how to get more easy access to the communities. What are the options we can provide the communities to when they are needing the financial support as over overall, looking to the the support for them? Next slide. So as we are sharing with you on the on the project schedule and the update, I really want to share with you that our commitment is now is a finishing strong. So there has been a lot of a complex process with the projects over the last eight years. For me, the top priority is how do we proactively managing this project moving forward to ensure that schedule and budget is to within this, the the time limit as well as the what is the required for the 16 month delay window? Like ken said, even we requested a two year extension to oha. But what we are really looking for is that finishing within that delayed actual window delay, and then the recent the 450 project estimate, that is the estimate. And it's not a set aside for contractors. I want to really clarify that. And instead I'm looking into stringent internal budget and control for every single specific project activities for the moving forward. What I would look for is really looking to the risk management framework because all about mitigating the future potential risk. And we have also looked into clear roles and responsibilities and discipline to deliver this project strong. So one of the pieces we are leveraging, industry national expert is called a project delivery advisory team. And ken's going to talk about the debt.

That we love our acronyms in engineering. Next slide. So one of the things we looked at is how do we make sure we're delivering this. We have the correct management in place, the correct controls. So we have a project delivery project delivery advisory team. We call them the expert panel a while ago. So if I slip up and say expert panel that's the same folks. So we originally had three consultants from folks from the consulting firms that are on the projects. So we have craig martel, gavin grissom, and we had roger, roger. Sorry, roger were the three expert. And then we have two people from the Portland utility board on as well, craig, gavin and roger are international experts on mega projects. They've all worked on at least 2 or 3 mega projects. So over $1 billion projects. So we have them. We brought them in. They spent a week here with the construction team, looking through all of the things that we are doing and how we're doing them. They've got they're pretty much spending this whole entire year going through the project in a very systematic manner, making sure that we're doing the right things, processing them the right way. In addition to that, we've added the claims analyst firm I talked about. So they're working directly with the claims analyst firm to make sure. And we hired them independently because we weren't sure when we started the claims analyst firm how we were going to have this expert panel, the PBOT set up. So we the contracting process is not smooth. So we started down that path. And so that's why they're under two different contracts since we've started. Our construction manager that works for the water bureau has given notice that he's retiring June 30th. So one of the things we've done is we've pulled roger off of the PBOT team, and he is now going he's transitioning into being the construction manager for the project. So he started today as his second end of his or sorry, beginning of his third week. So but he is transitioning to being on site full time. He's an excellent resource. We had some meetings with the contractor last week, and he is definitely getting up to speed very quickly. Next slide. So they're going through our people. Are they the right people are. Our construction management team is a mixture of city employees and consultants. So are they the right folks? All the processes that we're doing, are they being done correctly? Are they industry standards for a mega project? And then leveraging our leveraging our tools to make sure that we're getting that done? Our our claims analyst firm is really digging in on the claims that we've gotten from the contractor, from the remand and going through every piece of that. And they started I think it was about January 15th, and they have probably spent a few. They're probably approaching 1000 hours in the last four weeks, digging into all the documentation and looking at it, making sure that we are not they've already had a lot of work on looking at time and whether we're the delays during the remand really were delays where they would be compensated for that time or not. And they have had some pretty good suggestions so far. So they will be key in making sure that we don't, that we hold the contractor accountable. So so next slide I think that's back to you.

Yeah. Thank you ken. So we are really adding that capacity and expertise for this mega project. We're generational project. And I want to say that I look at this not just about what our bureau's project. This is the city's project. This is our the whole community and partners and engagement and with the neighbors together. So I'm going to talk about the project, communication, engagement with our communities and neighbors next. So we have been taking a proactive role in engaging the communities, including since 2017. We have been committed to keep communities informed and involved. We posted information on our social media channels and also share videos about the project update. Project information is shared also through our water quality report, bill inserts and also e-news. We have also provided information by tabling at community events and presentations. We are utilizing the media to also share information updates. Just like what you have already heard about the coverage about the cost and schedule from last week's media release. We also recognize the construction. Next slide. We also recognize that this construction is impact for our neighbors in that construction near that construction site, we have put significant effort to support the neighbors, and having that engagement and communication, including hosting a quarterly virtual evening meeting and a coffee with the contractor. During the month when we don't have the virtual meetings. This meeting has also been very helpful in allowing neighbors to share concerns and asking questions directly to the contractors. We have also updated our construction hotline, ODOT triple check, and sent text messages about the traffic impacts. We use door hangers and mailings to keep the community informed, and have also met with individual property owners at their homes with any concerns. Next one. So this is a really getting about the project overview, schedule, cost and information update. And I want to ensure that my commitment and we are focused on finishing this project safely and also responsible responsibly, which means really to look into proactively managing the filtration project. And now it's really the schedule and the budget to ensure fiscal stewardship and accountability. And taking that risk management approach with a clear roles and responsibilities and disciplines to finish project strong, but also ensure projects integrity and safety and quality at the same time. This includes the continued coordination with the Oregon health authority on this compliance schedule. We are hoping to getting some updates in the next few weeks about the request for extension to mitigate the risk. You have also heard several actions we are taking, including bringing additional experts, national expert, claim analyst and also the field staff with additional management expertise. I'm also looking to this and refresh the governance, making sure the director and chief engineer is having direct connection with the project team and managing project and ensure city leadership and council members having the updates as a regular basis. With that, I will turn it over to dc donna paul to close us out.

Thank you. Ting. This is one of our most significant infrastructure investments in our region's history, and it directly impacts the people that we serve. And as you've heard in the presentation today, we've had delays in permitting complexities in land use review as well as inflation, and these are all have affected us schedule and compounded a cost pressure. But I really want to highlight that not every factor affecting the project was within the city's control, but how we respond to it is in our control. Our role right now is disciplined execution. This still remains an essential infrastructure investment in the region's future, and we remain focused on finishing this project safely, managing costs responsibly and strengthening oversight, as well as ensuring transparency for our council and our community. As you've heard today, we want to further reduce risk. We're working closely with the legal team on land use and contractual matters. We've engaged a project development advisory and expert panel to provide independent guidance on cost and schedule management. At the same time, we recognize the impact on ratepayers. Affordability remains a priority for the city and that commitment will not change. No one should have to choose between paying the utility bill and meeting the basic needs, and the Portland water bureau will continue offering financial assistance programs, flexible payment plans and bill discount options for customers who need support so customers who are in need are encouraged to to reach out to their customer service team at 503 8237770, or go to Portland water to learn more about available assistance and determine eligibility. Our goal is to deliver a reliable water system while keeping service accessible to all households in our community. When this facility comes online, it will protect public health and provide safe, reliable drinking water for generations to come. And that commitment to that is never wavered from us. We are now focused on accountability, transparency, transparency and finishing this project strong. Thank you.

Thank you so much. This has been an excellent presentation, excellent overview. I've certainly learned a lot. I really appreciate what you said. Dca data paul, a disciplined execution I think is what the word that you used. I really appreciate that. I can see that. I'm glad that you opened up with the fact that we have some of the best, best tasting, healthiest drinking water in the entire country. And it is regrettable. Whenever I travel, I have to drink somebody else's water. And it's it's really awful. And I want to appreciate the foresight of all the people that came before us, that gave us this gravity system that has been really inexpensive up until now, with all kinds of federal and other kinds of requirements. Before I turn it over to my colleagues, who we have lots of hands up, lots of questions, and you don't have to answer this right now. But what I'm interested in knowing, I had no idea the breadth of all of these conditions of approval, the transportation, the limited hours, all of these things. And I'm just wondering if there's any way that you can quantify the cost of these things. The cost of you don't really know yet exactly what the busing might entail, but, you know, the cranes having to come and go, the the claims, the lawsuits, the things that you didn't expect. Those are not actually conditions of approval. But what where are some of those additional costs? Clearly the timing cost us. But there's also these conditions of approval. But if we could quantify all those pieces that led to this could be helpful for me and maybe other members of the public that are trying to understand the cost escalation. And as you said, dca, these are issues that were not within our control, but these are things that we have to grapple with. So and at some point, I'd be interested in knowing if you can quantify what the costs are of not just the conditions of approval, the the land use appeal, what that cost us. If there's some way to quantify it, I'd appreciate seeing that. So with that, I'm going to turn it over to my colleagues and councilor Morillo is the first person.

Angelita Morillo: Thank you chair. Thank you all so much for this presentation. And I think both me and chair Clark are still stuck on the baby elephant slide. Why was there a bull run watershed baby elephant moment? We need details on that immediately. No, but thank you. Seriously, I think this is a really difficult conversation to have. Obviously, we're in a very difficult financial time at the city of Portland, and this project is really important and also extremely costly, and it keeps changing every time. It seems like we hear about it. I know that a few months ago, when we first got a presentation, we were told that the city forecast that ratepayer increases are going to be about 5 to 6% through 2030, if I remember correctly. And I was wondering if with the additional cost of this project, if we know how much that increase is estimated to be now.

Thank you, vice chair. Morillo. That's a that's a question on everybody's mind. And our water bureau has forecasted to see what that would look like if there's a rate increase that will come to council for approval. And director lou, do you want to answer the.

Yeah. We also look into the different scenarios. So there's a what are the immediate rate increase. If we're looking to this increase immediately having for the next year or a few years. But also what is the scenario look like for let's say we're looking for a longer term bonds. So that will definitely relieve the immediate rate impact. So our finance director is looking to that scenarios and will provide that options for the councils to review.

Okay. I really appreciate the thoughtfulness in that because I think the the rate paying for different utilities is just such a burden for our constituents. And I know you guys hear that too. So anything we can do to mitigate that, I would be fully supportive of looking into that as much as possible. And could you just clarify for all of us and maybe for people who are watching at home as well, this is a federally mandated project, right? So because I think a lot of people see this and sometimes they're like, well, why don't you guys just get out of it somehow? Can you just explain that process a little bit more for folks who might be less familiar with it?

Yeah. So this is under the safe drinking safe drinking water act. So it's a requirement for the cryptosporidium. And then there's a long term to requirement as part of the Oregon regulations. Obviously there are different ways we can use the technology to. And that's what we are really talking about. The filtration doing much more than just meeting regulatory compliance. There's a capacity and capability to remove additional emergent contaminants in the future because really modular. And also there is a seismic and resilience as well. So that's why it's multi beneficial for the generation generational project.

And to add a final point to it, we hear often from the public and we have questions about why are you doing filtration. It is not an option. We have to be obligated to finish filtration project by a particular timeline by as per the federal requirements. So just wanted to make sure that's clear.

Yeah. Thank you I appreciate that. And I think it's good to get that on the record. And I think especially with all the deregulation we're seeing at the federal level of different carcinogenic things, I'm certainly interested in making sure that our water is as clean as possible. And I think councilor Chair Clark is absolutely correct. Our water is the most delicious water across the country, and we're lucky for that. If the project continues to change in cost and change, I mean dramatically increase. Is there a plan to scale back certain things that are not federally required if we literally don't have the money for it?

I can start on that. So the we are doing a prioritization exercise on what we can scale back on. And the water bureau is looking into that. And I can let director liu talk about what some of those options are.

Yeah, we obviously this project is one of the overall the the large cip projects we have. So so we are looking to how to prioritize that. I would also look into part of this increase when I look at is the inflation and material costs and increase. And thanks to this being a lot of for me to think about for the last two months as I'm in the new role. So what I have looking to is I want to look into how we can lock in to some of this long lead items and to prevent further escalation for the cost. So that's what we are going to proactively working with the contractors to ensure that we are mitigating this risk and locking to those somewhat pricing. So to avoid the future price increase.

I guess I would add one of the things the expert panel is doing is first, they want to make sure we're doing all the procedures correctly and making sure we're not having any issues there and documenting things. The second thing we're going to do is look at the risk risk registry and make sure that we have proper mitigations for any risks that are left outstanding, to make sure that we don't have large cost increases. So that's that's the second thing they want to look at, and they recognize as a priority, is making sure we get those things locked down.

So thank you. I think that's definitely comforting for all of us up here to hear that. And I know that you guys must be thinking of that and must be staying up nights thinking about it as well. So appreciate those clarifications. Thank you.

Thank you counselor. Counselor Green.

Thank you so much. Thank you for the briefing today. I think a lot of my questions have already been anticipated by councilor Morillo. I think we'll we'll want to be pretty clear eyed and honest on the rate impacts when we know more, but I do want to tease something out that director lu, you had sort of said for folks watching along that may not have the same level of expertise and command of the trade off between bonding versus paying for a project in current terms, which is sort of rate based or rate basing it, that is a rate smoothing. Technique that rate funded utilities can do, which is to issue debt over the long period of time to dampen the current immediate impact on rates. The trade off, of course, is that you put the bill onto a future generation. But I think I want to note here or I guess I would ask you, you know, how long do we expect this asset to provide benefits to the community, like how many generations?

50 to 100 years.

Yeah.

So I just 50 to 100 year asset that yields benefits. And so I think that if we're thinking about matching the benefits and costs to those who are part of this community, it's entirely appropriate to issue debt to make sure we do that well, while smoothing rate impacts the other thing that we've talked about in the past, in other contexts that I hope we can find a way to explain when we do, the rate modeling is the interplay between growth in our urban core, adding more residential commercial units, and whether or not that that helps shoulder the burden of these fixed costs on the system, because, you know, we're incurring a fixed cost that, you know, when we base it, rate base it, or issue debt against it will be fixed in some sense over time. And that will become much easier on a per ratepayer basis if we can grow the number of ratepayers. And so I think, you know, I don't know if we need to update our policy on submetering and make sure that when we when we create a new unit of housing, particularly in multifamily context, that each of those is getting their own water meter, so we can apply a bill to that water meter, because when you do that and you relieve, you flatten your long run rate rate pressure, right?

Yes. And that's where we're doing the ami project to getting more. But I also want to highlight that the growth is really the sustainable way for the future, because we built this incredible infrastructure for the next 50 to 100 years. And some of you probably know we are going to lose some of the wholesaler customers starting next year. So this is a part of my priority is looking to with the team. And what are the additional opportunities, whether whether it's for business, whether for other wholesalers. How can we provide that service. And that would require the need, the council support as we are moving to that growth perspective.

Thanks for bringing that back. We've had conversations about that, you and I in the regional water providers consortium context. And so thanks for bringing that into this venue. We can provide benefits to other municipalities that can then create revenue sources for us as well. You also noted something about sort of a risk hedge approach to materials contracting. I would love to know more about that at a future update. Colleagues, one of the things we've talked about at the consortium board is trying to work in partnership, because everyone's got the same inflation problem. Basically anyone who's going to do a capital program is going to face the same issue. So why don't we approach that in a pooled sense and help manage risk collectively? When we go out and contract for assets that we might need to to acquire now at current prices to then, you know, there's probably a storage problem that needs to be solved, but that's better if we can solve it concurrently and jointly. And so I just I really appreciate in the presentation that you guys laid out all the risk mitigation approaches that you were keeping top of mind as we go into this. I mean, obviously, a 20% increase on capital costs over one over two years is not not a pleasant thing to report. I think what gives me a little bit of comfort is knowing that there are a whole bunch of hedging and policy driven kind of risk mitigation techniques that that you're not waiting to be asked the question about. You're just sort of saying, this is what we're doing. And we last year we adopted, I think it was a code change or yeah, it was a code change that that enabled some value engineering contracting. That's huge. And so, you know, that's that's what we're going to need to be able to tell our constituents when we have to answer for this project. I think that's probably all I have at this point. But keep up the good work. And oh, the last thing I'll note, and you had it on a slide here. But I think for me, the part that's really, really important to think through, I think it was why filtration slide talks about why we're doing it. It we have these turbidity events that happen when you have a mudslide or sort of a heavy rain rain event. It happens when you've got a, a wildfire near, near the near the reservoir. And that without filtration you can't drink that water. You have to pump it from the ground. And so the groundwater supply is there if we need it. But but I think we're going to enter a period of increasing extreme weather events. So the risk of needing to trigger that is heightened. And so I think if we're thinking about providing resiliency benefits to future generations, these are tough conversations to have right now. But, you know, two generations down the road, we want we don't want to explain to our grandkids why they have to truck in water because we we didn't feel like taking on this cost today, which I think is a really important intergenerational conversation to have.

As you as you noted, I mean, we had a heavy rainfall event in December.

Yeah.

That triggered a landslide and we had to switch to groundwater. And it's we have a tremendous asset in groundwater. But if the filtration plant was online, we would not have had to switch. And there was a cost to switching to groundwater. There's cost to pump the water versus having a flow by gravity.

Also, can you, can you can you give us a sense of that cost?

We actually talked about trying to pull that together and it's hard with our accounting. But yeah probably just making that switch is is about a quarter million dollars just to turn it on.

Per event.

Per event okay.

Thank you.

Thank you. Councilor Green. I think your observation about turbidity is something I was saying in the beginning is with the propensity of forest fires, this new plant, it's really prescient, you know, that we're doing this now because it'll it'll take care of the particulate as well as the whatever sediment comes through when we have turbidity issues. So I'm really glad you brought that up. Also, my hoa is if anybody is listening in my hoa, they're really happy that you brought up the the billing issue. That's that's been a real problem for us. And we're remiss in not thanking you for your service on the consortium. I don't know if everybody is aware of that, but councilor Green has been going to meetings to talk about these kinds of issues on a region wide basis. So I really appreciate the work that you do there. Councilor Smith. Welcome.

Thank you, madam chair. I apologize for being late. I was in spokane and had to fly back this morning. I saw my granddaughter in her track meet her western conference track meet in spokane. So please forgive me. Yes she did. She did win a couple events. Thank you. I will no longer be the chair of the labor and workforce committee, and we have talked at length about subcontractors and. Some of the cobid participation. And I know that you have 90 subcontractors on this project. What is the what is the current COVID participation by dollars and by scope of work? And what are you doing right now to expand opportunity for minority contractors as we move into this peak construction time?

Thank you, councilor Smith. That's a very important question. If we have answers to the sure.

I don't have the exact dollars in front of me so I can get them for you, but.

That would be great if you could email them to me and we're going to email you. I have about 1213 questions, and I'm going to have my chief of staff, because I know we're expected to flush a lot of this out in committee and go deeper in committee than, you know, when we do this. And but the good news is for you all, I'm going to be the vice chair of the public works committee. So I will still be able to talk to you about these, about these issues that I'm really concerned about. And I'll send you I'll send you the, the questions. But there are a few that I wanted to get on record. You report 20% of the jobs are apprenticeships with 300 plus workers on site today and a peak of 460 in mid 2026. That's what you're projecting and I want you to find out how are those apprenticeship hours being distributed across the trades, and how are we ensuring equitable access, especially for portlanders and underrepresented workers? Because I heard you say earlier that, no, this is not a set aside for subcontractors with some sorts of of of urgency and. Of like, disdain of sorts. So I was like, wow, okay.

I want to clarify that. So the contractor is watching. So we want to be clear that the $450 million is not the contractors money, okay? Not that it's not a subcontractors, the contractors watching. We know he's watching every minute.

So the contractor is.

The we have two contractors. We have what they call the jv. So it's mw kiewit and then the other and they're building the facility. And then the other is mw fowler is a conveyance partners. So we want to make sure that we're going to pay them fairly, but they're not going to get $450 million. They're going to get what they're owed.

Well how did you come up with that number if it's not coming from the contractor?

Well, part of I mean, so part of that money is to pay for our staff for the additional two years and then pay for the expert panel that we hired and the claims analyst. So but all of the subs are being paid fairly, and we're negotiating with them. And the primes for all the work we're negotiating with the primes, I should say we're not negotiating directly with the subs.

Thank you for explaining that. And I'm glad you talked about that. One of the other things that I noticed in your presentation, you said our former employee, who has retired from the water bureau and now works for the contractor, but you didn't say which contractor. So I assume that you were talking about.

I think that we have a construction manager who is retiring from the city. He is not going to work for either any of the contractors.

Okay.

I thought we are hiring one of the consultants that we had on the expert panel or the PBOT. We are hiring them to lead the construction now, the construction management.

So is he working on this project because you thought that he would be protecting our interests? How how is that?

We hired was a yes to to look at whether we're how we're managing the project, how we're. Oh so.

He started his own consulting firm since he's retired from the city water bureau.

The city employee is leaving the city and not going to be involved in the project anymore. Is roger came in as one of the consultants on the project delivery.

I misunderstood that, yes. Okay. Second question. So have we secured any public customers? The last time we talked about this, I asked. We lost a lot of public customers because of the rates that we're going to be charging, and I wanted to find out if we have looked into increasing our public customers or if we've even. I offered the idea of reaching out to the tribes because they were having difficulties in keeping water. Just curious if we've lost any more or if we've gained any more public customers.

Go ahead.

We are still looking into options for gaining additional public customers or looking at other, other ways of helping bring in revenue. We don't have anything substantial to report at this time, counselor Smith, but we will definitely keep you posted. Okay, let me learn more.

So the other piece is that's really important from a health standpoint. I understand that the new facility won't filter forever. Chemicals called pfas. It is substances which build up in the bloodstream and it never leaves. That's what I'm told. And some of it often leads to some cancer, decreased fertility, increased blood pressure and a weakened immune system. And I know that I have a compromised immune system. And I'm just wondering, why is that? Why will the filtration, this new multibillion dollar system, why they won't deal with the forever chemicals?

Very clear. We don't have them in the watershed. We test for them. We don't have them in either one of our supplies right now, whether it's bull run or the groundwater system. So we do test for them and we do not have them.

But we have the crypto.

We have crypto, yes, we do, but we do not have pfas in the system. So we don't have to.

Did we ever have them in our system?

No.

Okay.

That's one of the nice things about having a very pristine watershed. We haven't had it had no public access, has been there since the 1890s.

So I love it. And the last thing your available contingency is shown at 0.101 billion in 2026. What are the defined thresholds that would trigger coming back to council or to the utility board with a revised budget, scope change or financing plan? And the reason why I'm asking you this is because of the increase 450 million. I don't know how much we have in reserve and contingency for change orders and what that looks like. And I'm not sure if you have to come back to us for the 450 million that we're going to overrun. That's not going to the contractors, but they're going to our consultants. So that's disturbing to us. Any idea?

So I can say for the project contingency, we've reset it based on an 8% contingency based on the construction remaining, which is an industry standard, is between 5 and 10%. So we put it at 8%. So that's the contingency on the construction. Based on what's left. We also have some contingencies in there for the for our in-house side. But that is our goal is not to come back to whether it's this or the pub.

So you don't have to come back for this $450 million. You don't have to come back.

We do have to for this. But our goal is not to come back after this.

After this. Yes. Thank you. So here's here's the other thing. And I'm going to wrap up chair. I'm going to say this in a way that I'm, I'm trying to to not put all of my frustration on the table. Well I might as well I'm frustrated right now because we have $106 million that we found in the Portland housing bureau, and I'm excited about this asset collection that we're making to see what our assets, what needs to go where and how. But I don't think we are we're going to that report that you're going to give to us by September. I don't know that you're going to be able to give that to us in a, a non disingenuous way, because until I find out how every single dime in the water bureau is put aside and what is what we're expecting to use it for, I don't know how we can do this asset preservation properly, because we found $106 million in the Portland housing bureau, and I think we're expected to find millions more. When I sit down with our cfo this afternoon. And that bureau only has a annual operating budget of 264 million. So almost half of that is we have in reserves somewhere in a surplus account. So I would like to see dca if we could know all the sub accounts and the fund accounts in the water bureau, what every dime that we have in there that is on record. What, what when is it going to be used and when is the expectation to use those dollars? That will help me get a better idea. So if you come back here again and ask for an additional 450 million, that I'll know what's in your reserve pot, and I can tell you to go to the reserve pot, and then we won't have to go to a loan or a second loan from the federal government, because this is really disturbing to me, and it's disturbing because it's not going to the contractor. It is going to our side of the ledger. And so that has nothing to do with tariffs. And because of the supreme court, those will be reduced soon. So we have to change our numbers to reflect that. If you could also do that, if that would be too much more trouble to add those things, because you all have a hefty restricted budget of funds that are in reserve. And I just get one number and it doesn't desegregate the money of where it's supposed to go to and when it's supposed to go someplace. So I just need a better understanding. And as we go further into this new form of government, I know when you had commissioners in charge, they knew the desegregation and they knew it well, but I know nothing of it, and it has not been transferred to us on they didn't give us a book and say, these dollars are in this fund, and it's going to be used for this. I would have liked to have had that. But I need you all to tell me what those funds in your reserve funds are going to be used for, and what the date of when they're expected to be used, if you could do that.

Yes, chairman. First of all, thank you for your leadership and holding us accountable. I appreciate that, and I also want to share the city administrator, lee is is wanting to make sure that every year, not just the housing bureau, is looking into their funds and providing accurate numbers to council and the community for transparency. And I have also asked our public works bureaus to look into it, and they're already on the process, so we will be happy to provide that information to you as a part of this process. And one point of clarification, if I may, the $450 million a part of it is, you know, that is also for construction, for which will go towards contractors as well as the the work that our staff will do that from the water, as well as the additional oversight that is.

He said. It wasn't he said it wasn't for the contractors. Now you're saying it's for the construction side.

Altogether.

Altogether, altogether.

It's the overall cost that we would need. It's a cost to complete the project, to see it through completion. Okay.

Okay.

Excellent. Thank you so much. And we will get you all these other questions. And I'll just send it to you so that we can have it in writing. You probably don't have all the answers to all these questions, but thank you so much.

Thank you. And we were able to pull up the some of the answers to your questions. And if chair clerk, if you're okay with it, we have a couple of slides to show for the remand cost as well as with respect to the economic development aspect of the filtration plant.

This is just a preliminary look. You know, councilor Smith, thanks for your questions. And would you send all of your questions? Just cc us whatever you send to the bureau. And also because I had asked for some kind of breakdown of what the conditions of approval were going to cost. This kind of dovetails right into what you're asking for is where's that 450 going as well? I think we can get more information. Okay. Yes. Do you see do you want to walk us through this or maybe director lu or one of you?

Okay.

This is this slide shows the breakdown of the remand cost. The cost because of the delay from the remand, we were spending approximately between 12 to $28 million each month. That's approximately one half to $1 million per day. These costs were to cover essential functions like site security, permit compliance, auditing materials and completing submittals, and so on. And if chief engineer ken ackerman or director lou would like to add any more to that, I would appreciate that.

Okay, so I'll start at the bottom. The potential right of way work. So we had a bunch of stuff to do off the site to improve the roadways. If any of you have driven out there, the roadways are very rural roadways, so we had to widen them pavements in fairly poor condition. We had conditions of approval to do that within the project area. So that's a few miles from the site. So we've repaved a lot of roads. The county is actually looking to us for some additional roads beyond that. But then we also had complete submittals. We order materials and equipment out there. So that was about another 5 to $10 million in work. So we probably spent like that's on there, half a million, $1 million a day. That ended up over at least the five months. Somewhere between 25 and $50 million just for the remand. And then we can look into the some of the conditions of approval, because it's kind of hard to calculate the additional time when we have time restrictions on how many people can go. Those are harder to calculate.

So okay.

Thank you ken. That's really helpful. And I know you'll tease out even more and get that back to us. We'll definitely want to invite you back at some point in the future for a progress report and maybe some more refined information around this, but thank you very much. Councilor Koyama Lane has her hand up.

Tiffany Koyama Lane: Thank you. Chair Clark, thank you for being with us today to talk to us about the bull run treatment projects. Thank you for the presentation, for your patience, for answering all of our questions, not just today, but really over the last year, I've found all of you to be very accessible. I've gotten multiple briefings. When I've gotten questions from community, I've been able to bring them to you all. Thank you for that. And my question is, can our committee maybe the the new version of it, the public works committee, come on a trip to come see this in person. And can it be extended maybe to all the councilors.

We would be honored to have you all on a tour. And director lou and I were talking about how to make it accessible. Both the bull run watershed and the filtration for all councilors. And so you can expect an email from director lou soon.

Sounds great. Sign me up.

Thank you. Thank you for your interest.

Thank you, counselor, thank you very much. And we'll wait for the better weather when it's sunny and nice. And we go up to the watershed and it'll be a beautiful day. Birds chirping. I'm sure that tate white was interested in hearing your comment about. I think you said eight. You replacing eight miles of, in some cases, hundred year old pipe. Woo hoo! That's progress on asset management, people. That's exactly what we want to see. Just a couple real quick questions. I have worked with TriMet on very complex light rail projects. So worked with kiewit, worked with other large contractors. So I think I have a different take on this. I think you're doing a great job, and I'm glad you put that oversight committee together. I think that was really smart because this is incredibly complex, lots of moving parts. I appreciate that it's different than building light rail in an urban setting. You've got other kinds of things to deal with you. I think you said this was the biggest public works project. How does the big pipe stack up to this? Do you maybe you don't know that I don't know, but you know, with the big sewer pipe that we did to stop csos.

And that's about 20, 25 years ago. So back then.

It seems like yesterday.

Yes, we're definitely benefiting the project every single day. Yeah. So that's definitely that's over $1 billion project. Obviously if you discount and everything it's similar scale. And then even with the big pipe project and with all the cip for bts, we are looking to the long term kind of bond options for paying for that. We're getting off to the final kind of payment for the big pipe project now.

But that this project is still larger than the big pipe.

Yes.

Okay.

Even taking into account inflation, we're still just a little bit bigger.

Okay. Okay. Good. Good to know. I don't think I have any other questions. Councilor Smith, did you have another question or is that legacy?

No, I have another statement. I looked it up. The big pipe was 1.4 billion.

Thank you. And it can said adjusted for inflation, it's still it's still less. Yes. Thank you for that. And we'll look forward to getting all your questions as well. Councilor Smith, this has been an excellent overview. We so appreciate your putting this together for us and all the work that you're doing and the work you're going to be doing for the next ten years or so, I think. I don't know when the projected completion is. Once we get the oha approval to extend.

It would be about four years from now. We'd start delivering water, and then we have to take the old pipes offline and fill them and stuff. So we've probably got about six years in front of us.

Okay, great. And back to councilor Smith's question. I would assume that there is there is in bottled water. What do you what do you think?

It's plastic.

It's plastic. It's probably in bottled water. Not in our water.

Not in our water. I know.

Not in our water. Yeah. Thank you. Thank you so much. Really appreciate your time. And we look forward to the tour. And we look forward to having you back in this committee to get an update.

Thank you.

Thank you, thank you. Chair. Chair. Clark.

Last thing I just want to say thanks. And also special thanks to the people who, whoever runs the social media accounts for the Portland water bureau. Actually, any of the public works bureaus, just like immaculate.

That's true.

Can I make a quick shout out? Our social media person, cassidy, she. Unfortunately, her last day with us is March 19th. She's moving to her home state of hawaii. She will be missed very much over here, and we wish her the very best of luck and thank her for her service. She's provided many light moments and also in educating the community and providing information to everyone.

So she's a true poster.

And I really appreciate that.

Say aloha to cassidy. Okay. Thank you.

For your support, colleagues.

Our next meeting and our last meeting of this particular committee, transportation infrastructure is Monday, March the 9th, and we'll have an update on all of our community meetings on the alternative transportation. We had our first one last week. The mayor showed up. It was in my district. There was at least 75 people there. It was terrific. Lots and lots of comments. So I know that the PBOT staff are going to be taking all those comments, and eventually we'll bring those back to us starting on the ninth. I think tonight is the district four or district one community meeting. I know the mayor will be there. I hope to be there as well. And I hope that some councilors from district one will will make an appearance.

25th is d3.

The 20th, the 25th. That's is that this week? That's this week. Okay. Well we'll be there too. We'll also get an update from our government relations staff on the cindy the short session and what happened with transportation, the transportation funding outcome. That'll be interesting. And then PBOT is going to bring us a street vacation for our consideration. So that's what we have to look forward to in a couple of weeks. So I'll adjourn the meeting of the committee. Thank you everybody.

Thank you.