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04/10/1996 - Minutes INTERGOVERNMENTAL WATER BOARD MEETING_ MINUTES APRIL 10, 1996 Members Present: Bill Scheiderich, Beverly Froude, John Budihas, Bob Rolf, and Bob Tydeman Staff Present: Bill Monahan, Ed Wegner, Randy Volk, Mike Miller, Wayne Lowry and Kathy Kaatz Visitors Present: Steve Feldman and John Haunsperger 1 . Call to Order The regular meeting of the Intergovernmental Water Board was called to order at 5 : 30 p.m. 2 . Roll Call and Introductions Roll was taken and all members were present with the exception of Commissioner Hunt whose representative was City Councilman Bob Rolf, and for Commissioner Manning was Mayor Bob Tydeman. 3 . Visitors Comments There were no visitors present that wished to speak. 4 . Approval of March 13, 1996 Meeting Minutes A motion was made by Commissioner Budihas to approved the minutes of the March 13 , 1996 meeting which was seconded by Commissioner Froude and was voted upon unanimously. 5 . Water Rate Study - CH2M Hill Mr. Lowry stated that last month a brief presentation was made by CH2M Hill and they had returned to present an update since the draft report is not completely finished. Mr. Lowry continued by stating that they would like some discussion and further direction by the Board, on the findings as well as rate alternatives . Eric Rothstein, Senior Economist for CH2M Hill distributed a packet of information to the Board members and stated that he wanted to discuss the system development charge calculations, cost of service rates and options, seasonal conservation rate, rate design options and typical bills, and backup information. Mr. Rothstein stated that the system development charges are intended to recover the cost of new development imposed upon the system. There are two components of this charge a) .... reimbursement fee requiring the new customer to provide equity contribution to the system equivalent to the equity that existing customers have in the system and b) capital improvement fee which intended to recover the costs of new capital improvements that are being required to service the development. Mr. Rothstein continued by saying that compared to the existing fees there is a $140 increase for the 410 zone and $500 increase for Bull Mountain. The cost comparison for these SDC' s was provided in the information distributed. Mr. Lowry stated that the current SDC' s as seen on this comparison chart were put in place in 1990 . Mr. Rothstein stated that it was CH2M Hill' s recommendation to adopt the revised System Development Charges for the main 410 system service area as well as the Bull Mountain service area. Councilman Rolf questioned why the SDC' s are low as compared to some other jurisdictions? Mr. Rothstein stated that these fees are based upon the capital program that the water service area has in place. Mr. Lowry also stated that we do not have a treatment facility. Mr. Wegner stated that this model is based upon the current system and does not reflect costs involved with a major capital program to bring a secure water supply system. Mr. Rothstein stated that the rate and SDC calculations can all be revised as needed. Mr. Rothstein then discussed the rate structure. Information was provided that compared the existing rate structure as well as the proposed cost of service rates. He continued by stating that there were two options with the proposed rates one being a base charge, booster charge which is slightly higher than the existing charges and volume rates by customer class and no volume built into the base charge. Commissioner Budihas questioned the same rates being charged to someone outside the district as opposed to in district users . Mr. Rothstein stated the they could reflect a higher rate to an outside user although there is such a limited number of customers outside it is hardly worth it . There is only approximately 120 accounts outside the District . Mr. Wegner stated that these services are in the Metzger area and Pac Trust, with the only potential for growth being Pac .Trust . An alternative to this options is to inbed the cost of 800 ccf into the base charge with all volumes in excess of the 800 ccf be charged accordingly (current rate structure) . Intergovernmental Water Board Meeting - April 10, 1996 Page 2 Mr. Rothstein stated that the advantage of the $3 . 89 base charge is that for low volume users (users that use less then 800 ccf) do not pay for the minimum water usage of 800 ccf . Chair Scheiderich questioned the percentage of users that use less than 800 ccf bi-monthly and whether a lifeline rate (minimal per person average use) was factored in? Mr. Rothstein stated that the percentage of users is relatively low in this category and they had not figured in specifically a lifeline rate. Mr. Lowry stated that out of 13 -14 thousand accounts in the District, there is only 2000 to 3000 low end users which are accounted for generally in King City and Summerfield. Mr. Rothstein stated that the primary benefit to having a minimum usage is revenue stability. There is a revenue loss when you do not charge all users the minimum base rate. Having more built into the fixed charges allows for higher revenue stability with the downside being that you are minimizing your conservation incentives and are moving away from cost of service since users are paying a fixed rate rather than the actual costs of service . Mr. Roth continued by saying that they generally recommend using the cost of service option. Councilman Rolf questioned the average water usage for residential service? Mr. Lowry stated the average usage to be between 18 and 20 ccf bi-monthly. Councilman Rolf continued and questioned why there is a lower rate proposed for industrial users? Mr. Rothstein stated that the differences in the volume rates are basically reflective of differences in peaking characteristics among customer classes . Mr. Rothstein continued by stating that while going through the cost allocation process to determine the cost of service, they look at operation and maintenance costs and capital costs and allocated those costs to average demand and peak demands . A portion of the costs is associated with providing peak levels of service and industrial users tend to have low peak demands and have stable, constant usage . Mr. Lowry stated that the current rate structure has the $14 . 30 minimum plus a $1 . 32 for any usage over that regardless of customer class . Both of these proposed rate structures cover the cost of service. Mr. Rothstein then discussed the consumption blocks and stated it was determined that even though there was limited data available of the distribution of use in residential class from low volume users to high volume users, the break point appeared to be at 50 ccf . The users that use more than 50 ccf .-� over would be assessed an incremental increase in rate (surcharge) . The amount generated with this was indicated on Intergovernmental Water Board Meeting - April 10, 1996 Page 3 the information provided. Mr. Rothstein continued to state that the new information on conservation rates indicates that increased rates for seasonal rates do not tend to be effective in promotion conservation in the absence of accompanying conservation education and/or incentive programs . Mr. Rothstein continued by stating that the rate design options available are to continue the current rate design or adopt cost of service rates and for either of these options a decision would need to be made on whether to adopt a seasonal conservation surcharge and whether to continue current fire service charges . Mr. Rothstein stated that the City is in a fairly stable revenue situation although thought should be given to whether the rate structure should be adjusted to provide for greater simplicity, add more conservation and be more cost of service based. He continued by stating that continuing the current rate design has some appeal in terms of acceptability since there will be no new administrative costs in implementing a new rate structure . Chair Scheiderich questioned if the decision came to continuing the current rate design, he would like to clarify what the difference in meter charges were? Mr. Lowry stated that these charges are not installation charges but bi-monthly meter charges . Mr. Wegner stated that the concept is that the larger the meter the larger volume of water being used. If you would change to a cost of service rate structure, you would pay for the amount of water used. Mr. Volk stated that there are only 33 meters that are above two inch. Mr. Rothstein stated that the original basis for the different meter charges was probably the higher meters take a higher claim on the capacity of the system. Mr. Wegner question within the next couple of years when we are purchasing water from another entity and will have hopefully a more constant rate, if we had a bi-monthly base charge with a volume charge can these be adjusted? Mr. Rothstein stated that this model can be adjusted at anytime to reflect a change in cost of supply. Chair Scheiderich questioned whether a cost of living (CPI) adjustment was figured in the structure? Mr. Rothstein stated infrequently are rates changed due to cost of living adjustment. Chair Scheiderich questioned whether there was any literature reporting success of conservation education? Mr. Rothstein stated that generally the conservation education has very positive results . Councilman Rolf questioned the range of Intergovernmental Water Board Meeting - April 10, 1996 Page 4 ^ surcharges and what would the optimal surcharge be? Mr. Rothstein stated that this would be based upon the requirements of implementing a reasonably effective conservation program (expenses, educational materials, etc) . Mr. Wegner stated that currently we budget $17, 000 for water conservation education which is being funded out of our current rates with the use of existing staff. Mr. Rothstein stated that you would be looking at the need for at least a part time position. Commissioner Froude stated that since landscaping is a big issue, and the need for emphasis on home gardens . Mr. Rothstein stated that the education process will demonstrate the efficient use of water. Mr. Wegner stated that the draft rate study will be mailed out next week and will be placed on Tigard City Council agenda on April 16 to hear the same presentation made tonight by CH2M Hill and at the May meeting of the IWB, a recommendation will be necessary to take to Tigard City Council in October with any needed changes being implemented by July 1 . Chair Scheiderich questioned whether notes on the Council discussion could be made available to IWB Board members? Mr. Wegner stated that we would check on sending those out to the Board. 6 . b. Sprint Mono Pole Since Mr. Monahan was not present, Mr. Wegner stated that Sprint Spectrum has approached the City on the possibility of installation of an antennae tower on one of three sites, the Water facility, Public Works building, or at the Canterbury site. After some testing, the best location proved to be the Water facility site. This would be placed behind the storage area, behind the Tualatin valley Fire District area. With Mr. Monahan' s arrival he provided some pictures of various mono poles that have been placed in the area. Mr. Monahan stated that he had attended the Tigard Water District meeting to discuss this mono pole and the Tigard Water District has a Resolution in place which limits the height of antenna on any Water District property to not more than three feet above the existing structures . The intent of this Resolution was to limit antennae in residential areas . The Tigard Water District did agree to allow it at this site and change the Resolution to exclude properties that within the central business district. Chair Scheiderich questioned the allowance of this with the Tigard zoning laws? Mr. Monahan stated that this would involve a conditional use zoning process . Mr. Monahan stated that they also contacted Mike Marr, the President of the Downtown Merchants Association and provided .� them with information. Mr. Marr' s has some concerns although he would prefer it located here rather than some area closer Intergovernmental Water Board Meeting - April 10, 1996 Page 5 to the downtown area. Mr. Monahan stated that the Tigard City Council did give authorization if the IWB approves to enter into an agreement to allow Sprint Spectrum to utilize 1, 500 square feet in the location described to erect a mono pole and some cabinets for storage of electronic devices for a lease amount of $800 per month for a five year term with the five year term being renewable up to five times with a 200 increase in the lease amount . This mono pole would also allow the City the capability of attaching additional communication devices for Police and Fire as well as locate another competitor devices on this pole for an additional lease amount . Chair Scheiderich questioned whether a market study had been done to ensure that the $800 a month was a fair market value for 1, 500 square feet? Mr. Monahan stated that a survey had not been completed since this piece of property is not being used currently. Mr. John Haunsperger (TWD Board Member) stated that in East Portland they are receiving a lease amount of $1, 400/month. Mr. Monahan stated that they had already negotiated from $600 to $800 per month and this would allow the City $9 , 600 per year income. Chair Scheiderich stated he would like to see someone do a quick market survey to see what market value would be for this type of property and at the five year intervals, the owners have the right to discontinue use and have equipment removed. Councilman Rolf questioned the time frame on making a decision in this matter? Mr. Monahan stated that Sprint is ready to move quickly and may consider another site. Chair Scheiderich questioned who would hear the conditional use process? Mr. Monahan stated that the Hearings Officer for the City of Tigard would process this application. Councilman Rolf made a motion to authorize the City Administrator to negotiate and consummate a deal with Sprint Spectrum provided that research shows fair rate. The motion was seconded by Commissioner Budihas and passed unanimously. 6 . a. Facility Use Commissioner Budihas provided Mr. Monahan with the King City decision on facility use. King City wants to retain ownership and negotiate for a monthly or yearly rental fee, the City of Durham is willing to allow usage of the building on a lease arrangement and to provide in kind services and the Tigard Water District has made the decision to retain ownership although they may be willing to allow the City the right to usage for other purposes with advance notice. Some of the other uses discussed with the Tigard Water District was use of the auditorium for Court purposes . The Tigard Water District authorized to proceed with what configuration and modifications will be necessary to accommodate the Court Intergovernmental Water Board Meeting - April 10, 1996 Page 6 proceedings . Mr. Monahan stated that the City is still considering the Amber Foods facility for a long term solution and the additional use of the Water facility a short term solution and to continue to utilize the building for some Water functions . Mr. Monahan continued by stating that the City is not in imminent need to make changes to this facility since the City' s position has changed with the Amber Food facility and with the decision by the various entities to retain ownership. Chair Scheiderich questioned the concern for use of the Water auditorium for free public space and stated that it would be appropriate to be agreed upon by all owners in advance. Mr. Monahan apologized for the use of the building for the homeless shelter and the Farmer' s Market without prior approval of the entities . This year the Farmer' s Market has only inquired about use of the parking lot area and the only inside access would be for restrooms beginning June 1 through October. The Board discussed the Farmer' s Market usage and the fact that they are a non-profit organization operating under the Chamber of Commerce. They used the Magna Humphrey' s site for two years and this would be the second year of usage at this site. It was discussed that there were no problems, they had placed flags in the lawn area and there was some electrical upgrades done with the Farmer' s Market paying for those improvements . The Board consensus was that this use would be acceptable although next year it would be advisable for the Farmer' s Market to make a presentation to the Board prior to use. Mr. Monahan stated that although the contract allows the City to make decisions on use of the facility, the Farmer' s Market organization will make presentation next year. 7 . a. Willamette River Water Update - Ed Wegner Mr. Wegner had provided the Board with an Executive Summary of a report that was commissioner by various entities which included Tigard on the Willamette River. The report states that the Willamette could be used as a drinking water source and the cities involved could benefit from this, although a lot more work will be involved. Issues that need to be clarified are where does this transmission line go, how does it connect the Clackamas River Water District, Canby with Wilsonville, Tigard, Sherwood and Tualatin Valley? Next week Mr. Monahan and Mr. Wegner will be attending a workshop to look at recommendations outlined and prioritize them and look to the next step. Mr. Wegner stated that more information will be made available at the next meeting. 7 . b. Regional Water Update - Ed Wegner ,..� Mr. Wegner highlighted the revisions of the RWSP and he requested if the Board had any concerns or questions in Intergovernmental Water Board Meeting - April 10, 1996 Page 7 regards to the revisions to the Plan to contact him prior to April 25 to discuss . Mr. Wegner stated that Murray, Smith and Associates had made a presentation to the Tigard City Council last night on the Menlor site and the Council authorized them to proceed. Murray, Smith and Associates will submit a scope of services within the next week and Mr. Monahan and Mr. Wegner will review and pass onto Council on April 23 . 8. Non Agenda Items City of Durham Mayor, Bob Tydeman requested to make a formal recommendation to the Intergovernmental Water Board to amend the original IGA to allow appointment of other than an elected official to the IWB. Mr. Tydeman stated that the City of Durham would like to appoint City Manager, Steve Feldman as the City of Durham' s representative to the IWB with Mr. Tydeman as the alternate representative. Mr. Wegner stated that he had received a request from Mr. Tydeman requesting Mr. Feldman' s appointment to the Board, since Ms. Manning has resigned from the Durham City Council . Mr. Wegner informed Mr. Tydeman that the bylaws that were adopted in December of 1993 , under section B3 "Board members shall be elected officials serving on the respective elected Board, except for the Member at Large" (Mr. Scheiderich) . 1. Chair Scheiderich stated according to the bylaws any amendments must be approved by the governing bodies . Mr. Scheiderich continued by saying that the each governing bodies consider and come back to the next meeting and inform the Board of their recommendation. Commissioner Froude questioned why the bylaws were written this way initially? Mr. Monahan stated that there was an interest in having the Board evenly staffed by allowing only elected officials . Mr. Tydeman questioned why a vote could not be taken at this time? Chair Scheiderich stated that each of the Board' s representatives are acting in behalf of their respective jurisdictions with the concern being that they need to take back to the various jurisdictions prior to making a change to the bylaws which states that the representative can be a elected office or City Administrator. Commissioner Froude stated that she thought each representative should go back to their respective agencies for discussion, prior to changing the bylaws . Councilman Rolf agreed that this Agreement should be considered by each respective City Council prior to making such a significant change. Mr. Monahan stated that the bylaws states that "amendments must be approved by the governing bodies of the District and Tigard" which he interrupted as every governing body. Chair Scheiderich entertained a motion that each representative go back to their respective Intergovernmental Water Board Meeting - April 10, 1996 Page 8 jurisdictions with an answer in advance of the next meeting to be communicated to Mr. Wegner. The next meeting of the IWB could be moved to May 15 to accommodate this request. Mr. Wegner stated that this would not be feasible due to the need to meet on purchasing prior to the next Portland City Council meeting (possibly May 1) . Chair Scheiderich stated he would not be available unless a phone meeting could be scheduled. Mr. Monahan rephrased the motion to read that each jurisdiction modify Section B 3 on page 4 of the IGA to allow Board members either elected officials serving on the respective body or City Manager/Administrator or a designee appointed by the City Council. Councilman Rolf questioned the possibility of Mr. Feldman attending the meetings to gather information but be restricted on being a voting member of the Board? Mr. Monahan stated that there is a provision in the IGA to allow employees to be an ex-officio members but it does state that Tigard may appoint City officials as ex-officio members . Mr. Monahan asked Mr. Tydeman if he would be attending the Tigard City Council meeting to make this formal request or did he prefer that it be placed on the agenda and be accompanied by a memo? Mr. Tydeman stated that he would prefer to have a _ memo explaining the request . Mr. Monahan stated that this will be placed on the agenda for the April 23 meeting of the Tigard City Council . Mr. Feldman who was in attendance at the meeting commented on his dissatisfaction with the Board' s inability to make this decision and to question Mr. Tydeman' s appointment . Mr. Feldman stated that it was his feeling that the governing bodies should be allowed to appoint whoever they think is appropriate and that the control remains in the hands of the elected officials . The next meeting of the Intergovernmental Board was set for May 15 and is a special meeting is deemed necessary it shall be set . 9 . Adjournment The meeting was adjourned at 7 : 15 p.m. kathy\iwb\4-I Omtg.min Intergovernmental Water Board Meeting - April 10, 1996 Page 9