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05/04/1993 - Packet TIGARD WATER DISTRICT 8777 S.W.BURNHAM ST. P.O.BOX 230000 TIGARD,OREGON 97281-1999 PHONE(503)639-1554 TIGARD WATER DISTRICT BOARD OF COMMISSIONERS AGENDA May 4, 1993 5:30 p.m. • 0.151AA4Akefe OWL4eS . -5,540 us%mss C ctk avcl 46. , 0 QQ: u-tiz /Jr*toi - Call to Order 1. Public Hearing for Resolution 5-93, a resolution to initiate proceedings to dissolve the District and liquidate all assets Recommendation: Aprove Resolution 5-93. sc, -7,t) 7'F p-p-pati -o • Visitors and comments. Adjournment TIGARD WATER DISTRICT 8777 S.W.BURNHAM ST. P.O.BOX 230000 TIGARD,OREGON 97281-1999 PHONE(503)639-1554 To: Honorable Chair and Board of Commissioners From: Je ' . Chenelle, Administrative Director Date: May 4, 1993 Subject: Dissolution of the District Statement of the issue: Now that the cities have withdrawn from Tigard Water District effective July 1, 1993, it is time to follow through on the dissolution of the "remnant" district which will remain. Recommendation: Approve resolution 5-93 initiating proceedings to dissolve the District and liquidate all assets. Analysis: I. History--For the past year, the Tigard Water District has held discussions with the cities of Tigard, King City and Durham about transitioning to a new governance structure to be established under the legal authority of an ORS 190 intergovernmental agreement. Under existing state law, water districts are set up as temporary institutions. Cities may legally withdraw from a water district, take a portion of the assets, and become the water provider. The City of Tigard originally indicated its intention to withdraw in order to consolidate the two water districts serving its citizens, to manage growth, and to enhance opportunities for operating efficiencies. A major concern of Tigard Water District has been to keep the district intact. The water distribution system was built as a single unit, and assets are not easily divided. All our reservoirs and pipelines are tied together without respect to any particular city boundaries. For example, High Tor reservoir located in the unincorporated area serves Tigard and the unincorporated area; reservoir number 4 in the unincorporated area serves Tigard and King City. The 10 million gallon terminal reservoir in Tigard serves all three cities and the unincorporated area. After a number of meetings, it was agreed that the three cities would form a joint water agency through an intergovernmental agreement in order to keep the district intact and continue service in the same service area. Negotiation of an intergovernmental agreement also allowed Tigard Water District to have more influence over the future of the district because it had representatives at the negotiating table. This meant TWD had a stronger voice in the contents of the agreement which would determine the structure of the new joint water agency. Dissolution of the District 04/27/93 Page 2 The original meetings consisted of the chief elected and administrative officials of TWD, King City, Durham, and Tigard. Bev Froude of CPO 4 also served as a representative for the unincorporated area. In later meetings, staff and attorneys negotiated agreement of a concept paper which was then approved by each of the cities. The attorneys are currently fleshing out the concept paper to turn it into an official intergovernmental agreement creating a joint water agency. 2. The unincorporated area--The unincorporated area of Tigard Water District does not have the legal ability to withdraw and transfer its assets into a joint water agency, as do the cities. Consequently, that area of the District which is not included in the boundaries of the withdrawing cities will continue to exist as the Tigard Water District. This includes the Bull Mountain area, the Highlands, and the Walnut Triangle. A guiding principle for TWD continues to be that the district should remain intact. This requires the dissolution of the remaining district in order to join the new joint water agency. Dissolving the remainder of the district can be accomplished only by an affirmative vote of the voters in the unincorporated area. Because assets cannot be easily divided, we anticipate a "paper" division of assets for purposes of the intergovernmental agreement until the remainder of the District can dissolve and join the joint water agency. For example, we might say that 75% of each transmission line is owned by the new joint water agency, and 25% of each line is owned by the remainder of the Tigard Water District. Or we might be able to say that the division of assets is deferred until the results of the September 21 election are known. The attorneys are currently researching the best way to handle this situation. Our studies show that the unincorporated area will need close to $10 million in additional improvements (four major reservoirs and two pump stations)within the next ten years in order to handle increased growth and water demands for the area. We do not believe it is financially feasible to pay for these improvements from only the small customer base that would remain in the unincorporated area. Of our 11,300 customers, we estimate about 25%, or 2825, of our customers are in the unincorporated area. Spread over a ten year period on a cash basis, these costs would average $354 per customer per year(or an extra $29.50 .-r month.) Over a 20 year period with 6°/ nancing costs, the costs would be about $ per customer per year, or an extra$ = per month. Of course, issuing bonds over a longer period of time would lower the annual cost, but would still be more of a burden than if the costs were spread over the entire customer base of the current district. 3. Dissolution Process--Dissolution of the remnant district requires the following steps: • TWD adopts a resolution finding that it is in the best interests of the inhabitants of the District that the District be dissolved and liquidated. The resolution is filed with. the Washington County Board of Commissioners. • TWD adopts findings of fact regarding the finances of the District and proposes a plan of dissolution and liquidation. The findings and the plan must be filed with the County Board of Commissioners no later than 30 days after the initial resolution is adopted. • Dissolution of the District 04/27/93 Page 3 • The findings and plan must be filed with the Boundary Commission no later than 10 days after filing with the County. • The Boundary Commission considers the proposed dissolution and has 120 days in which to approve or reject the dissolution. • If the Boundary Commission approves the dissolution, TWD must file a notice of election within 10 days after the Boundary Commission decision. The election is held on the next available election date for which the filing deadline can be met. The earliest date the dissolution election could be held is September 21, 1993. The filing deadline for that date is August 5, 1993. • If voters say yes, the TWD Board shall declare the District dissolved and its affairs liquidated. The corporate existence of the District is terminated at that time. Alternatives: The Board could make the decision to leave the remainder of the District (the unincorporated area) intact and not join the water agency, instead of approving the resolution initiating proceedings to dissolve the district. This would be contrary to previous direction to keep the district intact and have all assets and operations transferred to the new joint water agency. Fiscal Impact: Funds for an election have been included in the FY 1993-94 budget, as have funds for legal expenses. Attachments~= • Capital improvements cost calculations • Resolution 5-93 • Dissolution process timeline UNINCORPORATED AREA CAPITAL IMPROVEMENT COSTS Customer Unincorporated Unincorporated 10 Yrs/25%CB 10 Yrs/30%CB 20Yrs/25%CB 20 Yrs/30%CB Base Area Area Cash Basis Cash Basis Bond @ 6%Int Bond @ 6%Int 25%Cust. Base 30%Cust. Base $1 Million/Yr $1 Million/Yr $17,023,684 $17,023,684 11,300 2,825 3,390 Total Cost/Patron Total Cost/Patron Total Cost/Patron Total Cost/Patron $3,539.82 $2,949.85 $6,026.08 $5,021.74 Per Year Per Year Per Year Per Year $353.98 $294.99 $301.30 $251.09 Per month Per month Per Month Per Month $29.50 $24.58 $25.11 $20.92 Comparison of Costs for Capital Improvements Needed in the Unincorporated Area in Next Ten Years $30.00 -// / 25.00 -/ / / / / / / $20.00 -/ $15.00 -/ $10.00 _/ / $29.50 $24.58 $25.11 $20.92 $5.00 - $0.00 / / / / // 10 Yrs/25%CB 10 Yrs/30%CB 20Yrs/25%CB 20 Yrs/30%CB CB=Customer Base of 11,300 UNINCIMP.XLS Page 1 4/27/93 10:32 AM TIGARD WATER DISTRICT RESOLUTION 5-93 A RESOLUTION OF THE TIGARD WATER DISTRICT BOARD OF COMMISSIONERS, INITIATING PROCEEDINGS TO DISSOLVE THE DISTRICT AND LIQUIDATE ALL ASSETS. WHEREAS, the Board of Commissioners previously adopted Resolution 16-92 committing to work with the Cities of Tigard, King City and Durham to create an intergovernmental agreement to form a Joint Water Agency; and WHEREAS, the Cities of Tigard, King City and Durham and the unincorporated area within the Tigard Water District have met with representatives of the Tigard Water District over the past year; and WHEREAS, creation of an agency comprised of the three cities is desired by the Cities of Tigard, King City and Durham; and WHEREAS, Tigard Water District is committed to a smooth transition so that the Joint Water Agency will be created by July, 1993. NOW, THEREFORE,the Tigard Water District resolves and finds as follows: 1. The best interests of the inhabitants of the District will be served by the creation of an intergovernmental entity to deliver water services within the District. To accomplish this objective,the Board of Commissioners hereby initiates the dissolution of the District and the liquidation of the assets of the District through conveyance of the assets to the new intergovernmental entity. 2. District staff is directed to prepare findings of fact for adoption by the Board with respect to the following matters: a. The amount of each outstanding bond, coupon and other indebtedness, with a general description of the indebtedness and the name of the holder and owner of each, if known. b. A description of each parcel of real property and interest in real property and, if the property was acquired for delinquent taxes or assessments,the amount of such taxes and assessments on each parcel of property. c. Uncollected taxes, assessments and charges levied by the District and the amount upon each lot or tract of land. d. A description of the personal property and of all other assets of the District. , e. The estimated costs of dissolution. The findings shall be presented to the Board no later than May 25. 1993. 3. District staff is directed to prepare a plan of dissolution and liquidation and to present the plan to the Board no later than May 25. 1993. 4. District staff is directed to continue negotiations with the Cities of Tigard, King City and Durham regarding the provisions of an intergovernmental agreement for a joint water agency. Chair of the Board ATTEST: Administrative Director Date Page 2-Resolution 5-93 f DISSOLUTION PROCEDURE 1WD Resolution &Dissolve 30 days 1WD Adopts TWD Files Findings Findings and Plan with and Plan County 10 days TWD Files Findings and Plan with Boundary Commission Boundary Commission I Processes Up to 120 days Boundary Commission Says Yes 10 days TWD Calls Files Election Election Notice r By 8/5/93 ` Dissolution Election 9/21/93 1 IVoters Say Yes I W TWD Declares Dissolution ' i i E i 1 i i �/ j y1 to .� I � ; i' ifi .1-the,- 144/ , - M..k.'clkyta \re4,L114, .' - ( 7--C C 5-6,d /K-'--."; /6-d_tc, -7. y. ' 1/ , .23 95'111-s4v t3A -Avr'uiboi2 a. ��G' , i