Shady Cove takes another look at Waterworks

SHADY COVE — In its quest for a municipal water system, the City Council has decided to take one more look at acquiring parts of Shady Cove Waterworks, a private water system just west of the city limits.

Last November, the council voted unanimously not to buy Shady Cove Waterworks and to begin planning a water system from scratch. But at a two-hour special meeting Thursday, Mayor Ron Holthusen asked the council to allow him to meet with PremierWest officials to discuss the possible acquisition of some Waterworks assets.

The water system, owned by PremierWest, was offered to the city two years ago for $6 million. The price has since been reduced to somewhere around $2 million.

Two engineering firms have recommended that the city not purchase the water system, but one, Kennedy/Jenks, said there was value to some of the Waterworks equipment and infrastructure if obtained at the right price.

"Within our project we may have the opportunity to buy some assets at an attractive price," Holthusen said. "If we could get there, it's going to significantly lower our overall project cost because they have stuff in the river and on the ground."

Holthusen said the council would make any final purchase decision.

"All you will be doing," he said, "is authorizing me to have that conversation, come back to the council and say we've talked to these people and we're getting close to an area of understanding that — if we got agreement between the two parties — could look like this. And then we go from there."

The council agreed on a 4-1 vote with Councilman Leith Hayes dissenting.

"I thought not purchasing Shady Cove Waterworks was a done deal," Hayes said, "and I'm actually surprised to see us here talking about it."

"You buy pieces that work. Pieces that you're going to have to buy anyway," Holthusen said. "If you can buy those pieces at 10 cents on the dollar, and they're equal in quality, is that a good deal or not?"

"My point is," Hayes said, "I don't think we should be spending staff time pursuing a smaller water system. Don't you see this as muddying up the waters here?"

"No. Not at all," said Holthusen.

"What I see," Hayes said, "is that we're going to go through another summer of town hall meetings. We're going to thrash this around about whether to buy Shady Cove Waterworks, and it will go down to the end of the year before we make a final decision."

Councilman Jim Ulrich said he thought an "open dialog" with PremierWest was necessary.

"Now we're looking at this from a different standpoint, on loans and everything like that," Ulrich said. "If we do this and try this, I don't believe it's a muddying of the water. I would believe more that it is a clarification of the water."

"All I'm saying," Holthusen said, "is if Shady Cove Waterworks can cut the cost of a water system significantly, that's a pretty good bang for the buck."

Resident John Ward said he admired the council's effort to bring a municipal water system to Oregon's largest city without one, but was concerned.

"I'm stunned," he said, "that you seem to have taken some action over the last several months and all of a sudden you've gone backwards in a significant way. "… I would think that at some point you would need to have a plan of the way you see this thing rolling out, and it has to have some stability behind it. "… Unfortunately, it doesn't seem to correlate with the proposals you've had from the two engineering firms that you worked with."

"It's consistent with the Kennedy/Jenks evaluation," Holthusen said. "They said selected assets of Shady Cove Waterworks add viability."

Because the Rural Community Assistance Corporation will begin a water rate study within a few weeks, and will need to know how the city will proceed with its water plans, Holthusen said he will quickly bring the Waterworks information back to council.

Writer Bill Miller lives in Shady Cove. Reach him at

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