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Big Creek Dam Funding – Finally finding a way forward toward a long awaited water project

 

Big Creek Dams
They must be replaced ASAP. Getting quite old.

TO: City Council

FROM: Spencer Nebel, City Manager


RE: Report for the November 1, 2021 Work Session at 4 PM

On Monday, November at 4 P.M., Council will be holding a work session via zoom to
discuss various aspects of the Big Creek Dam, and the City’s Rocky Creek water storage
application with the regular meeting following at 6 PM. This work session will cover the
following items:


Update on Big Creek Dam Funding (75 minutes)


The City Council will hear an update on the Big Creek Dam and funding scenario. This
will also include an update of the repairs that were completed this month on the spillway
for the upper dam.


Verena Winters and Amy Dammarell will provide an update on the next steps regarding
the environmental efforts that will need to be taken to address the National Environmental
Policy Act (NEPA) process relating to the replacement of the two Big Creek Dams and
steps needed to address the designs of the dam. The NEPA process which is extensive
and will evaluate all the relevant environmental effects of the dam replacement. In
addition, the City will be dealing, among other things, with addressing fish passage with
the replacement dam. It is likely that we will request a waiver to fish passage on Big Creek,
which will require a mitigation project to improve fish habitat elsewhere. This process is
handled through the State of Oregon. The completion of these processes will impact the
final designs of the dam.


The attached report from City Engineer, Aaron Collett, provides a summary of the work
that was done to repair the upper dam and outlines the work that is currently underway,
and the work that will occur once additional funding is provided for this project.


On the funding side of the equation, we have had meetings with the State regarding a
grant agreement for releasing the lottery bond funds that will be available at the end of
this fiscal year or the beginning of the next fiscal year. The first installment will be $4
million. The second installment of $10 million will likely be provided after a second sale of
bonds occur in 2023, about a year after the first sale. Once the City is in receipt of the $4
million, we will be able to proceed more robustly with the engineering for this dam.

One fact that should not be overlooked, is that with each year that is lost on building the dam,
the costs for building the dam, will increase. Assuming a 5% inflation rate for construction,
the cost on a $70 million project are increasing $3.5 million each year. Keeping a project
on schedule for design is a significant challenge with the delay in State funding that
occurred when the original lottery bonds could not be sold due to concerns about
reduction in revenues due to the pandemic. The second area we are working on is what
impact dam construction would have on either utility rates and/or property tax rates if the
general obligation bonds are used for this project. Once we have preliminary figures on
that, we will share that with Council.


Rocky Creek Water Rights Update (15 minutes)


We will provide a brief summary of the history of the City’s application for water rights on
Rocky Creek. City Engineer, Aaron Collett, has provided a report summarizing the City’s
involvement with Rocky Creek. In summary, Rocky Creek is a good opportunity for
addressing regional water, but it does not replace the need for the City to proceed with
Big Creek Dams. The City has a pending application in which a draft permit was issued
in 2016. Water Watch filed a protest and the City and State opted to defer any decisions
on the permits until the placebased planning effort complete its work. At some point, the
City may be asked to proceed with work regarding the Rocky Creek application for water
rights. The City ended up being the sole party to go through the application process since
Lincoln City opted to drop out of this process in 2014. Once place-making is completed,
there will be significant expenses in moving forward with the process to obtain water rights
on Rocky Creek. It is my belief that this will take joint participation from water users to
keep this option alive. I do not think the City will be in a position to solely fund the work
necessary since we will be heavily involved with the replacement of Big Creek Dams.


I look forward to seeing everyone on Zoom on Monday at 4 PM.


Respectfully,


Spencer R. Nebel

City Manager

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