The best thing about the possible buyout of a part of the city of Bend’s water system is that everyone could win.
Avion Water Co., and Roats Water System are looking into a purchase of the former Juniper Utility Co., water system. The city condemned Juniper in 2002. To sum up the ownership experience, it has not been pleasant.
The city has already spent $5 million to $7 million upgrading the backbone of the water system. That’s after paying more than $9 million to settle a lawsuit with Juniper’s former owner. And the system needs more work.
It’s not up to city standards. Some pipes are near the end of their predicted life. Many are not clearly labeled. To call some areas a tangle of pipes is being kind.
Homeowners are concerned about the costs of improvements. The city is, too, and concerned about the liability.
Right now, any buyout is in the early stages. Nobody has committed to anything. There are, though, some good reasons to be encouraged.
First of all, Avion and Roats are held in high regard by the city for the quality of service they provide. And it does not seem to be the case at all that a problem utility is just being moved from one owner to another.
The fact is the city does not want to operate a dual drinking/water irrigation system as is found in Juniper. It doesn’t do that anywhere else in the city.
Many homeowners there are happy with the dual system. Avion and Roats have more experience in dealing with dual systems and would keep it. It is a cheaper way to provide irrigation, so homeowners may win by paying less.
If the city keeps Juniper, it will need to spend more upgrading it. If the Juniper area is sold, the city can focus more on other improvements the city needs.
Because the backbone of the system has been replaced, it will be less expensive for Avion and Roats to replace whatever smaller pipes need work. Avion and Roats also benefit by expanding their customer base.
Roats actually used to provide water to three of the neighborhoods in the Juniper service area. To some extent, its system is already oriented to provide the water there again.
Casey Roats of Roats Water System told us it’s not as simple as turning on a valve. In some places, it is close.
Avion and Roats can also use gravity systems to deliver the water to the neighborhoods. That’s cheaper than pumping. The city has to pump.
What are the worries?
The bigger worry is what might happen to Avion or Roats in the future. As we said, both Avion and Roats are well-regarded as water system operators. But there is always the possibility that one or both could be bought out.
New owners might not be as good. Of course, new owners would still be regulated by the state’s Public Utility Commission.
Could the city be forced to go back in and take responsibility for the system again?
The city staff believes the answer is no. But the PUC could put pressure on Bend. There could be legislative action.
There also could be complications in making the deal because not all the residents in the former Juniper utility may want to switch to Avion and Roats.
They may not have a choice.
City staff say they have found little legal precedent for selling off just a portion of a city water system.
That may make things more complicated, as well.
Avion, Bend, Roats and homeowners may still decide the buyout doesn’t make sense. But it’s hard not to be hopeful at this point, that if the parties continue to perform their due diligence, the former Juniper utility could look like a government success story.