Potential sale of old Juniper Utility Co. progresses

Avion, Roats Water to meet with affected Bend neighborhoods

By Scott Hammers / The Bulletin

A pair of private water companies looking to peel off a piece of the Bend city water system intend to meet with residents of the affected neighborhoods later this month to discuss their proposal.

Thursday, Jason Wick of Avion Water Co. and Casey Roats of Roats Water System met with Bend City Engineer Tom Hickmann to discuss their bid to purchase the former Juniper Utility Co., a private utility the city condemned in 2002 following a string of complaints about service filed with the state Public Utilities Commission.

The condemnation sparked a yearslong legal battle between the city and Jan Ward, the developer of multiple Southeast Bend neighborhoods who created the utility to provide the neighborhoods with water. The city ultimately paid Ward $9.6 million to settle the suit, according to city finance director Sonia Andrews.

Wick, the president of Avion, said discussions among himself, his counterparts at Roats and the city are still in the early stages. The upcoming meetings with residents of the Mountain High, Tillicum Village, Nottingham Square and Timber Ridge subdivisions will be key to determining the next steps, Wick said, particularly as regards the irrigation water historically provided by Juniper and currently provided by the city to those neighborhoods.

The former Juniper system is unique within the city’s water network in that it’s actually two systems — drinkable household water drawn from wells, and low-cost irrigation water drawn from the Arnold Canal, often running in parallel pipes.

Wick said Avion and Roats believe it is possible to preserve the irrigation system, while the city has concluded the irrigation system is a liability risk and has proposed phasing it out in 2015.

Hickmann said the thin-walled plastic pipes that carry both the household water and irrigation water are indistinguishable from each other. When one pipe breaks, it can break the other pipe, he said, and untreated canal water can contaminate the water used for drinking and bathing. The city has documented six instances of cross-contamination, he said, and a few residents have claimed to have been sickened by drinking untreated water.

“If things go wrong, and the city is the owner of it, people want to go after those deep pockets,” Hickmann said.

Wick said though Avion and Roats propose to maintain the irrigation system, they still don’t fully understand how the system is constructed. He said he’s hopeful the upcoming meetings can shed some light on how maintenance responsibilities ought to be divided among the utility provider, the homeowners associations and individual homeowners.

“We want to make sure the homeowners understand what we’re offering, and make sure we’re all on the same page in terms of what we’re going to operate and what we’re not going to operate,” he said.

The city has poured $5 million to $7 million into upgrading the Juniper system since acquiring it in 2002, the majority of which was spent on replacing 30- to 40-year-old plastic pipe with the iron pipe used elsewhere in the city, Hickmann said.

“It’s done remarkably well, frankly, it’s just at the point it needs to be replaced,” he said. “It’s at the point of failure.”

The cost of trying to bring the Juniper system up to city standards has been a drag on the finances of the city’s water system, Hickmann said, and selling it off could be a savings to those ratepayers who will continue to be served by the Bend city water system.

When system upgrades are included in the calculation, Hickmann said Bend is spending five times as much to serve each of the roughly 860 connections in the old Juniper system as it does the other 23,000 or so connections served with city water.

Hickmann said a handful of pumps and wells installed by the city since the takeover of Juniper will not be included in any sale, as they also serve other customers within the Bend water system.

Wick said Roats and Avion believe by preserving the irrigation system, they’ll be able to forestall the need to replace the plastic pipes. The high-pressure capacity of iron pipes is preferable if you’re using a single pipe to provide both household water and irrigation water, Wick said, adding that demand on the Avion system jumps more than eightfold during the summer. However, he said pair of plastic pipes running at lower pressures can do the same job, even if the utility operator has to periodically repair broken pipes.

The state PUC’s oversight authority ensures current Avion and Roats customers will not experience a rate increase if the two utilities are successful in taking over the old Juniper system, Wick said.

“If we were to take on too great a burden and increase our estimated costs too much, the PUC would not approve the deal because it would harm our existing rate base,” he said.

Avion and Roats have not yet determined how they would divvy up the different neighborhoods and accounts if they’re able to arrange a purchase from the city, Wick said, but expect to have answers for residents in the near future.

“If everything works out, I’d estimate it would take some time, eight months-ish?” he said. “Possibly sooner, but it all depends on if everyone comes to agreement.”

Editor’s note: This story has been corrected. In the original version, the name of Bend Engineering and Infrastructure Planning Director Tom Hickmann was misspelled. The Bulletin regrets the error.

— Reporter: 541-383-0387, shammers@bendbulletin.com