City Council Packet - 02/16/2021 City of Tigard
Tigard Workshop Meeting —Agenda
TIGARD
TIGARD CITY COUNCIL
MEETING DATE AND TIME: February 16, 2021 - 6:30 p.m.
MEETING LOCATION: Remote participation only. See PUBLIC NOTICE below.
PUBLIC NOTICE: In accordance with the City of Tigard's Emergency Declaration related to COVID-19
and Oregon House Bill 4212, this will be a virtual meeting where Council and staff will participate remotely.
There will be no verbal public testimony during this meeting.Written public comment may be submitted
electronically at www.tigard-or.gov/Comments. All comments must be submitted before 4:30 p.m. on the day
of the meeting.
VIEW LIVESTREAM ONLINE: http://www.tigard-or.gov/city_hall/council_meeting.php
Workshop meetings are cablecast on Tualatin Valley Community TV as follows:
Replay Schedule for Tigard City Council Workshop Meetings - Channel 28
•Every Sunday at 12 a.m.
•Every Monday at 1 p.m.
'Every Wednesday at 2 p.m.
•Every Thursday at 12 p.m.
•Every Friday at 10:30 a.m.
SEE ATTACHED AGENDA
" City of Tigard
Tigard Workshop Meeting—Agenda
TIGARD
TIGARD CITY COUNCIL
MEETING DATE AND TIME: February 16,2021 - 6:30 p.m.
MEETING LOCATION: Remote participation only.
6:30 PM
1. WORKSHOP/BUSINESS MEETING
A. Call to Order- City Council
B. Roll Call
C. Pledge of Allegiance
D. Call to Council and Staff for Non-Agenda Items
2. JOINT MEETING WITH THE PARK AND RECREATION ADVISORY BOARD (PRAB)
6:35 p.m. estimated time
3. DISCUSSION REGARDING CITY CENTER SUBSTANTIAL AMENDMENT REFERRAL
BALLOT TITLE LANGUAGE 7:20 p.m. estimated time
4. RECEIVE BRIEFING ON THE WATER COST OF SERVICE ANALYSIS AND RATE
STUDY PROJECT 7:45 p.m. estimated time
5. NON-AGENDA ITEMS
6. ADMINISTRATIVE REPORT
7. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive
Session is called to order, the appropriate ORS citation will be announced identifying the applicable
statute. All discussions are confidential and those present may disclose nothing from the Session.
Representatives of the news media are allowed to attend Executive Sessions, as provided by ORS
192.660(4), but must not disclose any information discussed. No Executive Session may be held for
the purpose of taking any final action or making any final decision. Executive Sessions are closed to
the public.
8. ADJOURNMENT 8:45 p.m. estimated time
AIS-4503 2.
Workshop Meeting
Meeting Date: 02/16/2021
Length (in minutes): 45 Minutes
Agenda Title: Joint Meeting with the Park and Recreation Advisory Board
Prepared For: Rick Gruen, Public Works Submitted By: Marissa
Grass,
Public
Works
Item Type: Joint Meeting-Board or Other Juris. Meeting Type: Council
Workshop
Mtg.
Public Hearing: No Publication Date:
Information
ISSUE
Convene a joint meeting of the City Council and Parks and Recreation Advisory Board
(PRAB) to discuss four key topic areas.
STAFF RECOMMENDATION / ACTION REQUEST
Provide input as appropriate to the PRAB.
KEY FACTS AND INFORMATION SUMMARY
The Parks and Recreation Advisory Board (PRAB) meets annually with the Council to discuss
items of importance to both bodies. The joint meeting allows the PRAB to get direction
from the Council and for the PRAB to advise Council on parks and recreation related items.
The Parks & Recreation Master Plan Update is underway, and both Council and PRAB
recently received updates from the project team.
PRAB is interested in discussing the following topics with Council:
•Recreation: Adaptability during COVID; need for stability after several years of
starting/stopping. Continued financial support is critical.
• Organizational Structure: Identify the best organizational structure that will allow parks
and recreation services to thrive.
•Park Maintenance: As the park system continues to grow, there will need to be an
on-going commitment to adequate staffing and resources to maintain the system.
•Future park acquisition: Development and maintenance decisions need to consider
equity among all service areas of the city as a key decision-making criteria.
OTHER ALTERNATIVES
N/A
COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS
The Parks and Recreation Advisory Board advises the Council on matters related to parks
and recreation and other associated Council goals.
DATES OF PREVIOUS COUNCIL CONSIDERATION
Council last met with the Parks and Recreation Advisory Board on December 17, 2019.
AIS-4567 3.
Workshop Meeting
Meeting Date: 02/16/2021
Length (in minutes): 25 Minutes
Agenda Title: Discussion Regarding City Center Substantial Amendment Referral
Ballot Title Language
Prepared For: Shelby Rihala, City Management
Submitted By: Carol Krager, Central Services
Item Type: Motion Requested Meeting Type: Council
Update, Discussion, Direct Staff Workshop
Mtg.
Public Hearing: No Publication Date:
Information
ISSUE
Does the proposed draft ballot language meet the City Council's expectations for requesting
Tigard voters to increase the maximum indebtedness of the Urban Renewal Area to $42.8
million?
STAFF RECOMMENDATION / ACTION REQUEST
Staff recommends Council authorize preparation of a final ballot title for Council's adoption
at its February 23, 2021 business meeting.
KEY FACTS AND INFORMATION SUMMARY
City Council approved the City Center Urban Renewal Plan Substantial Amendment at a
public hearing on February 9, 2021. The Substantial Amendment proposes an increase in
Maximum Indebtedness (MI). MI is the total amount of funds that may be spent on
programs, projects and administration over the life of a URA. MI does not include interest
paid on debt. The original and current MI for the Tigard URA is $22 million. The City
proposes to increase the MI by $20.8 million, bringing the total MI to $42.8 million. The new
MI would contribute funding to the following projects:
• Construction of new streets to provide connectivity
•Tigard Heritage Trail continuation
•Fanno Creek Trail improvements
•Universal Plaza Phase 2
•Parking facility
•Affordable housing and mixed-use development assistance
•Pedestrian safety and streetscape improvements
•Property acquisition
The proposed amendment would also extend the last day to issue debt from the 20th
anniversary to the 29th anniversary of the City Center Urban Renewal Plan. Tax increment
revenues after the 29th anniversary (FY 2034-35) will be spent solely on retiring debt.
A draft ballot title is attached for review and consideration. Based on tonight's discussion,
staff will bring a revised version back to Council and ask Council to approve the ballot title
and refer the plan to voters at its next meeting on February 23, 2021. The election would be
held on May 18, 2021.
OTHER ALTERNATIVES
Council could choose to postpone the ballot measure process and refer the plan amendment
to voters in a future election.
COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS
2019-2021 Tigard City Council Goals
Strategy 2.2 - Continue to make Downtown Tigard a place people want to be by making
substantial progress on projects that attract new residential and business investment. Evaluate
the size and scope of the City Center Urban Renewal Plan to determine whether tax
increment resources in the downtown are sufficient to meet council objectives. Prepare
recommendations regarding the City Center urban renewal area's possible continuation.
City Center Urban Renewal Plan
Tigard Comprehensive Plan
Special Planning Areas- Downtown
Goal 15.2 Facilitate the development of an urban village
City Strategic Plan 2020-2025
Priority 3 — Ensure development advances the vision
DATES OF PREVIOUS COUNCIL CONSIDERATION
February 9, 2021- Council Public Hearing on City Center Substantial Amendment
December 15, 2020- TCDA Board initiation of public review of City Center Substantial
Amendment
October 20, 2020 - City Center Substantial Amendment Update
August 18, 2020 - City Center Futures Update
Attachments
Ballot Title Language
Ballot Title for City Center Urban Renewal Plan Amendment
CAPTION (10 words)
City Center Urban Renewal Plan Amendment—Not a New Tax
QUESTION (20 words)
- Shall the City amend the City Center Urban Renewal Plan, including increasing the amount of
Maximum Indebtedness?
SUMMARY (175 words)
This measure approves an amendment to the City Center (Downtown) Urban Renewal Plan,
which would increase the maximum indebtedness of the Plan from $22 million to $42.8 million,
and duration of the plan by nine years (ending in 2035).
The Plan Amendment would not impose new taxes, nor raise existing taxes.
Funds generated from the Substantial Amendment will support the following new projects in
the City Center (Downtown) area:
• Connectivity: Designing and building new streets
• Universal Plaza Phase 2
• Parking Facility
• Tigard Heritage Trail Continuation
• Fanno Creek Trail Improvements
• Housing Development: funds to support affordable housing
• Pedestrian Safety and Streetscape Improvements
• Land Acquisition: buying land to encourage mixed-use development
Funding comes from property tax revenue generated from new development and increased
property values within the urban renewal area boundary. Urban Renewal is not a new tax, a tax
increase or an extension of a current tax. Funding generated within the area must be spent on
projects within that same area.
A copy of the Plan and Plan Amendment and additional information is available at www.tigard-
or.gov/urbanrenewal.
(175 words)
Ballot Title for City Center Urban Renewal Plan Amendment
IN MEETING EDITS
CAPTION (10 words)
City Center Urban Renewal Plan Amendment—Requires No New Taxes
QUESTION (20 words)
- Shall the City amend the City Center Urban Renewal Plan, including increasing the
amount of Maximum Indebtedness?
SUMMARY (175 words)
This measure approves an amendment to the City Center (Downtown) Urban Renewal Plan,
which would increase the maximum indebtedness of the Plan from $22 million to $42.8 million,
and duration of the plan by nine years (ending in 2035).
The Plan Amendment would not impose new taxes, nor raise existing taxes.
Funds generated from the Substantial Amendment will support new projects in the City Center
(Downtown) area such as:
• Connectivity: Designing and building new streets
• Universal Plaza Phase 2
• Parking Facility
• Tigard Heritage Trail Continuation
• Fanno Creek Trail Improvements
• Housing Development: funds to support affordable housing
• Pedestrian Safety and Streetscape Improvements
• Land Acquisition: buying land to encourage mixed-use development
Funding comes from capturing property taxes from new development and increased property
values in the urban renewal area. Funding generated within the area must be spent on projects
within that same area.
Urban Renewal is not a new or additional tax.
A copy of the Plan and Plan Amendment and additional information is available at www.tigard-
orgov/urbanrenewal.
(175 words)
AIS-4517 4.
Workshop Meeting
Meeting Date: 02/16/2021
Length (in minutes): 60 Minutes
Agenda Title: Receive Briefing on the Water Cost of Service Analysis
and Rate Study Project
Prepared For: John Goodrich Submitted By: John
Goodrich,
Public
Works
Item Type: Update, Discussion, Direct Meeting Type: Council
Staff Workshop
Mtg.
Public Hearing No
Newspaper Legal Ad Required?:
Public Hearing Publication
Date in Newspaper:
Information
ISSUE
Provide a briefing to Council about the recent Water Utility Cost of Service Analysis (COSA)
and Rate Study Project.
STAFF RECOMMENDATION / ACTION REQUEST
Provide the recent information received through the COSA and Rate Study Project so Council can
discuss and deliberate. The briefing will provide needed information to help guide decisions which
will come before you in April 2021.
KEY FACTS AND INFORMATION SUMMARY
Introduction
The city recently completed a Cost of Service Analysis (COSA) and rate study for the Water
Utility Division in the Public Works Department. The city's financial consultant, FCSG will
provide an overview of the COSA data and findings from the analysis and study. As a best
practice for financial management of the utility, it is recommended to conduct rate studies on
a routine basis.
In order to provide information to Council, staff and consultants are conducting several
workshops with council to share findings and receive Council guidance. The objective is to
provide Council with information related to project to make informed decisions relating to
future water rates. The project schedule for Council consideration and action is provided
below:
February 16, Workshop on Revenue Requirements and Cost of Service
2021 Analysis
March 16, 2021 Workshop on Water Rate Design
April 6, 2021 Public Hearing and Council consideration to adopt Water Rates
The city last completed a similar project in November 2010. The adopted recommendations
from the 2010 study included significant structural changes to the water service pricing model
to ensure adequate and stable revenues. The pricing model and rates were effective January 1,
2011. These significant changes were necessary to fund the Lake Oswego-Tigard Joint Water
Supply Project. The changes ensured greater fairness and equity by allocating costs based on
customer classification, by meter sizes, and by using an inclining tiered consumption rate
structure that recovers more revenue from high capacity users.
Cost of Service Analysis Overview
Cost of service and rate design studies are necessary to assist a water utility in setting rates
that are fair and equitable to its customers. These studies also support the water utility's
mission in providing clean, safe drinking water to the community. The water utility's policy
objectives for financial planning are to meet operating, debt service, and capital needs, allocate
costs equitably across customers, and balance costs between the fixed and volumetric
components of rates in order to provide appropriate incentives for customers while mitigating
fiscal risk to the city.
Cost of service analysis and rate studies follow guidance from the American Water Works
Association (AWWA) and the provisions of Tigard Municipal Code Chapter 3.32 — City Fees
and Charges. In summary, the key drivers of financial planning that guide this project are
equity, conservation, and financial stability.
The key principles of COSA are to match the costs of providing service to customer classes
and to design rates to equitably recover costs. The COSA considers maintaining revenue
adequacy while using fair and equitable cost recovery.
Authority
Tigard Municipal Code 3.32.020 states: "The Tigard City Council has the authority to review
and adopt by resolution rates for fees and charges reasonably related to the city's cost of
service. The city manager may set interim fees and charges pending adoption of a city council
resolution."
Other Information
The COSA and Rate Study project findings and recommendations were provided to the
Water Advisory Board (WAB) on February 10, 2021 during their regular meeting. WAB is
also scheduled to meet in March to review Water Rate Design information.
Council is scheduled to review and consider adoption by resolution rates for water utility fees
and charges on April 6, 2021. This will allow staff time to provide public communications
regarding the cost of service analysis and council actions related to water utility rates, fees, and
charges.
OTHER ALTERNATIVES
N/A
COUNCIL OR TCDA GOALS, POLICIES, MASTER PLANS
City Council adopted the 2020 Water System Master Plan on December 8, 2020. Tigard
Municipal Code Title 3 Revenue and Finance provides requirements under Section 3.32 for
City fees and charges.
DATES OF PREVIOUS CONSIDERATION
Council was briefed during a workshop session on July 21, 2020 regarding various water rate
issues related to the Water Cost of Service Analysis and Rate Study project. From this
workshop session, council provided guidance to staff and the consultant regarding booster
fees and charges, meter charges for residential fire suppression, and cost of service for 1-inch
diameter meter charges for residential customers.
Attachments
Water COSA Presentation
Water Utility Revenue Requirement, Cost of
Service Analysis, and Rate Design Study
Presented to the Tigard City
Council
Tuesday, February 16, 2021
Prepared by FCS Group
1111111111.111
_....airaimi.... let maIIMIIIIIW
• FCS GROUP
Solutions-Oriented Consulting
•:;> Agenda
Revenue Requirement
Cost of Service Analysis
Next Steps
FCS GROUP Slide 2
•:;> Past Council Actions
July 21 , 2020 Council Policy discussion
Three key discussion items related to
conducting Cost of Service Analysis
Booster Pump Fees and Charges
1 -inch residential meters with Fire
Suppression
1 -inch residential meters
FCS GROUP Slide 3
•:;> Agenda
Revenue Requirement
• Cost of Servke Aiiaiyis
• Next Steps
FCS GROUP Slide 4
•
❖> From Revenue Req . to COSA
Capital Improvement Fiscal Policies Operating
Program Budget
E
W .- System
•� Development ._
Charge(SDC)
W Rate Revenue
Ce
Requirement
Allocate Costs by
Function
U
.;
i
V)01)
Customer Meters/ Base Peak Fire
4— Services Demand Demand Function
0
CI)
0
0
Allocate Costs to
Customer Classes
FCS GROUP Slide 5
❖> Introduction to UtilityRatemaking
Utility rates are set to recover the cost of providing service.
Utilities incur two primary types of costs:
Operating costs (regular / ongoing)
Employee salaries and benefits
Materials and equipment ri 1 I
Asset repair and maintenance
Debt service
Capital costs (irregular / periodic) Year 1 Year 2 Year 3 Year 4 Year 5
Infrastructure replacement Operating Capital
Facility expansions and upgrades
FCS GROUP Slide 6
❖> What Should Rates Do?
Generate sufficient revenues to sustain the utility system
Charge for cost of services provided
Recover costs equitably
Achieve City objectives
» Conservation
» Revenue stability
» Maintain minimum fund balances and meet other fiscal policies
FCS GROUP Slide 7
♦
❖> YAssumptionsKe
•
Annual Cost Inflation Operating Forecast
• Escalation rates for operating • Rate revenue based on a compilation of
costs were provided by the customer statistics and forecasted using the
City and vary between 1 .00% customer growth rate forecast
and 6.30% • Operating costs and non-rate revenues
• Construction Costs: 2.79% based on FY 2020 Budget
— Adjusted for inflation in future years
— Debt service reflects recent
refinancing
Annual Growth Rates Financial Policies
• Customer growth:1 .30%, • Min. Fund Balance Target: 90 days of O&M
based on historical growth • Debt service coverage requirements
patterns
FCS GROUP Slide 8
❖> Capital Needs Forecast
•
$25,000,000
$20,000,000
$15,000,000
$10,000,000 1111 1
$5,000,000 I 1111111111111
$-
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
$212 million in capital projects from FY 2020 to FY 2039
Cash resources from rates and SDCs are expected to cover the
costs.
FCS GROUP Slide 9
❖>•
Revenue Requirement Forecast
$45,000,000
$40,000,000
$35,000,000 r
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
Existing O&M Existing Debt Service
,m—i New Programs _ Rate Funded Capital
—Total Revenues im. Total Revenues with Rate Increases
Annual 2% revenue increases (above customer growth)
until FY 2028-29 are needed.
FCS GROUP Slide 10
❖•> Fund Balances
$35,000,000
$30,000,000
$25,000,000411
$20,000,000411 111 °I
01
$15,000,000
01
$10,000,000 jp
$5,000,000
111iiIIllIIh
20
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
Ending Operating Fund Balance Ending Capital Fund Balance • • • •Minimum Target Balance
• $2 million in the rate stabilization account is not shown
FCS GROUP Slide 11
•:;> Agenda
• Revenue Requirement
Cost of Service Analysis
• Next Steps
FCS GROUP Slide 12
•
❖> From Revenue Req . to COSA
Capital Improvement Fiscal Policies Operating
Program Budget
E
W .- System
•� Development ._
Charge(SDC)
W Rate Revenue
Ce
Requirement
Allocate Costs by
Function
U
.;
i
V)01)
Customer Meters/ Base Peak Fire
4— Services Demand Demand Function
0
CI)
0
0
Allocate Costs to
Customer Classes
FCS GROUP Slide 13
•
•> Allocation of FY 2021 -22 Revenue Requirement
•
Fire Customer
Function $2,189,855
$473,692 1 /8°A
IlIliMeters &
Services
674,672
Peak 7 3%
Demand Base
$10,435,273 Demand
39% $12,737,943
48%
FCS GROUP Slide 14
❖> Customer Classes
•
• Largest customer group
Single-Family • Relatively low usage per account, high peak demand
• Usage per dwelling unit lower than single family account
Multi-Family • Relatively constant use
Commercial • Diversity in use per account
• Relatively constant use
• High volume significant industrial customers
Industrial • Lowest peaking, most constant use
• Majority of use in peak season
Irrigation • No fire flow requirement
Fire (Bulk • Very small number of customers representing temporary fire hydrant
Water Sales) meters as bulk water sales, generally for construction
_I
FCS GROUP Slide 15
❖> Allocation to Customer Classes
•
Meters &
ustomer Servic: Base Peak Fire
Monthly Peak Month Fire-Weighted
Alllocation Basis Accounts MSEs Average Use Use Accounts*
Projected FY 2021-22 Totals 20,165 27,799 244,619 279,101 32,060
Residential 91.5% 69.0% 57.6% 54.9% 86.3%
Multi-family 3.0% 5.8% 20.7% 19.6% 5.2%
Commercial 3.2% 4.6% 12.5% 15.1% 6.1%
Industrial 0.1% 0.2% 0.3% 0.5% 0.1%
Irrigation 1.0% 1.0% 8.4% 8.7% 0.0%
Fire 1.2% 19.3% 0.4% 1.1% 2.2%
al 100.0% 100.0% 100.0% 100.0% 100.0%
*Accounts multiplied by their fire flow requirements in 1,000 gpm
FCS GROUP Slide 16
❖> Cost Recovery Shifts
Cost Recovery Under Existing Rates
Fire Industrial
Irrigation 0.71% 0.40%
9.18%
Commercial
12.65%
Allocated Cost of Service
Fire Industrial
Irrigation 1.28% . 0.34%
Residential 7.59%
Multi-family 61.37%
15.70% Commercial
12.47%
Residential
Multi-family 60.14%
18.17%
FCS GROUP Slide 17
❖> Cost of Service Results
•
Compare COS to Revenues Before Policy-Induced Increase-
2022 Revenue at 2022 Cost of Difference (from
Class Difference
Current Rates Service ATB)
Residential $ 15,949,782 $ 15,942,854 $ (6,929) -0.04%
Multi-family 4,079,816 4,818,234 738,419 18.10%
Commercial 3,287,282 3,305,343 18,062 0.55%
Industrial 104,344 91,442 (12,902) -12.36%
Irrigation 2,384,976 2,012,896 (372,080) -15.60%
Fire 185,404 340,666 155,263 83.74%
Total $ 25,991,604 $ 26,511,436 $ 519,832 2.00%
FCS GROUP Slide 18
•:;> Agenda
• Revenue Requirement
• Cost of Service Analysis
Next Steps
FCS GROUP Slide 19
•:;> Next Steps
March 16, 2021 Council workshop
Water Utility Rate Design
Council policy direction
April 6, 2021 Council business meeting
Public Hearing and consideration to adopt
amendment to fees and charges
FCS GROUP Slide 20
❖> Rate esign PolicyItems
• Three Discussion Paper Items
» Booster Fee Charges
» 1 " Residential Meters with Fire Suppression Systems
1 " Residential Meters analysis and outcomes
Uniform volume charge for Multifamily
Implementation strategies
Cost of service implementation
Timing of rate change implementation
FCS GROUP Slide 21
Thank y ou !
Questions?
Doug Gabbard — Project Manager
(503) 252-3001
DougG@fcsgroup.com
www.fcsgroup.com
• FCS GROUP
Solutions-Oriented Consulting