Loading...
City Council Packet - 10/27/1993 1 1 S1) V CITY OF TIGARD j OREGON 1 t f a e i i 3 i ( AGENDA 1. Call to Order 2. Introductions 3. Purpose of Meeting: Follow-Up to Meeting Held September 29, 1993 Concerning Proposed Water Agreement 4. Set Next Meeting Date, if Necessary 5. Adjournment h:\recorder\oca\cca0929M COUNCIL AGENDA - OCTOBER 27, 1993 - PAGE 1 a ( Council Agenda Item L I TIGARD CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 JOINT MEETING: KING CITY, DURHAM, TIGARD WATER DISTRICT, AND SOUTHEAST WASHINGTON COUNTY INTERIM JOINT WATER AGENCY BOARD Meeting was called to order at 7:05 P.M. by Mayor Edwards. Mayor Edwards called for introduction of all persons present. The following persons signed in: Tigard City Council: Mayor Jerry Edwards; Councilors Judy Fessler, Wendi Conover Hawley, Paul Hunt, and John Schwartz. Tigard staff present: Patrick J. Reilly, City Administrator. John Acker, Associate Planner; Loreen Edin, Acting Maintenance Services Director; Mary Gruss, Accounting Supervisor; Phyllis Harris, Accounting Assistant; Wayne Lowry, Finance Director, Liz Newton, Community Involvement Coordinator; Tim Ramis, Legal Counsel; Terry Tourney, Accounting Assistant; Catherine Wheatley, City Recorder. Durham City Council: Mayor Peggy Manning; Councilors David Meyers and Robert Tydeman. Durham staff present: Roger Gano, City Administrator. King City City Council: Mayor Lynda Jenkins, Councilors Claudia Anderson, Pauline Chamberlain, and Barbara McCaige. King City staff present: John A. Buol, City Manager (also serving as the Acting Interim Manager of the Joint Water Agency). Tigard Water District: Board Chair John Haunsperger; Board Members Beverly Froude, George Morgan, and Lou Ane Mortensen. Also present: Legal Counsel George Mardikes. Southeast Washington County Interim Joint Water Agency: Board member Clarence Nicoli. Joint Water ,agency staff present: Lorry Christian, Leslee J. Gemmill, Cheryl A. Huegli, Diane Kuhn, Mike Miller, Rusty Thomas, and Randy Volk. Also present: Clark Balfour, Tualatin Valley Water District; Robin Franzen, Reporter for the Oregonian; Hill Hampton, Tigard resident; Frank Knight, Tigard resident; Jesse O. Lowman; Tualatin Valley Water District; Ken Martin, Boundary Commission staff; Jack Polans, Writer and resident of King City; Donna Schmidt, Reporter for the Tigard Times; and Linda Whalen, Durham resident. f CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 1 After brief introductory remarks, Mayor Edwards asked City Administrator Patrick Reilly to update all those present on the issues to date. The purpose of the meeting was to follow-up the September 29, 1993 Special Joint meeting concerning a proposed Water Agreement presented by the City of Tigard. City Administrator Reilly distributed to all those present a packet of material (see City Council packet for a copy of this information). As Mr. Reilly reviewed the information, he encouraged those present to note their cornments. The first page reviewed was entitled: "Assumptions Water Goal: Highest quality water service at lowest possible price." Mr. Reilly reviewed the following motions which were approved by the Tigard City Council at their October 26, 1993 meeting: • Upon expiration, 12/31/93, of the Joint Water Agency Agreement, the City of Tigard will form its own City Water Department. • The Council authorizes negotiations, starting immediately, with the Cities of Durham and King City and the Tigard Water District, to provide water and other related services, effective January 1, 1994. Reasons for creating a City Water Department were reviewed by Mr. Reilly. Among those reasons (see Page 3 of the handouts), it was Tiigard's view that: • redundancies would be eliminated, • a layer of government would be omitted, • resource use would be maximized, • water customers would benefit from efficiencies, • cities would have increased influence on growth and development, • Tigard could become more involved in long-term regional water issues, and • this would represent a step towards one water purveyor for the City of Tigard. Page 4 of the handout included a series of assurances to the Durham, King City and Tigard Water District residents which were included in the original proposal (submitted to the other entities on September 29, 1993). Page 5 of the handout outlined the authority and scope of the Advisory Board. Mayor Manning of Durham advised that their comments did not indicate a lack of trust of the City of Tigard, but were made for the purpose of providing a method of counter-balance for future political issues. Discussion followed on possible legal ramifications should the Advisory Board become a governing Board. Tigard City Attorney Ramis noted there were two questions which must be answered (one of which was raised by the Legal Counsel for the City of Durham): CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 2 i i 1. To what degree can the Tigard City Council delegate authority to an C appointed body? 2. What effect would this type of governance have on the ability to finance revenue bonds? Councilor Hawley noted the Tigard City Council was in agreement that Advisory Board members should have staggered terms, as suggested by King City. i City Administrator Reilly then reviewed Page 6 of the handout. This page dealt with water service to new development in unincorporated areas. Mr. Morgan of the Tigard Water District Board expressed his concerns with the effects this would have to the integrity of the Water District. Mr. Morgan also advised this would fragment their service area. TWD Legal Counsel Mardikes advised when annexation occurs, there would need to be a re- distribution of assets and liabilities; properties would be removed from the District. There was discussion on annexation. City Administrator explained this could work similarly to the current Tigard sewer connection annexation policy through agreement with the Unified Sewerage Agency. City Administrator Reilly reviewed Page 7, which outlined the issue of amending the rules and regulations. After brief discussion with Mayor Jenkins of King City, it was agreed that some "word-smithing" was needed for this language to reflect what would be more acceptable to all parties. Mayor Jenkins advised the King City Council wished to clarify what appeared to be an open policy on this issue. Page 8 was reviewed by City Administrator Reilly, which dealt with the issue of the 1% annual rebate. Mr. Reilly noted this had been proposed originally as a mechanism to rebate a percentage of the gross revenue to the Tigard Water District to provide administrative operating funds for them. In preparing a proposed draft agreement, the intention was to give this 1% rebate to all the entities to assure that all parties were treated the same. Page 9 was reviewed by City Administrator Reilly, which centered around the issue of use of water revenue only for water-related expenses. Through discussion with Fling City Councilor Chamberlain, it was clarified that some type of cost accounting would be preferred to account for water activities. Page 10 of the handout dealt with the issue of higher rates where the cost of service was higher. There was considerable discussion on this issue. Mayor Jenkins noted concerns and requested this be clarified. (see King City's comments on file in the packet concerning Item 4b). CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 3 i Councilor Hunt of Tigard noted that higher rates would probably affect Tigard and unincorporated residents because of pumping costs associated with those properties located at higher elevations. Durham City Councilor Meyers noted his concern was for assurances that costs would be spread commensurately across all jurisdictions. Another question raised: What impact will this issue have on the Advisory Board? City Administrator Reilly noted that efforts would be made to balance the Advisory Board representation of customers. He recommended City Councilors (from Durham, King City and Tigard) and the TWD Board Member be on the Advisory Board. City Administrator Reilly referred again to the goal of uniform rates. Capital improvement projects would be selected and prioritized on a system-wide basis. He recognized the concern for assurances that all of the customers will be treated fairly. Councilor Schwartz reminded those present that two critical areas would require approval of decisions by three of the four jurisdictions. Those areas are: 1) decisions for the long- term water source and 2) capital improvements. City Administrator Reilly reviewed the contract term language on Page 11 of the handout. He advised he recognized that security was the main issue with regard to this provision of the contract. Mayor Jenkins noted their City was concerned that if they should be without water, even with a five-year termination date, her City would be "hard put" to assure water service to their citizens. City Administrator Reilly suggested this issue could be worked out individually with the entities through a series of two-way agreements. Councilor Schwartz noted through provisions of State statute, the City could not cut off service. Discussion followed. Councilor Chamberlain of King City noted ten years from now it is possible that the statutes in place now, which provide protection, could change. There was discussion on changing the word "terminate" to "negotiate" or, what re- wording would assure the type of security the cities were hoping to achieve. Mayor Manning questioned why 25 years was selected as a term. City Administrator Reilly responded that 25 years was an arbitrary term for the contract; however, it was the thinking that a long-term contract would make the other entities feel more at ease than a shorter term. Discussion followed on the long-term contract concept. Durham City Councilor Meyers noted that because statutes can change, he would prefer contract language which would memorialize current statutes. In response to a question of Legal Counsel, City Attorney Ramis said it may be possible that local governments could set up local laws for water service delivery. Discussion followed. Wording for this issue will be developed; a draft will then go to all parties for consideration. CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 4 After discussion on the overall contract and in response to a question from TWD Board Member Morgan, City Administrator Reilly noted that certain issues could be identified which would be the same for all entities while other areas would be negotiable. Councilor Schwartz noted two of the issues open to negotiation (as examples): 1. Surcharges placed on water service by a city or the district 2. Annexation policy TWD Board Member Morgan summarized the TWD proposal. The TWD strongly supported continued operation of the Joint Water Agency. Following is a list of concerns reviewed by Mr. Morgan: • Noted that after two years' worth of negotiating, with the understanding the Joint Water Agency was going to be the governing structure, the proposal had now changed; • Noted that the JWA Advisory Board would have more stature than what was now proposed by Tigard; • Requested that additional time be given to the transition from a Joint Water Agency until the implementation of the separate contracts; • Concerned with long-term water supply; • Concerned with the equity interest of the Tigard Water District and outlined the integrated system under which they operate to provide water service within the urban growth boundary; • Noted the deterioration of performance of the employees because of the uncertainty of the past two years with administration and policy setting; • Suggested they take more than one step in the formation of the change- over to the City of Tigard. • Suggested the Joint Water Agency continue for 18 months. City Administrator Reilly responded that the City of Tigard is also concerned with the consumers and the well-being of the JWA employees. He referred to discussions which took place at the September 29, 1993 meeting when it was proposed that the City form a department. Much of what Mr. Morgan raised as concerns, was explained at length by the Tigard Council. Mr. Reilly reiterated that Tigard would agree to full participation from all of the entities in the decision-making process with regard to long-term water supply and the capital improvement program. Councilor Schwartz agreed with City Administrator Reilly, noting that many of the concerns could be addressed in the contract agreement. CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 5 With regard to comments by TWD Board Member Morgan concerning the integrated system, City Administrator Reilly responded the system probably would continue to be maintained in the same way. Durham Mayor Manning noted her appreciation of the City of Tigard for including Durham in these discussions. While somewhat intimidating, she noted it appeared that a good faith effort was made on the part of the City to consider the concerns of her City. Councilor Fessler responded to Mayor Manning's remarks. She noted she served on the Metropolitan Policy Advisory Committee (MPAC); MPAC serves in an advisory role to Metro. She said a collective of elected officials serving in an advisory role appears to "carry a lot of weight." The elected officials serving on the Board makes a difference with regard to the ability to exert significant pressure if an idea makes sense. Councilor Hawley noted she wished to proceed on the formation of a City Department as soon as possible on behalf of the JWA employees. Formation of the department would give certainty to the employees which was noted as a concern by Mr. Morgan. Mayor Jenkins referred to the 1% annual rebate and asked for clarification on the original proposal. She advised, perhaps, King City would like to see the rebate option remain in the agreement. Councilor Schwartz responded that the Tigard Water District would not have any administrative operating funds if they chose not to dissolve. The rebate was proposed to give TWD operating funds for administrative costs for elections and for staff assistance. Discussion followed on the 1 % rebate issue. Mayor Manning of Durham said Durham did not need this. One possibility would be to decrease Durham's customers' bills by 1%. After discussion, it was decided this issue would be negotiable among all the entities. Discussion returned to the contract term. City Administrator Reilly advised he would review the language on this issue. TWD Board member Morgan suggested that bond counsel be asked for recommended wording to determine how different financing could affect the term (length) of the service delivery agreements. Meeting recessed at 8:50 p.m. Meeting reconvened at 9:06 p.m. City Administrator Reilly summarized: • Many of. issues raised by King City and Durham were for wording clarification ("word-smithing") and would require some individual discussions and redrafting of language. Also, there were some legal issues which need to be researched and incorporated into draft agreements for each of the entities' review. CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 6 • City Administrator Reilly asked that a committee be formed consisting of the Mayor of each of the cities and the TWD Chair. This committee will review the concerns raised by each of the entities and work on language changes. • After redrafting is completed by the committee, the amended agreements will be submitted to each of the entities' governing bodies for consideration. Durham Councilor Meyers suggested the committee compose a mission statement to develop the ethics and intent under which the agreements will be formulated. The Tigard City Administrator will keep everyone informed with any major developments resulting from the review being done by the Mayors/Board Chair Committee. Meeting adjourned at 9:10 p.m. L) b=LE Attest: Catherine Wheatley, City Recorder C of Tigard Date: h:\reoorder\ocm\ccm 1027.93 CITY COUNCIL SPECIAL MEETING MINUTES - OCTOBER 27, 1993 - PAGE 7 COMMUNITY NEWSPAPERS, INC. Legal P.O. BOX 370 PHONE (503) 684-0360 Notice Tr 7699 BEAVERTON, OREGON 97075 Legal Notice Advertising • City of Tigard • ❑ Tearsheet Notice Accounts Payable Terry • 13125 SW Hall Blvd. • ❑ Duplicate Affidavit Tigard, Oregon 97223-8199 The following meeting highlights are published for your information. Full. • • agendas may be obtained from the City Recordet, 13125 S.W. Hall Boulevard, Tigard, Oregon 97223, or by calling 6394171. SPECIAL CITY COUNCIL JOINT MEETING WITH KING CITY, DURHAM, TIGARD WATER DISTRICT & AFFIDAVIT OF PUBLICATION SOUTHEASTERN COUNTY STATE OF OREGON, ) INTERIM JOINT WATER AGENCY BOARD COUNTY OF WASHINGTON, as. OCTOBER 27, 1993 -7 P.M. I, Judith Koehler TIGARD WATER BUILDING being first duly sworn, depose and say thtit I a th9 Advertising 8777 S.W. BURNHAM, TIGARD, OREGON Director, or his principal clerk, of the Tigar~ iYmes • Introductions a newspaper of general circulation as defined in ORS 193.010 • Purpose of Meeting. and 193.020; published at Tigara in the FOilow-up to Meeting Held September 29, 1993 aforesaid coun and state; that the tY Concerning Proposed Water Agreement Special City CYi'm_il Tnint Meeting a printed copy of which is hereto annexed, was published in the M699-Publish October 21, 1993. entire issue of said newspaper for Ona successive and consecutive in the following Issues: Oct. 21, 1993 Subscribed and sworn t fore me this r, k99!3= OFF!CIAL SEAL ROBIN A. BURGESS NOTARY PUBLIC - OREGON Notary P lic for Oregon COMMISSION NO. 024552 a 2 MY COMMISSION EXPIRES MAY16.1997 My Commission Expires: AFFIDAVIT _ ~ n 1-11 Q.3 I i JWA "J Lag-/~.-~-1 ~ ✓wR [-Fke c f ita 0, ly4-, --T-, vv\ R-C~ vl/t, C, CC) ~~f J--4 A/I - ,pct 5c w; f r I i r UU\ d , C c v yr ~avv~ hN a N 5 r'~63 ~ 4 ~ i~-;9RD //(,fib rER ~sTR~ cT e- Ae-p-sek pcg -.fie s5e a~J M(!, N 4Q~QT~tU vGZx oft If If 1 ~,~t' Na>~10h ard Ies~~en~ T. C`'G!1 C NOW N MEMORANDUM CITY OF TIGARD CITY OF TIGARD, OREGON OREGON TO: Honorable Mayor and Councilors for Durham King city Tigard Board Members for Southeast Washington County Joint Water gency Tigard Water District ~i FROM: Patrick J. Reilly, City Administrator DATE: October 20, 1993 SUBJECT: Special Meeting on October 27, 1993 - Water Issues Attached please find copies of the following information: 1. Memorandum dated October 19, 1993 - City of Durham; reference "Ideas for New Water Intergovernmental Agreement" 2. Letter dated October 18, 1993 - City of King City; reference their response to the joint meeting of September 29, 1993 3. Letter dated October 18, 1993 - Tigard Water District; reference their response to the joint meeting of September 29, 1993 4. Approved Council Minutes of the September 29, 1993, council meeting. Prior to the next meeting, I will summarize the major points for discussion purposes. THE NEXT MEETING WILL BE HELD ON OCTOBER 27, 1993, 7 P.M., AT THE TIGARD CITY HALL, TOWN HALL ROOM, 13125 S.W. HALL BOULEVARD, TIGARD, OREGON 13125 SW Hall Blvd., Tigard, OR 97223 (503) 639-4171 TDD (503) 684-2772 Attachment No. 1 C f-rrv u DURHAM M E M ® October 19, 1993 To: Pat Reilly, Tigard City Administrator From: Roger Gano, Durham City Administrator SUBJECT: Ideas for New Water Intergovernmental Agreement The City of Durham respectfully offers the following points for consideration and discussion at the upcoming joint meeting on October 27th: 2. Term- The City of Durham proposes that the second sentence read as follows: "The City of Durham may terminate this agree- ment by providing notice to the other parties a minimum of two years prior to the effective date of termination." 3. Advisory Board.- The city of Durham proposes that the "Advisory Board" be named "the Governing Board". Under 3.A., the "At Large" member of the "Governing Board" should be selected by a majority vote of the other members. Further, 3.E. should be amended (in its entirety) to read as follows: "The Governing Board shall make water ser- vice-related recommendations to the Tigard City Council; and the Council may affirm such recommendations. If the Council fails to affirm such recommendations, the Governing Board may, by a super-majority (four of the five members present) override the Council's inaction and compel the recommended action. mmw 10-19-1993 09:56AM FROM TO 6847297 P.02 4- Asset Ownership/61a er RatesZReye=22 The City of Durham proposes that 9.8. be amended (on the top E of page 4) as follows: i "Notwithstanding the foregoing, Tigard may (with the concurrence of the Governing Board) Impose higher rates for providing water ser- vice to residences and businesses when the cost of providing such service is { greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers." Further, the City of Durham proposes the complete removal of paragraph 4.F. dealing with what we consider a "franchise fee". S. Rules and Regulations. Vith regard to this section, the City of Durham wishes the opening sentence to be amended to read as follows: "The rules and regulations governing water service as are now in effect under the South- east Vashington County Joint Water Agency, shall be deemed a part of this Agreement." Attachment No. 2 "ING CITY 15300 S.W. 116th Avenue, King City, Oregon 9i`1d Phone: 639.4082 October 16, 1993 Patrick Reilly, City Administrator City of Tigard 13125 S.W. Hall Blvd. Tigard, OR 97223 Dear Mr. Reilly: On September 29, 1993, the City of King City attended the joint meeting to discuss the City of Tigard's proposed intergovernmen- tal agreement. As a result of this meeting we were asked to provide you with the following information. • A pro and con list regarding the proposal. For this item we are returning the proposed intergovernmen- tal agreement with our suggested corrections to the agreement. Items to be deleted are noted in strike-out. Items to be inserted are noted inside square brackets Items of concern are noted inside asterisks • A list of priorities. 1. The City of King City would prefer to see the Joint Water Agency perform its functions as originally designed, and honor the original intergovernmental Agreement as written. The City would like to give the joint agency an opportunity to function as a joint agency. 2. We would like to see an equal partnership as originally proposed. All partners should be respected, treated, and kept informed as equals. 3. We would like to continue to get a good water source, and to develop a long term and an intermediate term quality water supply agreement, and by such an agree- ment gain an equity interest. 4. We would like to see that service is provided, at the highest level, at the lowest possible cost to the consumer. T Patrick Reilly October 18, 1993 Page 2 5. We would like to know that someone is giving a long term view to the issues as well as serving the immediate needs. • Decision as to whether the proposal, with regard to the elimination of redundancies and resultant cost savings, is a logical assumption. To eliminate redundancies and effect cost savings is of course a logical assumption. As to whether or not this can be completed by the method proposed is another question. The City of King City is concerned that the original intent of equal partnership in this venture is becoming lost in this process. King City entered into this venture believing that all parties would be equal. The suggested use of an Advisory Board seems to suggest otherwise. This is a point which needs more attention and discussion. Additional suggestions, such as a initiating a Water Commission, should be looked into. With respect to having an audit conducted, it is our understanding that this has never been done. We firmly believe that some method of determining current assets and values should be performed. • A decision as to which points in the proposal are agreeable and which areas are "sticking points". The following are our issues of concern regarding the intergovernmental agreement, should this be the avenue we all follow. Item 2 - Termination and dissolving of the agreement should require the consent of both parties involved. Item 3A - Regarding an Advisory Board, concern was expressed that each City should select it's own representative. It might also be wise to consider a Water Commission, with it's own authority, such as in the City of Medford. This would provide the checks and balances needed in a municipal district and an appointed commission (board). An Advisory Boards authority is minimal at best and can be overruled by the Council. Another major issue related to the Advisory Board is regarding recommendations to the Council; will the Board's recommendations be taken seriously and how can that be instituted into the rules and regulations. i Patrick Reilly October 18, 1993 Page 3 Item 3B - The terms of office for the Advisory Board members need to be staggered. In this fashion, the Advisory Board will always retain experienced members. Item 3F - The Advisory Board needs to be granted the final authority to grant variances. Item 4A - In regards to asset ownership, again, some form of study needs to be conducted that each agency would know what the value of their percentage of ownership is. Item 4B - This item needs to be clarified. What is the intent of "Notwithstanding the foregoing . . Are pumping costs necessary? Maybe there should be a cost of services study, or a who benefits analysis. It should also be clearly understood that if Tigard imposes higher rates for providing water service to residences and businesses when the cost of providing such service is greater due to unusual circumstances, that the rates should be applied regardless of city boundaries. Tigard residents would also.be subject to these higher rates. Item 4F - This item needs to be-defined clearly. This money may be used only for water related purposes. It should be clearly understood that this money is not at the discretion of the City Council, and should not be used for any overhead expenses, or any other expenses not. clearly authorized. This money should be directed towards "potable" water related issues. Item 5 - The agreement needs ~to,~address how the water department.. will address, new:Undebtedness. xWhat!' types of bonds;-:'!'-... Will be issued,;-how they will be :issued;" and who will issue.them.`: Also when repayment is made is it by;the jurisdiction-getting.•the capital~.gain or all water customers? If all:.pap who then gets the:capital improvements? Also,.would..each,City.;have their own intergovernmental ; agreement with Germs<-applicable :to that:municipality?..:..,:i i Item 7 - The agreement needs to"raddress how new :,'rules and regulations,will ;be adopted. There needs to be clear'... direction on how.rules are changed or how new rules are established and°who will establish them. The Advisory Patrick Reilly October 18, 1993 Page 4 Board? The City Council? What weight will the recommendations of the Advisory Board carry? We feel there needs to be a procedure established spelling out the rules and regulation changes. The procedure should include the following steps: A. The Advisory Board should be notified, if the Board did not initiate the changes, two (2) weeks prior to action on changes. B. The changes need to be established by ordinance. C. Any ordinances which will change the water depart- ment rules and regulation need to be passed by a unanimous vote of the Council. Item 9 - In relation to employee benefits it needs to be determined what overhead expenses can be charged to the water department, and what other expenses, if any, the City of Tigard can charge against the water department. The City of King City.is primarily interested in entering into an equal partnership wherein we can provide the best. possible water service to our consumers.. We realize this may not-be workable, but our first choice would be to see the Joint Water Agency perform its functions!as originally-designed,-.and honor the original Intergovernmental.Agreement as written. -If we stick to the original intent of the project and provide all..agencies with equal partnership we'll better serve our citizens. If the water system becomes divided our citizens will suffer, along with the credibility of the Joint Water Agency, and all those involved. S' cerely, ynda M. enkins,,. Mayor of King City LMJ:tlb is Enclosure INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITIES OF TIGARD AND KING CITY (DURHAM) FOR DELIVERY OF WATER SERVICE TO KING CITY (DURHAM) This agreement is made and entered into by the cities of Tigard, an Oregon municipal corporation, (hereinafter "Tigard") and the city of King City (Durham), an Oregon municipal corporation, (hereinafter "King City (Durham)"). Tigard and King City (Durham) are jointly referred to herein as "the Cities" and "the Parties." RECITALS: 1. Tigard and King City (Durham) withdrew from the Tigard Water District effective July 1, 1993. 2. Pursuant to ORS 222.540, the Tigard Water District is obligated to turn over to the Cities its water mains, service installations, structures, facilities, improvements and other property in the area withdrawn from the district that are not necessary for the operation of the remainder of the water supply system of the district. 3. The area withdrawn by Tigard was a major portion of the Tigard Water District. Because of this, Tigard is entitled to a major portion of the Tigard Water District's infrastructure pursuant to ORS 222.540. King City and Durham are entitled to smaller portions of the Tigard Water District infrastructure. Furthermore pursuant to ORS 222.550, should the Tigard Water District dissolve, Tigard will be in a position to obtain all of the Tigard Water District's remaining assets which have not been distributed under ORS 222.540. 4. With the assets and infrastructure obtained by its withdrawal from the Tigard Water District, Tigard is creating a city water department. 5. The Cities agree that it is in the best interests of both cities if King City (Durham) were to receive water service from Tigard's city water department. 6. The Cities and Tigard Water District agree that it is in the best interests of the Parties that they together share authority for decision-making regrading the long-term water supply and capital improvement program to serve the water customers of the area. 7. The Cities acknowledge that they have authority to enter into this Intergovernmental Agreement pursuant to the powers of their respective municipal charters and pursuant to ORS 190.010. i ! INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 1 NOW, THEREFORE, the premises being in general as stated in the foregoing recital, it is agreed by and between the parties hereto as follows: 1. Purpose. The purpose of this agreement is to provide a domestic water supply to King City (Durham). 2. Term. This agreement will be in full force and effect until December 31, 2018, unless sooner terminated by one-or both of the parties. Either [Both] party[ies] may terminate this agreement by [obtaining consent and] providing written notice to the other party a minimum of two years prior to the effective date of termination. 3. Advisory Board. Tigard will by ordinance establish an Advisory Board. A. The Advisory Board will consist of five members. Members of the Board will be appointed as follows: Tigard - One Member ( King City - One Member Durham - One Member Tigard Water District/Unincorporated Area - One Member At Large - One Member Selected by Vote of the other Member[s] B. Each-Board-member-shall-be-appointed-for-a-term-of-two J2)-Years.- [Three Board members shall be appointed for a term of three years, and two Board members shall be appointed for a term of two years, so that there will always be experienced members on the Board.] Members may be re-appointed to succeeding terms. C. Tigard may appoint city officials as ex officio members of the Advisory Board to assist the Board in its duties. They shall serve at the pleasure of the Tigard City Council and shall have no voting privileges. D. A quorum of the Board shall be three (3) members. All actions of the Board shall require three (3) votes. E. The Advisory Board will make recommendations to the Tigard City Council on the following water service issues: (1) to study and prepare proposed rules and regulations to govern the operation of the Tigard water system. INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 2 (2) to make a continuing review of any and all rules and regulations regarding the water system which may be adopted by the Council and periodically to make recommendations to the Council for additions or amendments of such rules and regulations. (3) to make a continuing study of the rate structure of the water system. (4) to consider and prepare plans for and make recommendations to the Council for a long-range operation and management program. (5) to investigate and study means of effecting economies in operation and management. (6) to review and make recommendation to the Budget Committee and Council on all budget requests for operation and management. (7) to study and consider ways and means of improving the water system and services which it provides. (8) to make recommendations to the Council relative to all of the above-mentioned matters and as to any other matters which the Advisory Board may feel to be for the good of the water system, the overall public interest and for the benefit of the consumer. [Recommendations submitted to the Council will be subject to a two/thirds majority vote of the Council to be considered defeated.] F. Power to Grant Variances (1) Except when prohibited by subsection 2 of this section, upon application, the Advisory Board may [will have final authority to] grant variances from the water system rules and regulations enacted by the City of Tigard when it finds that: a) strict application of the rules and regulations create undue economic hardship for the applicant with no significant benefit to the water system; b) the variance requested has no adverse effect upon the water system and it is consistent with established policies of the Tigard City Council. (2) The Advisory Board may not grant variances relating to annexation of property, fire protection requirements, [and] cross-connection requirements;-fees;-rates-and charges. INTERGOVERNMENTAL AGREEMENT TIGARD/RING CITY (DURHAM) - 3 4. Asset Ownership/Water Rates/Revenues. A. Assets (both real and personal property) received by King City (Durham) as a result of withdrawal from the Tigard Water District may be utilised by Tigard in order to provide water services to residences and businesses in King City (Durham). Ownership of these assets shall be retained by King City (Durham). B. The rates charged by Tigard for providing water services to residences and businesses in King City (Durham) shall be the same as those charges within Tigard. Notwithstanding the foregoing, Tigard may impose higher rates for providing water service to residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher rates imposed for providing water service shall be limited to covering the actual additional costs of providing such service. C. Revenues for system-capital improvement shall be held in an account dedicated solely for this purpose. D. Capital projects shall be implemented in accord with a [system-wide] long-range capital improvement program supported by sound engineering analysis with the best interests of water ( customers within the area served, ignoring city boundaries. The capital improvement program must be approved by three of the four jurisdictions holding partial ownership of the water system. E. Long-term water supply contracts shall be entered into in accord with the best interests of water customers within the area served, ignoring city boundaries. Long-term water supply contracts must be approved by three of the four jurisdictions holding partial ownership of the water system. F. The City of King City (Durham) shall receive an annual rebate equal to 1% of the previous years water sale revenue within the City of King City (Durham) for [potable] water [supply] related expenses. G. Ownership of any capital improvements shall remain with the jurisdiction in which the improvement is located. 5. Indebtedness. Each of the Parties shall be liable for their respective share of the debt, if any, acquired as a result of withdrawal from the Tigard Water District. **How is the issue of new indebtedness going to be addressed?** INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 4 6. Services Provides By Tigard. (a) Tigard will provide water to customers in all jurisdictions equally. If circumstances require water restrictions, each jurisdiction shall share equally. (b) The City of Tigard will provide all services required for delivery of domestic water to customers within the cities of King City and Durham as well as the territory of the Tigard Water District, including but not limited to system repair and maintenance, water distribution, new installations, system upgrades, and billing functions. 7. Rules and Regulations. The rules and regulations governing water service by the Tigard city water department as are now in effect [by this agreement] or-as-the-eity-ecunci+ [or as the Advisory Board's members four out of five votes] later adopts, shall be deemed a part of this Agreement, and King City (Durham) agrees to comply with such rules and regulations and water service to King City (Durham) shall be governed thereby. Nothing contained in this Agreement shall be deemed to modify, alter or repeal any such rules or regulations. 8. Extension of Service. A. Extension or modification of King City's (Durham's) water distribution system shall be done only with prior written approval of King City (Durham). Furthermore, Tigard will not make any extensions or service connections within King City's (Durham's) Urban Growth Boundary without permission fro the King City (Durham) City Council. B. No existing development in an unincorporated area of the service area will be required to annex to a City as a consequence of this Agreement. C. Residents of King City (Durham) shall not be responsible for any expenses associated with efforts of the City of Tigard to withdraw from the Tualatin Valley Water District to reach the goal of having a single water purveyor for the City. 9. Employee Benefits/Personnel. [A.] All Employees of the Southeast Washington County Joint Water Agency shall become employees of the City [as needed]. The City shall accept such employees with all existing benefits and salary, including but not limited to, health, retirement, disability insurance, wages, vacation and compensatory time. INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 5 Nothing in this subsection is intended to limit the City's authority to alter benefits or salary except as such authority is otherwise limited by this Agreement or by the provisions of ORS 236.605 to 236.650. [B. Bi-monthly reports shall be given to the Advisory Board on any employee that isn't a full time employee of the water department. All employee time (for non water department personnel), equipment, and supplies which were not used by water department personnel and which were charged to the water department shall be declared. Any and all expenses not directly attributable to the water department shall be declared.] [C. The City of Tigard shall hire a Water Administrator on contract for temporary period of one and a half, or one year, to assist in the transfer and completion of the water entity, and to attend all meetings. At the end of this contract period, the district shall be run by the City of Tigard's Public Works Administrator.] 10. Attorneys Fees. In the event any suit, action or other proceeding is brought with regard to this Agreement, or to enforce any of the provisions hereof, the prevailing party in any such suit, action or other proceeding, or any appeal therefrom, shall be entitled to reasonable attorneys fees. 11. Ratification-of-this Agreement. Prior to the effective date of this Agreement, each of the parties shall enact an ordinance ratifying the Agreement. 12. Effective Date. CITY OF TIGARD, OREGON Attest: By: CITY OF KING CITY (DURHAM), OREGON Attest: By: INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 6 Attachment No. 3 TIGARD WATER DISTRICT ; 8777 S.W. BURNHAM ST. P.O. BOX 230000 TIGARD, OREGON 97223-9917 PHONE (503) 639-1554 October 18, 1993 Patrick Reilly, City Administrator City of Tigard 13125 SW Hall Blvd. Tigard, OR 97223 Dear Mr. Reilly: The Board of Commissioners of the Tigard Water District met on October 14, 1993 to discuss the City of Tigard's proposal to contract with the Tigard Water District for the provision of water service. As requested at the meeting of September 29, 1993, we are writing to provide our comments to the draft. Tigard Water District strongly supports the continued operation of the Joint Water Agency formed pursuant to the Intergovernmental Agreement effective July 1, 1993. We believe this Agreement, the result of extensive discussions, fulfilled the long-expressed interest of the City of Tigard in having a direct voice in the policy management of the water service and supply system. It is our firm conviction, at this time, that this is a form of governance that can work well if given strong support and opportunity. Accordingly, we have the following suggestions for the City of Tigard and our other partners in the Joint Water Agency: I. All of the participants should approve an extension of the Intergovernmental Agreement for the Joint Water Agency. It appears to us that with some clarification of assignment and minor additional detail the existing agreement would be adequate. 2. We would suggest one change which we believe will reduce the political pressures which appear to be affecting discussions on water service and supply policies. We believe the Board of the Joint Water Agency should be a citizen-only body. Citizens representing each jurisdiction would be appointed in accordance with the existing provisions of the Interim Intergovernmental Agreement. Page Two October 18, 1993 3. The Joint Water Agency requires full time, professional management and administration. John Buol has made important contributions to the Agency in his part- time capacity, but full-time attention is essential to address key long term water supply and service matters and provide stability and support for the supervision of all employees and/or service contracts. For these reasons, a full time administrator should be retained at an early date. 4. The District would accept an arrangement by which the City of Tigard would serve as the Agency's administrator under contract to the Joint Water Agency. With this plan, all agencies, via their appointed representatives, would share policy development and implementation responsibilities subject to limitations identified in the Intergovernmental Agreement. Professional stable management and operating service activities would be centralized affording opportunity for cost savings and efficiencies. We encourage you to discuss this option with your city council. Please feel free to contact me or our attorney, David Knowles, if you have any questions about the Board's position. We look forward to meeting on October 27, 1993 with all of our partners to seek resolution of these important issues. Sincerely, 64A Y\/, ~4CcGcrw John T. Haunsperger Chair, Board of Commissioners Tigard Water District ng cc: City of King City City of Durham TWD Board of Commissioners Attachment No. 4 ~t . I Council Agenda Item;-," TIGARD CITY COUNCIL SPECIAL MEETING MINUTES - SEPTEMBER 29, 1993 JOINT MEETING: KING CITY, DURHAM, TIGARD WATER DISTRICT & SOUTHEAST WASHINGTON COUNTY INTERIM JOINT WATER AGENCY BOARD • Meeting was called to order at 7:10 p.m. by Council President Schwartz. Councilor Schwartz asked persons sitting at the table to introduce themselves. The following persons signed in: Tigard City Council: Council President John Schwartz, Councilors Judy Fessler, Wendi Conover Hawley, and Paul Hunt. Tigard Staff present: Patrick J. Reilly, City Administrator; John Acker, Associate Planner; Janice Deardorff, Personnel Director; Loreen Edin, Acting Public Works Director; Mary Gruss, Accounting Supervisor; Wayne Lowry, Finance Director; Tim Ramis, City Attorney; Terry Tourney, Accounting Assistant; Catherine Wheatley, City Recorder. Durham City Council: Mayor Peggy Manning. Durham Staff present: Roger Gano, City Manager. Fling City Council: Mayor Lynda Jenkins; Councilors Claudia Anderson, Pauline Chamberlain, John Greene, Barbara McCaige; Barbara C. Stilson (Council President). Fling City Staff present: John A. Buol, City Manager (also serving as Acting Interim Manager of the Joint Water Agency). Tigard Water District: Board Chair John Haunsperger; Board Members; Beverly J. Froude, Lou Ane Mortensen, Art Pedersen. Also present: Legal Counsel, David Knowles. Southeast Washington County Interim Joint Water Agency: Board Member Clarence Nicoli. JWA Staff Present: Brian Clancy; Miko iviiiler; Richard Sattler; Randy Volk. (Also serving on the Joint Water Agency Board as well as other councils or boards who are already listed include Lynda Jenkins, Chair; Beverly J. Froude, Paul Hunt, Patrick J. Reilly; John Schwartz). Other persons present: Clark Belfour, Tualatin Valley Water District; Robin Franzen, Oregonian; Bruce Griswold, City of Lake Oswego; Darrel Johnson, resident of The Highlands; Jesse O. Lowman, Tualatin Valley Water District; Ken Martin, Boundary Commission; Donna Schmidt, Tigard Times. CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 1 Council President Schwartz introduced City of Tigard City Administrator Patrick Reilly. Mr. Reilly facilitated the review of the proposed Intergovernmental Agreement by guiding those present through a series of overhead projector outlines presented for discussion. (A copy of the set of material reviewed by Mr. Reilly is attached to these minutes). During the presentation, the following represents the general issues raised: • (Fling City) A concern was expressed that the other two cities had been convinced to withdraw from the Tigard Water District and then the alternative for the City water department was introduced. (Tigard) The response was that, until recently, it had been assumed that the Tigard Water District would dissolve. It is now known that the Tigard Water District Board does not support the action to dissolve TWD at this time. In fact, the Tigard Water District may continue indefinitely. • (King City) Concern was expressed as to why Tigard thought this altemative (City water department) would be any better than the Joint Water Agency or, before that, the Tigard Water District (i.e., what was wrong with the way the old Tigard Water District was doing business?) (Tigard) Response was the City of Tigard wished to become more involved in securing a long-term water source and to become more involved with water-related decisions which affected the City's operations. One example cited, with regard to decisions which affect the City, was that of growth. Through participating in water decisions, growth issues can be managed more effectively. Another issue for Tigard was the desire to have one water system for the entire city. At this time the City of Tigard is served by the Joint Water Agency and by Tualatin Valley Water District. The Tigard Council wants to assure continuity for all residents (for water service) within City boundaries. • (Tigard) It was stressed that the agreements before the Tigard Water District and the cities of Fling City and Durham were draft agreements. The proposed agreements require long-term water contracts and capital improvements to be approved by three of the four entities. • (Tigard) A member of the Tigard City Council reviewed some background information surrounding this issue. In January, 1991, there was a presentation of the steps (approximately 30) involved in forming a 190 Agreement. At that time, the cities began preparations to withdraw from the CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 2 i Water District. As time passed, other unanticipated events occurred. One unforeseen dilemma arose when it became known that the Washington County Board of Commissioners did not want to appoint or be involved with the appointment of a board member from the unincorporated area to the Joint Water Agency. (A member of the Joint Water Agency noted the Tigard Water District then decided it must remain as a board, because it was necessary to appoint the member of the Joint Water Agency). There was general discussion about the history of this effort. Mr. Ken Martin, Boundary Commission Administrator, concurred and clarified past events with regard to the County's position on this issue and the resulting impact this had on the process. He noted at this point it was important to move forward on this issue and to proceed under the circumstances which are now before the decision-makers. • (TWD) It was also noted there is a bond levy which must be overseen by the Tigard Water District Board (as well as to appoint a representative to the JWA Board). A Councilor from Tigard noted the Tigard Water District will remain as a participant with rights as one of the parses to the agreement. { (King City, Durham, TWD) Concern was expressed regarding the make-up of the water agency board and the balance of powers. An advisory board was not perceived to have enough authority and ability to influence a decision of the Council. • There was a request to review again the overhead page which cited the key differences (page 7 of the attachment). It was noted by a Tigard Councilor that the City of Tigard would have no more authority than they would have had under the Joint Water Agency with regard to capital improvement programs and the water supply contract. • City of Durham representative asked if there was any preliminary data which indicated how much savings there would be by eliminating redundancies. City Administrator Reilly advised preliminary estimates project that approximately a $150,000 savings could be realized. These savings would come through elimination of doubled-up department functions and personnel, as well as duplication of field equipment and vehicles. City Administrator Reilly stressed the City of Tigard does not usually lay off personnel. In the past, changes (reductions) in staff are accomplished through attrition or by movement of personnel within the organization. CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 3 LM In response to a question, Mr. Reilly advised that an immediate reduction in water rates would probably not be realized. Over the long term, however, growth in water rates would be minimized because of cost savings by elimination of redundancies. Mr. Reilly explained the water function would be handled as an "enterprise fund." Revenue and expenses would be accounted for separately from other City functions. Several members of the King City Council (as well as a TWD Board member) noted their reservations that this amount of money was, in fact, the amount which could be saved. They questioned why more detailed information and financial data was not presented. They also expressed concern that the agreement may be too general in terms to guarantee that water revenues would be utilized for water-related expenses. • (TWD) A member from the Tigard Water District board advised she thought the Advisory Board, in essence, would abdicate all authority to the City of Tigard Council. A King City Council member also noted this was of concern. She cited the example that a Planning Commission's decision (as would an Advisory Board's) could be over-ridden by City Council. • There was brief review of some items contained in the Intergovernmental Agreement. It was noted that on Page 5, Item 7, there was concern that the City of Tigard would be able to alter the rules and regulations governing water service. • Concern was expressed regarding employees currently working for the Joint Water Agency. • (ling City) There was a notation of concern regarding Page 4, Item F, that the 1% rebate to the cities be used for water-related expenses. • There was a request that a complete inventory of assets be done soon. • Councilor Hunt (Tigard) acknowledged the reluctance of the other decision- makers. The following questions were asked: Were there were any areas of consensus/agreement at this time? What areas were of the most concern? In these areas of concern, were there any ideas on how to move forward toward negotiation and resolution? t CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 4 f Councilor Hunt summarized, what he thought he heard as the main areas of concem or disagreement with the current Tigard proposal: 1. The status of the Advisory Board needs to be negotiated. There was concern by the other entities that this Board be empowered with more authority than a typical city advisory board. 2. More documentation needs to be presented which substantiates the assertion that cost savings of at least $150,000 would be realized if the water services were provided by Tigard as a City department. There was indication from several officials at the table expressing agreement with the above observations as phrased by Councilor Hunt. • There was discussion on whether or not cities were the proper place for managing water systems. Observations were made on both sides of this issue; i.e., problems and successess were cited. • Mayor Jenkins, King City, reminded all present that the most important interest to be represented was that of the consumer. Mayor Jenkins noted there were realty only two options left: (1) they would continue to try to work together; (2) or they would not. • Mayor Manning, City of Durham, summarized the next steps in this process as follows: Each entity schedule a meeting of their council or board at which time they will develop a pro and con list with regard to the Tigard proposal. Each entity review their priorities. For example, where does long- term water supply fit within their ranking of importance? Each entity decide whether or not the proposal presented to them with regard to the elimination of redundancies and resultant cost savings is a logical assumption. If not, should an outside audit be conducted? If an outside audit is the choice, then how much would each entity be willing to contribute towards the cost of such an audit? Each entity decide as to which points are agreeable to them in the Tigard proposal and which areas were "sticking points." CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 5 C Councilor S&,,F.,wu asked if anyone disagreed with Mayor Manning's summation of the next step. No objections were noted. It was requested that comments from each of the jurisdictions be given back to City Administrator Reilly by the week of October 18. City Administrator Reilly will compile and distribute the comments to all parties. The next joint meeting was set for October 27, 1993, at 7 p.m., Tigard City Hall. ADJOURNMENT: 9:11 p.m. C erine Wheatley, City R corder 0 Atte t: Council int City of Tigard Date: of ~a h:\rooorder\ccm\c =0929.93 CITY COUNCIL MEETING MINUTES - SEPTEMBER 29, 1993 - PAGE 6 ASSUMEBONS WATER GOAL: HIGFIEST QUALITY WEAMB SERVICE AT LOWEST POSSIBLE PRICE Everybody Is Trying to Do the Right Thing Tigard Water District is Not Going to Dissolve Everyone is Wary of Others No One Likes Change Midstream and It's Always the Other Guy Who Changes No Value In Accusing Each Other of Improprieties Need to Resolve! Page 1 i WHAT CAUSED ALL ®F THIS Proposed Merger Between Wolf Creels Water District and Metzger Water District! (Districts are Temporary Political Institutions) Key Dates: February 3, 1991 City notified of proposed merger of Wolf Creek and Metzger Water Districts April 2, 1991 City of Tigard decides to review water service January 23, 1992 First joint meeting of cities and water district August 11, 1992 Tigard adopts resolution committing to orderly withdrawal from District, dissolution of District, and creation of ( a Joint Water Agency WHY CHANGE? Defensive/Protection of Local Governance Wanted Influence/Control Over Key Decisions Growth Management.. Water Should Be Tied to Land Usse Economy of Scale/Consolidation Savings Regional Political Clout One Water Purveyor for City of Tigard Page 2 KEY FEATURES OF TIGARD PROPOSAL 1. A SERIES OF TWO-WAY AGREEMENTS BETWEEN THE CITY OF TIGARD AND THE ENTITIES BEING SERVED WATER BY THE CITY OF TIGARD. 2. STILL NEGOTIABLE. 3. RESIDENTS OF TIGARD, KING CITY, DURHAM AND TIGARD WATER DISTRICT PAY SAME RATE FOR WATER, UNLESS RESPECTIVE GOVERNING BODY AUTHORIZES EXCEPTION. 4. WATER IS PROVIDED TO ALL, EQUALLY. IF RESTRICTIONS REQUIRED, ALL TREATED EQUALLY. 5. CAPITAL PROJECTS ARE IMPLEMENTED IN ACCORD WITH LONG RANGE CIP, SUPPORTED BY SOUND ENGINEERING ANALYSIS WITH BEST INTEREST OF WATER CUSTOMERS WITHIN AREA SERVED, IGNORING CITY LIMITS. 6. THE ANNUAL CAPITAL IMPROVEMENT PROGRAM AND ANY LONG TERM WATER CONTRACT WILL REQUIRE RATIFICATION BY 3 OF THE 4 PARTIES TO THE AGREEMENT. 7. ADVISORY BOARD ...5 MEMBER, 1 FROM EACH CITY AND UNINCORPORATED AREA AND 1 AT LARGE AGREEABLE TO AT LEAST 3 ENTITIES... ROLE IS TO ADVISE TIGARD COUNCIL WITH SELECTED "ADMINISTRATIVE MATTERS." A. RECOMMENDATION REQUIRED ON SIGNIFICANT MATTERS, SUCH AS RATES, CAPITAL IMPROVEMENTS, OPERATING POLIC_f CHANGES, BUDGET, LANG TERM CONTRACTS INCLUDING WATER; B. AUTHORITY TO ISSUE VARIANCES TO OPERATING POLICIES; C. AUTHORITY TO OFFER RECOMMENDATIONS ON ANY MATTER. PERTAINING TO WATER 8. LINE EXTENSION PRACTICES REFLECT COMPREHENSIVE PLANS OF EACH CITY. A. NO EXISTING DEVELOPMENT IN THE UNINCORPORATED AREA SHALL BE REQUIRED TO ANNEX TO A CITY AS A CONSEQUENCE OF THIS AGREEMENT. 9. EACH POLITICAL SUBDIVISION SERVED BY THE CITY OF TIGARD IS ENTITLED TO 1% OF GROSS WATER SALES WITHIN RESPECTIVE JURISDICTION FOR EXPENSES ASSOCIATED WITH THIS WATER AGREEMENT AND WATER RELATED. 10. ASSUMING AGREEMENTS CAN BE REACHED WITH All PARTIES WITH ASSETS PLEDGED TO OPERATION OF WATER UTILITY - E.G., CONTRIBUTED CAPITAL -(WITH ENTITIES RESERVING RIGHT TO DIVIDE AT FUTURE TIME), THE ACTUAL DIVISION OF ASSETS WILL BE MINIMIZED. 11. RESIDENTS OF AREAS CONTRACTING WITH CITY OF TIGARD SHALL NOT BE FINANCIALLY RESPONSIBLE FOR ANY EXPENSES ASSOCIATED WITH EFFORTS OF THE CITY OF TIGARD ASSOCIATED WITH WITHDRAWAL FROM THE TUAL.ATIN VALLEY WATER DISTRICT AND GOAL OF ONE WATER PURVEYOR FOR THE CITY OF TIGARD. Page 3 ( AS A CITY DEPARTMENT Pros Cons Elimination of Redundancies Tigard Benefits More Than Anyone Else Water Savings Passed Along Tigard Has Control to All Maximize Use of Not Expected From Assets/Resources Beginning Reduces Layer of Government Employees Benefit Through Larger Organization Page 4 Ell REDUNDANT OPERATIONS Administration... 1 Finance Department (Billing/Audit/A.R./A.P./G.L./Counter) i Permitting Process Engineering Public Information Field Equipment/Vehicles Utilization Project Coordination Personnel Department Page 5 PROTECTIONS Jurisdictional Approval Required for Lone-Perm Water Supply Contract and Capital Improvement Program Rates Will Be Uniform Restrictions (if Required) Will Be Uniform Each Entity Retains Its Assets Page 6 KEG DIFFERENCES i 1 1gard as ' Provider JWA i 1. Day to Day Service City Department Separate Delivery Water x Operation 2. Capital Improvement 3 of 4 Juris- 5 of 7 mem- Program diction must bers must f approve approve f 3. Water Supply Contract 3 of 4 Juris- 5 of 7 mem- diction must bers Must approve approve 4. "Policy' Decisions Tigard City JWA Council with Advisory Board Review Page 7 JOINT WATER AGENCI( Pros Cons Governance Is Shared Economies of Scale/ Redundancies Achieved Only Through Negotiations Expected Outcome Unknown Entity/Added Layer of Government Water Remains Independent Water Remains Isolated Page 8 ~ aJ» ►k 3 5~,~ c~ cc..Q cOWAUl M eel e9 ASSlJMPTIONS WATER GOAL: JUISHENT-DUALU Everybody Is Trying to do the Right Thing Trust is Lacking Among Entitles City of Tigard Wants to be In tits Water Business Everyone Wants to Deep the Service Area Intact Division of Assets Is Appropriate Even If Pledged No Value in Accusing Each Other of Improprieties Disagreement Continues Not Ready For Wordsmithing Yet Need to Resolve Key Concepts Page 1 1®/27/93 The following motions were approved by the Tigard City Council at their October 26, 1993 meeting: Moved that... • Upon expiration, 12/31/93, of the Joint Water Agency Agreement, the City of Tigard will form its own City Water Department. Moved that... ® The Council authorizes negotiations, starting immediately, with the cities of Durham & King City and the Tigard Water District to provide water and other related services effective January 1, 1994. h:\login\cathy\wtr REASONS FOR CREATING; A CITY WATER DEPARTMENT a Eliminates redundancies that occur with separate organizations ® Reduces a layer of government ® Maximizes the use of resources through shared use and purchase of equipment, flexibility of personnel e Allows all water customers benefit from efficiencies gained through consolidation 0 Increases influence on growth and development ® Creates an avenue to become more involved in long term and regional water issues o Assures local control o Step towards one water purveyor for City of Tigard Assurances to Durham, King City and Tigard Water District Residents Included in Original Proposal 4.13. Uniform Rates 4.13. Capital Projects Decided on System-Wide Basis and Jurisdictional Approval 4.E. Long Term Water Supply Contracts Require Jurisdictional Approval 6.A. Water Provided Equally to All 3. Advisory Board 4.A. Each Entity Retains Its Assets, Although Pledged L ~o~t? October 27, 9993 ISSUE Authority and scope of the Advisory Board Original: The Advisory Board makes recommendations to the City Council regarding specific matters. King City: The Advisory Board makes recommendations to the City Council regarding specific matters. The City Council needs a 2/3 majority to reverse a recommendation. Durham: The Governing Board (their name) makes recommendations to the City Council on all water service related issues. The Governing Board can override a City Council decision with a 4-1 majority vote. PROPOSAL: The Advisory Board operates as originally proposed by recommending actions to the City Council on specific matters. October 27, 1 993 ISSUE Water service to new development In unincorporated areas Original: No existing development will be forced to annex as a consequence of the agreement. VJng City: No development will be forced to annex as a consequence of the agreement. t PROPOSAL: Each city may set its own policy regarding annexation of new developments within Its area of Interest in accordance with its comprehensive plan. _r October 27, 1993 ISSUE Amending the rules and regulations Original: Rules and regulations are as now in effect or as the City Council later adopts. King City: Rules and regulations are as now In effect or as the Advisory Board (four of five votes) later adopts. ( Durham: Rules and regulations are as now in effect under the Southeast Washington County Joint Water Agency. PROPOSAL: Rules and regulations are as now in effect or as later recommended by the Advisory Board and adopted by City Council. O I October 27, 1993 ISSUE One percent annual rebate R~ t Original: Each entity shall receive an annual rebate equal to 1% of the previous years water sale revenue for water related expenses. :r Durham: Remove completely .s ( Icing City: Restrict the use of the rebate to potable water supply related expenses. { PROPOSAL: Drop the 1% rebate. Permit surcharge If authorized by the contracting agency.. i c October 27,1993 ISSUE Use of water revenue only for water related expenses. Icing City: Bl-monthly reports shall be given to the Advisory Board on any employee that Isn't a full time employee of the water department. All employee time (for non water department personnel), equipment, and supplies which were not used by water department personnel and t which were charged to the water department shall be declared. Any and all expenses not directly attributable to the water department shall be declared. Q PROPOSAL: Insert the following paragraph Water activities will be accounted for in the same manner as other enterprise activities currently under the jurisdiction of Tigard. Expenditures directly linked to water activities will be recorded in the water fund. Applicable indirect charges will be apportioned to the water fund in the same manner as such charges are apportioned to other enterprise funds to properly reflect the costs associated with each activity. October 27, 1993 ISSUE Higher rates where the cost of service Is higher F f Original: Tigard may impose higher rates where the cost of service Is higher such as high altitude areas that require pumping. Durham: Tigard may with concurrence of the Advisory Board 3 Impose higher rates where the cost of service is higher such as high altitude areas that require pumping. PROPOSAL: After review of the Advisory Board, Tigard may Impose higher rates where the cost of service is higher (pumping). 1~ IF October 27, 1 993 ISSUE Contract term Original: The contract shall be in effect until December 31, 2018, unless sooner terminated by one or both of the parties. Either party may terminate this agreement by providing written notice to the other party a minimum of two years prior to the effective date of termination. King City: The contract shall be in effect until December 31, 2018, unless terminated by both of the parties. Both parties may terminate this agreement by obtaining consent and providing written notice to the other party a minimum of two years prior to the effective date of termination. Durham: The contract shall be In effect until December 31, 2018, unless sooner terminated by one or both of the parties. The City of Durham may terminate this agreement by providing notice to the other parties a minimum of two years prior to the effective date of termination. PROPOSAL: The contract can be terminated by either party by giving a minimum of five years notice to the other party. ~I INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITIES OF TIGARD AND KING CITY (DURHAM) FOR DELIVERY OF WATER SERVICE TO KING CITY (DURHAM) This agreement is made and entered into by the cities of Tigard, an Oregon municipal corporation, (hereinafter "Tigardle) and the city of King City (Durham), an Oregon municipal corporation, (hereinafter "King City (Durham)"). Tigard and King City (Durham) are jointly referred to herein as "the Cities" and "the Parties.11 RECITALS: 1. Tigard and King City (Durham) withdrew from the Tigard Water District effective July 1, 1993. 2. Pursuant to ORS 222.540, the Tigard Water District is obligated to turn over to the Cities its water mains, service installations, structures, facilities, improvements and other property in the area withdrawn from the district that are not necessary for the operation of the remainder of the water supply system of the district. 3. The area withdrawn by Tigard was a major portion of the Tigard Water District. Because of this, Tigard is entitled to a major portion of the Tigard Water District's infrastructure pursuant to ORS 222.540. King City and Durham are entitled to smaller portions of the Tigard Water District infrastructure. Furthermore pursuant to ORS 222.550, should the Tigard Water { District dissolve, Tigard will be in a position to obtain all of the Tigard Water District's remaining assets which have not been distributed under ORS 222.540. 4. With the assets and infrastructure obtained by its withdrawal from the Tigard Water District, Tigard is creating a city water department. 5. The cities agree that it is in the best interests of both cities if King City (Durham) were to receive water service from Tigard's city water department. 6. The Cities and Tigard Water District agree that it is in the best interests of the Parties that they together share authority for decision-making regarding the long-term water supply and capital improvement program to serve the water customers of the area. 7. The Cities acknowledge that they have authority to enter into this Intergovernmental Agreement pursuant to the powers of their respective municipal charters and pursuant to ORS 190.010. NOW, THEREFORE, the premises being in general as stated in the INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 1 0 ORIC.~JAt. ~1 qj foregoing recital, it is agreed by and between the parties hereto as follows: 1. impose. The purpose of this agreement is to provide a domestic water supply to King City (Durham). 2. Term. This agreement will be in full force and effect until December 31, 2018, unless sooner terminated by one or both of the parties. Either party may terminate this agreement by providing written notice to the other party a minimum of two years prior to the effective date of termination. 3. Advisory Board. Tigard will by ordinance establish an Advisory Board. A. The Advisory Board will consist of five members. Members of the Board will be appointed as follows: Tigard - One Member King City - One Member Durham - One Member Tigard Water District/Unincorporated Area - One Member At Large - One Member Selected by Vote of the ( Other Member B. Each Board member shall be appointed for a term of two (2) years. Members may be re-appointed to succeeding terms. C. Tigard may appoint city officials as ex officio members of the Advisory Board to assist the Board in its duties. They shall serve at the pleasure of the Tigard City Council and shall have no voting privileges. D. A quorum of the Board shall be three (3) members. All actions of the Board shall require three (3) votes. E. The Advisory Board will make recommendations to the Tigard City Council on the following water service issues: (1) to study and prepare proposed rules and regulations to govern the operation of the Tigard water system. (2) to make a continuing review of any and all rules and regulations regarding the water system which may be adopted by the Council and periodically to make recommendations to the Council for additions or INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 2 i3 C)%Lj.1jAL. 8193 amendments of such rules and regulations. (3) to make a continuing study of the rate structure of the water system. (4) to consider and prepare plans for and make recommendations to the Council for a long-range operation and management program. (5) to investigate and study means of effecting economies in operation and management. (6) to review and make recommendations to the Budget Committee and Council on all budget requests for operation and maintenance. (7) to study and consider ways and means of improving the water system and services which it provides. (8) to make recommendations to the Council relative to all of the above-mentioned matters and as to any other matters which the Advisory Board may feel to be for the good of the water system, the overall public interest and for the benefit of the consumer. F. Power to Grant Variances (1) Except when prohibited by subsection 2 of this section, upon application, the Advisory Board may grant variances from the water system rules and regulations enacted by the City of Tigard when it finds that: a) strict application of the rules and regulations create undue economic hardship for the applicant with no significant benefit to the water system; b) the variance requested has no adverse effect upon the water system and it is consistent with established policies of the Tigard City Council. (2) The Advisory Board may not grant variances relating to annexation of property, fire protection requirements, cross-connection requirements, fees, rates and charges. 4. Asset Ownershin/Water Rates/Revenues. A. Assets (both real and personal property) received by King City (Durham) as a result of withdrawal from the Tigard Water District may be utilized by Tigard in order to provide water services to residences and businesses in King City (Durham). Ownership of these assets shall be retained by King City (Durham). B. The rates charged by Tigard for providing water services INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 3 lq 3 O~Zi ~ i N A~. MOSElw- to residences and businesses in King City (Durham) shall be the same as those charged within Tigard. Notwithstanding the foregoing, Tigard may impose higher rates for providing water service to residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher rates imposed for providing water service shall be limited to covering the actual additional costs of providing such service. C. Revenues for system-capital improvement shall be held in an account dedicated solely for this purpose. D. Capital projects shall be implemented in accord with a long-range capital improvement program supported by sound engineering analysis with the best interests of water customers within the area served, ignoring city boundaries. The capital improvement program must be approved by three of the four jurisdictions holding partial ownership of the water system. E. Long-term water supply contracts shall be entered into in accord with the best interests of water customers within the area served, ignoring city boundaries. Long-term water supply contracts must be approved by three of the four jurisdictions holding partial ownership of the water system. F. The City of King City (Durham) shall receive an annual 4 rebate equal to it of the previous years water sale revenue within the City of King City (Durham) for water related expenses. G. Ownership of any capital improvements shall remain with the jurisdiction in which the improvement is located. 5. indebtedness. Each of the Parties shall be liable for their respective share of the debt, if any, acquired as a result of withdrawal from the Tigard Water District. 6. Services Provided By Tigard. (a) Tigard will provide water to customers in all jurisdictions equally. If circumstances require water restrictions, each jurisdiction shall share equally. (b) The City of Tigard will provide all services required for delivery of domestic water to customers within the cities of King City and Durham as well as the territory of the Tigard Water District, including but not limited to system repair and maintenance, water distribution, new installations, system upgrades, and billing functions. INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 4 7. Rules and Regulations. The rules and regulations governing water service by the Tigard city water department as are now in effect or as the City Council later adopts, shall be deemed a part of this Agreement, and King City (Durham) agrees to comply with such rules and regulations and water service to King City (Durham) shall be governed thereby. Nothing contained in this Agreement shall be deemed to modify, alter or repeal any such rules or regulations. 8. Extension of Service._ A. Extension or modification of King City's (Durham's) water distribution system shall be done only with prior written approval of King City (Durham). Furthermore, Tigard will not make any extensions or service connections within King City's (Durham's) Urban Growth Boundary without permission from the King City (Durham) City Council. B. No existing development in an unincorporated area of the service area will be required to annex to a City as a consequence of this Agreement. C. Residents of King City (Durham) shall not be responsible for any expenses associated with efforts of the City of Tigard to withdraw from the Tualatin Valley Water District to reach the goal of having a single water purveyor for the City. 9. E oloyee Benefits/Personnel. All employees of the Southeast Washington County Joint Water Agency shall become employees of the City. The City shall accept such employees with all existing benefits and salary, including, but not limited to, health, retirement, disability insurance, wages, vacation and compensatory time. Nothing in this subsection is intended to limit the City's authority to alter benefits or salary except as such authority is otherwise limited by this Agreement or by the provisions of ORS 236.605 to 236.650. 10. Attorneys Fees. In the event any suit, action or other proceeding is brought with regard to this Agreement, or to enforce any of the provisions hereof, the prevailing party in any such suit, action or other proceeding, or any appeal therefrom, shall be entitled to reasonable attorneys fees. 11. Ratification of this Agreement. Prior to the effective date of this Agreement, each of the INTERGOVERNMENTAL AGREEMENT TIGARD/KING CITY (DURHAM) - 5 opt i c. i v & L `+/43 parties shall enact an ordinance ratifying the Agreement. 12. Effective Date. CITY OF TIGARD, OREGON Attest: By: CITY OF KING CITY (DURHAM), OREGON Attest: By: wam\t1prd\ p9.17 INTERGOVERNMENTAL AGREEMENT ! TIGARD/KING CITY (DURHAM) - 6 otz~~.,~Ac. ~~53