Santiam Canal

Water maintenance worker Shane Matthews clears debris from the Santiam-Albany Canal Monday afternoon at 34th Avenue in Albany. (David Patton/Democrat-Herald)

The Albany City Council on Monday said it wants to impose conditions on Lebanon before granting that city a permit for a new drinking water intake on the Albany-owned Santiam-Albany Canal.

Albany bought the roughly 140-year-old canal from Pacific Power and Light in 1984, part of a purchase of the city's overall water system from PP&L. It's 18 miles long -- the first six go from the South Santiam River to Lebanon, the other 12 from Lebanon to Albany.

Lebanon plans to construct a new water treatment plant and has bought land adjacent to the canal

about a mile and a half upstream of its current plant. The new plant needs a new intake. Lebanon needs, and is seeking, cooperation and approval from Albany to build it.

Public works staffers for the two cities have been negotiating. Monday's council action sets guidelines for future negotiations.

According to a report by Jeff Blaine, an engineer for the city of Albany, "a 1986 intergovernmental agreement between Albany and Lebanon was the last written agreement under which Albany operated and maintained the canal for the benefit of both communities. The IGA specifies Lebanon is responsible to reimburse Albany for one-third of the total annual operating costs, as well as provide an annual contribution for capital improvements.

"Over the years, Albany has continued to maintain all aspects of the canal, and has made significant capital investments ... . In recent years, Lebanon has not abided by the cost-sharing method specified in the IGA and has

fallen in arrears in making payments for both ongoing operating and capital contributions, therefore

breaching the 1986 agreement. ... The end result of Lebanon's lack of participation has been that Albany water rate payers have paid for significant costs that arguably should have been shared with Lebanon utility customers."

Blaine said Lebanon is at minimum $323,900 in arrears, based on a verbal, temporary modification of the agreement in 2007, or substantially more than that if the terms of the 1986 agreement are fully enforced.

On Monday, the council agreed that Lebanon must get current on its debt and enter into a new IGA before Albany will grant Albany's permission for a new intake. Lebanon had asked that the permit process be separated from the IGA negotiations.

The council also said Lebanon needs to share in the cost of capital investments that have been made at the diversion dam, head gates and fish screens.

Furthermore, the panel wants Albany to maintain control of the new intake -- because, among other reasons, that would be incentive for Lebanon to get current and stay current on its bills.

"This is the first time Lebanon has needed something from us," Public Works Director Mark Shepard said, referring to an intake permit. "If we continue to own the straw, Lebanon will continue to need something."

The canal is Lebanon's sole source of drinking water. Lebanon also uses it for storm water discharge, something Albany public works staff would like to see addressed.

Albany, meanwhile, uses the canal as a supplemental water source and for hydropower.

Both Blaine and Shepard say Lebanon city staff are working hard with their Albany counterparts to hammer out agreement on the various issues.

Follow Steve Lundeberg on Twitter, @AnyGivenLundy



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