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03/13/1996 - Minutes INTERGOVERN14iENTAL WATER BOARD MEETING MARCH 13, 1996' BOARD MEMBERS PRESENT: Bill Scheiderich, Peggy Manning, Paul. Hunt, Beverly Froud and John Budihas STAFF PRESENT: Bill Monahan, Ed Wegner, Mike Miller, Randy Volk, and Wayne Lowry VISITORS PRESENT: John Haunsperger, Norman Penner, and Jack Polans 1. Call to Order The March 13, 1996 meeting of the Intergovernmental. Water Board was called to order. 2 . Roll Call and Introductions Roll call was taken and all Board members were present . Mr. Wegner introduced representatives from CH2M Hill that were in attendance to make a presentation on the status of the rate study. He also introduced Phil Smith and Chris Uber from Murray Smith and Associates . Other visitors were Norm Penner, Chairperson of the Tigard Water District Board, John Haunsperger, Tigard Water District and Jack Polans . 3 . Visitor Comments Mr. Polans stated he had spoke at the Tigard City Council Meeting last evening where he had presented them with 3 items 1) lawyers letter that was copied to the Department of Motor Vehicles, 2) complaint of CH2M Hill report, 3) sale of Tigard Water Building which did not include ground money evaluation and assessment. Mr. Polans stated- he was required to leave due to Executive Session and hopes that Mr. Monahan can clarify what the results of that Executive Meeting in regards to the sale, lease or sharing of that building were. Mr. Polans continued by discussing a newsletter from the Regional Water Supply Plan which stated that a request was made to hold additional public workshops prior to making a decision. Mr. Polans stated he had requested from Maintenance Services a copy of the report from CH2M Hill on the rate study so as to prepare for tonight' s meeting and since that was unavailable he would be unable to give his input on the report . Mr. Polans stated he had made a decision on what to do concerning the drinking water situation. 4. Approve February 14 Meeting Minutes A motion was made by Commissioner Hunt to approve the minutes of the February 14 meeting as written which was seconded by Commissioner Budihas and passed unanimously: 5. a. Rate Study - CH2M Hill Eric Rothstein, Senior Economist with CH2M Hill introduced Bob Tomilinson also a Economist with CH2M Hill who has completed most of the legwork with this project. Mr. Rothstein stated the this was a progress status report since and there is .no report document for viewing at this time. Most of the information being presented should be treated as draft information until input from the Board is complete. Mr. Rothstein stated that he will be advising the Board on the status of the technical work and the issues that are coming up. The operations and maintenance budget includes the current budget with an escalation of 4% a year, over a 4-5 year forecast period. The rate design will recover the cost that each type of customer group imposes on the system. Mr. Rothstein continued by saying that they have completed a draft of the calculations of the System Development Charges and the rate design work is all that is remaining to be completed. Chairperson Scheiderich question why they have dropped out SDC revenue for the fifth year? Mr. Rothstein stated that is the net SDC revenues and not the total revenues to be reflected of SDC. That is the SDC revenues to be applied against capital projects that provide for general system benefits, a portion of which will be serving the customers, as opposed to specific projects that are meeting new customer growth. Mr. Rothstein stated that any delays that have occurred to date. are due to data collection and CH2M Hill is ready to complete the work. The issues the Board will probably be concerned with will be adjustments desired to the System Development Charges . The rates that will be calculated by CH2M Hill are rates that will cover the cost of service and cost of service based SDC's . The other concerns may be policy issues with imposing fees and/or rates . Mr. Rothstein continued by stating that the SDC' s that are calculations of which are the results which are shown on the back page (information distributed) indicate a significant increase of charges to ' developers for new connections . In some communities there is a desire to encourage development by not charging the full or allowed SDC while in other communities these charges are passed along to the developer. Even the increase in SDC reflected in this information would still place Tigard very competitively with neighboring communities. Intergovernmental Water Board Meeting 3 - 13-96 Page 2 Adjustments to revenue requirements would be another policy that may require attention. There is some argument to suggest the desire to imbed in the revenue requirements some savings for future capital increases (development of water supplies, funds available for rate stabilization, etc. ) . Form of the rates implemented would be another policy issue to be considered. Would we continue with the current rate structure or eliminate the quantity allowance, impose some type of conservation rate, etc? Chairperson Schedeirich questioned whether Mr. Lowry was satisfied with the progress that is being made on the study? Chairperson Scheiderich questioned whether CH2M Hill has considered computation of the SDC, a few issues that have not been considered in earlier versions he has seen such as, 1) a charge to be imposed for fire line connections (sprinkler connections) considering the size of the service lines? CH2M Hill stated that they had not included that in their analysis . Mr. Scheiderich continued by questioning whether 2) what charges would be for upgrades? CH2M Hill stated that you would basically charge for the differential not the entirety of the service . Mr. Scheiderich stated that he would like to see those charges in the report . Mr. Scheiderich also questioned the instance of a downgrade of system use? CH2M Hill stated that these would be more of a policy issue versus a computation issue. Mr. Scheiderich questioned on the adjustments to the SDC charges, most would agree that the numbers support a charge greater than charges actually enacted. He would prefer that the numbers support the numbers that are appropriate without adjusting a change . An alternate capital improvement plan could be suggested which would support a different charge to be enacted. Mr. Rothstein continued to state that once this document is presented to the Board, they will still be policy issues that will need to be made . Chair Scheiderich questioned Mr. Monahan on whether the Board would recommend some work items to the study? Mr. Monahan stated that these could be added and the costs factored into the study. Commissioner Hunt questioned the completion date of the study? Mr. Rothstein stated that they are hoping to come back next month. Mr. Polans stated that he had a question and was informed by Chairperson Scheiderich that he could address that question to CH2M Hill at a later time . Mr. Polans questioned how the public would give input if they are stopped from speaking? Chair Scheiderich stated that the Board members have been Intergovernmental Water Board Meeting 3-13-96 Page 3 appointed by their respective cities to represent the public' s interest and if Mr. Polans feels that Mr. Budihas is not representing the interests of the citizens of King City then Mr. Polans should speak with Mr. Budihas or the King City Council . Chair Scheiderich questioned whether the Board would like to recommend that this study include the demand placed by fire line connections and the appropriate charges? A motion was made by Commissioner Budihas to have the study by CH2M Hill to include a charge, if any, for fire line connections. This motion was seconded by seconded by Commissioner Froude. Prior to voting on this motion, it was decided that a motion was not necessary, but just a consensus by the Board. 5. b. Mentor Reservoir Site - Chris Uber/Ed Wegner Chair Scheiderich stated that the Board had been provided with a Menlor Reservoir Site analysis provided by Murray Smith and Associates and questioned whether the Board would like to review this document or have Chris Uber discuss briefly since he was in attendance at the meeting? The Board decided that they would like a summary of the analysis distributed. Mr. Wegner stated that this issue has been discussed for the last ^ two years and a decision was finally made to proceed. With all the growth on the far side of Bull Mountain (Bull Mountain Meadows) the following presentation will show that we are moving ahead with this plan and will present the final plan to this Board prior to presenting to the Tigard City Council. Ed Wegner introduced the firm of Murray, Smith and Associates, the engineering firm that the City has contracted with for the past two years . Phil Smith is the Senior Partner since Hal Murray' s retirement and Chris Uber has moved from Project Engineer to Principal member of the firm. Mr. Smith stated that although Hal Murray has retired he is willing to work on a consultant basis for City of Tigard, if needed. Mr. Smith continued by stating that some changes have occurred recently with the firm, some of which include Chris Uber moving from Associate to Vice President of the firm, Mr. Smith assumed the role of President and Dave Leibrandt is the Senior Vice President . Mr. Smith continued by stating that the District has had 10 acres since 1989 on the west side of Bull Mountain. In recent months the City has begun looking at the site due to the considerable amount of growth in that area. Murray Smith and Associates Otre commissioned from the City of Tigard to do study on that site as well as addressing some master plan issues associated with that reservoir as well as answer some questions on whether the site is adequate, is it the right elevation, at what volume should the reservoir be, costs, procedures to proceed with to keep the project moving, and Intergovernmental Water Board Meeting 3-13-96 Page 4 access issues. The results of this study were distributed to the Board. Mr. Uber stated that he will begin by answering questions that were noted above. Mr. Uber discussed the information that was distributed and pointed out areas on the map. The Menlor site sits just South of Old Scholls Ferry Road. The 1986 master plan report recommended that two reservoirs be constructed and also recommended that some other reservoirs be constructed, which were added to this study. The 1986 plan recommended two reservoirs at Menlor one at 410 feet, one at 470 feet and on the South side of Bull Mountain a reservoir was recommended at 410 feet and one at 550 feet . Mr. Uber continued and discussed the hydraulics and reservoir elevations as presented. Mr. Uber continued by stating that their recommendation was to not build the 470 feet reservoir at this time. The 410 feet reservoir serving the area of the red zone is the reservoir that is discussed in the document . Once this determination was made, they began looking at the site and how the reservoir would fit on the site. The site ..� was then surveyed and tied into a known benchmark and they developed a site plan. The survey found that both reservoirs could be built on the site, although they are recommending that just one is built at this time. Commissioner Manning questioned why the recommendation for building just one reservoir at this time? Mr. Uber stated that the recommendation is to pursue the 550 feet reservoir site on the North side. Since the 470 feet reservoir would only serve 70 feet of elevation and ideally you would want to serve approximately 150 feet . Mr. Uber continued by discussing the survey of the Menlor site, which showed a need for a 410 feet reservoir with a capacity of 3 . 5 million gallons. Existing reservoir #3 (2 .5 mg) is concrete reservoir that has had a layer added to it and it currently has leaking problems . This reservoir will eventually be abandoned due to maintenance problems . The question is whether to replace the capacity of this reservoir at the Menlor site. Chairperson Scheiderich questioned the linear progression per 100, 000 gallons at a cost of $100 ,,000 of construction costs and are there set sizes of concrete 'tanks? Mr. Uber stated that the tanks could be built to any size capacity. Mr. Uber stated that he will later discuss the difference between a reinforced concrete tank as opposed to a steel reservoir. Intergovernmental Water Board Meeting 3 -13-96 Page 5 Commissioner Budihas questioned if reservoir #3 is abandoned what happens to the site. Mr. Volk stated that there is another reservoir on the same site (2 . 5 mg) as well as a well . Mr. Uber stated that placement of the reservoir is based upon ground elevation. Mr. Uber continued to discuss access to the reservoir site. There were three options of access available 1) track G access (advantage since the City has existing water pipes there waiting to connect the new reservoir and allow for efficient use of the property without having to clear the entire property. The disadvantage of track G access is having to send trucks through the neighborhood since this is at the end of a residential street . The second option 2) Sunrise Lane access which is at the SE corner (disadvantage was traveling over the unused portion of the property and not knowing at the time what the future use of this portion of the property would be) and the County initially expressed some concern about using one of their roads for carrying heavy construction equipment . Mr. Wegner pointed out this area on the vicinity map that was furnished to the members . The third access 3) Roundtree Estate access with an advantage similar to the track G access allowed access without a disturbance to the remainder of the property. This access is also close to the existing water main and the closest direct access to Old --� Scholls Ferry Road although there is an undeveloped piece of property just to the North of it which Mike Miller is attempting to get easements through, so there would be a potential to develop a reservoir access with this property. The Roundtree Estate access was the recommended access by MSA. Development of this site would involve conditional use . Mr. Uber continued by discussing that their recommendation includes a pre-stressed concrete reservoir since a portion of the reservoir will be buried. Commissioner Manning questioned what type of anchor would be used? Mr. Uber stated that the anchor typed would be a part of the design project . Mr. Uber stated that a geo-technical engineer would determine what type of anchors will be needed to stabilize this foundation. Commissioner Manning questioned whether this geo-technician will also look at the seismic stability in this area? Mr. Uber stated that the geo-technician is involved to a certain extent, although the seismic requirements of this reservoir are handled by the structural engineer. Commissioner Manning questioned the cost of this particular site to meet all required conditions, and would we be considering alternate sites? Mr. I7ber stated that a site can be made to work geo technically. Chairperson Scheiderich questioned whether MSA would be doing the design work or would that be handled -1 through the RFP process? Mr. Wegner stated that this will be discussed later. Intergovernmental Water Board Meeting 3- 13 -96 Page 6 Mr. Uber continued by discussing how the existing transmission system would work with this new site. They looked at some peak water days and that effect on the other reservoir sites . This new site would sit a far point away from the supply (from Lake Oswego, Portland and TVWD connections) and with existing conditions, there would be a problem filling this reservoir. A review of the current transmission system would need to be completed to determine what type of improvements would need to be made in order to fill this reservoir site. The current system does have some links that could be added to improve the hydraulic capacity. Mr. Uber stated that one of the recommendations by MSA is to analyze the water system under peak demand conditions and determined what improvements need to be made to the transmission system. Commissioner Hunt questioned where the reservoir site of the 550 feet fit into this plan overall? Mr. Uber stated that MSA is also recommending that the City immediately begin looking for an additional site that will accommodate a 550 feet site. Mr. Hunt questioned how many years would this current site carry us until the need exists for the 550 feet site? Mr. Uber stated that is difficult to answer although he felt that it would be sooner than later with the pace of the demand and the development in the area. Commissioner Manning questioned the amount of property required for an additional site? Mr. Uber stated that depends upon the condition of the site. Commissioner Hunt questioned pumping from the 410 feet elevation? Mr. Uber stated that we are currently supplying down from High Tor. Mr. Uber stated that the City currently has on the South side property, space for a 410 feet reservoir and there is not a site for the proposed 550 feet site. Chairperson Scheiderich questioned the highest elevation of the supply mains on the East side of town? Mr. Miller stated that the highest is at 670 feet. Mr. Uber stated that they have included a cost estimate in the packet provided to the Board. Mr. Wegner stated that we still have to complete the land use process with Washington County. Mr. Uber and Mr. Wegner have already met with them at a pre-application meeting and have some things to finish up. Mr. Wegner stated that once things are completed in house and get on the agenda with Washington County, the hearings presentation would probably be July or August and design and construction next year (probable completion 18 months out) Commissioner Hunt questioned how this project is being funded? Mr. Wegner stated that this is funded through SDC' s . Mr. Lowry stated that the current projection now for the reserve ^ fund and water SDC' s in the 1996/97 fiscal year, we would be appropriating approximately 3 . 5 million dollars of worth for water projects out of thele two funds, which have been Intergovernmental Water Board Meeting 3-13-96 Page 7 earmarked for this project . Mr. Lowry continued by saying that if the three million dollar project estimate is appropriate, there would be an additional half a million dollars for possible purchase of property for a future site and the future SDC' s funds will also be available. Commissioner Hunt questioned the cost of the existing site? Mr. Miller stated that this property cost $125, 000, although land values have escalated in the last few years. Mr. Uber stated that the next steps are to meet with Washington County on the conditional use permit process and to proceed with an analysis of the transmission system, begin looking for additional property for the 550 feet site, and continue talking with property owners around Three Mountain Estates since a traffic impact state will be needed to access the property. Mr Uber stated that there are risks involved with the beginning design work prior to having the land use application completed. He stated that they have spoke with the County on what would be needed to get this process through. Mr. Wegner stated that the IWB need to recommend that this project proceed to the Tigard City Council . The City' s '1 consulting engineering contract with Murray, Smith and Associates stipulates that large, single projects are not necessarily included in their scope of services, however, this would not preclude the City from requesting an RFP from Murray, Smith and Associates to complete work on this project, or solicit proposals from other firms. The type of firm that is needed is a full service firm that can take us from beginning to end of this project with a geo-technical people, G and possibly an attorney to make presentations. This firm should also be the firm that will do the design work. Commissioner Hunt questioned whether we can legally contract 4_ with MSA? Mr. Monahan stated that we do not need to go out for bid for professional services . Mr. Wegner stated we would however, need a separate RFP if we go with MSA. Mr. Scheiderich questioned who would write the RFP for this project? Mr. Wegner stated that Jim Hendryx and himself would write the RFP. Mr. Monahan stated that the legal aspect would not need to be written into this RFP since we could use the City attorneys . Mr. Wegner clarified that once MSA presents the preliminary design for the Menlor site to Tigard City Council, they have completed the scope of services under their current general services contract . The Board discussed the issue of granting this contract to another firm which would include some review of the work already completed by Murray, Smith and Associates . Intergovernmental Water Board Meeting 3-13-96 Page 8 A motion was made by Commissioner Hunt to recommend to the Tigard City Council, to proceed with the Land Use Application and a geo-technical study that has been identified by Murray, Smith and Associates on the Menlor Reservoir site. This motion was seconded by Commissioner Budihas and Commissioner Hunt questioned whether we should include the necessity to look for additional land for future site? Commissioner Hunt' s language was added to the motion and was passed unanimously. A motion was made by Commissioner Budihas to recommend to Tigard City Council to issue a change order to the existing contract of Murray, Smith and Associates to seek preliminary engineering and design of this reservoir site. Chair Scheiderich clarified the motion by adding that this motion would be a recommendation of negotiation towards a change order. Mr. Wegner stated that it was his recommendation that an a request for a formal proposal from Murray, Smith and Associates, with the right to reject if the proposal was unacceptable . This motion was seconded by Commissioner Hunt and was passed unanimously. 5. Facility Use - Bill Monahan Mr. Monahan stated that there has been further conversations with City of Durham and the Tigard Water District concerning the potential use by the City of Tigard. To date comments have been received from City of Durham expressing an interest in using their portion of the building in exchange for maintenance services. The Tigard Water District has a mixed opinion. King City has not responded to date. Commissioner Budihas stated that they will meet again next week and will make a decision after additional consideration. An issue that is of concern is the valuation of the building and why the City has proposed a figure that does not include the land. Mr. Monahan stated that in a letter dated February 1 which outlined the interests of the City and included an approximate figure of the property valuation and the portion of the shares for each entity. The value was determined to be a $1, 370 , 644 for the building with a calculated depreciation that brought the value of the building to $1, 079 , 382 , these figures do not include the underlying land. Mr. Monahan continued to say that there are two ways of determining value based upon proportionate interest and the proportion of assets which are found in the EES study. The range based on these figures were for Tigard Water District $241, 000 to $299 , 000 . The proposal asked that the owners of the interest either consider leasing, selling or allowing use by the City of Tigard. Intergovernmental Water Board Meeting 3 -13 -96 Page 9 The physical location report that was received from Mr. Lowry stated that a replacement value for the building itself of $645, 190 and the land underneath valued at $525, 000 . The value of the entire site would be $1, 170, 000 which is $90, 000 more than what was estimated in the February 1 letter. This land encompasses more than just the building site. At this time the Tigard staff is working on space needs for the next twenty years and the scenarios that are developed will be taken to Tigard City Council on Tuesday. Mr. Monahan stated that they are also looking at the Amber Foods building across the street as an option. Chair Scheiderich questioned when discussing the possibility of rent or lease and payments in services in kind distributed according to each entity shares, what term of a lease is being considered? Mr. Monahan stated that they would like to have this agreement be long term, if possible. The expectations of utilizing the Water building could necessitate some improvements to the building itself and possibly an addition to the structure. These additional value from these improvements would be a 1000 of the City of Tigard. Commissioner Manning questioned what the valuation portion for -� the City of Durham and King City for purchase? Mr. Monahan stated that Durham' s valuation was a little over 8o and King City 6a Commissioner Budihas stated he would like to hear what all three options are and be able to take this back to the King City City Council for consideration. Mr. Monahan stated also that the issue of where the money goes if each entities interest is bought out . The Tigard Water District stated that their portion would be valued at $281, 000 and where would this money go. Their only option would be to put these funds back into water services . Mr. Monahan questioned when the interests are bought out should these funds not go back into the water system and help reduce rates to the rate payers since it was those rate payers who paid for the building? Chairperson Scheiderich questioned whether this building met the seismic code? Mr. Volk stated that it met those standards when it was built . The Water District' s concern is that this building was built to enable the water patrons and staff a better facility and if they are displaced they are compromising the issue of the buildings use . John Haunsperger from the Tigard Water District stated that this building should be continued to be used for the purpose of which it was built to accommodate and serve the water Intergovernmental Water Board Meeting 3-13 -96 Page 10 patrons and staff . Mr. Haunsperger stated that the building was built with Capital Improvements funds . Mr. Wegner stated that the Tigard Water District does not have any staff, the staff is City of Tigard staff and some have other office space. Mr. Monahan stated that he felt the best scenario would be for the City to have the ability to use without paying the lease or paying to purchase and keep it available and not reduce the space for the people who are doing water functions. Since some of the people outside the water building (Monahan, Wegner, Volk) are also doing water functions, other facilities are being used to do water functions and these would offset the use of the water building for other than water functions . Mr. Monahan stated that the auditorium could be used for court purposes to alleviate traffic issues and crowding at City Hall . Commissioner Hunt stated that one of the goals of Tigard City Council is to attempt to look at staff needs in the future. When looking at long term needs , the need to look at this building and its use and incorporate it into the needs of the organization. Mr. Hunt stated that a concern when the City began supervising the distribution of the water system was whether we could save the amount of money as projected. Mr. Hunt continued by saying that we have saved at least as much as was projected, if not more. Chair Scheiderich stated that he would like to get a consensus from the Tigard Water District at their next meeting prior to proceeding on this topic. 5 . Fiscal Year 1996/97 Budget - Randy Volk/Ed Wegner Chairperson Schedierich stated that in regards to the budget he would suggest that the Board look at the summary that was provided and ask specific comments of staff at the next meeting. Mr. Wegner stated that the Board could contact staff prior to the next meeting with any necessary questions, since that next meeting will be well into the budget process. Mr. Lowry stated that budget meetings begin April 13 and City Council adoption of the budget is scheduled for mid June. 6 . Director' s Report - Ed Wegner Mr. Wegner ' stated that he had distributed the monthly summaries to the Board members for their review which included monthly supply purchase, and a news release which will go out —� in billings about landscaping seminars and water conservation. Intergovernmental Water Board Meeting 3 -13-96 Page 11 7 . Non Agenda Items None noted 8 . Adjournment With no further business or discussion a motion for adjournment was made by Commissioner Budihas and seconded by Commissioner Hunt and passed unanimously. kathy\iwb\3-13 iwb.mtg Intergovernmental Water Board Meeting 3 - 13-96 Page 12