On Tuesday night, the Lake Oswego City Council voted to move ahead with one of the largest infrastructure projects in the city's history: a $372 million contract with Jacobs to design, build, operate and maintain a new wastewater treatment facility in the Foothills District. Alongside it came the number residents will actually feel: a 28% sewer rate increase, set to take effect July 1, 2027, which works out to roughly $25 to $30 more per month for the average customer, the Lake Oswego Review reported.
The new plant replaces the Tryon Creek Wastewater Treatment Plant, a facility built in 1964 and, in a quirk of regional history, owned by the city of Portland. The replacement will be Lake Oswego's own: smaller, less odorous, more environmentally sustainable and built to withstand the seismic event the Pacific Northwest has been bracing for. Portland is covering 30% of the cost. Operating and maintaining the plant will run about $6.5 million a year.
The road to Tuesday's vote was long, and it nearly went somewhere else entirely. The city spent more than five years pursuing the project and at one point had a public-private agreement with EPCOR, which it dissolved in 2024 after the company's final offer to build the plant came in at $674 million, according to earlier Review reporting. Lake Oswego pivoted to a public financing model, landing a $123.5 million loan from the EPA's Water Infrastructure Finance and Innovation Act program in September 2025, with municipal bonds, system development charges and Portland's cost-share rounding out the funding.
The rate structure was its own debate. The council weighed the one-time 28% jump against a gentler path of 8% annual increases over 10 years. City staff and consultants found the sticker-shock option is actually the cheaper one for ratepayers in the long run, costing less than the gradual alternative by 2033. After the initial increase, rates would rise about 3.9% annually with inflation.
For the water industry, Lake Oswego is a case study in the math hitting utilities everywhere: a 60-year-old plant, seismic risk, tighter environmental expectations and no cheap way out. The city's answer was to walk away from a P3 that got too expensive, lock in federal financing and ask ratepayers to absorb the pain once rather than for a decade.
Demolition at the site is slated for December, with construction expected to begin in early 2027.
