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04/17/2000 - Minutes TIGARD WATER DISTRICT BOARD OF COMMISSIONERS MEETING April 17, 2000 Members Present: Norm Penner, Beverly Froude, David Strauss and Gretchen Buehner Staff Present Mike Miller Visitors Present None 1. Call to Order Commissioner Norm Penner called the regular meeting of the Tigard Water District Board of Commissioners to order at 7:04 p.m. 2. Roll Call and Introductions Several board members need to leave early for other meetings. Formal roll call was dispensed with. Commissioner George Rhine was not present. 3. Approval of Minutes Commissioner Penner made one clarifying change to page 4, first paragraph, fourth sentence. The minutes were amended to read: "What does this Board really do?" Commissioner Davis Strauss moved the minutes of the March 27, 2000, meeting be accepted as amended and Commissioner Beverly Froude seconded the motion. Minutes Approved as amended. Commissioner Froude stated she wanted to discuss several points of interest within the minutes later in the meeting. (The agenda items were discussed out of order to enable those who needed to leave the meeting early the opportunity to make recommendations.) 4. Proposed Budget Review Commissioner Penner suggested dispensing with the budget discussion and decision making until later. Commissioner Strauss requested clarification on when the regular meeting was to be scheduled for May. (The last Monday in May would place it on the Memorial Day holiday.) There was some discussion as to whether it was the last Monday or the fourth Monday of each month. It was concluded that the regular schedule was on the fourth Monday of each month, which would make the next meeting on May 22, 2000. The budget meeting will begin at 6:00 p.m. followed by the regular meeting of the Tigard Water District at 7:00 p.m. TWD Meeting Minutes - 1 - April 17,2000 Commissioner Strauss has reviewed the minutes of last year's Budget Committee Meeting. He contacted Mike Miller to obtain the names of the members of that committee. Two members of that committee will need to be replaced. A short discussion ensued resulting in the recommendation of Wally Groce and Ron Baker as possible budget committee members. Commissioner Strauss will make the contacts and inform them of the upcoming meeting. Commissioner Strauss commented that last year the budget committee was presented with the proposed budget at the meeting. He requested that they be provided with that information at least a week in advance of the meeting in order to familiarize themselves with the information. A preliminary review and discussion of the budget took place. Numerous comments and concerns were expressed, questions were asked, and Mr. Miller made clarifications. Recommendations were made that attorney fees be set at$6,000.00 and public relations at$3,000.00. Mr. Miller will provide the budget committee with the amount for meeting staff support and insurance. Commissioner Froude made comments on the minutes of previous Tigard Water District meetings. The Tigard Water District has requested in past meetings that copies of the Intergovernmental Water Board minutes be distributed to the TWD members. This can be verified in previously approved minutes. She requested clarification as to why this has not come to pass. Mr. Miller explained that he had mentioned the request to Kathy Kaatz and Ed Wegner. Mr. Wegner told him that he was not going to send the minutes out to anyone else except to the IWB representative. The IWB representative is responsible for disseminating all the information from the IWB meetings to their board members. Commissioner Froude requested that the TWD's request for IWB minutes needs to be responded to formally in writing by Mr. Wegner, explaining the reason so that that policy will become part of the official minutes of the Tigard Water District. Commissioner Penner stated that he understood the argument presented, since the TWD has a representative at the Intergovernmental Water Board, that representative should come back and report to the Tigard Water District. His concern as chairman of the Board is that he would like to be sure that the full story is being reported each time. He requested that Commissioner Buehner provide copies that can be distributed to them. He also requested that Mr. Miller request a response from Mr. Wegner to the request previously made by the TWD. Commissioner Penner requested information on how the TWD minutes were distributed. Mr. Miller informed him that a copy is distributed to each board member, a book copy at the Library and Public Works office, Bill Monahan and Ed Wegner. Commissioner Froude quoted from the March 27, 2000, minutes, page 4. "Returning to the topic of the General Qualifications, Operations & Organization booklet, all agreed it was outdated. Commissioner Strauss requested Mike Miller provide copies of the TWD policies to members of the board. That information, along with the booklet and the answer to the letter they received, might map out the course of how the TWD should proceed." She stated she thought the TWD sometimes didn't follow up on these items. She requested the status of this request. TWD Meeting Minutes -2- April 17,2000 Commissioner Penner informed the board members that Mr. Miller had talked with him before the other members of the board had arrived. He continued to inform them that the material requested is in storage and that Mr. Miller is in the process of having it searched for in past records. Commissioner Froude suggested looking in the Library copy. Mr. Miller informed them that those proceedings were done prior to the operations becoming part of the City. During that period of time there was a separation between the City and the Water District. Information was, therefore, not put into the Library record books. Commissioner Penner requested an update on the lobbyist issue to represent in negotiations with Portland Water. Mr. Miller stated that IUG is the consulting company that is representing us and the Tualatin Valley Water District, Rockwood and Gresham. They are attending the meetings with Portland to bring a historical perspective and also help decipher what Portland is trying to do. They have only met one time recently. It was supposed to be an all day meeting, but ended after about two hours. Commissioner Penner also requested an update on the need for a publicist or someone to convey the Tigard water issues more firmly to the newspapers. Mr. Miller responded that nothing has been done in that direction. Commissioner Penner requested the minutes reflect that the Tigard Water District Board of Commissioners feels strongly that the public needs to be informed as to what is going on in the water system side of the equation. 5. Intergovernmental Water Board Update Commissioner Gretchen Buehner indicated that the IWB meeting was not a 'fun' meeting. The Rate Increase Report apparently will not happen due to Measure 47. The City has received a legal opinion and it cited that under the initiative, the increases received from Portland do not qualify as being exempt. The bottom line is that this is retroactive to December 6, 1998, and if there are any increases over 3% between that date and December 6, 2000, they are subject to a vote by the people. If the people do not approve the rate increase, they will receive a refund, plus interest at 6%. The most they could raise the rates would be 1.5%. Commissioner Penner asked Commissioner Buehner if she was there for the entire meeting. She responded that she walked out before the end because it was so depressing. Mike Miller interjected that the IWB did approve a 3% increase. It was felt that 3% would not help much, but it was better than nothing at all. Commissioner Buehner indicated that after reading all the information on this issue, she felt that local government would not be able to function effectively. Commissioner Penner requested clarification on how the fees Portland charges its wholesale customers for surplus water were subject to this. Commissioner Buehner indicated that the fees that Portland charges the wholesale customers cannot be passed on to the water users. Basically, Portland Water can charge anything they want, but the IWB cannot pass it on. Consequently, operations will continue to run in the red. Mr. Miller stated that the attorney stated at that meeting that a portion of the fee could be passed on as long as that portion is not attributed to Portland's labor costs. TWD Meeting Minutes -3 - April 17,2000 Commissioner Buehner discussed several legal cases brought before the courts and has the legal opinion available for review. Commissioner Buehner went on to report on the 20-year CIP study of district plans for reservoirs and water main replacements. She displayed a map and calendar, which showed what is being looked at. There is adequate water storage at the 410' level and the 713' level, however, there are no reservoirs at the 550' level. That is the critical issue. There is a shortage of water at that level and two reservoirs are needed. The land acquisition will begin and construction of the first reservoir is anticipated to be in the 2003-05 period and the second one in the 2007-09 period. Two appeals for water credits were also made due to water leaks. Commissioner Penner brought up an incident in his neighborhood where a swimming pool was drained and flooded the surrounding neighbors downhill. He asked Mr. Miller whether there was a law pertaining to the building of a swimming pool that does not drain into the sewer. Commissioner Buehner stated the action was a common law nuisance. Mr. Miller reported that if the water was chlorinated and they illegally discharged it, DEQ and USA could fine them. Chlorinated water is to be discharged into a sanitary sewer or a Best Management Practice training is to be taken to learn how to de-chlorinate the water. Mr. Miller indicated that USA has been notified of the incident. If DEQ was notified of this incident, they probably would not do anything about it because it is too small of an issue. Commissioner Penner thinks his neighbors should take the offenders to court. Considerable property damage did occur. 6. Utility Manager's Report Mr. Miller reported that the TWD already had received the hydraulic report. 7. Non-Agenda Items Commissioner Buehner requested an update on the land acquisition problem. Mr. Miller reported there is to be a joint meeting tomorrow night with the School District Board and the Tigard City Council to discuss the entire concept. The bond measure will go ahead in May, but a ballot title tax measure will not be put on the November election. Commissioner Buehner informed the TWD that there was another reason not to do that. One of the things that is unclear from Sizemore's measure is that if a ballot measure is on the November ballot and it passes, there is a question whether it would have to go back and be resubmitted to the voters. He has the needed signatures, but it still has to be certified before going on the ballot. It will then be up to the voters. The way it is drafted, it is done in such a way that if it passes and a government has not held off doing basically anything that might go afoul, the government will be penalized very heavily. This has caused most government entities to be reluctant to do anything until they find out the results. Commissioner Strauss asked for clarification on the fines. Commissioner Buehner continued by using the example of the proposed rate increase by the water district; if the Sizemore measure passes in November, not only would an election need to be called, but if the election was not won, TWD would have to make refunds with interest back to TWD Meeting Minutes -4- April 17,2000 the time of the increase (TWD would also have to track down every rate payer even if they have moved out of the district) as well as pay a 6% penalty to all rate payers. Commissioner Buehner referenced the Preston Gates report. She felt it would be very useful for the board members to read that report rather than the legal opinion. The report talks about what the effect is and some of the specific language. She provided the TWD with an Internet address of prestongates.com\muni\TPI_init.htm in order to obtain the Oregon Taxpayer Protection Initiative Special Report. Commissioner Penner expressed his concern that if this measure passes and if the City of Portland needs money to make capital improvements or to build a treatment facility that is not approved by their constituents, they could feasibly raise their rates at will to the buyers of their surplus water. That water would not be covered under these proposed regulations, however, the TWD would not be allowed to pass that increased cost on to their rate payers unless it was taken to the voters for the approval of a rate increase. Apparently only the residents of the City of Tigard would be allowed to vote. The unincorporated areas would not be allowed to vote. The City of Tigard has the legal obligation and authority and is administering the program. The TWD is right back where they were about the Willamette issue. Commissioner Penner feels it is important for the four members of the IWB (King City, Durham, Tigard and the unincorporated area) need to come to some understanding so that if this were to come to pass, any vote on a rate increase should be opened to all parties. If it is put to a vote and the same anti- government/anti-tax mentality exists in the City of Tigard that exists in Oregon generally, they will turn down any attempt to raise the water rates. If that occurs, bankruptcy is inevitable. Commissioner Buehner asked whether a 3% increase would stop us from having to go into reserves to maintain current operations. Mr. Miller indicated there would not be a capital plan. There would not be funds for main line replacements or extensions due to road improvement projects. Reservoir construction comes out of a different fund (SDC) and would not be affected at this time. If the initiative goes through, a vote would have to be made when it came time to increase the amount on the SDC's. Tigard Service Area is entitled to recover the costs for installing services. Commissioner Buehner questioned who was responsible for the draft, commenting that it is full of holes and inconsistencies. Mr. Miller stated that the SDC's would not cover the 20-year plan. Commissioner Buehner stated that the anti-tax people in West Linn voted to stop the rate increase and their system totally collapsed before they were able to get a vote to raise the water rates. Commissioner Penner hoped it would not come to that and stated the problem would not be solved that night. He received off the Internet the actual text of the Initiative and gave copies to the TWD board members. He stated he would be writing a letter to the editor. He feels that the general public has only heard Sizemore's side of the issue. Commissioner Buehner stated that between the two measures, one would shut down the ability of local government to function and the other measure would effectively totally stop the State government from being able to function. TWD Meeting Minutes -5 - April 17,2000 At the last TWD meeting, Commissioner Penner said he would write a letter to the Tigard City Council. He has been doing some investigating into the issue in order to obtain information to intelligently write on the issue. Commissioner Penner also has been researching the water issue where citizens stated they would drink bottled water if they couldn't drink Bull Run water. Bottled water costs approximately $5.00 per gallon. One hundred cubic feet of water, which we pay $1.32 for, contains 748 gallons. It would cost $3,740 for 100 cubic feet of bottled water. The average home in Tigard uses between 8-10 hundred units per month. He wants the board to think seriously about how they might have an impact on preventing the initiative from becoming law. It was discussed that a letter from the TWD is needed to inform the ratepayers about how the initiative would effect them. The letter should include the following information: • In FY 1999-2000 due to the substantial rate increases from the City of Portland, it has been necessary to dip into reserves to maintain current operations. • The water rates did go down, but we will still have to go into the red. • If this measure passes, we would not be able to continue with our capital improvements. • Because we have been fiscally prudent and haven't raised the rates for the last several years, the citizens of the Tigard Water District will now be penalized. Commissioner Penner will compose a draft of the letter. There was a brief discussion relating to a draft of a proposed letter to the editor written by Commissioner Penner in an effort to get information out to the community. Mr. Miller indicated that a copy of their letter could be stuffed into the billings that are mailed out to the TWD service area. Commissioner Penner will draft a letter for the Tigard Water District. 8. Next Meeting Date The next meeting of the Tigard Water District is scheduled to be on Monday, May 22, 2000. The budget committee meeting will be at 6:00 p.m. and the regular meeting will follow at 7:00 p.m. A special notice was requested for remind them of the earlier budget meeting. 9. Adjournment Commissioner Buehner moved to adjourn the meeting. Commissioner Strauss seconded the motion. The regular meeting of the Tigard Water District Board of Commissioners adjourned at 8:15 p.m. TWD Meeting Minutes -6- April 17,2000