REDMOND – After three years of planning and controversy, Eagle Crest Resort has abandoned plans to hook into Redmond’s sewer system.

City Manager Jo Anne Sutherland received a letter dated Monday from Jerry Andres, CEO of the resort west of Redmond. The resort expected ultimately it would add a total of 2,100 houses onto the city’s sewer system.

”We have come to realize that this option is not the most economical decision for our owners,” Andres stated in the letter. ”Therefore, we will immediately begin to design and construct our own permanent treatment facilities as soon as possible.”

Combined with system development charges (SDCs), a sewer connection fee and city rates, the cost exceeded what Eagle Crest had expected to pay, Andres wrote. He said the resort would save close to $1 million by installing its own sewer system.

The decision surprised Mayor Alan Unger, who said they city has already spent money to hire a consultant for the project. Sewer lines large enough to fit Eagle Crest’s capacity were recently installed on the city’s west side.

”It wasn’t what I expected to hear,” Unger said. ”We worked hard to work through the challenges of both sides. It’s just the way things go – we all tried to develop a solution, and solutions to the problem just seem to point in a different direction.”

The recent construction won’t be a loss to the city, Unger said, because the lines will serve the city’s fast-growing west side.

But the pull-out by Eagle Crest is a blow to the city’s goal to create a regional sewer facility.

Unger said said Eagle Crest’s inability to pay for the extension is more proof that Terrebonne won’t be able to pay to hook up to the system either. The city should rethink the regional concept and enter into discussions with Deschutes County about how to connect the small community north of Redmond.

Because of the process with Eagle Crest, some staff work that will be required to include other communities is already done, said Sutherland.

”It is disappointing,” she said. ”We truly would like to be a regional facility. If other opportunities come along, such as Terrebonne, we wouldn’t have to go through the process again.”

Redmond initially expected to receive about $500,000 in SDC charges from Eagle Crest. Then, as houses were built, SDCs were to continue to flow into the city, along with a $100,000 annual charge. Eagle Crest agreed it would pay for the pressure line and the lift station to the city’s urban growth boundary, located at Highland Avenue and 35th Street.

But cost estimates fluctuated, said Alan Van Vliet, the resort’s director of construction and development.

”It really comes down to a business decision,” he said. ”We can build our plant and expand it as we need to, rather than pay the up-front cost.”

The technology is used in Japan and Europe, and recently was approved by the Oregon Department of Environmental Quality.

The first phase of Eagle Crest’s new sewer system will cost about $1.7 million, opposed to an initial $2.5 million payment to the city of Redmond, Van Vliet said. That phase, expected to be complete this fall, will take three months to build.

Eagle Crest has been under pressure from state and county officials to solve its sewer problems, after periodic spills and maintenance troubles in the past.

Although some Redmond resident opposed adding the resort onto the city system, city councilors voted unanimously in January to accept the first of several agreements allowing Eagle Crest to hook into the city’s sewer system.

About 5,000 houses and businesses in Redmond are hooked up to the sewer. The treatment plant was originally built in 1978. The plant’s expansion, finished last year, cost the city about $15 million. Another expansion, slated in 10 years, would need to be even larger than the recent addition had Eagle Crest hooked into the sewer system.

Eagle Crest’s withdrawal means the city may have another year before expansion is required, Unger said. But environmental upgrades required by the state are needed regardless of the resort’s participation.

After a $5 increase in water rates last summer, the city is planning another increase this summer, Unger said.

City officials defended the Eagle Crest hook-up as a way to keep future rate increases to a minimum, but opponents argued that the deal favored the resort.

”Some people are going to feel relieved because they felt the partnership wasn’t to their advantage,” Unger predicted. ”Other people will be concerned because of the environmental impacts. It’s going to be a mixed bag. I don’t know where it will all fall out.”

Jenny Slater can be

reached at 541-504-2336

or jslater@bendbulletin.com.