Portland water treatment plant costs climb past $2.5 billion, project completion faces 2-year delay

​The costs of Portland’s new water filtration plant – one of the most expensive municipal projects in the city’s history – will rise an additional $450 million, running the total to more than $2.5 billion, water officials said Thursday.

Completion of the Bull Run plant also will be delayed by two years, the officials said, largely because the city had to pause construction while it faced an appeal from neighbors and other critics. The Oregon Land Use Board of Appeals last week issued a decision affirming the project’s permits.

The controversial project has been in the works for eight years, finally breaking ground two years ago. The latest $2.56 billion cost estimate – up from $2.1 billion in April 2024 – is a five-fold increase from the $500 million plan first approved by city elected leaders in 2017.

City officials said at a news conference that the massive project east of Gresham will protect public health and comply with federal and state safe drinking water regulations.

Ting Lu, Portland director of public utilities, attributed the ballooning price tag, which is adjusted for inflation, to additional contracting costs incurred during the pause in construction, permitting and legal costs associated with the land-use approval process as well as rising costs of labor and materials.

The city is building the plant – as required by the federal government – on 95 acres of city-owned property south of Oxbow Regional Park. Controversy has trailed the project for years, with nearby residents and businesses fighting the construction over concerns about noise, air pollution, tree removal and wildlife impacts.

The city has requested a 24-month extension from the Oregon Health Authority for providing filtered water, Lu said, largely due to the nearly six-month delay during prime construction season. Lu said the extension also would provide flexibility to address future unforeseen site conditions and weather delays.

The extension will shift the city’s compliance deadline from 2027 to 2029 for installing the filtration needed to remove cryptosporidium, the parasite that causes diarrhea and can lead to more severe symptoms for people with weakened immune systems. In the meantime, city officials said, the Water Bureau will continue to monitor Portland’s water for cryptosporidium.

The Portland Water Bureau does not currently treat for cryptosporidium even though it is required to do so under federal drinking water regulations. The city, Multnomah County and the Oregon Health Authority say water from the Bull Run watershed in the Mount Hood National Forest is safe to drink and there is no need for the general public to take additional precautions.

In 2017, the U.S. Environmental Protection Agency and the Oregon Health Authority said the city had to start treating its water because cryptosporidium was showing up too often in the city’s water samples – a perennial problem for many water systems across the U.S. that rely on surface water such as rivers, lakes and streams.

Water from the Bull Run serves about 1 million Portland-area residents. This includes people in Portland as well as residents of Gresham and Sandy, among others, via wholesale contracts with 19 area water providers.

Lu said the City Council will help determine how to cover the additional costs – it will likely include a combination of customer rate increases, federal loans and long-term bonds. To date, the project has secured two low-interest federal loans, which city officials say will help smooth out rising rates.

The Water Bureau also said it has changed the sequence of its capital projects, choosing to construct some of them later to spread out the impact on ratepayers, officials said.

The council is expected to review the Water Bureau’s budget, including the Bull Run project, in the coming weeks as part of the city budgeting process. Council members will also hear an update on the project in the Transportation and Infrastructure Committee next Monday.

Officials said the project will account for about a third of the planned increases to the water portion of residents’ bills.

Last summer, Portland residents saw the largest water and sewer rate hike – slightly over 6% – in more than a decade – and the Bull Run water filtration plant is one of the main reasons. Officials last summer said the city’s expected annual rate increases over the next five years will likely climb even higher. Water rates for the coming year will be finalized in May.

The city’s water officials said that even with the recent rate increase, Portland’s water rates are still among the middle of the pack for similar utilities nationwide. The combined water-sewer monthly bill in a typical city household is now roughly $160, which means the average Portland household pays more than $1,900 annually for the service.

City officials said the filtration plant will strengthen the water system both on a daily basis and during emergencies. They pointed out that the Camp Creek fire burned more than 2,000 acres near the Bull Run drinking water source three years ago, threatening the quality of the water supply. And just two months ago, sediment from heavy rains threatened the Bull Run’s water quality.

“These are not hypothetical challenges. Filtration will address these risks directly and it will allow us to deliver safe, reliable driving water even as conditions change,” said Priya Dhanapal, deputy city administrator of public works.

Both Multnomah and Clackamas Counties approved the city’s land use permits for the filtration plant in 2023. That same year, a group of neighbors, joined by several environmental and rural industry groups, appealed Multnomah County’s decision.

Last January, the Oregon Land Use Board of Appeals ruled that the county failed to determine whether plant construction would adversely affect the rural area’s natural resources. The board ordered the conditional land-use application back to Multnomah County for further review.

A month later, the city paused construction. It then restarted construction last summer when the county reapproved the land use permits and continued as community groups filed a second land use appeal – which they ultimately lost on Friday.

The site of the filtration plant — a parcel of forestland purchased by the city in 1975 — is not zoned for the project, which is why it currently needs a conditional land-use permit.

The state board’s order issued is not final. Opponents could still appeal to the Oregon Court of Appeals. 1000 Friends of Oregon and the Multnomah County Rural Fire Protection District No. 10, two of the groups that filed the land use appeals, did not immediately return calls seeking comment about next steps.