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Bull Run Treatment Projects Financing and Rate Affordability

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The Water Bureau is taking steps to maintain water rate affordability while making important long-term investments in the future of the Bull Run water system.
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The Portland Water Bureau is making lasting improvements to the Bull Run water system to help secure cleaner, safer water for generations of Portland customers. We completed construction of an improved corrosion control treatment facility and are building anew water filtration facility and pipelines that will be key components of a more reliable and resilient water system.

Watch highlights from Bull Run Treatment WIFIA Loan Award Recognition event

To help maintain water rate affordability while we make these long-term improvements, we secured federal financing through the Water Infrastructure Finance and Innovation Act (WIFIA) program that will significantly lower the cost of investment for our ratepayers and provide at least $387 million of debt-service savings over the loan term.

Learn about the WIFIA loan

Managing project decisions to balance performance, reliability, and affordability 

We’re managing the Bull Run Treatment Projects closely to make the best use of every dollar. Our project decisions are guided by community values, including balancing consideration of public health and water quality benefits with affordability for current and future customers. For the Bull Run Filtration Project, this includes completing a robust, third-party value engineering process to evaluate cost-control opportunities in the design. The resulting scope adjustments are part of our proactive approach to cost management and include reducing the amount of new pipeline planned for the project and identifying ways to optimize the site grading and onsite soil reuse for the water filtration facility.  

Contracting with guaranteed maximum prices

The current cost estimate for the Bull Run Treatment Program is $2.134 billion. We're using a construction delivery method for the Bull Run Treatment Projects where contractors are involved early during the design and prepare a guaranteed maximum price for construction once the project design reaches a certain level of completeness.

The first project, Improved Corrosion Control Treatment, was completed on schedule in April 2022 to help make our water less corrosive to lead that can be found in some home plumbing. The final project cost of $21 million included a construction guaranteed maximum price of $17,989,637 from MWH Constructors with more than $4 million of hard construction costs contracted with minority and women-owned firms.

Construction guaranteed maximum prices for the water filtration facility and pipelines were submitted by our contractors and approved by City Council in 2024. We're continuing to track changes in the construction economy—such as labor shortages and supply chain issues—and take steps to actively manage project costs and risks. This includes using value engineering to identify cost-control opportunities in the design and maintaining a project contingency for additional cost escalation given the uncertainty of the construction economy. 

Maintaining rate affordability for current and future customers 

Hear from Director of Finance Cecelia Huynh about ways the Water Bureau is maintaining affordability

To help maintain water rate affordability, we secured two low-interest WIFIA loans that allow us to smooth water bill impacts from the Bull Run Treatment Projects over time, so bills increase slowly over a longer period.

We use very conservative assumptions in our financial planning and rate projections as part of our fiscal responsibility to customers. The projected bill impacts include project cost escalation over the multi-year Bull Run Filtration Project and more than $100 million in project contingency to help manage risks and uncertainty in the current construction economy. 

Using WIFIA’s flexible terms to maximize benefits for ratepayers

Hear from Senator Jeff Merkley about WIFIA and the Bull Run Treatment Projects

We locked in a 1.89 percent interest rate for our first WIFIA loan in 2021, and our second WIFIA loan has a 4.49 percent interest rate. Based on rate projections, these loans will save Portland ratepayers $387 million in repayment costs. WIFIA’s flexible terms also allow us to spread repayment over many years so more future ratepayers who are getting the benefits of the projects help share in the costs.  

Our total loan amount for the Bull Run Treatment Projects is $1,045.6 million. The loans cover direct project costs, indirect costs, inflation, bond reserves, and interest costs—plus a project contingency. We're using the project contingency to help manage potential risk of additional cost escalation given the uncertainty of the construction economy.   

The total allowable loan amount which was calculated using cost estimates submitted to City Council in 2019 ($820 million for the filtration facility and pipelines, and $20 million for improved corrosion control). Other eligible costs include project contingency, inflation, indirect costs, bond reserves and interest costs, and a contingency amount.
Calculating the WIFIA loan amount for the Bull Run Treatment Projects.

Learn about WIFIA benefits

Continuing to provide low-income bill discounts and other financial assistance  

Keeping water rates affordable for our customers is important to us. We offer a variety of financial assistance programs to be responsive to community needs, including bill discounts and crisis vouchers to qualifying low-income customers. We will continue to explore opportunities to help keep project costs low and bills affordable.

Learn about Portland’s Financial Assistance Programs

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