Moving bill clouds EWEB deal.
Early estimates of how much it will cost to move all or part of the Eugene Water & Electric Board campus has raised questions about whether the utility can afford to relocate in order to make room for a proposed five-story hospital.
The preliminary figures, released Wednesday night at an EWEB work session, ranged from a low of $60 million for a partial move to a high of up to $90.9 million for a full move.
The numbers, which could change as an ongoing design study further isolates specific costs, caught some utility officials by surprise. "I'm shocked," Commissioner Patrick Lanning said.
A design team led by Eugene-based WBGS Architecture & Planning has been working since February to nail down the actual costs of a potential EWEB move to a 46-acre parcel in west Eugene.
The utility began seriously considering moving off its riverfront campus after McKenzie-Willamette Medical Center offered $24.8 million for 22 acres of EWEB's downtown headquarters and operations yard. Triad Hospitals Inc. of Texas, majority owner of McKenzie-Willamette, has pledged to spend $85 million or more to put a new hospital on the site.
The five commissioners have pledged that an EWEB move would not lead to rate increases and said that the bulk of the moving costs should come from the sale of the downtown campus. But these early estimates for new EWEB facilities are more than double Triad's bid for the property.
Another suitor, Eugene real estate firm Arlie & Co., two weeks ago bid $27.8 million for the same 22 acres.
When asked Wednesday afternoon whether the hospital still would be interested in the property at a much higher price, spokeswoman Rosie Pryor said she didn't know what impact a price tag of $60 million or more might have on the hospital's plans.
If the price is too high, that would be likely to increase pressure on Lane County officials to look harder at a proposal to move part of the Lane County fairgrounds to make room for a hospital.
The two-part design study by WBGS looks at both the cost to move just just the operations divisions of EWEB, and also the cost to relocate the entire campus, including the administration building.
Preliminary estimates of the cost to move both the operations division and the headquarters ranged from $77.4 million to $90.9 million.
The $90.9 million figure includes a 17 percent contingency, and the range between the two numbers should narrow considerably by time the design study is complete in October, said Mel Damewood, EWEB's water division engineering manager and project leader for the study.
The cost to move just the water and electric divisions to a 46-acre tract at Belt Line Road and Roosevelt Boulevard, was estimated at between $60 million and $69.2 million. This split scenario, with EWEB staying in its 17-year-old headquarters building, drew widespread approval during public meetings held earlier this year. Many ratepayers noted that the utility is still paying off bonds issued to construct the 100,000-square-foot headquarters.
Commissioners questioned some of the assumptions built into the design study, such as an estimated 19 percent increase in full-time employees between now and 2020. The study addresses space needs for current and future workers going out 15 years and assumes that a 23 percent increase in square footage - compared to what EWEB has now - would be needed to handle growth in that time period.
Board President Ron Farmer said he was anticipating the proposed operations facilities would be about the same size as what the utility has now, and questioned whether a 19 percent increase in employees is an accurate estimate.
Farmer noted that the utility, after several years of budget tightening, now has roughly about the same number of workers as it had in 1980.
The split scenario also assumes that engineering functions for the water and electric divisions would move to west Eugene. Housing those engineering and miscellaneous support functions would require two-story buildings in addition to a large warehouse and fleet maintenance shops.
"I'm surprised at the high cost of the split option," Simpson said. "I was assuming engineering would stay here."
General Manager Randy Berggren told board members that the assumptions behind any split or combined move all center on making the utility more efficient.
"If we're looking at cutting square footage to save money, we need to reconsider those assumptions," he said.
The utility has long wanted to move its electric and water operations away from the riverfront.
Aside from aesthetic considerations, the large trucks often have trouble getting off the site - especially when trying to exit onto northbound Coburg Road at the Ferry Street Bridge.
Commissioners agreed that they need more detailed information on how and why the design team created the various building sizes and the assumptions behind those calculations.
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|Title Annotation:||Utilities; Early estimates of $60 million to $90 million - approaching the price of a new hospital - shock some utility officials|
|Publication:||The Register-Guard (Eugene, OR)|
|Date:||Jul 21, 2005|
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