New city water treatment plant opens with ceremony

Following more than eight years of planning and almost two years of construction, the City of Lebanon’s new water treatment plant located at 2500 River Road is expected to begin serving residents by the end of March.

City officials took the wraps off the new $28 million water treatment plant with a ribbon cutting ceremony on Thursday, March 14.

Engineering Services Director Rob Whitlatch briefed Mayor Paul Aziz and city councilors on the status of the project at the city council’s March 13 meeting.

The new plant has the capacity to produce 4.5 million gallons of water per day, with the ability to expand production to as much as eight mg/d. It’s enough production to serve Lebanon for as many as 100 years, unless the city has any unforeseen exponential growth, Whitlatch said.

The new plant replaces the water treatment facility located at A and Second streets, which was built in 1946. Last year it produced 823 million gallons of water, with its peak day at 3.53 million gallons, Whitlatch said. It serves 5,774 Lebanon water customers, and pretty much maxes out at about 4 million gallons per day.

Whitlatch said plant operators have been testing the new system. The water generated during testing is discharged into Cheadle Lake. Sometime in the next few weeks the city plans to start sending treated water to households and businesses.

“We’re really close to sending water to the system. We’re working out a few minor bugs,” he said.

Once the facility is operational the city plans to close the aging Second Street water treatment plant. Whitlatch assured council members that generating clean water from the old plant remains an alternative should any unexpected problems occur with the new facility.

“If we had an emergency, it would take us 24 hours to start that old plant up and get going again,” he said.

Whitlatch said the city plans to decommission the old plant in the next fiscal year. The city has not yet decided what to do with the facility once it is no longer operational.

Construction of the new plant began in early 2017. Lebanon selected Stayton-based Slayden Constructors Inc, as the contract manager/general contractor for the project. In addition to the treatment plant, crews also constructed a new water intake on the South Santiam River, built a new raw water pump station and laid additional water and storm water lines.

The 1946 plant uses filter beds in large concrete holding tanks, but the new plant will use a microfiltration process through pipes, which uses a smaller footprint and less chemical cost, Whitlatch said.

“We’re using membranes rather than your conventional sand filter clarifier like we’re using right now,” he said.

The overall cost associated with the plant totals approximately $36.8 million, and is paid for by two loans through the state and money saved by the City through water system development charges and water rate increases.

The new plant solves two problems the City of Lebanon has had since the late 1980s: the need to accommodate population growth, and the need to break away from financial obligations to the City of Albany.

History of the canal

The Elkins Flour Mill in Lebanon was built on a millrace in 1871 tapping the South Santiam River north of Lebanon and flowing back to the river downstream. The millrace was built by the Elkins family to provide power.

That same year, the Albany & Santiam Water Ditch or Canal Co. formed to contruct a 12-mile commercial waterway from the mill to Albany, which was completed in 1873 and was used for hydropower in Lebanon and Albany.

In 1892, a six-mile canal was completed for the Lebanon and Santiam Canal Company, tapping the South Santiam River southeast of Lebanon and meandering north through town to connect with the headwaters of the canal at Elkins millrace.

Lebanon followed that project with the production of an hydroelectric plant and water pumping station at Main and A streets. In 1920 a larger powerhouse and pumping station was built to meet the demand for more electricity, and in 1946 a brick water processing plant was built to meet population growth, which at that time was about 4,000 people. This is the same water treatment plant the City of Lebanon has been using up to today.

Mountain States Power Company purchased interest in the Albany Canal in 1918, and later purchased interest in the Lebanon Canal in 1923. With both canals under single ownership, the two canals were considered as a single canal. In 1954, Pacific Power and Light Company assumed control of Mountain States Power Company, gaining ownership of “the canal and associated power and water processing structures.”

In 1984, the City of Albany gained ownership of “the canal and its associated hydroelectric facilities,” but the City of Lebanon gained control of its own power and water facilities. An agreement was contracted between the two cities regarding operation of the Albany-Santiam Canal, which was the source of municipal water for both cities.

A revised agreement in 1986 states that Albany would be responsible for the delivery of raw water supply to the City of Lebanon, and Lebanon would share in the net cost of operation, maintenance and improvement of the canal by 33 percent.

During the 1990s, Albany focused on regaining lost control of its hydroelectric plant, which relied on the canal. Meanwhile, Albany upgraded the diversion dam at the southeast intake of the South Santiam River in Lebanon, which later became part of a financial dispute between the two cities.

Dispute over Canal

There was some disagreement about how much Lebanon owed Albany, Whitlatch summarized. He said he can understand both cities’ points of view.

By 2014, the City of Lebanon was trying to address the need for a new water intake off the canal. They also were behind in their payments to the City of Albany. In addition to the fees Lebanon was responsible for, Albany claimed Lebanon also owed them $3.8 million for the dam improvements.

After some back and forth, the two cities were able to iron out their disagreements, but by then Lebanon decided it was time to separate itself from Albany and build its own intake site off the river.

Whitlatch wouldn’t call the results of their negotiation “a good deal,” but Albany probably wouldn’t think of it as a good deal either, he noted.

“We came out of it with a negotiation where we’re both happy and we work together today,” he said.

The two cities still need to address problems with storm drainage into the canal, he said. Both cities plan on developing a drainage master plan refinement, and look for ways to take storm water out of the canal and create a different drainage system.

In 2015, the Lebanon City Council approved the plan to build a new intake site at 37920 River Road and the new water treatment plant near Cheadle Lake that would make them independent of Albany’s control.

“We’re no longer relying on Albany to maintain and provide the water from the canal. This is our last year of payment to them for our water on the canal,” Whitlatch said.

During the ribbon cutting ceremony, Aziz took a moment to make note of what this means for Lebanon.

“The commencement of operations of this plant and the Santiam River intake facility is the first time in at least 72 years that the city will be drawing water directly from the Santiam River instead of the Albany canal,” Aziz said. “This means the City is no longer dependent on another community for our water supply.”

Building a New Plant

“Clearly the Second Street plant has served the community well,” Aziz said. “But the needs of today’s Lebanon, with a population of nearly 17,000, are vastly different than when the (first) plant was built.”

The council rejected initial bids on the project, which ranged from $30 to $34 million. The original Slayden bid totaled about $29 million. Lebanon and Slayden cut the original project cost to $26,353 by cutting out extra features.

“What it really boiled down to is anything that didn’t make water got cut,” Whitlatch said at the council meeting.

Lebanon financed construction of the water treatment plant through a combination of cash on hand and 25 and 30-year government loans. Whitlatch estimated annual debt service on the project at $1.2 million.

According to figures provided by the city, Lebanon’s water utility services are on track to generate about $5 million in revenue this year.

Whitlatch said the city needs an additional $7 to $9 million in water line replacements and upgrades in the next decade.

Water Rates Rise

In 2008, water rates in Lebanon increased 10 percent for the 2008/09 fiscal year. It was the first water rate increase since 2001.

Rates continued to jump the following four years: a series of 3 percent and 3 percent again for FY 09/10, 15 percent for FY 10/11, 15 percent for FY 11/12, and 15 percent for FY 12/13, followed by a moratorium for FY 13/14.

Rate increases became softer after that: 4 percent for FY 14/15, 2.8 percent for FY 15/16, 3.1 percent for FY 16/17, 4 percent for FY 17/18, and 2.7 percent for FY 18/19.

The more recent rate increases have allowed the City to set aside capital for the construction of the new plant, Whitlatch said. Although he doesn’t anticipate any large rate increases in the future, the City looks at inflation and costs and makes recommendations to the council annually.

Of 20 cities studied recently, Lebanon is number four.

“Yes, our rates are high. There’s no doubt,” Whitlatch said.

He noted that, unlike Lebanon, many other communities have an existing water plant that fits their needs, but a time will come when they face the same problem Lebanon did.

“Other communities will catch up,” he said. “It might be 20 years before community ‘x’ has to do theirs, but when they do, rest assured, their rates are going to be climbing through the roof just like ours were. It’s all in where you are on the need for that capital expansion, and we just happen to be there.”

To reduce the cost for Lebanon’s new plant, they kept staff numbers low and cut the building size.

“We’ve crammed, you know the expression, 10 pounds of crap into a five pound sack, and it’s tight, but we gotta be able to do the right thing,” he said.

“I have less staff now than when I started (in the mid-90s). That’s good and bad. It’s good in the fact that we’ve tried to keep our costs as low as we can possibly do it and still do a job.”

During the ribbon cutting, Aziz thanked all those involved in tackling and successfully completing “the single largest capital project ever undertaken by the City of Lebanon.”

“Water security and independence is vital to any community, and today we celebrate our community’s new-found access to the river,” he said.

Because Homeland Security considers water treatment plants critical infrastructure, public access to the new facility is tightly controlled.

Whitlatch said he hopes to conduct group tours soon. He is also open to individual tours on request.

“If I have someone who calls me up and says, ‘I want a tour,’ we’ll set it up,” he said.

– Correspondent Larry Coonrod contributed to this story.