City Council Packet - 10/15/2002
Drib i n GLl
TIGARD CITY COUNCIL
WORKSHOP MEETING
OCTOBER 15, 2002
COUNCIL MEETING WILL NOT E
TELEVISED
H:ljeannieldocslccpkt2
Revised - 10-10-02
CITY OF TIGARD
OREGON
PUBLIC NOTICE:
Assistive Listening Devices are available for persons with impaired hearing and should be
scheduled for Council meetings by noon on the Monday prior to the Council meeting.
Please call 503-639-4171, Ext. 309 (voice) or 503-684.2772 (TDD -
Telecommunications Devices for the Deaf).
Upon request, the City will also endeavor to arrange for the following services:
• Qualified sign language interpreters for persons with speech or hearing impairments;
and
• Qualified bilingual interpreters.
Since these services must be scheduled with outside service providers, it is important to allow
as much lead-time as possible. Please notify the City of your need by 5:00 p.m. on the
Thursday preceding the meeting date by calling:
503-639-4171, x309 (voice) or 503-684-2772 (TDD - Telecommunications Devices for
the Deaf).
SEE ATTACHED AGENDA
COUNCIL AGENDA - October 15, 2002 page 1
AGENDA
TIGARD CITY COUNCIL WORKSHOP MEETING
October 15, 2002
6:30 PM
1. WORKSHOP MEETING
1.1 Call to Order - City Council
1.2 Roll Call
1.3 Pledge of Allegiance
1.4 Council Communications 8z Liaison Reports
1.5 Call to Council and Staff for Non Agenda Items
6:35 PM
2. JOINT MEETING WITH THE INTERGOVERNMENTAL WATER BOARD TO
HEAR AN UPDATE ON THE BULL RUN REGIONAL DRINKING WATER
AGENCY PHASE II REPORT
a. Staff Report: Public Works Staff
b. Council Discussion
7:20 PM
3. UPDATE ON THE COMMUNICATION PLAN
a. Staff Report: Administration Staff
b. Council Discussion
7:40 PM
4. DISCUSSION OF PROPOSED HOUSING SET-ASIDE GUIDELINES
a. Staff Report: Community Development Staff
b. Council Discussion
7:50 PM
5. DISCUSSION OF THE ADDITION OF "TREES ON PUBLIC PROPERTY" TO THE
TIGARD MUNICIPAL CODE AND DISCUSSION OF TREE MANUAL
a. Staff Report: Public Works Staff
b. Council Discussion
8:10 PM
6. DISCUSSION OF METRO'S URBAN GROWTH BOUNDARY EXPANSION
a. Staff Report: Community Development Staff
b. Council Discussion
COUNCIL AGENDA - October 15, 2002 page 2
8:40 PM
7. PREVIEW NEW LIBRARY COMMUNITY MEETING/OPEN HOUSE ON
OCTOBER 16 AND ALSO PREVIEW THE CONCEPTUAL SITE AND DESIGN
PLANS
a. Staff Report: Library Staff
b. Council Discussion
9:20 PM
8. COUNCIL LIAISON REPORTS
9:40 PM
9. NON-AGENDA ITEMS
9:50 PM
10. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If
an Executive Session is called to order, the appropriate ORS citation will be
announced identifying the applicable statute. All discussions are confidential and
those present may disclose nothing from the Session. Representatives of the news
media are allowed to attend Executive Sessions, as provided by ORS 192.660(3),
but must not disclose any information discussed. No Executive Session may be held
for the purpose of taking any final action or making any final decision. Executive
Sessions are closed to the public.
10:00 PM
11. ADJOURNMENT
I:WDWGREEMCITY COUNCIL\021015.DOC
COUNCIL AGENDA - October 15, 2002 page 3
Agenda Item No. 3. 1
;Meeting of 1), /,D-pa
COUNCIL MINUTES
TIGARD CITY COUNCIL MEETING
October 15, 2002
1. WORKSHOP MEETING
1.1 Mayor Griffith called the meeting to order at 6:30 p.m.
1.2 Council Present: Mayor Griffith, Councilors Dirksen, Moore, and Scheckla
1.3 Pledge of Allegiance
1.4 Council Communications 8z Liaison Reports: None
1.5 Call to Council and Staff for Non Agenda Items: None
2. JOINT MEETING WITH THE INTERGOVERNMENTAL WATER BOARD TO
HEAR AN UPDATE ON THE BULL RUN REGIONAL DRINKING WATER
AGENCY PHASE 11 REPORT
Intergovernmental Water Board Members Present: Patrick Caroll, Jan Drangshoit,
Norman Penner, Bill Scheiderich.
Public Works Director Wegner presented the staff report, which is on file in the City
Recorder's office. Staff has prepared a schedule of workshops, public presentations,
displays and a public hearing where the City Council, Intergovernmental Water Board,
and local citizens can review and discuss the Bull Run Regional Drinking Water Agency
Report. The process is scheduled to end February 25, 2003 with a public hearing
and a decision by the City Council.
The highlights of Mr. Wegner's remarks are outlined in a PowerPoint presentation,
which is on file in the City Recorder's office. This presentation included the history of
this issue, a review of Phase I and II of the Bull Run Regional Drinking Water Agency
Report, an outline of the proposed agency concept, engineering components, a
system asset map, a list of impacts, governance options, governance recommendation
(ORS 190), a review of the principles of agreement (intergovernmental agreement),
agency organization, agency function and assets, system ownership, system use,
system expansion, system operation 8t maintenance, a conceptual approach to
contractual operations, rates a charges, water sales to outside parties, withdrawal or
termination, liability, dispute resolution, and a review of unresolved issues.
Mr. Wegner's comments included:
o Tigard has no assets to contribute to the regional system. Tigard will need
to buy in to the system and build a supply line.
o An ORS 190 will allow local representation.
o One of the unresolved issues is that a cost for each agency is unknown at
this time.
Tigard City Council Meeting Minutes - October 15, 2002 Page 1
o The City of Portland will retain the water rights; however, these rights will
be assigned to the Agency through the Intergovernmental agreement.
o Tigard will still need another source of water. Willamette River water is not
an option without an approval by voters, so a secondary source would
need to come from the Trask or Clackamas Rivers. The City is still working
with the Joint Water Commission ()WC) and it appears that Tigard will be
asked for a decision in 60-90 days about whether Tigard will join the ]WC.
o Discussed management of seasonal operations (storing water In winter to
use in summer when demand increases).
Staff will present another report to the Council and IWB at the Council Workshop on
November 19, 2002. Information to be presented at this workshop meeting will be
on the Bull Run Regional Drinking Water Agency Report Phase 11 - Finance and
Public Involvement.
3. UPDATE ON THE COMMUNICATION PLAN
Assistant to the City Manager Newton presented the staff report, which is on file in
the City Recorder's office. Ms. Newton reviewed the city's major communication
efforts: the CITs, Communication Plan, neighborhood meetings, press releases,
Community Connectors, cable television, Cityscape, the Website, the Goal Guide, and
the TVTV Bulletin Board. The status of the preceding items can be found in Ms.
Newton's October 7, 2002, memorandum to the Mayor and City Council, which
was Attachment 1 to the staff report.
Ms. Newton advised that beginning in February 2003, she recommended that the
CIT meetings be discontinued In their present format. She recommended that the
city focus be shifted to producing monthly informational programming to air in the
CIT time slot. These programs could be taped during the day, include
announcements of upcoming events and status reports; however, the bulk of the
program would be devoted to educating an informing citizens about city programs,
projects, and issues. Council members agreed with Ms. Newton's recommendation
about a change in the CIT process. In November, Ms. Newton will advise the CITs
about the discontinuation of the present CIT forrnat.
Council also agreed with Ms. Newton's recommendation to I: ►vestigate alternative
options for distribution of the Cityscape for efficient, effective communication and
cost savings. Staff will schedule a follow-up report to Council on their findings In
about two months. This will also be scheduled for review by Council during its goal-
setting session in 2003.
Tigard City Council Meeting Minutes - October 15, 2002 Page 2
4. DISCUSSION OF PROPOSED HOUSING SET-ASIDE GUIDELINES
Associate Planner Roberts presented the staff report, which is on file in the City
Recorder's office. The proposed guidelines were acceptable to the Council, Including
the suggestions of Community Partners for Affordable Housing and Washington
County Housing. Council consensus was that there would be no roll over of
uncommitted funds to the next fiscal year. A resolution will be presented to the
Council on October 29, 2002, for formal consideration of the Housing Set-Aside
Guidelines.
5. DISCUSSION OF THE ADDITION OF "TREES ON PUBLIC PROPERTY" TO THE
TIGARD MUNICIPAL CODE AND DISCUSSION OF TREE MANUAL
Parks Manager Plaza presented the staff report, which is on file in the City Recorder's
office. Consensus of Council was that staff should return to Council on October 29
with a proposed resolution and ordinance to add a trees-on-public-property section to
the Tigard Municipal Code and adopt a Tree Manual. (City Recorder's note: The
ordinance and resolution were rescheduled to the November 12, 2002, Council
agenda.)
After discussion, it was determined that staff would make a wording change to the
proposed ordinance clarifying that the City will also follow established procedures
regarding tree removal (i.e., obtain permits and keep a record of tree removal). Also
Council requested that the Street Tree list be readily available.
6. DISCUSSION OF METRO'S URBAN GROWTH BOUNDARY EXPANSION
Community Development Director Hendryx reviewed the staff report, which is on file
in the City Recorder's office. He presented the issues and questions for the Council
on several charts that outlined the issues and posed the "Question for Tigard" in
several areas. Copies of these charts on file in the City Recorder's office.
Following are the highlights of the discussion on this item:
o Councilor Dirksen suggested reevaluation of the requirement to identify a 20-
year land supply; it is likely land will be added that is not needed since forecasts
of land needs don't always materialize.
o Councilor Dirksen noted concern about new development at the periphery of
the UGB because of lack of infrastructure.
Tigard City Council Meeting Minutes - October 15, 2002 Page 3
o Discussion on whether to add mixed-use areas in Tigard included a caution
about increasing Intensity of use because of infrastructure needs. A
philosophical discussion is needed to determine whether to first build
infrastructure to anticipate needs or build infrastructure after an area is
developed to meet increased needs.
o Councilor Dirksen noted support for keeping industrial designations for land
along Hwy 217 in Tigard, rather than promote a change to mixed use.
o Council supported flexibility for planning uses in the UGB expansion areas
adjacent to Tigard to further the ability to keep density at a similar level to
adjacent developed property, provide a variety of housing types, plan for parks,
and provide neighborhood commercial areas.
o Council supported Tigard responsibility for planning in the two areas adjacent to
Tigard identified for UGB expansion.
7. PREVIEW NEW LIBRARY COMMUNITY MEETING/OPEN HOUSE ON
OCTOBER 16 & PREVIEW THE CONCEPTUAL SITE AND DESIGN PLANS
Library Director Barnes reviewed the conceptual site and design plans that would be
introduced during the October 15 Library Community Meeting/Open House. A
copy of the Project Vision Statement and a Site Plan and a Floor Plan for the first and
second floors are on file in the City Recorder's office. Council consensus was that
staff and the architects proceed with presentation of information at the open house.
It was noted that the Wall Street extension should be shown as access to the site.
Any continuation of Wall Street will be determined through the LID process.
Refinements of site and design plans will continue over the coming weeks.
Information was presented about whether to pursue LEED certification for the new
library. An October 15, 2002, memo (prepared by Finance Director Prosser and
Library Director Barnes) outlining information on LEED certification is on file in the
City Recorder's office. After discussion, consensus was to proceed with LEED
registration only. The city is planning to include "green building" technologies in
the design of the new Tigard Library; however, the city will not seek certification or
hire a commission agent.
8. COUNCIL LIAISON REPORTS: None.
Tigard City Council Meeting Minutes - October 15, 2002 Page 4
9. AEON-AGENDA ITEMS: None.
10. EXECUTIVE SESSION: Not held.
11. ADJOURNMENT: 10:29 p.m.
Attest: Catherinia Wheatley, City Recorder -7 Flayor(C[q o ar
D te: 0 /a o?c:L
I:1AD MkCAT HY\C C W021008. D OC
Tigard City Council Meeting Minutes - October 15, 2002 Page 5
AGENDA ITEM # Z
FOR AGENDA OF October 15, 2002
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE Bull Run Regional Drinking Water Agency: Phase H Report
PREPARED BY: Dennis Koellermeier DEPT HEAD OK A& At CITY MGR OK
ISSUE BEFORE THE COUNCIL
The Phase H Report of the Bull Run Regional Drinking Water Agency has been accepted by the Policy Steering
Committee and the complete document will be distributed at the October 15`h study session. The process now calls
for all 13 participating agencies to review the document, provide an opportunity for public input, and reach a
conclusion by March 2003.
Staff has prepared a schedule of workshops, public presentations, displays and a public hearing where the City
Council, Intergovernmental Water Board, and local citizens can review and discuss the report. The issue before
Council is to review the schedule for adequacy and begin the process of reviewing the report. Staff will be making
a presentation on two segments of the report, Governance and Engineering.
STAFF RECOMMENDATION
Provide guidance on the schedule and review the report.
INFORMATION SUMMARY
Tigard has been participating in a 13-member agreement to explore the formation of a new regional water supply
agency. The initial phase of that project was concluded in December of 2001, and the Tigard City Council decided
to participate in Phase II of that process. The Phase H work document is now complete and being distributed and
considered by the member agencies. The Policy Steering Committee (PSC), which is comprised of an elected
official of each of the 13 member agencies, voted to accept the report on September 26, 2002.
The report answers most of the questions an agency would have in their effort to decide to continue on in the
process. Some questions cannot be specifically answered yet, but the report proposes possible alternatives and
ranges between which the final decision is likely to fall.
By designs the revie, and decision process has been structured so that the member agencies would provide local
public participation ::s they so choose as they go through their respective processes. City staff has prepared the
attached schedule fir public involvement. We are recommending four joint work sessions between the IWB and
City Council due the volume of material and the benefit each body would receive by interaction. Press releases,
displays, W -b pages, CIT and the CITYSCAPE all will be used. Our process is scheduled to end February 25, 2003
with a publ is hearing and a decision by the City Council.
OTHER ALTERNATIVES CONSIDERED
Tigard is also participating in projects with the Joint water Commission (JWC) which, if feasible, will allow Tigard
membership into the JWC and ownership of water rights.
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
Urban and Public Services chapter of "Tigard Beyond Tomorrow" has a goal, which states "actively participate in a
regional development of drinking water sources"
ATTACHMENT LIST
Attachment 1: Schedule
Attachment 2: Executive Summary
FISCAL NOTES
Acceptance of this plan will not have any fiscal impact this fiscal year.
mod
City of Tigard's Attachment 1
Long Term Water Supply Options
Work Timeline
ITEM
DATE DESRIPTQ~F6 CONTACT
09/26/02 PSC Meeting Final booklet is presented regarding Bull Run Drinking Water
Agency Proposal Dennis & Sally
Materials that need to be scanned for the OcL 15 Council .
09/27/02 Prep for 10-15.02 Council Meeting
Meeting are due by noon Kathy K
10/01/02 Prep for 10-15-02 Council Meeting Materials that are to be included in the packet for the Oct. 15
Council Meeting are due by noon. Kathy K.
-
0/04/02 Cityscape' Articles for November's thyScape issue are due, Cathy .W:
10/15/02 IWB & Council Workshop Present proposal to IWB and Council - discuss governance
and engineering topics Ed
11/01/02 Prep for 11 19 02 Council Meeting Materials that need to be scanned for the Oct 15 Council
Meeting are due by noon Kathy K.
11/05/02 Prep for 11-19-02 Council Meeting Materials that are to be included in the packet for the Oct. 19
Council Meeting are due by noon. Kathy K.
11/19/02 r IWB & Council Workshop Continue-presentation of proposal to IWB and Council
discuss the topic of finances Ed f)ennis &Tom
12/05/02 CIT 20 min. presentation of what has been presented to the IWB &
Council regarding Tigard's long term water supply options Sally
COMMENTS/NOTES:
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IMPLEMENTATION PLAN FOR THE
FORMATION OF A BULL RUN REGIONAL
DRINKING WATER AGENCY
PRASE II
SEPTEMBER 2002
Prepared By
Murray, Smith & Associates, Inc.
121 SW Salmon, Suite 900
Portland, OR 97204
In Association With
CH2M HILL Integrated Utilities Group, Inc.
825 NE Multnomah, Suite 1300 811 SW Naito Parkway, Suite 610
Portland, OR 97232 Portland, OR 97204
Participants' Program Manager
Jeanne LeJeune Consulting, LLC
862 NE Market Drive
Fairview, OR 97024
02-0565.101
EXECUTIVE SUMMARY
INTRODUCTION
General
This plan is Phase II, the implementation planning phase, of the Regional Drinking Water
Supply Initiative for the Portland metropolitan area. This initiative was set in motion in early
2001 by Commissioner Erik Sten, then Commissioner-in-Charge of the Portland Water
Bureau. This plan is the continuation of the prior Phase I planning effort completed in
December 2001. This Phase II plan provides an in-depth examination of the regional
drinking water agency concept, develops more detailed principles of agreement to
accomplish the regional objectives of the thirteen participants, and sets out next steps,
estimated costs and a schedule to implement a regional drinking water agency.
Regional Drinking Water Supply Initiative
For over 100 years, the Portland Water Bureau has sold water on a wholesale basis to other
communities in the region. Twenty-five year wholesale water supply agreements with
nineteen communities are due to expire between 2004 and 2007. Many wholesale contract
holders had long expressed an interest in a more substantial role in managing these drinking
water resources.
In March 2001, City of Portland Commissioner Erik Sten, then the Commissioner in Charge
of the Portland Water Bureau, proposed the formation of a new governmental structure to
provide drinking water service for the Portland metropolitan region. The Portland City j
Council directed Commissioner Sten to work with other elected officials in the region to
identify and analyze alternative institutional and governance arrangements for regional water
utilities.
In August 2001, those agencies interested in pursuing the regional proposal agreed to jointly
fund and research the potential for formation of a regional drinking water supply and
transmission agency. There were fourteen agencies participating in Phase I of the regional
drinking water supply initiative. The culmination of the Phase I work was the report entitled
"Progress Report, Regional Drinking Water Initiative, December 12, 2001."
Joint Funding Agreement for Implementation Plan
On March 15, 2002, thirteen public agencies entered into a joint funding agreement for the
preparation of this Phase II Implementation Plan. Those agencies were the Cities of
Beaverton, Gresham, Portland, Tigard and Tualatin, Powell Valley Road Water District,
Raleigh Water District, Tualatin Valley Water District, West Slope Water District, Clean
Water Services, Sunrise Water Authority, Rockwood Water People's Utility District
(Rockwood PUD), and METRO. Figure 1-1 illustrates the water service areas of the
participating agencies. The agreement provided for the joint preparation of the
implementation plan by the participants' staffs and consultants retained by the participants.
02-0565.101 Page ES-1 Implementation Plan for the Formation of the Proposed
Executive Summary Bull Run Regional Drinking Water Agency
September 2002
F.\PROJECrS\02\0565\I0IVmpl mmtatimPlan\ExecuuveSummuy doe
Professional Services Agreement
The participants entered into a professional services agreement with Murray, Smith &
Associates, Inc. (MSA) to undertake and complete the work. Key partners teamed with
MSA on the project were CH2M HILL and Integrated Utilities Group, Inc.
Regional Context
This regional initiative is an outgrowth and reflection of the regional planning work that has
been on-going among Portland metropolitan area water providers since 1987. From 1993 to
1996, a series of studies was conducted that culminated in the development of the Regional
Water Supply Plan (RWSP). In 1996, after the RWSP was developed, the Regional Water
Providers Consortium was formed by inter-governmental agreement to coordinate the
implementation of the RWSP as well as future planning efforts.
PLANNING PROCESS
Project Management and Organization
Two committees were established to guide the development of this plan. These were the
Policy Steering Committee (PSC) and the Technical Advisory Committee (TAC).
The PSC consisted of an elected official from each participating agency. The role of the PSC
was to identify policy issues that needed administrative and technical analysis. Based on
those analyses, the PSC examined various policy alternatives and selected and approved
policy recommendations that were included in this plan.
The TAC consisted of administrators and senior officials or staff from each participating
agency. The TAC's role was to provide support to the PSC and to manage the planning
activities including the work program, schedule and other activities.
Four working groups were also formed. These groups consisted of staff of the participating
agencies and a member of the consultant team. The Governance and Legal Working Group
was charged with responding to the many governance and legal issues pertaining to the
proposed agency. The Finance Working Group was charged with reviewing all financial
analyses prepared by the project consultant. The Engineering Working Group was charged
with determining what assets comprise the supply system and how the supply system would
operate to serve all of the members of the proposed agency. The Public Involvement
Working Group was charged with developing a plan and process to inform and receive input
from the public on the development of the proposed agency.
02-0565.101 Page ES-2 Implementation Plan for the Formation of the Proposed
Executive Summary Bull Run Regional Drinking Water Agency
September 2002
FAPROJECfS\02P0565%101 Vmplmentati mPlanExewtiveSummary.doe
Planning Documents
The initial work of the project team was the joint development of four technical memoranda.
These memoranda were as follows:
• Technical Memorandum No. 1 - Fundamental Objectives and Criteria and Key Issues
Inventory
o Technical Memorandum No. 2 - Supply System Overview and Overall Engineering
Issues
a Technical Memorandum No. 3 - Financial
® Technical Memorandum No. 4 - Governance and Legal
The implementation plan was then developed by integrating the information and analyses
developed and presented in the four technical memoranda.
Objectives and Criteria
The TAC developed objectives and implementation plan criteria for the purpose of providing
a framework to conduct and guide the project work. The TAC considered the objectives and
criteria of the previous Phase I work effort along with participants' comments. Under the
revised criteria, the scope of the proposed new agency was narrowed from that suggested in
Phase I, which was a full regional agency, to one that would utilize only the Bull Run
Watershed and the Columbia South Shore Wellfield as its sources. The criteria also named
the proposed new agency as the proposed Bull Run Regional Drinking Water Agency
(BRRDWA). The PSC approved the objectives and criteria as proposed by the TAC.
Key Issues
In order to guide the project work, key issues were identified for examination and
assessment. A key issues inventory was developed. The work effort focused on the key
policy and technical issues that might have a significant bearing on the participants'
decisions to join or not join in on the regionalization concept.
Public Participation
A Public Information and Involvement Plan (PI&I Plan) was developed, approved by the
PSC, and implemented as part of the project. This plan covered the period of the Phase II
work, March 2002 through September 2002. There was significant public involvement
during the project.
PROPOSED REGIONAL SYSTEM
Proposed Regional Drinking Water Supply System
The TAC proposed that the regional supply system be comprised of the Portland Water
Bureau's Bull Run system, the Columbia South Shore Wellfield system, the Powell Butte
02-0565.101 Page ES-3 Implementation Plan for the Formation of the Proposed
Executive Summary Bull Run Regional Drinking Water Agency
September 2002
F:\PROIECrS\02\0565\101VmplmlmtabmPlan\Execu iveSummuy.doc
Reservoir and the Washington County Supply Line (WCSL) system, which is jointly owned
by the Cities of Portland and Tualatin, the Tualatin Valley Water District and Raleigh Water
District. The PSC adopted the TAC's recommendation.
Figure 3-1 is a perspective view of the proposed regional drinking water supply system. The
figure also illustrates the general location of the participants in the project. Figure 3-2 is a
schematic of the proposed regional water supply system. Figure 3-3 is a plan view of the
proposed regional system.
The Bull Run system currently has a peak day supply capacity of approximately 210 million
gallons per day (mgd). The capacity of the Columbia South Shore Wellfield depends on how
long it is operated, among other variables. The current short-term capacity of the wellfield is
approximately 90 mgd, assuming a 30-day operating period. The wellfield capacity is
approximately 75 mgd, assuming a 120-day operating period. For the purposes of this study
the capacity of the wellfield is identified as 90 mgd. Accordingly, the total current peak-day
supply capacity of the proposed regional drinking water supply system is estimated to be
approximately 300 mgd assuming use of the Columbia South Shore Wellfield.
Asset List for Proposed Supply System
The Portland Water Bureau's fixed asset records were reviewed to identify those assets that
were proposed to be part of the regional supply system. That list was then compiled and
used by the Finance Working Group and financial consultant in developing the system
valuation information.
Water Demands and Capacity Nominations
Water demand information and water supply capacity nomination information was developed
for use in the analyses performed under this plan. The participants provided their total
system demand forecasts (average day, peak-season, and peak-day) for the years 2005, 2010
and 2020. The participants also provided estimates (capacity nominations) of the supply they
might require from the proposed regional supply system for those same three demand types
and time periods. The water demand and capacity nomination information was used by the
Financial Working Group and the financial consultant in the financial element of the project.
Proposed System Capital Improvements Program
The Portland Water Bureau has a capital improvements program (CIP) for those facilities
that are proposed to become part of the regional water supply system. The TAC carefully
considered the Bureau's CIP and adopted a major portion of it for inclusion in this plan.
Table ES-1 below summarizes the major capital improvement projects anticipated for the
proposed regional water supply system and project timing needs.
02-0565.101 Page ES4 implementation Plan for the Formation of the Proposed
Executive Summary Bull Run Regional Drinking Water Agency
September 2002
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Table ES-1
Preliminary Capital Improvements Summary
Proposed Bull Run Regional Drinking Water Agency
Estimated Project
Near-Term (3 to 5 years) Cost
Year 2002 dollars
• Groundwater Improvements $22,700,000
• Conduit Vulnerability 15,500,000
Reduction Improvements
• Repair and Replacement 25,000,000
Program
• System Meter Improvements 2,000,000
Total - Near-Term Improvements $65,200,000
Medium Term 5 to 10 years)'
• Conduit Vulnerability $22,200,000
Reduction Improvements
• Powell Butte Reservoir No. 2 57,200,000
• Water Treatment Plant 202,000,000
• Conduit No. 5, Gresham Section 21,300,000
• Repair and Replacement 25,000,000
Program
• Endangered Species Act 15,000,000
Impacts
Total - Medium Term $34,700,000
Improvements
Total Improvement Costs $407,900,000
The TAC excluded three projects from the Bureau's current CIP. These were the
Washington County Supply Line No. 2, the Clackamas Transmission Main, and Dam Raises
at Bull Run Reservoir Nos. 1 and 2. The TAC determined that there is enough uncertainty at
this time regarding the future need for and the timing of these projects that they would be
best considered by the new Agency Board as it develops its capital improvements program.
Operational and Service Considerations
The proposed regional drinking water supply system can provide water supply to all of the
project participants either directly, through wheeling arrangements and connections, or
ultimately through construction of new transmission facilities.
02-0565.101 Page ES-5 Implementation Plan for the Formation of the Proposed
Executive Summary Bull Run Regional Drinking Water Agency
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Existing Intergovernmental Agreements
Currently and historically, there has been a high degree of cooperation among the water
providers in the Portland metropolitan region. Over sixteen existing water supply and mutual
aid agreements were identified during the study in addition to the nineteen wholesale water
supply contracts between the Portland Water Bureau and wholesale water users. All of these
agreements need to be considered in the development of a regional agency.
FINANCIAL EVALUATION AND ANALYSIS
Forms of Ownership
There are several forms of ownership that can be considered with respect to the regional
proposition. These include:
® Having an agency's name on the deed of a facility
o Having a perpetual right to the benefits of a facility
® Having a perpetual right to the benefits of a facility with the name being added to the
deed at a later time
This study has considered these ownership forms and assumes ownership along the
traditional lines of having complete legal control of the facilities where assets will be
transferred from the current owners to the new Agency.
Benefits of Ownership
The reasons that a water provider might want to own water works facilities versus being a
wholesale purchaser of water generally include the following:
o Ownership assures a long-tern source of supply.
• Ownership provides the ability to participate in decisions on future capital
improvements and system expansion.
• Ownership may allow the funding of growth using system development charges.
• Ownership may, as part of a regional approach, achieve economies of scale that
reduce the overall cost of providing water.
Risks of Ownership
Ownership of a water utility does have inherent risks that typically include the following:
• Interest rate risk
• Business risk
• Financial risk
• Liquidity risk
a Physical risk
• Environmental risks
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• Liability risks
Ownership Model
The Financial Working Group considered several ownership models for the new Agency and
recommended a model described as the "system capacity" method. Under this method of
ownership, the participating agencies would each have an undivided interest in the Agency
that is represented by the peak day demand capacity that each participant chooses to
purchase.
Entry and Exit Terms
Participation as an owner in the contemplated Agency will demand a high-level, long-term
commitment to participate in the Agency. Significant adverse impact could occur to the
Agency if an owner were to depart the Agency. In Technical Memorandum No. 4 and the
Principles of Agreement, provisions to address. entry and exit from the proposed Agency are
discussed. The proposed exit terms are intended to make leaving the Agency difficult and
furthermore to mitigate the adverse impact on the Agency of an owner leaving the Agency.
Participation in the Proposed Agency
The cost to a participant to buy into the Agency depends upon the number of other agencies
that choose to also become owners. The number of agencies that choose to become owners
is likely to also depend upon the cost to buy into the Agency and to fund future system
improvements. In order to provide meaningful information from this circular dilemma, three
Agency participation scenarios were developed as follows:
• Narrow Agency (5 owners) - Portland, Gresham and owners of the Washington
County Supply Line system (Tualatin Valley Water District, Raleigh Water District,
and the City of Tualatin)
• Medium Agency (9 owners) - Portland and its current wholesale customers that
participated in this study
• Broad Agency (12 owners) - All of the agencies that participated in this study
excluding Metro
Table ES-2 presents a matrix showing the three participation scenarios.
The matrix indicates if a participant is assumed to be an owner or remains as a wholesale
purchaser. Financial information, with respect to initial costs to buy into the Agency as well
as the costs to each owner of future facilities, is presented under the three participation
scenarios.
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Table ES-2
Agency-Participation Matrix
Proposed Bull Run Regional Drinking Water Agency
Participant Narrow Agency Medium Agency Broad Agency
City of Beaverton Wholesale Wholesale Owner
Clean Water Services Wholesale Wholesale Owner
City of Gresham Owner Owner Owner t
METRO 1
City of Portland Owner Owner Owner
Powell Valle Road Water District Wholesale Owner Owner
Raleigh Water District Owner Owner Owner
Rockwood Water PUD Wholesale Owner Owner '
Sunrise Water Authority Wholesale Wholesale Owner
City of Tigard Wholesale Owner Owner
City of Tualatin Owner Owner Owner
Tualatin Valle Water District Owner Owner Owner
West Sloe Water District Wholesale Owner Owner
Table ES-3 presents the capacity nominations for each provider that is assumed to be an
owner under each of the participation scenarios. No nominations are included for utilities
that are assumed not to be owners. Each provider's nominations were used to estimate its
percentage of ownership in the proposed Agency.
Table ES-3
Estimated Capacity Nominations of Proposed Owners
Proposed Bull Run Regional Drinking Water Agency
2005 2010 2020
Participant Narrow Medium Broad Narrow Medium Broad Narrow Medium Broad
Beaverton 0.00 0.00 7.00 0.00 0.00 7.00 0.00 0.00 7.00
CWS 0.00 0.00 6.75 0.00 0.00 13.50 0.00 0.00 20.10
Gresham 13.95 13.95 13.95 16.09 16.09 16.09 20.37 20.37 20.37
Metro 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Portland 145.00 145.00 145.00 145.00 145.00 145.00 145.00 145.00 145.00
Powell
Valle 0.00 1.00 5.00 0.00 1.00 5.00 0.00 1.00 5.00
Raleigh 1.53 1.53 1.53 1.59 1.59 1.59 1.71 1.71 1.71
Rockwood 0.00 6.50 13.00 0.00 6.57 13.13 0.00 6.70 13.40
Sunrise 0.00 0.00 5.00 0.00 0.00 10.00 0.00 0.00 20.00
Tigard 0.00 9.00 15.00 0.00 9.35 17.00 0.00 9.00 18.00
Tualatin 14.00 14.00 14.00 19.00 19.00 19.00 20.00 20.00 20.00
TV WD 44.50 44.50 44.50 50.80 50.80 50.80 65.70 65.70 65.70
West Sloe 0.00 3.73 3.73 0.00 3.84 3.84 0.00 3.84 3.84
Totals 218.98 239.21 274.46 232.48 253.24 301.95 252.78 273.32 340.12
Note: Capacity nominations are in millions of gallons per day (mgd).
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.we
Financial Separations for Differentiated Services
The proposed Agency could incorporate two mechanisms to assure that there is no
subsidization occurring within the organization between the regional water supply function
and other functions that the Agency might conduct such as operating and maintaining
distribution systems, joint billing, joint purchasing, operating a water quality laboratory, and
other water-related services. These two mechanisms could be creation of separate enterprise
funds or establishment of a cost-of-service framework. These two mechanisms would
provide the desired "financial firewall."
Estimated ]Market Value of Facilities
Associated with the formation of the Agency is the need for the participants to agree on the
value of the assets to be transferred into the Agency. These assets would be the regional
water supply and transmission system previously described above. Four agencies would
contribute assets to the Agency - the City of Portland, the Tualatin Valley Water District, the
City of Tualatin and the Raleigh Water District.
Four industry standard approaches to estimating the market value of the facilities were used.
These approaches are as follows:
• Book Value
• Original Cost
• Replacement Cost New Less Depreciation
• Replacement Cost New
Book value is the traditional accounting definition of the value of a utility. Original cost is
the actual cost to place an asset in service without regard to depreciation. Replacement cost
new less depreciation (RCNLD) is a common valuation technique for utilities and is often
used when estimating fair market values for condemnation proceedings. Replacement cost
new is the same as RCNLD except that accumulated depreciation is not deducted from the
estimated market value.
Table ES-4 presents the estimated market value of the Portland Water Bureau's Bull Run and
Columbia South Shore Wellfield and the Washington County Supply Line system assets
under the four valuation methods and under the three participation scenarios. The table also
indicates the values per million gallons per day (mgd) using year 2010 capacity nominations.
Estimated Buy-In Cost to Potential Owners
The estimated buy-in costs for each of the potential owners of the proposed Agency were
calculated utilizing the estimates of market value of existing facilities, the capacity
nominations, the three participation scenarios, and the proposed capital improvements
program as shown previously. Buy-in costs were also calculated considering credits to those
participants who would contribute assets. Due to the extensive and detailed nature of these
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Table ES-4
Estimated Market Value of Regional System Assets
Proposed Bull Run Regional Drinking Water Agency
Cost per MGD
Valuation Technique Value Narrow Medium Broad
A en A eri Agency
Book Value $106,000,843 $455,957 $418,579 $353,985
Original Cost $173,174,259 $744,900 $683,835 $578,308
Replacement Cost New Less $179,711,929 $773,021 $709,651 $600,140
Depreciation
Replacement Cost New $553,451,541 $2,380,642 $2,185,482 $1,848,227
Capacity Nominations in 232.48 253.24 299.45
2010 m d
buy-in calculations, the results are included in Technical Memorandum No. 3 in Appendix F
and are not repeated here.
The Portland Water Bureau proposed another method to estimate the market value of its
facilities. This method was identified as "Replacement Cost New Less Depreciation
(Modified)." This method is the same as RCNLD except that the facility lives, as they
appear in the City's current asset records, were modified to reflect a "true life" of those
assets. This preliminary analysis by the Bureau resulted in a valuation of approximately
$300 million for the Bull Run and Columbia South Shore Wellfield systems.
Cost-of-Service Framework
A proposed cost-of-service framework for the new Agency was developed and
recommended. This framework was intended to achieve the following objectives:
e Equity - the system of charges should reflect the cost of serving each member of the
proposed Agency
e Consistency with other principles - the Financial Working Group and other working
groups developed other principles that were incorporated in the cost-of-service
methodology
The elements of the cost-of-service framework include the following:
• Revenue requirements
0 Determination of customer characteristics
• Allocation of costs
• Rate design
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Figure ES-1 presents a framework overview of the cost-of-service approach recommended
for the new Agency.
Figure ES-1
Proposed Cost-of-Service Framework Overview
Proposed Bull Run Regional Drinking Water Agency
e
®y 0 - • - Capital Calls
<Actua! Use Nomination of Use W/True-U
Estimated Rates for Owners and Non-Owners
Estimates of water rates for the potential members of the new Agency as well as the Portland
Water Bureau's current customers were calculated and presented under the three
participation scenarios using a value of facilities equal to the replacement cost less
depreciation (RCNLD) approach described previously. Estimated rates are presented for the
years 2005, 2020, and 2020. The rates are expressed in cost per hundred cubic feet (CCF) of
water delivered and do not include buy-in costs to the Agency. Due to the extensive and
detailed nature of these rate calculations, they are shown in Technical Memorandum No. 3
and are not repeated here. The total estimated cost for each participant to be an owner in the
Agency consists of two additive cost factors, the buy-in costs to the Agency plus the cost of
water.
Strategies for Existing Debt
The City of Portland currently has approximately $168 million of outstanding debt attributed
to the Portland Water Bureau. Because of restrictions in the bond covenants, Portland may
be required to repay some of this debt to form the new Agency. The bond types and
principal amounts are summarized in Table ES-5.
i
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Table ES-5 •
City of Portland Bonded Debt Summary
Proposed Bull Run Regional Drinking Water Agency
Outstanding Principal Estimated Additional
Bond Type Attributable to Portland Cost of Repayment
Water Bureau
Charter General Obligation $30.1 million $1 million
Bonds
Revenue Bonds $96.9 million $8 million
Pension Obligation Bonds $41 million* $9 million
The City's revenue bond covenants allow the sale of assets under certain conditions. A
group of bond experts was assembled to review the City's options in meeting the
requirements of its bond covenants. Four options were identified to meet those requirements
and they are as follows:
• Complete repayment
• Certificate from a qualified consultant
• Long-term contract
• Repayment of revenue bonds only
There are costs associated with bond repayment. These estimated costs which are shown in
Table ES-5 are in addition to the cost to repay the principal balance on the outstanding debt.
These estimates are very sensitive to interest rates and other variables and actual costs are
likely to be somewhat different than the current estimates.
Strategies for Future Debt
The Agency's strategy on issuing future debt needs to be considered before the Agency is
formed due to the long-term nature of debt obligations. The question that needs to be
answered early on is which agency or agencies should issue the debt that capitalizes the
Agency, more precisely should the individual member agencies separately issue the debt or
should the regional Agency itself issue the debt. Both options are available to the Agency
and its members and each has advantages and disadvantages.
Optional Financing of Buy-In
It is expected that the Agency would be formed primarily from the facilities currently owned
by the City of Portland. The Portland Water Bureau has offered to finance some of the buy-
in costs of participants into the new Agency.
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Paying for Growth
The Financial Working Group identified four methods that the Agency could adopt so that
"growth pays for growth." Further analysis would be needed prior to formation of the
Agency to determine the best method. These methods are:
• Tiered rate design
• Capital growth charge
• Regional systems development charge
• Direct cost assessment
GOVERNANCE AND LEGAL CONSEDERATIONS
Governance Alternatives
Governance alternatives were identified that met the project criteria which specified that the
proposed Agency would be created under existing Oregon law. The five alternatives that
met that specific condition were:
• Intergovernmental Agreement - Oregon Revised Statues (ORS) 190
• People's Utility District - ORS 261
• Domestic Water Supply District - ORS 264
• Regional Service District (Metro) - ORS 268
• Joint Water Authority - ORS 450
Upon review and consideration of the information on the five alternatives, the TAC
recommended to the PSC that the Intergovernmental Agreement (ORS 190) alternative be
selected as the governance method for the proposed Agency. The PSC adopted that
recommendation.
Proposed Principles of Agreement
The Governance and Legal Working Group developed proposed principles of agreement that
would guide the formation of the proposed Agency. A summary of the proposed principles
of agreement is included in Section 5. The detailed proposed principles of agreement are
included within Technical Memorandum No. 4. These principles are the foundation on
which an intergovernmental agreement between the participating parties would be
developed. Essentially, the principles are the policy statements upon which the new Agency
would be formed.
Unresolved Items
The proposed principles of agreement as presently drafted contain unresolved items of a
significant nature. Valuation of contributed assets and the method of voting are key
unresolved issues. A summary of unresolved items is included in Section 5.
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i
KEY FINDINGS AND CONCLUSIONS
Through the work on this phase of the project, the concept of the proposed Bull Run
Regional Drinking Water Agency (BRRDWA) was further developed and was established as
follows:
• The new Agency will own, operate and maintain a regional water supply system
comprised of the Bull Run Watershed (Bull Run) and Columbia South Shore
Wellfield sources and the Washington County Supply Line.
• The Agency will be constituted under an ORS 190 intergovernmental agreement.
• The Portland Water Bureau will contribute its supply system assets consisting of the
Bull Run and Columbia South Shore Wellfield systems to the Agency and receive
credit for the value of those facilities.
• The Portland Water Bureau will enter into an agreement allowing the Agency's use of
its water rights related to the Bull Run and Columbia South Shore Wellfield supplies.
• Participating agencies that own the Washington County Supply Line (Portland Water
Bureau, Tualatin Valley Water District, City of Tualatin and Raleigh Water District)
will contribute this system to the Agency and will receive credit for the value of this
facility.
9 The Agency will undertake supply system improvement projects, which may consist
of rehabilitation, repair and/or replacement of existing supply system facilities as well
as construction of new supply system facilities.
• The staff of the new Agency will consist primarily of the staff of the Portland Water
Bureau, which will be transferred to the new Agency.
O The Agency may assume the wholesale water sales contracts of the Portland Water
Bureau.
0 The Agency will have the authority to provide any water related services, including
distribution, as agreed to by individual members of the Agency.
® The Portland Water Bureau will retain ownership of its distribution system, which
will be managed, operated and maintained by the Agency.
The following are key findings and conclusions regarding the proposed Agency concept:
• The work completed under this phase of the project, Phase II, has developed
substantial additional detailed information for regionalizing the Bull Run and
Columbia South Shore Wellfield water supply sources.
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• The formation of a regional drinking water supply system, the proposed Bull Run
Regional Drinking Water Agency, is feasible and can be implemented considering the
engineering, financial, legal and governance aspects of the proposed Agency concept.
• Key issues as identified by the participants and the public were addressed as part of
the project.
• There were no apparent "fatal flaws" discovered that would preclude the ability of the
participants to form the new Agency.
• The proposed regional system will consist of the Bull Run and Columbia South Shore
Wellfield sources and the Washington County Supply Line.
• The proposed Agency will be formed under an ORS 190 intergovernmental
agreement.
• The engineering analyses provided information on the facilities comprising the
regional system, the capacity of that system, the anticipated water demands on that
system, and the anticipated capital improvements required in the future.
• The financial analyses provided infonmation on the estimated range of values of
facilities to be purchased and transferred, the estimated buy-in costs for potential
Agency owners, estimated water rates for potential Agency owners and non-owners,
and strategies for debt financing, financing of buy-in costs, and paying for growth.
• The legal and governance analyses addressed the key issues of the project related to
those aspects of the proposed Agency including the form of the Agency and water
rights.
• Detailed "Principles of Agreement" were developed which document the
recommendations of the TAC and the PSC throughout the course of the project. This
is the basic document upon which the full elected bodies of the participating agencies
will make decisions regarding future participation.
• The proposed Agency concept meets Criteria Nos. 1 through 15 as established by the
PSC and as listed in Section 2 and Appendix D.
• With respect to Criteria No. 16, which says, "Creation of the proposed Bull Run
Regional Drinking Water Agency will not result in increased overall costs for water
by virtue of combining infrastructure and operations," an analysis of this issue was
not completed as part of this study.
• The project included an extensive public involvement program during the study
period and significant public input was received throughout the project.
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• Major and significant actions need to be taken by the participants to undertake and
complete the formation of the proposed Agency. Among the key actions is
determining the value of facilities and the purchase terms for those facilities.
• This report serves as the "Decision Document" for use in further consideration by
each of the participants as to their interest in proceeding with the project.
IMPLEMENTATION PLAN
General
A comprehensive plan to implement the formation of a new Agency is presented in Section
7. This implementation plan includes recommended actions with dates and schedules, and a
general outline of the scope of a recommended Phase III work program.
Recommended Actions and Preliminary Phase III Schedule
The unprecedented governmental transition contemplated through the formation of this
Agency requires the successful completion of a myriad of necessary tasks. A target date of
July 1, 2004 has been established for the Agency to commence operations. To accomplish
this, a number of actions and critical activities must be completed. Figure 7-1 illustrates a
list of recommended project actions along with target dates, durations and milestones for
those actions.
With respect to Criteria No. 16, an analysis was not performed in this study addressing this
criteria. Criteria No. 16 says, "Creation of the proposed Bull Run Regional Drinking Water
Agency will not result in increased overall costs for water by virtue of combining
infrastructure and operations." A task is included in the Phase III schedule for an analysis to
address this issue if some or all of the participants desire to do so.
Public Involvement
During the period of October 2002 through February 2003, the thirteen participating
agencies' full boards, councils and commissions will hold briefings, hearings and work
sessions, take public comment and vote on whether or not to participate further in this
regional water supply initiative. Each of the participating agencies will use their own public
information and education methods and resources to reach out to and involve local citizens,
media contacts and interested parties.
Proposed Phase III Work Program
In order to successfully form the proposed Agency, it is anticipated that tour major tasks
must be accomplished. These tasks are:
• Preparation of legal agreements
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• Preparation of a business plan for the new Agency, including a public information and
public involvement element
m Preparation of a transition plan between the Portland Water Bureau and the new
Agency
• Transfer of assets
A general description of each of these four major tasks follows:
Legal Agreements: In order to implement the formation of the new Agency, new legal
agreements and amendments to existing legal agreements will need to be drafted, negotiated
and executed.
Business Plan for New Agency; The formation of the new regional drinking water Agency
will require the preparation of a detailed business plan. This plan would provide
comprehensive and strategic direction for the organizational and operational structure of the
Agency. The goal of this effort is to structure an efficient and effective new Agency.
Transition Plan: A transition plan needs to be developed to provide for the orderly and
timely transfer of the ownership, management, operation and maintenance of the Bull Run
and Columbia South Shore Wellfield water supply systems from the Portland Water Bureau
to the new Agency. In addition, the transition plan would need to incorporate the
management, operations and maintenance of Portland's water distribution system which will
be performed by the new Agency.
Transfer of Assets: The values to be assigned to the transferred assets and the terms of their
acquisition will need to be established by the parties that form the new Agency. The process
of transferring assets would involve several steps including completing detailed asset
descriptions, conducting a due diligence process, and agreeing on the asset values and terms
of purchase.
Phase III work efforts must be performed concurrently and approached in a comprehensive
and integrated way in order to complete the work, form the Agency and commence Agency
transition operations by July 1, 2004.
The budget for the Phase III work will depend upon many factors including the extent and
complexity of the work to be accomplished, the number of agencies participating, the
schedule for the work, how the work will be accomplished, and what participating agency
staff and resources would be utilized. The final work program for Phase III will need to be
developed jointly by those participants that choose to proceed with that phase of the regional
initiative. The work program will include a scope of work, schedule and budget.
With respect to the budget for Phase III, it is anticipated that substantial portions of the work
effort would be completed with participant staff and other internal participant resources. The
allocation of costs among the participants in the Phase III effort will also need to be
determined. In Phase II, the costs of the project were shared equally among the thirteen
participants. For Phase III, it is anticipated that the costs would be allocated on a different
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basis. The allocation might consider, for example, the size of the participants, the relative
responsibility for various aspects of the scope of work, the available participant staff and
resources and other factors.
Upon agreement on the scope of work, schedule, budget and cost allocation, a joint funding
agreement between the participants would be prepared and executed. Considering the
proposed Phase III work program as developed above and assuming a similar approach to
accomplishing the work as in Phase II utilizing a combination of participant and outside
resources, it is recommended that a Phase III budget in the range of $500,000 to $800,000 be
considered.
Summary
Proceeding with the implementation of the formation of the Bull Run Regional Drinking
Water Agency will entail much discussion and review. Following consensus to proceed,
significant work efforts must be undertaken and completed including the preparation of legal
documents, a business plan and a transition plan, and the final transfer of assets.
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1 ATTACHMENT A
2
3
4
5
6
7
8
9 Principles of Agreement
10 Proposed Bull Run Regional Drinking Water
11 Agency
12
13 Draft No. 5
14 19 September 2002
DRAFT NO.5 0
1 Table of 'Contents
2 1) Definitions .......2
3 2) Bull Run Regional Drinking Water Agency 3
4 3) The System .....8
5 4) System Use ....12
6 5) System Expansion and Improvement 14
7 6) System Operations and Maintenance 16
8 7) Rates and Charges 17
9 8) Water Sales to Outside Parties 18
10 9) Withdrawal, Termination of Membership and Sale of Assets 18
11 10) Liability 20
12 11) Dispute Resolution 20
13 12) Amendments to Agreement (process description to be inserted) 21
14 13) General Provisions (to be inserted) 21
15
16 Last of Appendices ........................................................................................22
DRAFT NO. 5
1 Draft Proposed Principles of Agreement
z
3
4 1. Definitions
5 1.1. Agency: Bull Run Regional Drinking Water Agency
6 1.2. Agreement: The Bull Run Regional Drinking Water Agency agreement dated
7 . as amended from time to time.
8 1.3. Board: the duly appointed elected officials who constitute the governing body of
9 the Agency.
10 1.4. Bull Run Regional Drinking Water Agency: An ORS 190 age ncy created under
11 the Agreement.
12 1.5. Capacity: the drinking water producing and conveyance capability from the
13 various components of the System, measured in acre-feet, gallons, millio n gallons
14 per day or gallons per minute or other comparable measurement (including their
15 metric equivalents), available based on operating conditions consistent with
16 generally accepted engineering and operating practices. Such practices may be
17 defined formally by the Board in case of disagreement.
18 1.6. Unit Account: the account of each Party that records its number of Units in the
19 Agency.
20 1.7. Cost-of-Service Model: a computer model adopted by the Board annually which
21 allocates costs to the Parties based on generally accepted cost-of-service principles.
22 1.8. Demand: the amount of water used by a Party and imposed on the System to
23 serve a Party's customers measured in ac re-feet, gallons, million gallons per day or
24 gallons per minute or other comparable measurement (including their metric
25 equivalents).
26
27 1.9. Initial Peak-day System Capacity: for purposes of establishing initial water
28 delivery allocations and Units of ownership, it will be assumed that the System, as
y 29 of the date of establishment of the Agency, has a peak-day capacity from the Bull
i 30 Run system and the Columbia South Shore Wellfield of 300 million gallons per day
31 (MGD), as measured at the point of delivery to Powell Butte.
2
i 32
i
33 1.10. Nomination of Supply: the document su bmitted by the Parties in accordance
34 with Section 4.1.4 which shows the Demands of each Party to be imposed on the
35 System.
DRAFT NO.5 2
1 1.11. Operating Agreements: the Agency may from time to time a nter into agreements
2 with the Parties, or others, to manage and operate drinking-water-related facilities,
3 such as distribution systems. Such systems are not considered part of the System.
4 1.12. Ownership: the number of Units in t he Agency owned by a Party to the
5 Agreement. Ownership may be expressed in whole or fractions of Units.
6 1.13. Peak-day: the single day of highest total water use during a calendar year.
7 1.14. Parties: the signatories to this agreement, as amended in accordance with Section
8 12, from time to time.
9 1.15. Secondary System Facilities: supply and transmission facilities that are not part
10 of the System but which are necessary or used to provide water to one or more
11 Parties.
12 1.16. System: stored raw water, water treatment facilities, transmission system, treated
13 water storage system, and other facilities necessary or used for the treatment and
14 conveyance of water, as is more specifically defined in Appendix A, attached hereto,
15 as amended by the Board from time to time. Initial system assets will be the Bull
16 Run and Columbia South Shore Wellfield water supply systems and the
17 Washington County Sup ply Line and related facilities, all as shown in Appendix A.
18 1.17. System Expansion: A project that increases the Peak-day and/or peak season
19 and/or annual average capacity of the System.
20 1.18. System Improvement: a project that improves the System, such as by improving
21 water quality or decreasing the vulnerability of System components to damage, but
22 may not increase System capacity.
23 1.19. Unit: One million-gallons-per-day of Peak-day System Capacity.
24 1.20. Wheeling: the transmission of water to a Party over another Party's Secondary
25 System Facilities.
26 1.21. Wholesale water: refers to the drinking water sold by the Agency to a Party or
27 other purchaser.
28
29 2. Bull Run Regional Drinking Water Agency
30 2.1. The Board :
31 2.1.1. The Board shall consist of one member from each of the following Parties:
32 (insert list).
33 2.1.2. Each Board member shall be appointed by the governing body of its
34 respective Party and each shall be a sitting elected member of the governing
35 body of the Party.
36 2.1.3. Members shall serve at the pleasure of their respective appointing bodies.
DRAFT NO.5 3
1 2.1.4. Alternates: a governing body may appoint an alternate to a Board member,
2 which alternate shall be an elected of ficial and shall serve when the principal
3 Board member is absent. Said alternate shall have the same right to vote as the
4 principal member. However, in the case where the absent member is an
5 Officer, the alternate shall not exercise the role of Officer.
6 2.2. Board's General Powers and Duties:
7 2.2.1. The Board shall govern the business and affairs of the Agency created by the
8 Agreement.
9 2.2.2. The Board shall adopt such bylaws, rules, regulations and policies, as it
10 deems necessary to carry out the Agreement.
11 2.2.3. The Board shall have the power to re tain such employees as it deems
12 necessary and to contract for the purchase of property and s ervices.
13 2.2.4. The Board shall have all powers necessary and incidental to the execution of
14 its specific duties, which powers shall be consistent with the Agreement and
15 law.
16 2.3. Board's Manner of Acting:
17 2.3.1. Meetings of the Board shall be conducted in accordance with the provisions
18 of the Oregon public meeting law, ORS Chapter 192.
19 2.3.2. The Board shall hold an organizational meeting within _ weeks of the
20 signing of the Agreement and shall hold regular meetings at least quarterly.
21 2.3.3. Special meetings may be called with forty-eight hour's notice by the Chair or
22 a majority-less-one of Board members.
23 2.3.4. Voting: As a general principle, the Parties desire that votes on major actions
24 (defined below) reflect broad consensus among t he Parties and that one Party
25 not be able to veto an action. The Parties recognize that the final decision on
26 voting may not fully achieve these p rinciples. The Parties agree, whatever final
27 voting method is selected, that there should be two votes on each item v oted
28 on: a vote based on percentage ownership in the System and a vote based on
29 the number of Parties to the Agreement. For an item to be ap proved, it must
30 receive the required majority of both votes. The TAC has not reached
31 agreement on what majority should be required, but recommends the PSC
32 consider two options:
33 2.3.4.1. Option 1: an affirmative vote of a majority of the Parties and a
34 majority of ownership of the Syste m shall be necessary to approve any
35 action.
36 2.3.4.2. Option 2: an affirmative vote of at least sevent y-five percent of the
37 Parties and an affirmative vote of a majority of the ownershi p of the
38 System shall be necessary to approve any action related to the following
39 major actions: issuing d ebt, setting Wholesale Water rates, taking in new
40 owners, capital improvements or other asset additions to the System ov er
DRAFT NO.5 4
1 that are not included on the list in Table 1 of Appendix B, signing
2 water sales agreements to non-Parties, or dissolution. A simple majority
3 of the Parties shall be required to approve all other matters coming before
4 the Board.
5 2.3.5. Merger or consolidation of Parties: if two Parties merge or consolidate
6 political boundaries or a Party transfers all of its assets in the System to another
7 Party, the new Party or Party becoming the owner of the assets shall have only
8 one voting representative on the Board. The resulting Party shall have the
9 combined rights to water from the Agency and the combined obligations of the
10 merging Parties. Additional language need s to be added to this section to cover
11 mergers or consolidations with non- Parties.
12 2.3.6. When state, federal or local law requires that a Party approve or ratify a
13 Board action by separate action of that Party's governing body, the Party's
14 representative on the Board who votes to approve an Agency action shall in
15 good faith recommend that the Party's governing body take the action that was
16 enacted or approved by the Board and the Party's governing body shall
17 consider the recommended action in good faith.
18 2.3.7. A quorum for the transaction of business of the Agency shall consist of: (to be
19 inserted when decision is made o n voting in 2.3.4. The quorum would be the
20 same as is required to approve the type of item coming before the Board for a
21 vote).
22
23
24 2.4. Officers:
25 2.4.1. The Board shall elect from among its members a Chair and a Vice-Chair who
26 shall be the Officers of the Board.
27 2.4.2. Elections shall occur at the first organizational meeting and annually
28 thereafter.
-ME 29 2.4.3. The Officers shall serve until a successor is elected. If an Officer is no longer
30 a member of the Board, a new Officer shall be elected at t he next meeting of the
31 Board.
32 2.4.4. The Board may establish advisory groups composed wholly or partly of non-
33 Board members and non-Parties.
34 2.4.5. The Board may appoint an Executive Committee, whose powers shall be
35 defined in the Agency's Bylaws.
36 2.4.6. The duties of the Chair shall be (insert)
37 2.4.7. The duties of the Vice-Chair shall be (insert)
' The PSC should consider the option of allowing the Board by supermajority vote to add other things to this list, for there may
be issues that we have not foreseen that the Parties would not want approved by a simple majority of the Parties.
DRAFT NO. 5 5
1 2.4.8. Vacancies: the Bylaws of the Agency shall establish a means by which the
2 Board addresses vacancies on the Board.
3 2.5. Transition
4 2.5.1. It is assumed that there will be a transition period of a number of months in
5 order to start up the Agency. A first task of t he Board shall be to define the
6 process, timeline and cost for the transition. The Agency may phase-in c ertain
7 operations or activities over time.
8 2.5.2. If required, the Parties will agree to provide interim financing for the Agency
9 during the transition period until regular revenues are received.
10 2.5.3. The Agency may retain staff on a temporary basis to assist in the transition,
11 which staff may become permanent staff if the Agency so determines. The
12 Parties do not intend that this clause supercede the provisions of st ate law with
13 respect to the transfer of employees into the new agency, as provided for in
14 Section 2.6.
15 2.5.4. A key principle of the transition shall be that water service to the Parties or
16 wholesale contractors shall not be interrupted due to the tr ansition.
17 2.5.5. The Parties intend that the Agency shall have full operating authority over
18 and responsibility for the System, wi th the possible exception of water rights.
19 To accomplish this, prior to signing the Agreement, the Parties will agree how
20 best to accomplish this transfer of responsibility and the Agency will have the
21 powers necessary to implement the transfer.
22 2.6. Labor and Personne12:
23 2.6.1. If staff is transferred from the Parties to the Agency, the Agency shall follow
24 the provisions of ORS 236.610 et seq and ORS Chapter 243 in the incorporation
25 of existing staff of the Parties into the Agency. If the Agency directly
26 undertakes obligations presently the responsibility of the Portland Wa'er
27 Bureau, it is the intent of the Parties that the Agency will fil l the positions from
28 the staff of the Portland Water Bureau. Within the constraints of these laws and
29 according to such agreements as may be bargained with the relevant parties,
30 the Agency may operate under the same or similar terms and conditions of the
31 existing labor contracts with the staff of the Parties.
32 2.6.2. The Parties shall agree, to the extent practicable, which employees of the
33 Parties who will be transferred to the Agency qualify for transfer under O RS
34 236.610 et seq.
35 2.6.3. The Agency shall have the power to undertalk such procedures and enter
36 into such agreements as are necessary to transfe, staff from the Parties to the
37 Agency.
2 The TAC and PSC should consider an alternative where the Agency is established with minimum staff. In this case, the
Agency would obtain the staff needed to operate the System by contract with the City of Portland, much as the JWC currently
does with the City of Hillsboro.
DRAFT NO.5 6
1 2.6.4. The Agency shall have the authority to hire such staff as it needs, including
2 staff specifically assigned to support the activities of the Board.
3 2.6.5. The Agency shall clearly define which sta ff is assigned to the operation of the
4 System and which staff is assigned to operation of a Party's distribution system.
5 In cases where staff performs both functions, the Agency shall have a ti me and
6 financial accounting system that clearly records these costs separately. To the
7 maximum extent practical, the Agency sha 11 assign staff wholly to operation of
8 the System or to the operation of a Party's distribution system.
9 2.7. Agency Financing and Financial Management:
10 2.7.1. The Agency is intended to be operated as an enterprise utility, all of whose
11 costs shall be paid for from user fees, systems development charges, grants,
12 revenue bonds and such other funds as may be available.
13 2.7.2. The Agency may establish a systems development charge or other types of
14 charges to finance its growth-related capital costs, and, if requested by the
15 Agency, the Parties agree to collect these fees and remit them to the Agency.
16 The charge shall be set to equitably reflect the use of the System by each Party.
17 2.7.3. The Agency shall not have general taxing authority nor shall it issue General
18 Obligation bonds.
19 2.7.4. The Agency shall have all revenue raising authorities permitted under ORS
20 Chapter 190, including but not limited to setting Wholesale Water rates, system
21 development charges for the Syst em, and issuance of revenue bonds.
22 2.7.5. The Agency shall prepare and adopt a budget for its operations consistent
23 with Oregon Budget Law.
24 2.7.6. The Agency shall maintain an accounting system that fully tracks costs and
25 revenues and provides monthly reports. This system shall clearly separate
26 accounts for operations and maintenance, capital expenditures, operations of
27 distribution systems, the reserve fund, and other accounts as determined by the
28 Board.
29 2.7.7. The Agency shall cause an independent audit to be performed annually by a
30 Certified Public Accountant licensed to do municipal auditing in Oregon.
31 2.7.8. The Agency's fiscal year shall begin on July 1 and end on Ju ne 30 each year.
32 2.7.9. Since a Party's ownership in the System might not equal its demand on the
33 system, a procedure will be established so that each Party earns a return on its
34 investment in the Agency. There will be no guarantee of a set rate of return. In
35 general, the rate of return the Agency would use in its calculations would be
36 the average cost of long-term borrowing for the Agency or a reasonable proxy
37 for this figure. It is expected that the rate of return used for water sales
38 contracts to non-Parties would be higher.
DRAFT NO.5 7
1 3. The System
2 3.1. System Value:
3 3.1.1. The System as of the date of the Agreement shall be valued in accordance
4 with the schedule of values listed in Appendix A of the Agreement. The value
5 listed therein is deemed by the Parties to represent the agreed value of the
6 System. (The value remains to be determined.)
7 3.1.2. The value of contributions at a later time of assets by the Parties or new
8 Parties shall be determined by negotiatio n and units shall not be issued to the
9 Party until approved by the Board.
10 3.1.3. The value of future capital improvements to the System shall be based on the
11 cost of the improvements.
12 3.1.4. System assets shall be depreciated in accordance with gener ally accepted
13 accounting principles, or the principle of useful life, as determined by the
14 Board.
15 3.2. Definition of System Components:
16 3.2.1. It is the intent of the Agreement that the System shall consist of those
17 components that are integral to the collection, storage, treatment and
18 transmission of raw and treated drinking water to the Parties. However, the
19 Parties acknowledge that there are Second ary System Facilities not part of the
20 System that are necessary or may be used to transmit water to some Parties.
21 3.2.2. Water Rights: The rights of the City of Portland to water in the Bull Run
22 River and the Columbia South Shore Wellfield are not considered to be assets of
23 the System.
24 3.2.2.1. The City of Portland agrees as a condition of its participation in the
25 Agency to execute such documents as are necessary to make available to
26 the Agency the right to use said water at the actual cost, if any, to the
27 Agency, subject only to applicable state or federal law.
28 3.2.2.2. The City of Portland agrees to support the Agency if the Agency, at its
29 cost, elects to pursue complete assignment of the City's water rights to the
30 Agency. The City of Portland shall c harge the Agency at actual cost, if
31 any, to accomplish assignment of these rights.
32 3.2.2.3. The City of Portland and the Agenc y agree to take all actions they
33 separately or jointly deem necessary to maintain in force the City's rights
34 to water and permits of all types that affect obtaining water from the Bull
35 Run watershed and the Columbia South Shore Wellfield: T he Agency
36 shall reimburse the City for its costs in undertaking these actions, or shall
37 undertake them on behalf of the Cit y, as they mutually agree. Additional
38 provisions shall be added to the Agreement to more clearly define the
39 rights and obligations of the City and the Agenc y with respect to the
40 principle described here.
DRAFT NO.5 8
1 3.3. System Ownership:
2 3.3.1. The Parties each shall own an undivided interest in the Initial Peak-day
3 System Capacity. The number of Units of said Capacity in the Agency each
4 owns shall define each Party's percentage of ownership in the System.
5
6
7 3.3.2. Since voting rights are partly depend ent on a Party's percent ownership in
8 the system, and these percentages may change when new System components
9 are built which invol ve increases in Peak-day Capacity, it will be impo rtant to
10 decide at what point a Party's ownership change is reflected in its voting right.
11 The TAC did not make a final decision on this matter so it is left to later
12 clarification.
13 3.3.3. The Agency shall maintain an accurate account of the Units owned by each
14 Party..
15 3.3.4. The Parties agree that certain capital improvements are needed in the System
16 over the next 10 years and wish to assure that financing is available to build
17 such facilities, approximately according to the schedule therein, in Table 1 of
18 Appendix B. To accomplish this, the Pa rties agree that each Party shall be
19 responsible for paying its share of the required investment and that if a Party
20 fails to remit its share within a reasonable period the Agency is authorized to
21 fund the construction of the listed fac ilities in accordance with the description
22 and schedule in Table 1 of Appendix B. As part of this approval, the Par ties
23 agree to estimate the amount of Peak-day capacity, if any, involved in each
24 project and to allocate this increase and the proportionate cost responsibility
25 among the Parties. When the project is finally authorized to be built, at which
26 time the Board will determine the Peak-day capacity increase, the Parties
27 further agree to adjust their estima ted cost responsibility and capacity
28 allocations proportionate to the determined capacity increase.
29 3.3.6 For any System Expansion project involving an increase in P eak-day
30 Capacity, the Parties shall be given an opportunity to nomina to the amount
31 of the increase in Peak-day Capacity that each wishes to buy. The cost to buy
32 a given amount of this capacity increase shall be as determined by the Board
33 under Section 5.1.43. If the Parties nominate more than the total capacity
34 increase available, the Board shall enter into discussions with the Parties to
35 seek agreement on the allocation and if this fails after a reasonable period, the
36 Board shall determine the allocation at its sole discretion. If the Parties
37 nominate less than the total Peak-day capacity increase available, the Board
38 may vote4 to have the Agency own the un-nominated capacity or the project
39 may be cancelled.
3 The required vote will be determined by which voting option is selected in Section 2.3.4.
4 The required vole will be determined by which voting option is selected in Section 2.3.4.
DRAFT NO. 5 9
1 3.3.7 For projects or portions of projects listed in Table 1 of Appendix B where
2 Peak-day Capacity is not increased, the Parties shall be allocated
3 responsibility for project costs in proportion to their ownership in the System.
4 3.3.8 Prior to signing the Agreement, the Parties agree to determine the date at
5 which a Party's Unit Account, and therefore its voting rights, shall be
6 adjusted to reflect its contribution to a project that expands the Peak-day
7 Capacity of the System.
8
9 3.4. Initial Capitalization of the Agency:
10 3.4.1. It is intended that the Agency be capitalized in one or a combination of three
11 ways: (1) transfers to the Agency of physical assets; (2) contributions of cash
12 (which may be obtained by a Party issuing bonds); and/or (3) the Agency
13 issues revenue bonds for which individu al Parties have a direct obligation to
14 service the debt (this is a way for a Party to pay for its Units over time). These
15 sources of capital are deemed to be equal with respect to how they are credited
16 to a Party's Unit Account. The Legal/Governance and Financial Working
17 Groups and the TAC ha ve examined a number of different ways to structure
18 the initial capitalization, but have not yet reached a conclusion on which t o
19 recommend to the PSC. All of the alternatives considered appear to be legal
20 and do-able, but each carries different types and degrees of risk and cost. The
21 Working Groups wish to emphasize that a fundamental issue affecting all these
22 alternatives is determining the value of the existing System assets. Until this is
23 done, it may be difficult for the Parties to decide which alternative makes the
24 most sense. The key alternatives that are under consideration are:
25 3.4.1.1. The "Rouse" Plan: the City of Portland and owners of the WCSL
26 would contribute the System assets to the Agency, receiving in return a
27 credit for the assets' value, which value would be translated into Units
28 and credited to its Unit Account. They would receive no direct payment
29 from the other Parties fo r these assets and would, therefore, resolve bond
30 payment obligations on their own. To achieve the Peak-da y Capacity
31 targets desired by the Parties, those who contribute no assets or too few
32 assets to achieve their ownership target would commit to financing future
33 capital improvements up to an amount needed to pay for their target
34 Units. An unresolved issue is how t he Parties who contribute asse is or
35 funds at the time of signing the Agreement would be compensated by
36 those who contribute their funds at a later date.
37 3.4.1.2. Straight purchase of assets: this is the alternative detailed in footnote
3(~ 5. This alternative has many financial issues related to the obligations
3 1 under Portland's existing bonds and to PERS, which are probably
4'j resolvable, but potentially at considerable cost to the Agency. This
DRAFT NO.5 10
1 alternative was developed in greater detail than the others. Many of these
2 details are included in the footnote below.5
3 3.4.1.3. Asset Contract: another alternative is to have no actual transfer of the
4 ownership of existing assets to the Agency. Rather, the Agency could
5 contract for the use of the assets from Portland and the WCSL owners on a
6 long-term basis, paying the owners a defined fee for use of the assets. This
7 alternative would avoid most if no t all of the difficulties with the transfer
8 of assets to the Agency in alternative s 3.4.1.1 and 3.4.2.1 above, and would
9 allow the Agency to control and operate the assets as if it were the owner.
10 However, it would not achieve the goal of many Parties to be an actual
11 owner of the existing System. They would, however, become direct
12 owners of future System improveme nts.
13 3.4.2. Once the Agreement is executed, each Party shall have voting rights on the
14 Board corresponding to its Units of ownership.
15
16 3.5. Valuation of Units
17 3.5.1. The value of a Unit of ownership at the time of the signing of the Agreement
18 shall be $ per Unit.
19 3.5.2. The Board shall annually determine the Unit value by the beginning of a ach
20 fiscal year.
21 3.5.3. The Unit value shall be the Agency's book value divided by the number of
22 Units outstanding. 6
23 3.6. Buy-in by New Parties:
24 3.6.1. New Parties may buy into the System from time to time with Board approval.
5 (1)The Parties who are owners of the assets of the System at the time of signing the Agreement will transfer ownership of all
of these assets to the Agency. The parties that have agreed to make cash contributions will transfer the cash to the Agency. The
value of the assets, cash, and obligations in lieu of cash (i.e. agreeing to pay for the debt service on an asset, similar to how the
WCSL was financed) shall be translated into Units.
(2) The intent is that ownership will be available only to those who take a significant ownership position in the Agency relative
to their current or potential Peak-day Capacity demand and financial resources. As a general rule, Parties would buy into
the Agency at least in proportion to their current Peak-day demand on the system. Parties not currently obtaining water
from the System should plan to invest a minimum of Sx million or an amount proportional to their expected demand on the
system at a future date.
(3) Appendix C lists the initial asset or cash contributions or in-lieu obligations of file Parties and the corresponding Umte of
i ownership each will have.
4
H (4) If required, front cash contributions received or revenue bards issued, the Agencl shall pay tine City of Portland an amount
i equivalent to $ which money file City of Portland will use to defease its tooter revenue bonds or other Water
Bureau-related bonds.
(5) Appendix E defines the initial financial status of the Agency at the time of the Agreement, including revenue bonds to be
h issued, use of those Raids, and the obligations of llte Parties to service the revenue bonds.
6 The Governance/Legal and Financial Working Groups will continue to examine alternative formulae and make a
recommendation later to the PSC.
DRAFT NO.5 1
1 3.6.2. The new Parties will be i ssued Units in proportion to their asset, cash or in-
2 lieu contributions to the System.
3 3.7. Purchase of New Units by Existing Parties:
4 3.7.1. Existing Parties may increase or decrease their number of Units from time to
5 time with Board approval.
6 3.7.2. The Board shall adopt procedures to implement this by, for example,
7 enabling Parties to purchase new Units directly from the Agency, to ex change
8 Units among the Parties, or to pay a differential amount for new System assets.
9
10 4. System Use
11 4.1. Rights of Use:
12 4.1.1 Each Party shall use the System in a manner that is consistent with prudent
13 water utility operating practices and that minimizes the impact of that use on the
14 other Parties.
15 4.1.2 The Parties acknowledge that at the time of signing the Agreement the
16 System may not have the capacity to deliver from Powell Butte all the Peak-day
17 demand of one or more Parties. The improvements listed in Appendix B are partly
18 intended to resolve these capacity shortages. However, it is anticipated that other
19 improvements unknown at this time will be needed.
20 4.1.3 The Parties agree that constructing new components to the System is costly
21 and the Parties, therefore, agree to optimize the use of the existing System for the
22 benefit of the Parties before construc tion of new facilities. Such optimization may .
23 include conservation measures, operational controls, scheduling of water deliveries,
24 and other methods.
25 4.1.4 Each Party shall have available to it sufficient Capacity in its system to serve
26 the Demand imposed by the Party o n the System.
27 4.1.5 Nomination of Supply: each Party s hall submit to the Agency annually no
28 later than a Nomination of Supply document. The Document shall set forth
29 the Party's projected Demand, Capacity to serve the Demand and any deficiencies of
30 Capacity. The document shall det ail these Demand and Capacity figures for the
31 transmission, treatment and treated-water storage components of the System for a
32 ten year period and for Raw Water for a fifty yea r period by ten year increments.
a 33 The demand figurer. shall be projected on the basis of Pe ak-day, Peak Season and
34 Annual Average. The P eak-day figure may exceed the Party's Units of ownership of
' 35 Peak-day capacity in the System but the Agency shall have no obligation to provide
36 Peak-day amounts that exceed a Party's ownership. The Board shall define the
37 terms Peak Season and Annual Average prior to when the first year nominations are
38 due. The Parties agree to inform the Agency annually in their Nomination of Supply
39 document if the Party does not intend to take all the water listed in Appendix D, but
40 the Party shall be liable to pay for said water in cases where the Agency is unable to
DRAFT NO.5 12
1 resell it in whole or in part. Said paymen t shall only be for the actual cost to the
2 Agency of not selling the water. The Agency shall make a good faith effort to sell
3 surplus water.
4 4.1.6 Agency Consolidation of Nominations: of ter receiving the Nomination o f
5 Supply document from the Parties, the staff of the Agency shall consolidate the
6 demand figures into one table and provide it, together with appropriate analysis, to
7 the Board for discussion and a decision. In the event that more water is demanded
8 than the capacity of the System, the Board shall pursue measures to bring the
9 demands into balance with System capacity, including negotiating lesser demands
10 with the Parties, and expanding the System. The Board's goal in performing this
11 consolidation function shall be to try to m eet all reasonable demands of the Parties.
12 The Agency shall have available suff icient water to deliver from Powell Butte all
13 Peak-day demands that do not exceed the Parties' ownership in the System. The
14 Agency shall have final authority to allocate available capacity of Peak Se ason and
15 Annual Average water to the Parties.
16
17
18 4.1.7 Substitution: the Agency shall only deliver water to the Parties from the Bull
19 Run watershed and/or the Columbia South Shore Wellfield. However, in the event
20 of emergencies, the Agency may deliver water from other sources to a Party if that
21 Party, by prior written agreement, ha s agreed to take water from another specific
22 source. The Board shall define the term "emergency", but in general it means an
23 event that involves interruptions of normal System supply, storage, treatment, or
24 delivery capacity. In the case where a Party does not agree to take water from
25 another source, the Agency shall have no obligation to deliver water to the non-
26 agreeing Party during emergencies. Emergency supply connections and agreements
27 existing at the time of signing the Agreement are listed in Appendix F. The Board
28 shall update this list when change s occur.
29 4.1.8 With the exception of the obligations under existing water sales contracts
30 with the City of Portland, the Parties have first right to the water available from the
31 System. Water that is surplus to the needs of the Parties may be sold by the Agency
32 to non-Parties on contract subject to the requirements of Section 8.4.
33 4.1.9 The Parties agree that the intent is to terminate without penalty their
34 wholesale contracts with Portland and substitute water purchase agreements with
35 the Agency. This process shall assure that there is no interruption of service.
36 4.2. Secondary System Facilities Use: Since ce rtain Parties are not served directly by
37 the System, those Parties that own facilities that enable such Parties to receive water,
38 agree to execute Wheeling agreements with the Agency, on a cost-of-service basis,
39 to ensure delivery of System water to those Parties not served directly by the
40 System7. Parties served by wheeling agreements as of the date of the Agreement,
7 The PSC should also consider the option of requiring the Parties to wheel water over their systems, where capacity is
available, to wholesale customers of the Agency.
DRAFT NO.5 13
1 who increase their Demand, shall not be entitled°to increased delivery of water
2 through these facilities unless the Party owni ng the facilities agrees to the increase.
3 The Parties recognize that arrangements exist among some of the Parties prior to
4 signing the Agreement to wheel water between the Parties that do not fit the
5 conditions described above in this pa ragraph. The Parties intend that these
6 arrangements shall continue and shall not be deemed to violate the provision
7 against reselling of water by the Parties.
8
9 4.3. Overuse and remedies for Overuse8:
10 4.3.1. The Board shall set reasonable standards for when a Party shah be deemed to
11 have overused the System. If overuse occurs, the Party shall be subject to
12 appropriate remedy, which may incl ude payments or curtailment.
13 4.3.2. Remedies for Overuse: (insert)
14 4.4. Conservation and Curtailment:
15 4.4.1. The Board may adopt water conservation standards for the Parties, w hick the
16 Parties agree to implement.9 Such standards shall be uniform among all similar
17 classes of uses. However, said standards shall only apply to the Parties with
18 respect to the water they obtain from the Agency.
19 4.4.2. The Board may adopt reasonable penalties for Parties failing to implement
20 conservation measures.
21 4.4.3. The Board may adopt a curtailment plan and reductions, which plan shall
22 provide for pro rata reductions by the Parties. However, in determining
23 curtailment percentages, the Agency may not (option: may) consider alternative
24 sources available to the Parties. (Note: in the case wh ere the Agency reduces a
25 Party by a greater than proportional amount because it has alternative sources, it
26 would need to figure in compensation to that Party if its casts for the alternative source
27 are higher).
28 4.4.4. The Board shall define the curtailment methods and reasonable notification
29 procedures.
30
31 5. System Expansion and Improvement
32 5.1. System Expansion and Improvement
8 This section was added because it is part of the JWC agreement. However, it may not be needed in this Agreement, so the
PSC should consider removing it after discussion.
9 The City of Portland presently does not require conservation as a condition of its wholesale contracts. The issue of any entity
setting conservation targets or standards for others has been much debated in the Region. It seems logical that once the
Parties come together to form an Agency, they would want to be able to set uniform conservation standards. But, some may
not agree, so this is a debatable issue for the PSC.
DRAFT NO.5 14
1 5.1.1. The Agency shall develop plans to im plement System Expansion projects
2 when the Parties are projected to use all the Capacity within a reasonable
3 planning horizon, or at such time as the Board deems appropriate.
4 5.1.2. The Parties agree that the System Improvement and System Expansion
5 projects listed in Appendix B are likely to be needed over the next 10 years in
6 accordance with the schedule contained therein and the Agency is authorized
7 to construct those facilities listed in Tabl e 1 of Appendix B, in accordance with
8 the schedule and as limited by the revenue bonding authorized in 3.3.5.
9 5.1.3. Cost allocations for projects listed in Table 1 of Appendix B shall be based on
10 one of the following methods:
11 5.1.3.1. For system improvement projects where Peak-d ay Capacity is not
12 increased, the Board shall allocate the Parties' responsibility for project
13 costs in proportion to the Parties' o wnership in the System.
14 5.1.3.2. For system expansion projects resulting in an increase in Peak-day
15 and/or Peak Season and/or Average Annual System Capacity, the Board
16 shall reasonably allocate the Parties' responsibility for project costs and
17 capacity expansion in millions of gallons per day (MGD) between the
18 three elements of capacity expansion, at its sole discretion. 10.
19 5.1.3.3. For projects that provide both syste m expansion and system
20 improvements, the Board shall assign the portions of project cost
21 attributed to system expansion and to system improvement based on
22 findings of an engineering study. The Board shall then allocate the
23 Parties' responsibility for the portion of project costs assigned to system
24 improvement per Section 5.1.3.1 and system expansion costs shall be
25 allocated per Section 5.1.3.2.
26 5.1.4. If the Board determines that projects not in Table 1 of Appendix B are needed
27 the Board may provide for the Agency to build, manage and operate such
28 improvements". The Board shall negotiate reasonable terms for this service
29 and these terms shall not impose any obligations on Parties not choosing to
30 participate in the project.
31 5.1.5. Based on the Nomination of Supply document submitted in 4.1.4, the Board
32 shall use reasonable standards to determine when the System shall be
33 expanded beyond the list in Table 1 of Appendix B, and shall revise the list in
34 Appendix B accordingly.
35 5.1.6. No later than June 1, 2007 (option: set any date), the Board shall submit to the
36 Parties a list of projects (with budgets and schedules) that it believes will be
37 needed to meet the needs of the Parties for the 10-year period after completion
38 of the Table 1 projects in Appendix B. It is the intent of the Parties to agree to a
39 list of projects and to have the governing bodies of all Parties approve said list
10 The required vote will be determined by which voting option is selected in Section 2.3.4.
11 The required vote will be determined by which voting option is selected in Section 2.3.4.
DRAFT NO.5 15
1 and associated revenue bonding no later than N ovember 1, 2008. In the case
2 where all the Parties do not agree to approve revenue bonding for a new I ist of
3 projects, the Board, at its sole discretion, may allow non-listed projects to be
4 constructed by a subset of Parties; a ppropriate financing and cost
5 reimbursement methods shall be established so that non-participants are not
6 liable for the projects, do not pay for them, and do not receive the benefits of
7 them.
8 5.2. Notice: The Agency shall provide the Part ies _ days of written notice of the
9 intent to expand or improve the System.
10
11 6. System Operations and Maintenance
12 6.1. Operation and Maintenance of the System:
13 6.1.1. The Agency shall operate and maintain the System in accordance with
14 generally accepted maintenance standards of comparable US water utilities.
15 6.1.2. The Agency shall adopt protocols for the System to provide for the equitable,
16 effective and efficient operation of the System. The Board shall appoint a
17 technical committee from the staff o f the Parties to develop these protocols and
18 recommend them to the Board for adoption. The Parties recognize that there
19 may be more than one way to transmit water o ver the System and the
20 Secondary System Facilities to the Parties. Also, there may b e times during
21 emergencies or drought when it may be necessary to transmit water via
22 alternative facilities. As a general principle the Parties agree to operate the
23 system to maximize efficiency, lower costs and equitably serve the Parties. The
24 operating protocols may be updated, as needed.
25 6.1.3. The Parties shall adopt operating protocols for their own systems which
26 demonstrate a best efforts and good faith effort to conform with the Agency's
27 protocols to assure that the Party shall have the Capacity to take delivery of
28 water in accordance with its approved Nominat ion of Supply.
29 6.1.4. The Agency shall operate the system in a manner consistent with all
30 agreements among the parties and all applicable local, state and federal laws.
31 Consistent with these agreements and laws, the Agency may set operational
32 standards that exceed the standards in these laws.
33 6.2. Operations of Distribution Systems and Other Services:
34 6.2.1. The Agency may enter into contracts with the Parties or others to operate
35 their distribution systems or other drinking water-related systems or services.
36 6.2.2. The agreements shall adequately protect the Agency and the Parties from
37 liabilities associated with providing the contracted services.
38 6.2.3. The Agency may perform such services as are necessary to a xecute these
39 contracts.
DRAFT NO.5 16
1 6.2.4. The Agency shall not become the ow ner of the assets of the systems that it
2 operates.
3 7. Rates and Charges
4 7.1. System:
5 7.1.1. Parties shall be charged for water delivered by the System on generally
6 accepted Cost-of-Service principles. The intent is that each Party pays its cost
7 of service and that no Party either pays or receives a subsidy. Such principles
8 shall consider a Party's use of the System and the allocation of charges shall be
9 based on such use. Charges to the Parties and non-parties shall fully cover the
10 Agency's revenue requirements. C harges to the Parties shall take into
11 consideration a Party's ownership.
12 7.1.2. The Parties intend that rates for Wholesale Water shall provide funds for
13 capital improvements needed to maintain the Sy stem in good operating
14 condition and to replace depreciated parts of the System. The Parties also
15 intend that the Wholesale Water rate may include a fee to establish a separate
16 Reserve Fund to be used for emergency repairs and emerge ncy capital
17 improvements not elsewhere provided for in the Agreement. The Boar d shall
18 determine the appropriate size of Reserve Fund.
19 7.1.3. A general principle for setting rates for new facilities built to accommodate
20 growth shall be that "growth pays for growth". A number of methods exist for
21 allocating these costs and the Board shall determine which to use.
22 7.1.4. The Cost of Service to the Parties shall be as determined by the Cost-of-
23 Service Model. Said model shall be adopted annually by the Board, and
24 updated as needed to maintain a reasonable allocation of charges.
25 7.1.5. For delivery of water to Parties west of the Willamette who do or could
26 receive water from the Washington Court ty Supply Line, the cost of wheeling
27 water through Portland or operating the Washington County Supply Line shall
28 not be specifically allocated to individual Parties. Rather, they shall be
29 allocated equally using cost of service principles.
30 7.1.6. Within three months after the end of each fiscal year, the Agency shall
31 calculate the actual cost-of-service costs of water delivered to each Party during
32 the previous fiscal year and debit or cred it the Parties for these actual costs.
33 7.2. Distribution Systems and Other Services:
34 7.2.1. The cost for providing services shall, at a minimum, reimburse the Agency
35 for its costs, including overheads and other indirect costs.
36 7.2.2. The Agency shall maintain an accounting system that fully tracks the costs
37 and revenues for these services and shall establish separate enterprise funds as
38 needed to maintain separation of Agency and no n-agency funds.
39 7.2.3. The Agency shall not issue revenue bonds for a Party's distribution system.
DRAFT NO.5 17
1 7.3. Monthly Payments:
2 7.3.1. Each Party or contractee of the Agency shall make monthly payments to the
3 Agency for operation and maintenance expenses, capital improvements and
4 other upgrades in accordance with t his Section.
5 7.3.2. The Agency shall send monthly billings to the Parties and contractees for all
6 payments due the Agency, which bi Ring shall be due within 30 days of the
7 invoice date. Late- or non- payment fees, interest charges and penalties shall be
8 determined by the Board.
9
10 8. Water Sales to Outside Parties
11 8.1. The Agency shall have authority to ente r into contracts to sell water to no n-
12 parties to the Agreement.
13 8.2. Portland intends to transfer without penal ty its existing wholesale contracts with
14 non-parties to the Agency as of the date of the Agreement. In the case where a
15 wholesaler owes money to Portland at the date of the Agreement, the Agency
16 agrees to assume the accounts receivable and pay Portland the amount. However,
17 in the case that the City is unable to transfer these contracts, it will continue to
18 service them.
19 8.3. A model contract for sale of water will be provided in an appendix to the
20 Agreement. The purpose of drafting the wholesale contract ahead of time is for the
21 Parties to understand what commitments the Agency will be making in new
22 contracts. Said model contract may be amended from time to time by the Board
23 and shall be the contract used for these water sales.
24 8.4. Parties to the Agreement shall not re sell water from the System.12. However, in
25 the event that the City of Portland is unable to assign existing wholesale contracts to
26 the Agency, the City shall be allocated sufficient water to cover those obligations
27 and shall be permitted to deliver water to the contractees under the terms of the
28 contracts.
29
30 9. Withdrawal, Termination of Membership and Sale of Assets
31
32 9.1. Voluntary Withdrawal or Termination of Membership
33 9.1.1. As a general principle it is the intent of the Parties that voluntary withdrawal
34 from the Agency shall be difficult.
35 9.1.2. Any Party may elect to terminate its participation in the Agreement and
36 withdraw from the Agency by giving written notice of its desire to terminate to
37 all other Parties, and stating the date for termination which shall be not less
12 The TAC and PSC should consider whether it should allow the Parties to continue selling water to their existing wholesale
contractors. As written, this clause would require that these contracts be terminated, which may be legally difficult.
DRAFT NO.5 18
1 than eighteen months (option: other time period) from the date of the notice of
2 termination.
3 9.1.3. Parties may terminate participation only in the entire System, not in
4 components of the System.
5 9.1.4. The Agency shall purchase the terminating Party's Units under these terms:
6 the value per Unit shall be the then-existing Board approved Unit value; the
7 payment shall be made over twenty years beginning the next fiscal year after
8 the termination occurs; the interest on the unpaid balance shall be at the
9 Agency's then-existing average cost of debt less 100 basis points (option: some
10 other interest rate). Nothing shall prohibit the Board, by supermajority of the
11 remaining Parties, to agree to different terms. The Agency may pay all or a
12 portion of the price at any time without penalty. Upon the initial payment, the
13 defaulting party shall be deemed terminated and have no further interest
14 herein except those binding obligations and commitments of that defaulting
15 party as provided in other provisions of the Agreement.
16 9.1.5. In order to prevent a very large owner in the Agency from creating a fisc al
17 crisis for the Agency, any Party with an owners hip interest in the System that
18 exceeds twenty-five percent (option: some other figure) who wishes to leave the
19 Agency agrees to remain a Party unti 1 such percentage drops below fifteen
20 percent (option: some other figure), unless the Agency agrees to purchase said
21 ownership interests under mutually satisfactory terms and conditions, as
22 provided for in this Section.
23 9.1.6. Upon completion of the transaction, the Agency may elect in its sole
24 discretion to provide wa ter to the leaving party under a whol esale water
25 purchase contract.
26
27 9.2. Involuntary Withdrawal or Termination of Membership
28 9.2.1. If a Party violates or breaches a material term of the Agreement, including
29 non-appropriation of funds, then, u pon 30 days' written notice, the following
30 occurs:
31 9.2.1.1. Voting rights are suspended from the effective date of notice
32 (suspension) during the period a Part y is in default until the default is
33 cured or the Dispute Resolution procedures result in a decision finding no
34 default occurred and the Party is reinstated to membership. The Board, in
35 its sole discretion, may determine that termination of the Party's
36 membership is appropriate, not reinstatement. In such case, and after
37 Dispute Resolution processes are exhausted affirming the declaration of
38 default, the Board may terminate the Party's interest and pay the
39 terminated Party according to this Section.
40 9.2.1.2. Upon suspension, the Party shall continue to receive its current
41 allocation of water from the Agency at the same Wholesale Water rate and
DRAFT NO.5 19
I on substantially the same terms as it was receiving water prior to the
2 notice of suspension.
3 9.2.1.3. If the Board determines to terminate the defaulting Party's
4 membership, and if the declaration of default is affirmed under the
5 Dispute Resolution process, then notwithstanding any other provision
6 herein, the Agency shall upon 90 da ys' written notice purchase the
7 defaulting Party's proportionate interest in the Agency and assets at
8 original cost less depreciation (option: other formula). The Board shall make
9 payment over 20 years (beginning the next fiscal year after the termination
10 occurs) with the unpaid balance accruing interest at the Agency's average
11 cost of debt less 150 basis points (option: some other interest rate). The
12 Agency may pay all or a portion of the price at any time without penalty.
13 Upon the initial payment, the defaulti ng Party shall be deemed terminated
14 and have no further interest herein except those binding obligations and
15 commitments of that defaulting Party as provided in other provisions of
16 the Agreement.
17 9.2.1.4. Upon termination, the Agency may elect in its sole discretion to
18 provide water to the terminated Party under a wholesale purchase
19 contract.
20 9.3 Dissolution of the Agency (to be inserted)
21
22 10. Liability
23 10.1. A Party's liability for the debt of the Agency shall be in accordance with a Party's
24 percent ownership.
25 10.2. To the extent it determines reasonable, the Board shall obtain insurance to limit
26 the Parties' liability to their percentage of owner ship.
27 10.3. A leaving Party shall remain liable for its Unit of the debt of the Agency at the
28 time of its notice to leave, unless the Agency or other Parties agree to assume this
29 liability.
30 10.4. Tort Liability of the Parties: The Agency shall maintain insu ranee to cover the
31 tort liability of Board members and s taff acting in their capacity as agents for the
32 Agency.
33 11. Dispute Resolution
34 11.1. The Parties agree that decisions by the Board by supermajority shall be final and
35 Parties disagreeing with such decisions shall proceed directly to step 3 in this
36 dispute resolution process. For all of her disputes between a Party and the Agency
37 or among the Parties, steps 1 and 2 shall occur first. However, nothing shall prevent
38 the disputing parties from waiving any of the steps by mutual consent.
39 11.2. Step 1: Negotiation: each party to a dispute shall designate a person to represent
40 them in attempting to resolve the issue. If the dispute is resolved at this step, there
DRAFT NO.5 20
I shall be a written determination of such resolution, signed by the designated
2 representative and ratified by the governing bodies, which shall be binding upon
3 the parties.
4 11.3. Step 2: Mediation: If the dispute cannot be reso Ived within thirty days at Step 1,
5 the Parties shall submit the matter to no n-binding mediation. The Parties shall
6 attempt to agree on a mediator. If they cannot agree, the parties shall request a list
7 of five mediators from an entity or firm providing mediation services. A mediator
8 shall be selected by mutual agreement of the Parties, or, failing such agreement, by
9 random lot from the list of five names. Any common costs of the mediation shall be
10 born equally by the parties. If the issue is resolved at this step, a written
11 determination of such resolution shall be signed by the person representing the
12 parties and ratified by the governing body of each party, which shall be binding on
13 the parties.
14 11.4. Legal Action: After exhaustion of Steps 1 and 2, the Parties may initiate litigation
15 in the Circuit Court of the State of Or egon for _ County.
16 11.5. Each party shall bear its own legal and expert witness fees.
17 12. Amendments to Agreement (to be inserted)
18 13. General Provisions (to be inserted)
19 13.1.1. Notices
20 13.1.2. Severability
21 13.1.3. Counterparts
22 13.1.4. Force Majeure
23 13.1.5. Survival of Covenants
GRAFT NO.5 21
mmmi
1
2 List of Appendices
3' A. List of System Assets
4 B. Capital Projects
5 C. Units of Ownership in the Agency (to be added later)
6 D. Demand Projections of the Parties
7 E. Initial Financial Status of Agency (to be added to ter)
8 F. Water Supply and Mutual Aid Interg overnmental Agreements Summary
DRAFT NO.5 22
1 Appendix A
2 List of System Assets
3
4
Asset Item
o Bull Run Watershed lands
o Bull Run Lake permit assets
o Bull Run Dam Nos.1 and 2
o All other Headworks facilities
o Sand River Maintenance Facility
o Lusted Treatment Plant site
o Conduit Nos.1 and 5 rights of way
o Wholesale users' taps and meter facilities
o Columbia South Shore Wellfield
o Conduit Nos. 2,3 and 4 from Headworks to Powell Butte Reservoir
o Powell Butte Reservoir and properties
o Emer enc Operations Center
o Water Control Center and Lab
o Washington Coun Su ly Line
5
DRAFT NO.5 23
M M MEMEMEa
1 Appendix B
2 Table 1
3 Capital Improvements
4
Near-Term (3 to 5 years) Estimated Project Estimated Project Annual O&M
Cost Cost (Inflated costs
Year 2002 dollars dollars)
• Groundwater $22,700,000 $26,300,0001 $250,0004
Improvements
• Conduit Vulnerability 15,500,000 16,700,0001 05
Reduction Improvements
• Repair and Replacement 25,000,000 26,600,0001 0
Program
• System Meter 2,000,000 2,300,0001 12,0003
Improvements
$65,200,000 $71,900,0001
(dear-Term Improvements Total
Medium Term 5 to 10 ears
• Conduit Vulnerability $22,200,000 $31,500,0002 05
Reduction Improvements
• Powell Butte Reservoir No. 57,200,000 66,500,0002 333,0006
2
• Water Treatment Plant 202,000,000 245,000,0002 8,000,0007
• Conduit No. 5, Gresham 21,300,000 27,550,0002 138,0006
Section
• Repair and Replacement 25,000,000 28,400,0002 0
Program
• Endangered Species Act 15,000,000 20,200,0002 0
Impacts
$342,700,000 $419,150,0002
Medium Term Improvement Total
Total Improvement Cost $407,900,000
5
6 Notes: 1. Near-term project cost estimates are inflated to year 2007 dollars at a 3 percent annual inflation rate.
7 2. Medium-term project cost estimates are inflated to year 2012 dollars at a 3 percent annual inflation
8 rate.
9 3. Annual meter facility O&M costs are in year 2002 dollars based on 0.5% of capital costs.
10 4. O&M costs are in year 2002 dollars for ASR operations. Ongoing well field operating costs are
11 included in current operating expenses.
12 5. Conduit operating costs are included in current operating expenses.
13 6. Annual reservoir and transmission system O&M costs are in year 2012 dollars based on
14 0.5% of capital costs.
15 7. Annual treatment plant O&M costs are in year 2007 dollars and begin mid year in 2007.
16 8. The water treatment plant cost estimate includes the cost of the membrane filtration option
17 from Section 4.6, page 19 of the September 2002 Report and Recommendations of the Bull
18 Run Treatment Panel.
DRAFT NO.5 24
1
2 Table 2
3 Additional Capital Improvement Project Summary
4
5
Medium Term (5 to 10 y ears) Estimated Project Estimated Project Annual O&M
Cost Cost (Inflated costs
Year 2002 dollars dollars
• Dam Raise at Reservoir Nos. $13,900,000 17,500,0001 03
1 and 2
• Washington County Supply 115,200,000 154,800,0001 774,0004
Line No. 2 - Northern Route
$129,100,000 $172,300,0001
Medium Term Improvement Total
Long Term (10 to 20 Years)
• Clackamas Connection $28,500,000 $51,500,0002 $258,0005
$28,500,000 $51,500,0002
Long Term Improvement Total
$157,000,000
Total Improvement Costs
6
7 Notes: 1. Medium-term project cost estimates are inflated to year 2012 dollars at a 3 percent annual inflation rate.
8 2. Long-term project cost estimates are inflated to year 2020 dollars at a 3 percent annual inflation
9 rate.
10 3. Dam Nos.1 and 2 operating costs are included in current operating expenses.
11 4. Annual transmission system O&M costs are in year 2012 dollars based on 0.5% of capital
12 costs.
13 5. Annual transmission system O&M costs are in year 2022 dollars based on 0.5% of capital
14 costs.
i
-1
7
I
i
i '
DRAFT NO.5 25
Appendix D
2 Water Demand Forecast and Supply Nomination Summary
3
2005, 2010 2020
Member Water Demand Estimate Average Peak Peak Average - Peak,, Peak Average Peak Peak
or Supply Nomination Day Seasons . Day Day Seasons. Day Aay ;Seasonf Dap
and at d: and and mdmd, u~d' i= and ar'd
City of Water Demand Estimates 8.64 11.20 17.28 9.74 12.64 19.49 11.05 14.33 22.10
Beaverton Nominated Supply - Low 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50
Nominated Supply - High 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00
Clean Water Water Demand Estimates 4.50 6.43 6.75 9.00 12.86 13.50 13.40 19.14 20.10
Services Nominated Supply -Low 0.90 1.29 1.40 1.80 2.57 2.70 2.70 3.86 4.00
Nominated Supply - High 4.50 6.43 6.75 9.00 12.86 13.50 13.40 19.14 20.10
City of Water Demand Estimates 7.83 8.68 13.95 9.10 9.62 16.09 11.64 11.51 20.37
Gresham - Nominated Supply - Low 7.17 10.74 8.06 10.35 9.79 9.39
Nominated Supply - High 7.83 8.68 13.95 9.10 9.62 16.09 11.64 11.51 20.37
Metro Water Demand Estimates - - - - _ _
Nominated Supply - Low -
Nominated Supply - High - - - _ _ _
City of Water Demand Estimates 75.00 90.00 145.00 75.00 90.00 145.00 75.00 90.00 145.00
Portland Nominated Supply - Low 75.00 90.00 145.00 75.00 90.00 145.00 75.00 90.00 145.00
Nominated Supply - High 75.00 90.00 145.00 75.00 90.00 145.00 75.00 90.00 145.00
Powell Valley Water Demand Estimates 6.00 7.40 11.00 6.00 7.40 11.30 6.10 7.30 11.40
Road Water Nominated Supply - Low 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
District Nominated Supply - High 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Raleigh Water Water Demand Estimates 0.67 0.77 1.53 0.72 0.80 1.59 0.78 0.86 1.71
District Nominated Supply - Low 0.67 0.77 1.53 0.72 0.80 1.59 0.78 0.86 1.71
Nominated Supply - High 0.67 0.77 1.53 0.72 0.80 1.59 0.78 0.86 1.71
Rockwood Water Demand Estimates 7.00 9.57 13.00 7.07 9.67 13.13 7.21 9.86 13.40
Water PUD Nominated Supply - Low 3.50 4.79 6.50 3.54 4.84 6.57 3.60 4.93 6.70
Nominated Supply - High 7.00 9.57 13.00 7.07 9.67 13.13 7.21 9.86 13.40
Sunrise Water Water Demand Estimates 5.20 9.50 13.40 8.20 15.10 21.30 13.70 25.30 35.60
Authority Nominated Supply -Low 0.0 0.0 0.0 0.0 0.0 0.0 2.50 10.00 10.00
Nominated Supply - High 1.00 5.00 5.00 2.50 10.00 10.00 6.00 20.00 20.00
DRAFT NO. 5 0
1
2
2005r t.zmo s_ ;zb2o:~
Member Water Demand Estimate Average Peak Peak LAWh Pea k Peak eak
or Supply Nomination Day Season Dayc (m d (m d) ui ''d . » uid , m` d Citv of Tigard Water Demand Estimates 6.50 10.80 15.00 6.76 12.24 17.00 7.09. 12.96 18.00
Nominated Supply - Low 3.90 6.48 9.00 3.72 6.73 9.35 3.60 6.50 9.00
Nominated Supply - High 6.50 10.80 15.00 6.76 12.24 17.00 7.09 12.96 18.00
City of Water Demand Estimates 5.60 8.30 14.00 8.37 12.40 19.00 8.80 13.10 20.00
Tualatin Nominated Supply -Low 5.20 10.80 10.80 6.00 10.80 10.80 6.00 10.80 10.80
Nominated Supply - High 5.60 10.80 14.00 9.00 12.50 19.00 9.00 13.10 20.00
Tualatin Water Demand Estimates 25.70 36.80 50.50 29.00 41.50 56.80 36.60 52.30 71.70
Valley Water Nominated Supply - Low 18.23 29.99 44.50 21.53 34.69 50.80 29.13 45.49 65.70
District Nominated Supply - High 18.23 29.99 44.50. 21.53 34.69 50.80 29.13 45.49 65.70
West Slope Water Demand Estimates 1.49 1.90 3.73 1.53 1.96 3.84 1.54 1.96 3.84
Water District Nominated Supply - Low 1.49 1.90 3.73 1.53 1.96 3.84 1.54 1.96 3.84
Nominated Supply - High 1.49 1.90 3.73 1.53 1.96 3.84 1.54 1.96 3.84
Totals Water Demand Estimates 154.13 201.35 305.14 170A9 226.19 338.04 192.91 258.62 38122
Nominated Supply - Low 120.56 15052 237.7 126A 156.89 2455 139.14 178.9 270.64
Nominated Supply - High 139.82 185.94 274.46 154.21 206.34 301.95 172.79 236.88 340.12
3 Note 1: Peak season begins on July 11, and ends on October 313t.
DRAFT NO 5
1 Appendix F
2
3 Water Supply and Mutual Aid Intergovernmental Agreement Summary'
4 Proposed Bull Run Regional Drinking Water Agency
5
6
PAMES Agreement Type
City of Gresham and Powell Valley Road Mutual Aid Agreement (MAA)
Water District
City of Gresham and Lusted Water District MAA
City of Gresham and Rockwood Water MAA
People's Utility District UD
Clackamas River Water and Rockwood Water Water Supply Agreement (WSA)
PUD
Clackamas River Water and North Clackamas WSA
Count Water Commission
City of Tualatin and City of Tigard WSA
City of Tualatin and City of Sherwood WSA
City of Tualatin and Tualatin Valley Water WSA
District for the City of Sherwood
City of Tualatin and the City of Lake Oswego WSA
City of Tualatin and the Rivergrove Water MAA
District
City of Lake Oswego and the City of Tigard WSA
Tualatin Valley Water District and the City of WSA
Tigard
Tualatin Valley Water District and the City of MAA
Beaverton
Tualatin Valley Water District and the West MAA
Slope Water District
City of Beaverton and the City of Tigard WSA
Tualatin Valley Water District and the Joint WSA
Water Commission
7 Note 1: Not listed are the water supply agreements between the City of Portland and the wholesale
8 water users.
9
DRAFT NO.5 0
r~ Vj -C,
Ed Wegner ! AD. 15 , a2
PROPOSED
BULL RUN REGION
DRINKING WATER AGENCY
HISTORY
In March 2001, Commissioner Sten
proposed the formation of a new
governmental structure to provide
ownership and management of the region s
water sources.
In August of 2001, a dozen interested
water providers joined together to research
Commissioner Sten's proposal.
Regional Water System
ti.. ~
4 ~
,y 1 `I
r .1
Proposed Bull Run Drinking Water Agency 1
Ed Wegner
f
Purpose of Phase I
Achieve a consensus on goals.
Adopt a criteria.
Investigate governance models.
Provide public information.
Key Findings of Phase I
Significant interest dm exist.
To stan, supply should be limited to
the Bull Run Watershed and the
Columbia South Shore Wellffeld
systems.
Purpose of Phase II
Analyze govem:utce alternatives.
Develop financial models.
Create a public involvement plan.
Determine the facilities that would he a
part of a regional supply and
transmission system.
Proposed Bull Run Drinking Water Agency 2
Ed Wegner
Kgy Findings of Phase II
Formation it feasible.
No apparent "fatal flaws" discovered.
Proposed Regional System will consist
of the Bull Run and Columbia South
Shore Welifteld sources and the
Washington County Supply Line.
Key Findings of Phase II(cont.)
Form Agency under an ORS 190
intergovernmental agreement.
Engineering analyses provided
information on facilities.
Financial analyses provided
information on the estimated range of
values of facilities to be purchased and
transferred.
Key Findings of Phase II(cont.)
Legal and governance analyses
addressed the key issues of the project.
I
I
Principles of Agreement were
developed.
1
Criteria No. I through 15 were met
as established by the Policy Steering
Committee during Phase I.
!1
I
Proposed Bull Run Drinking Water Agency 3
Ed Wegner
Proposed Agency Concept
New Agency will own, operate and
maintain regional water supply.
Constitute under an ORS 190
intergovernmental agreement.
Portland Water Bureau will contribute
supply system assets consisting of Hull Run
& Columbia South Shore Wellfreld
systems to Agency and receive credit for
their value.
Proposed Agency Concept (cont.)
Agreements to allow Agency use of water
rights.
Washington County Supply Line will be
contributed to the Agency and credit for its
value will be received.
Agency will undertake supply system
improvement projects.
Agency may assume the wholesale water
sales contracts.
Proposed Agency Concept (cont.)
Staff of new Agency will consist primarily
of the staff of the Portland Water Bureau.
Agency will have the authority to provide
any water related services.
Portland Water Bureau will retain
ownership of its distribution system, which
will be managed, operated and maintained
by the Agcncy.
Proposed Bull Run Drinking Water Agency 4
Ed Wegner
ENGINEERING
Components
.Bull Run Watershed lands;
.Bull Run Dam (No. I and 2);
.Conduits;
.Columbia Souris Shore Wellfteld;
.Powell Butte Reservoir and properties; and
.Washington County Supply Line.
SYSTEM ASSETS MAP
0 0 ,r
a
Impacts
Creation of a regional agency provides the
opportunity of system operation
improvements including more efficient
and coordinated use of the storage and
transmission facilities.
Proposed Bull Run Drinking Water Agency 5
Ed Wegner
Operational Issues
The Engineering Working Group
recommends the establishment of a supply
and transmission system operations group.
Key operational issues include:
. Wheeling
. Optimal Seasonal Operations
. Degree of Benefit
A New Supply Line
The Regional Water Supply Plan calls for
regional transmission system
improvements within the next 10 years
including the construction of Washington
County Supply Line Number 2.
This project is excluded from the proposed
Agency preliminary capital impruvcment
program list.
GOVERNANCE
f Options Evaluated
1 ORS 190 Intcr-go-:erntnental Agreement
I
I
2. ORS 261 People's Ihility Districts
I
I
3 ORS 264 Water Districts
4. ORS 268 Regional Scrs•ice Districts
1
5 ORS 450 Water Authorities
Proposed Bull Run Drinking Water Agency 6
Ed Wegner
Intergovernmental Agreement
• Local governments agree to provide
certain functions together.
• Board consists of elected officials from
members.
• Agency formed:
Owns assets;
• Sets wholesale rata;
• Collects revenues; and
Operates facilities.
People's Utility District
• Citizens vote to create PUD.
• 5 member Board elected by zone.
• PUD:
Owns assets;
Sets wholesale rates;
v Collects revenues and
Operates facilities
Water
. Power
Recommendation
ORS 190:
I nter•Governmental Agreement
Recoinmrttded by elected o)Tjciulr for it
• Provides control by local government.
• Board consists of elected officials.
• Control which water sources are used.
Proposed Bull Run Drinking Water Agency 7
Ed Wegner
Principles of Agreement
• Section 1: Definitions
• Section 2: Agency Organization
• Section 3: The System
• Section 4: System Use
• Section 5: System Expansion
• Section G: Operations & Maintenance
Principles of Agreement (cont.)
.r
'Section 7: Rates and Charges
-Section 8: Water Sales to Outside Parties
'Section 7: Withdrawal, Termination
-Section 10: Liability
-Section 11: Dispute Resolution
Section 2: Agency Organization
• Board appointed by parties - one per
member.
• Board has full powers to act.
• Clcar separation of Agency stag.
• There will be a ennsition process.
• SedT'transkrring into the new Agency will
be under state law provisions.
Proposed Bull Run Drinking Water Agency 8
M=j
Ed Wegner
Segion 2: Agency Organization (cunt)
• Agency is an enterprise utility, getting
funds from rates, revenue bonds, SDCs,
gnnts, but not GO bonds or property
taxes.
• Agency will establish a regional SDC to
finance growds.
General Agency Organization
Member Agencies
Board of Directors
j -
Agency Director
SupplySystctn pjy,,~a Lx
Sufr Staff
Agency Functions & Assets
Giucj}al punnious r.JUSIy]I A] •scts
• O&M on System Portland Supply
physical assets. System
2 CoNncmal services Washingmn County
IOr nthets Supply Line
Wholrsale comrans New projects built by
• Plan. finmce. butyl Agoscy
srstrm Cash or in-lieu funds
uuprurcntents from numbers
Proposed Bull Run Drinking Water Agency 9
Ed Wegner
7~
Section 3: The System
• Bull Run rights to water are not part
of assets, but Agency has has use of
there.
• Parties own an undivided interest in
the System. - one v V+Q
• Parties authorize Agency to bond &
build defined list of npital
improvements.
Section 3: The System (cont.)
• Ownership in Agency are valued at
book value.
• Existing Parties can increase and/or
decrease ownership.
Section 4: System Use
• Parties are not buying a right to a defined ~ ~ p~~ /V
_}.jI'OL,O 0
their maximum daily capacity purchased. C(~(
• Parties agree to a minimum allocation of
water for rolling 10-year period.
` Parties "nominate" water needs each year
and the Boar[I adjust them to fit available
water.
• Agency supplies only [lull Run or well field
water, excel,[ in anergencics.
1) Oul-j In S-~ t~~ V'C C_
a t, LbTC t ~C L(11Ce G
Proposed Bull Run Drinking Water Agency 10
Ed Wegner
Section 4: System Use (cont.)
• Parties have first right to water available,
subject to wholesale contracts.
• Portland agrees to wheel water through its
distribution tyste»s to west-side parties.
• Board establishes conservation and
curtailment policies.
Section 5: System Expansion
• Agency will expand System to meet
needs of the Parties.
Section 6: System O & M
• System will be operated to meet generally
accepted utility standards.
• Agency may operate distribution systems
of the parties or others, and provide
other water-related services.
Conceptual Approach to
Contractual Operations
Agency Functions Contractee Funcdoes
• O&M on Continua to own its
Cnntnctrr's sY,tem
Systrm
• Pays fee to Ageluy 1
• Monthly billing 1a1 operate system and i
""ica other functions, as
• Othcr smicet as agrml
srquatrd: e.~, See rams for servicn to
callltal 1,14 g. its costorners
1111111 ItIC111111
• I'nwidcs capital for
system intprovanrn6
Proposed Bull Run Drinking Water Agency 11
Ed Wegner
Section 7• Rates and Cha e-i
• Parties pay for water on cost-of-service
basis no subsidies or excess profits.
• Growth pays for growth.
• Contract services pay full costs.
Section 8:
Water Sales to Outside Parties
• Portland will assign existing wlsolcsale
contracts to Agency.
• Agency will develop model wholesale
contract.
Section 9:
Withdrawal. Termination
• Agency guarantees to buy out anyone
leaving at a defined unit value and terms.
• Parties may he removed as owners
involuntarily if they fail to meet terns of
the Agreement.
Proposed Bull Run Drinking Water Agency 12
Ed Wegner
Section 10: Liability
• Liability for backing the revenue bonds
and other debt of the Agency is ,
apportioned to the Panics according to
their ownership.
• Agency covers ton liability for Board
members and staff.
Section 11• Dispute Resolution
• Tluct step dispute resolution process is
set up.
• Decisions by supcrmaiority of the Board
are deemed final - appeal to the courts.
Unresolved Issues
• Valuation of Portland Water Bureau and
Washington County Supply line assets.
• Voting process of the Board.
• Actual process of transition to rise new
Agency.
Proposed Bull Run Drinking Water Agency 13
Ed Wegner
Unresolved i.suts (scent.)
.Amount of watcr the agency would be requited '
to provide under existing contracts assumed by
the Agency.
Level of nomination of the participating
agencies.
Remedies for participating agencies that
overuse the system.
Discussion & Qutsdow
Next Workshop: 11/12/02
Topics: Finance bt Pubtic Involvement
Proposed Bull Run Drinking Water Agency 14
AGENDA ITEM # 3
FOR AGENDA OF 10/15/02
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE Communication Plan Update
PREPARED BY: Elizabeth Newton6P ` DEPT HEAD OK CITY MGR OK
ISSUE BEFORE THE COUNCIL
An update on the city's communication efforts.
STAFF RECOMMENDATION
1. Provide direction on discontinuing the CIT program in its present form.
2. Provide direction on conducting an evaluation of the effectiveness of the Cityscape.
INFORMATION SUMMARY
This is an update on the city's major communication efforts: the CITs, Communication Plan, neighborhood
meetings, press releases, Community Connectors, cable television, Cityscape, the Website, the Goal Guide, and the
TVTV Bulletin Board.
Staff recommends that the CIT meetings in their present format be discontinued. As the attached memo explains,
while there is an audience for cable programming, attendance at CIT meetings has declined. In place of the CIT
meetings, staff proposes educational and informational programs on city issues and programs be produced to air.
Other tools for involving citizens such as Town Hall meetings, the Website, and specialized task forces will be
emphasized.
Staff also recommends that staff undertake an evaluation of the effectiveness of the current method for distribution
of the Cityscape newsletter. There may be more cost effective ways to get the information out.
OTHER ALTERNATIVES CONSIDERED
1. Continue the CIT program as currently structured.
i 2. Continue the current publication and distribution of the Cityscape.
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
Community Character and Quality of Life Goal 1, Strategy 1, "Improve communication about all aspects of the
city's business."
ATTACHMENT LIST
1. Memo from Liz Newton dated October 2, 2002.
2. Neighborhood meeting process packet.
FISCAL NOTES
None \ \COUNCIL AGENDA ITEM SUMMARIES\2002\COMMUNICATION PLAN UPDATE.DOC
M
MEMORANDUM
CITY OF TIGARD, OREGON A4:
TO: Honorable Mayor and City Council Members
FROM: Liz Newton, Assistant to the City Manager
DATE: October 7, 2002
SUBJECT: Update on City's Communication Efforts
This memo provides an update on the status of many of the tools used to communicate
with citizens and promote their involvement.
CITs
Monthly meetings have been held since the last update to Council in April except for the
July 3 meeting, which was canceled. The June, August, and September meetings were
taped in the morning to air during the regular 7:00 p.m. time slot on the first Thursday of
the month.
Attendance at CIT meetings during the summer months averaged about six citizens per
meeting. This is fewer than attended evening meetings the previous six months. It was
anticipated that attendance would be somewhat lower, in fact, four of the regular CIT
attendees had informed me they would be unable to attend morning meetings, but
expected to attend again once the meetings shifted back to evenings.
The CIT meetings do have regulars that attend with a few people attending just for a
specific agenda topic. Last month, two new residents attended and were complimentary of
the information presented but did not participate in the discussion.
The recent Bull Mountain annexation survey asked respondents how they generally learn
what's going on in local government. Multiple responses were allowed and 3% of Tigard
residents named public access television as at least one of their sources. This scientifically
valid survey used registered voters as the source for participants. There are currently
22,035 registered voters in the city. Three percent is an estimated 661 that watch cable
programming to get information on local issues. This doesn't count those that aren't
registered to vote that may watch cable. Cable casting information on city issues,
programs and projects allows the city to reach far more than are able or willing to attend a
CIT meeting.
'MEE
We plan to hold CIT meetings in the evening in October, November, December and
January and air them live. This will accommodate the 2002-03 Capital Improvement
Program public involvement process.
Beginning in February 2003, 1 recommend we discontinue the CIT meetings in their
present format. I recommend that we focus on producing monthly informational
programming to air in the CIT time slot. These programs could be taped during the day,
include announcements of upcoming events and status reports but the bulk of the program
would be devoted to educating and informing citizens about city programs, projects, and
issues.
The "tape to air" format would allow breaks in production to accommodate changes in
format (from one presenter to an interview) and media (PowerPoint, video, charts and
graphs).
Obviously, these productions would be open to the public but the emphasis would shift
away from public participation at these meetings to education and information. I
recommend that the public continue to have access to an e-mail address to comment or
provide suggestions for programs.
The CIT meetings are just one tool for involving citizens. Participation on topics could be
achieved using other tools-Town Hall meetings on specific issues, the Website, special
task forces, to name a few. Recent attendance at CIT meetings indicates that citizens
probably don't see CIT meetings as the primary citizen involvement tool.
If Council concurs with the recommendation to discontinue the present CIT format, I
propose that change be presented at the November CIT meeting as part of an overview of
the city's citizen involvement and communication program.
Communication Plan
The department communicators met on June 10, August 5, and October 7. An update of
the Communications Plan is still in process. The last new section to be added on how to
use TVTV's Bulletin Board is waiting for the final details to be worked out so that
information for the Bulletin Board can be transmitted to TVTV electronically. The
department communicators discussed the proposed change to the CIT format and
concurred that the emphasis on public education and information might be a better use of
resources. At each meeting, the communicators share successes and use the group as a
resource for communications challenges.
Neighborhood Meetings
Since the last communication update to Council, the Community Development
Department has revised the information that is distributed to affected property owners
about the land use process (copy attached). Community Development staff will conduct an
annual review of the process, and recommend and implement changes as appropriate.
Press Releases
We continue to fax at least one press release per week to newspapers regarding a current
issue, event, or program. An average of nearly 89% were printed each month from April
through July, up from the 77% last reported to Council. The Times prints nearly all of the
releases submitted. Space limitations are cited as the primary reason releases are not
printed. In some cases too, information in press releases submitted on library programs
are combined into one story.
Community Connectors
The regular communications continue. No new connectors were added during the summer
but one homeowners association and one individual contacted me about the program. A
brochure and sample communication has been sent to those individuals and I will follow-
up.
In the Bull Mountain annexation survey it was interesting to note that when asked how
they generally learn what's going on in local government, 20% of Tigard residents
responded that word-of-mouth was at least one of the ways. As a representative sample of
22,035 registered voters that represents 4,407 people.
The Community Connector program is designed to provide accurate, timely information
that connectors can share with neighbors or associates. A higher priority should be given
to enlisting more connectors to serve as liaisons between the city and the neighborhoods. I
will develop a list and will contact one person a week to start building our connections.
Cable Television
Chris Myers and Curtis Young of the network services staff are now both certified
producer/directors as well as camera operators. City staff and trained volunteers are now
producing City Council meetings, CIT, and Hearings Officer without assistance from TVTV.
During the next year, staff would like to add the Planning Commission and one Municipal
Court session per month to the regular programming. With staff trained to produce and
direct, we will also shift the focus to producing and airing more special programs.
Cityscape
The Cityscape format was revised with the June 2002 issue. The Bull Mountain
annexation survey data reflects that 21 % of registered voters use the Cityscape as a way
of learning about what's going on in local government. Of 22,035 registered voters, that's
4,627 people. Staff recommends that we evaluate the mission, cost, and other options for
distributing the newsletter information.
Website
Use of the city's website has increased in the last 6 months from an average of 732 visits
per day in March to an average of 864 visits per day in September. The city's job posting
section is the most heavily accessed section of the site. The library and police pages are
also popular.
Goal Guide
The Spring 2002 Goal Guide featured parks. The fall issue will feature transportation and
will be issued at the end of November. Staff will promote the Goal Guide as a way for
citizens to learn about the progress on Council Goals, will post it on the Website, and will
monitor the use to ascertain its effectiveness.
Bulletin Board
TVTV has installed and is using the new Bulletin Board software so cable viewers should
notice some changes to the Bulletin Board. City staff is working with TVTV to incorporate
more graphics including photos and eventually video and more information on Tigard
events. Ultimately, staff will transmit information for the TVTV Bulletin Board electronically.
%%TIC377WSROEPTSWDMLLIZ%COMMUNICATION PLAN UPDATEAOC
SAMPLE NOTICE CONCERMIMG NEIGHBORHOOD MEETIMG
(Date of mailing)
NAME AND ADDRESS OF PROPERTY
OWNER WITHIN 500 FEET, OR IF }
RESIDENT, USE "RESIDENT AND }
PROPERTY ADDRESS }
RE: (Application Name)
Dear Interested Party:
lmy/company name) (am/is) the (owner/representing the owner)
of the property located at (give address if available or a general description of the location
tax map(s) and lot(s) l/w are considering proposing a (describe the proposal, such
as: conditional use site development review subdivision etc) at this location.
Prior to applying to the City of Tigard for the necessary permits, I would like to discuss the
proposal in more detail with the surrounding property owners and residents. You are invited
to attend a meeting on:
(Day, Month, Date, Year)
(Location)
(Address)
(Time ...this should be an evening meeting
and located somewhere in the CIT, as
close to the neighborhood as possible)
Please notice this will be an informational meeting on preliminarX plans. These plans may be
altered prior to the submittal of the application to the City.
look forward to more specifically discussing the proposal with you. Please call me at
(phone number where you can be reached) if you have any questions.
Sincerely,
(Your name)
(Your title. if applicable)
h:lpatty4nas9enlcit-Mr.mst
DEVELOPMENT PROPOSAL
CITY OF TIGARD
NEIGHBORHOOD MEETING PROCESS
NEIGHBORHOOD MEETING/NOTIFICATION IS REQUIRED
FOR THE FOLLOWING APPLICATIONS:
♦ Comprehensive Plan Amendment j
♦ Zone Change
♦ Subdivision
e Sensitive Land Review
o Conditional Use
s Site Development Review
1. Applicant makes arrangements for the neighborhood meeting
e Applicants' choice of date (using staff guidelines below).
♦ Applicant schedules a meeting facility. The meeting should be held in the evening and be located
somewhere in the CIT area, as close to the neighborhood as possible.
2. Applicant prepares a letter regarding the upcoming meeting to be held with the
neighborhood (see example)
e Letter shall briefly describe the proposed development and location, and set the date, time and place for
the meeting.
o NOTE: Meeting date is to be held within 2-4 weeks of the date that the letter is mailed.
e Two (2) weeks minimum notice must be provided to the neighborhood property owners within 500 feet of
the subject properties, the Citizen Involvement Team (CIT) contacts, and the City of Tigard Planning
Division.
3. Applicant mails letter of neighborhood meeting to all affected parties and includes
"Frequently Asked Neighborhood Questions" with the letter, and on the same day, posts
notice of the proposed project on the site
• Applicant acquires list of affected property owners and CIT contacts from the City of Tigard Planning
Division and mails to all parties INCLUDING THE CITY OF TIGARD PLANNING DIVISION.
e Sign must be posted at a location easily observable from a public right-of-way.
s Sign shall state that the site may be under consideration for a land use application and include a phone
number where the applicant can be reached for additional information or comments.
4. Applicant prepares affidavit of mailing/posting on the form that was provided by the City of
Tigard, to the applicant at the pre-application conference
5. Applicant holds meeting for neighborhood as scheduled
o Applicant reads the required "Statement of Purpose" letter to attendees.
o Applicant presents the proposal, including known City requirements, and answers any questions.
♦ Applicant makes note (sign-up sheets) of the names and addresses of all individuals who speak at the
meeting and provides documentation to the City of their comments, concerns or issues.
6. Applicant modifies preliminary proposal (if desired) following the neighborhood meeting to
take into consideration recommendations, concerns, or issues which could delay the
applications approval process
7. Applicant submits the proposal to the City of Tigard for review, accompanied by the
following essential documents
o A copy of the letter mailed to the affected property owners in regard to the neighborhood meeting along
with a copy of the mailing list and the corresponding affidavit of mailing the neighborhood meeting
letter/notice and the affidavit of posting the site.
♦ A copy of the sign-up sheets from the meeting(s).
o A copy of the minutes and/or comments, concerns or issues raised by those attending the meeting.
APPLICATIONS WITHOUT THESE MATERIALS WILL NOT BE ACCEPTED AS COMPLETE.
FAILURE TO FOLLOW THESE PROCEDURES MAY REQUIRE THE APPLICANT TO HOLD AN
ADDITIONAL NEIGHBORHOOD MEETING. I%w+ envev%adv*thbwhwa wee NNrodlicamPmeenAOe UPDATM 26UN2m
(SIGNS ARE AVAILABLE FOR PURCHASE AT THE DEVELOPMENT SERVICES COUNTER AT THE PRICE OF $2.00 EACH.)
I
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Meeting Date Time Location
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rKwpozpr.D PwROOMIECT:
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o
The following is a list of questions developed by a subgroup of the Citizen Involvement Team. These
questions are intended to aid you in formulating your own questions for proposed development in your
area. Feel free to ask more or alter the questions to address your own unique concerns and interests.
PROCESS
• What applications are you (the developer) applying for? When do you expect to submit the
application(s) so that neighbors can review it? What changes or additions are expected prior to
submittal?
o Will the decision on the application be made by City Staff, Hearings Officer, Planning Commission or
City Council? How long is the process? (timing)/
• At what point in the process are citizens given notice and the opportunity to provide input?
• Has a pre-application conference been held with City of Tigard Staff?
✓ Have any preliminary requirements been addressed or have any critical issues been identified?
✓ What City Planner did you speak with regarding this project? (This person is generally the Planner
assigned to the land use case and the one to contact for additional information).
STREETS
o Will there be a traffic study done? What are the preliminary traffic impacts anticipated as a result of the
development and how do you propose to mitigate the impacts if necessary?
o What street improvements (including sidewalks) are proposed? What connections to existing streets
are proposed?
o Are streets proposed to be public or private? What are the proposed street and sidewalk widths?
• What are the emergency access requirements and what is proposed to meet those requirements?
70NING AND DENSITY
• What is the current zoning? What uses are allowed under this zoning?
• Will there be a re-zone requested by the developer? If yes, to what zone?
• How many units are proposed for the development and what is the minimum and maximum density
allowed in the zone?
DRAINAGE AND WATER QUALITY
• What is your erosion control and drainage plan What is the natural slope of the property? What are
the grading plans?
• Is there a water quality facility planned within the development and where will it be located? Who will
own and maintain the facility?
TREES AND LANDSCAPING
• What are the tree removal plans and what is proposed to mitigate for trees removed?
• What are the landscaping plans? What buffering or fencing is required and/or proposed?
CITY OF TIG D
OREGON
STATEMENT OF PURPOSE
The following notice shall be read to attendees at the
beginning of a neighborhood meeting.
This meeting is regarding (project name)
located at ( project location)
and is being held as required by The City Of Tigard development review process.
The purpose of this meeting is to inform neighbors of the project as currently planned.
This meeting is not a decision forum and is not to approve or disapprove the project in
whole or in part. It is to share information regarding the project and to solicit
constructive input from neighbors and affected property owners.
Application for the project being discussed here has not yet been submitted to the City.
Therefore, the project will be at various stages of planning and some details may not be
available at this time. Property owners of record within 500 ft. should have received a
list of frequently asked questions along with the notice of this meeting.
This meeting is not attended by City staff in order to encourage dialog between the
developer and affected neighbors. Your comments and questions will be taken down
and submitted with the application for consideration by the City planning staff.
Property owners within 500 ft will be notified after a complete application-is submitted.
They will be provided an opportunity to comment. Any appeals are decided based on
the provisions of applicable laws and the development code.
For questions regarding the development review process, please contact the City of
Tigard Planning Department. For project details, you will need to contact the developer.
13125 SW Ball Blvd., Tigard, OR 97223 (503) 639,4171 TDD (503) 684-2772
AGENDA ITEM # 4
FOR AGENDA OF 10/15/02
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE Proposed Housing Set-Aside Guidelines
PREPARED BY: Duane Roberts DEPT HEAD OK MGR OK
ISSUE BEFORE THE COUNCIL
Staff has prepared suggested guidelines for the award of affordable housing set-aside funds for Council
review.
STAFF RECOMMENDATION
Review and provide comments on draft set-aside guidelines.
INFORMATION SUMMARY
The new City Affordable Housing Program, adopted by Council on 9/24/02, included specific land use and
non-land use housing promotion measures. One of the land use measures was a budget set-aside designed to
offset fees and charges imposed on affordable housing development. As directed by Council, staff is
returning to Council with proposed guidelines for the award of the set-aside funds.
OTHER ALTERNATIVES CONSIDERED
Consider amended or alternative guidelines.
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
Growth and Growth Management, Goal #3: Partnerships for advocacy for development of additional units
and preservation of affordable housing are encouraged and supported by the City and the community.
ATTACHMENT LIST
Attachment # 1: Staff memo, "Proposed Guidelines for the New Housing Set-Aside"
FISCAL NOTES
The adopted 02/03 budget includes a $10,000 affordable housing set-aside within the Events and Social
Services Fund.
i/citywide/sum/affordable housing. standards
Attachment 1
A L
CITY OF TIGARD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: City Council
FROM: James Hendryx, Director of Community Development ,
DATE: September 25, 2002
SUBJECT: Proposed Guidelines for the New Housing Set-Aside
The new City Affordable Housing Program, adopted by Council on September 24, 2002, included
specific local level land use and non-land use housing promotion measures. One of the land use
measures was a budget set-aside designed to reduce fees and charges imposed on affordable
housing development. The first-year, or 2002/03, set-aside amount is $10,000. As directed by
Council, staff is returning to Council with proposed guidelines for the award of the set-aside funds.
As described in the City Affordable Housing Program, system development charges (SDCs) and
permit fees increase the cost of building housing and are required up front which increases the
amount of money a developer needs to start a project. Typical fees and charges imposed on a
single-family house in Tigard are in the $10-11,000 range. Atypical multi-family housing project is
assessed approximately $3,000 per unit in fees and charges.
Listed below are possible guidelines for considering set-aside funding requests. Staff comments
are in parentheses. Two of the guidelines are based on Council comments pertaining to the set-
aside made during past affordable housing meetings. The proposed list should be seen as a
starting point for discussion of this topic. No standards or guidelines currently in use elsewhere
were found that would serve as a model for Tigard's set-aside program. And there are many
different ways of looking at how it would work.
1. The proposed project must be owned and managed by an organization incorporated as a
private, non-profit 501(c) organization.
2. The proposed project must be consistent with City housing policies and applicable planning and
zoning standards.
3. Only units targeted to families earning at or below 50% of median income are eligible for City
funds. (This reflects the focus of the City housing program. Affordability is defined as monthly
rent plus utility costs that does not exceed 30% of the household's monthly gross income.)
4. The organization guarantees that the housing produced will maintain long-term affordability,
with long-term defined as 20-30 years, or the period of any State or Federal housing loan
attached to the project. (Nearly all affordable housing projects receive State or Federal loans.)
5. The organization guarantees that the project will be enrolled in the City Enhanced Safety
Program (ESP) and maintain ESP certification for the respective housing loan period and the
life of the ESP program. (A Council member suggested this guideline.)
6. Council review and approval of each separate award will be required. This review will include
an in-person presentation to Council by a representative of the organization making the
request. (A Council member suggested this guideline.)
7. The time limit on the use of the funds is two years. (It is anticipated that an organization would
request the obligation of City funds at the beginning of the housing development process. This
would allow the organization to include the contribution in the financial plan for its project and,
most important, to demonstrate local support should the organization apply for State or Federal
housing development funds as part of its financial plan. The City dollars would be used at the
time of building permit issuance. Two years is a reasonable timeline for readiness to use the
dollars. An operational problem with this time limit is that all of the City appropriations expire at
the end of the year. The Finance Director is seeing if there is a way around this problem.)
8. Applications for assistance will be accepted on a first come first served basis.
In addition to the guidelines outlined above, staff forwards to Council a few specific guideline-
related issues for resolution and refinement of the proposed or different guidelines.
A. What is the appropriate local subsidy available per individual unit?
Comments: In keeping with affordable housing loan and other programs, set-aside funds
should be allocated on a per unit basis. As indicated, the current cost of fees and charges
average $3,000 for a multi-family and $10,000 for a single-family unit. The City's first year
fund amount is $10,000. A per unit amount of $500 would help ensure that the funds would
be used and that small projects would benefit from the program.
B. Should the program be open to Washington County Housing Services, or should
eligibility be limited to private non-profit organizations only?
Comments: On the one hand, it shouldn't matter who provides the affordable units. What is
important is that the community need for more affordable units is being met. On the other
hand, the resources of the Housing Authority are far greater than are those of the nonprofit
housing developers. In terms of leverage effect, the comparatively small amount of City
funds available would make more of a difference to the non-profits than to the tax-supported
County Housing Agency. In addition to the cost savings involved, a local subsidy would
serve to strengthen the non-profit's request for State or f=ederal housing development funds
by demonstrating local financial support.
C. Should eligible activities include rehabilitation or be limited to new development
only?
Comments: The goal of creating the fund is to promote the development of new units within
the City. It is intended to serve as incentive for local projects by providing front end funding
and support. This program purpose is best served by limiting the funds to the production or
acquisition of additional units, as opposed to the rehabilitation of existing publicly- or non-
profit owned units.
D. Should unallocated portions of the annual set-aside amount be added to the set-aside
amount for the next fiscal year?
Comments: This proposed guideline comes from CPAH. The City Finance Director
recommends against a policy of adding unspent amounts as part a housing set-aside
request each year.
Finally, as suggested, if Council decides to restrict eligibility to private non-profits and/or to the
development or acquisition of new units, staff recommends the addition of a flexibility provision to
the suggested criteria 1-8 listed above to ensure that the set-aside funds would be used during the
fiscal year.
9. Should any set-aside funds remain unspent or uncommitted following the first six months of
the budget cycle, the City will accept applications for assistance from (1.) Washington
County Housing Services for the development or acquisition of new units and (2.) from any
non-profit housing provider, including Washington County Housing Services, for the
rehabilitation of existing units.
I/Irpn/dr/affordable housing.budget com
CITY OF TIGARD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: City Council
FROM: James N.P. Hendryx *DATE: October 10, 2002
SUBJECT: Affordable Housing Set-Aside Guidelines
One of the items included in the October 15th Council workshop agenda is the
consideration of proposed guidelines for the allocation of the set-aside funds
established in the 2002-03 budget for off-setting fees and charges on affordable
housing development.
Last week, staff prepared and forwarded to Council a tentative list of guidelines for
dispersing the funds. The goal of the guidelines is to make the most effective use of the
limited dollars ($10,000) on the table. As noted in the agenda packet memo, the
guidelines are intended to be a first cut, working list of possible approaches. They are
meant to give Council something to react to, with the expectation that Council would
wish to modify and refine the guidelines on the basis of its discussion of how the
program should be targeted.
Copies of the proposed guidelines were provided to the three non-profit housing
providers who presently manage affordable housing projects located in Tigard. The
three include Community Partners for Affordable Housing (CPAH), Tualatin Valley
Housing Partners (TVHP), and Washington County Housing Services.
The directors of CPAH and Washington County Housing Services have each reviewed
and provided comments on the guidelines based on their individual perspectives and
hands-on experience administering affordable housing agencies. Copies of the full
letters are attached. The directors' comments are summarized below under the
individual guidelines addressed. No comments were addressed to guidelines 2, 5, and
6. As such, these particular guidelines are not reiterated below.
M
Generally speaking, staff believes the housing providers should be regarded as partners
with the City in the provision of affordable housing within the community. If the housing
providers are coming to the City with information and advice regarding their needs and
how the City's new incentive program can be targeted to best meet these needs, to the
extent feasible, the City should attempt to accommodate their requests. As the City
endeavors to put together a workable approach to fee reduction, it is important to listen
to those with direct experience in the affordable housing area. Overly restrictive
guidelines could mean that the money is not used. This is why staff generally supports
revising the proposed guidelines in the ways suggested by the housing providers.
1. The proposed project must be owned and managed by an organization
incorporated as a private, non-profit 501(c) organization.
The County Department of Housing Services states the housing authority should be
eligible for City funds on an equal footing with the private non-profits. The director
points out that, while bigger than the non-profits, the County agency does not receive
tax dollars, and their projects are financed by bank loans or bonds that must be repaid
from project revenues. The director indicates that: "The reality is that a big budget
does not translate into resources available for acquisitions and rehabilitation" and
that "A few thousand dollars here or there makes a big difference" in the organization's
ability to put together feasible projects. The recently acquired Bonita Villa is cited as an
example of a local project that preserves the community's affordable housing stock and
also addresses a major, long-standing community safety problem.
The CPAH letter supports guidelines that give "a slight preference" to the nonprofits
versus County Housing Services. CPAH also supports making private for-profit
developers eligible for funds provided they meet other program requirements. CPAH's
comments regarding eligibility are further discussed under #9.
Staff agrees that the Housing Authority should be eligible for the. City program on an
equal basis with the non-profit housing providers. The Housing authority has made a
major contribution to affordable housing opportunities and as well as to community
character and livability generally by purchasing and managing the 98-unit Bonita Villa
project. To the extent feasible, the City should be supportive of the Housing Authorities
efforts to increase affordable housing opportunities in Tigard. A small subsidy can go a
long way in assisting the agency in acquiring and improving housing. Another reason
for including the housing authority is the increased likelihood that the funds available
would not go unused.
Staff supports the CPAH recommendation that for-profit affordable housing providers
have access to the City incentive funds. The City's goal in creating the offset is to
support the provision of affordable housing in the community. Provided they meet the
program criteria, it shouldn't matter whether the housing developer is for- or non-profit.
3. Only units targeted to families earning at or below 50% of median income are
eligible for City funds.
CPAH argues that 60% units should be eligible because these higher-rent units are
needed to subsidize the 50% units included in projects. Most projects include a mix of
units at different rent levels, and most public subsidies are available to all units in a
project.
Staff is aware that affordable housing projects typically include a mix of units at different
rent levels, but suggested targeting the 50% units because this is the emphasis of the
city's adopted housing program and of the Metro housing strategy. In the interest of
increasing program flexibility and better ensuring that the set-aside will be used, staff
supports broadening the guideline to include 60% units, as suggested by CPAH.
4. The organization guarantees that the housing produced will maintain long-
term affordability.
CPAH is supportive of this guideline.
7. The time limit on the use of the funds is two years.
The CPAH letter expresses support for this time period.
8. Applications for assistance will be accepted on a first come, first served basis.
CPAH recommends a semi-annual in-take period, so that applications can be
considered together and prioritized. "Twice a year allocation would be frequent enough
to meet the production cycles of developers and their need to demonstrate City
commitment."
Staff is supportive of this recommendation, if a semi-annual schedule is workable for the
housing providers. The original recommendation was based on the comments of a
housing official who indicated that special loan opportunities can become available at
any time during the year. Staff agrees that a semi-annual program would be easier to
administer and would allow for evaluation and prioritization should multiple requests be
received.
9. Should any set-aside funds remain unspent or uncommitted following the first
six months of the budget year, the City will accept applications for assistance
from (1.) Washington County Housing Services for the development or
acquisition of new units and (2.) from any non-profit housing provider,
including Washington County Housing Services, for the rehabilitation of
existing units.
As already noted, the County favors an even playing field in terms of County housing
provider eligibility.
The CPAH director supports a priority system that includes all affordable housing
providers including the for-profits, but gives preferential treatment to the private non-
profits over other providers and favors housing development over rehabilitation. In
brief, the CPAH-recommended application priorities are:
e Affordable housing development undertaken by private non-profits.
Rehabilitation by non-profits.
v Affordable housing development undertaken by public or private for-profit providers.
v Rehabilitation by public and private for-profit providers.
As indicated, staff is supportive of a level playing field among public and private non-
profit housing providers. As indicated in the guideline #9, staff also is supportive giving
higher consideration to projects that involve the construction or acquisition of affordable
units as opposed to the repair or rehabilitation of existing non-profit-owned units.
In addition to suggested guidelines listed above, the staff guidelines memo to Council
discussed certain other issues related to the set-aside, which the two letters also
address.
A. What is the appropriate subsidy per unit?
No comments in opposition to a suggested per unit amount of $500 were received.
B. Should eligibility be limited to private non-profit organizations?
See comments under #1 and #9 above.
C. Should eligible activities include rehabilitation?
Both the County and CPAH support including rehabilitation as an eligible activity. "It is
less costly to preserve and rehabilitate existing affordable housing than it is to build
new. Any amount of assistance with major capital repairs, therefore, is just as
important as a subsidy to the creation of that housing."
Staff is supportive of this recommendation, which both the County and CPAH have put
forward, with the qualification that housing creation, as also recommended by CPAH, be
given somewhat greater consideration than repair.
D. Should unallocated portions of the annual set-aside amount be added to the
set-aside amount for the next fiscal year?
s
CPAH recommends the roll over and accumulation of unused funds to the succeeding
year. "If the City is committing these funds for the promotion of affordable housing, then
the funds should be preserved for that use and not recaptured for use in the general
fund."
As pointed out in the current adopted City budget, the demand for City services is
greater than the resources available to pay for them. Further, the proposition of "rolling
over" funds is unmanageable from a budgetary standpoint, and staff does not support
this concept. Should additional need exist beyond available resources, i.e., $10,000,
Council can consider adding funds through its normal budgetary process.
I/Irpn/affordablehousi ng.standards.responses
^76IM-oh- RECD OCT 0 8 2002 WASHINGTON COUNTY
OREGON
pw'-
October 4, 2002
James Hendryx, Director
Department of Community Development
City of Tigard
13125 SW Hall Blvd.
Tigard, OR 97223
Dear Mr. Hendryx;
I am writing in response to the," Proposed Guidelines for the New Housing Set-Aside,"
policy that your City Council will be considering. A copy of the policy was e-mailed to
me from Mr. Duane Roberts of your staff. Mr. Robert's indicated that comments received
by October 7 would be forwarded to the Tigard City Council.
First, I applaud the city's interest in establishing an affordable housing fund to pay city
fees associated with the development of affordable housing within The City of Tigard.
However, I ask that the proposed policy be amended to include participation of the
Housing Authority of Washington County as well as allow funds to be used to offset fees
associated with the acquisition and rehabilitation of affordable units.
In June of 2002, The Housing Authority of Washington County acquired the infamous
Bonita Villa Apartments because of a perceived community interest in addressing a
problem property within The City of Tigard. Bonita Villas had been the site of a fatal fire,
numerous police problems and despicable living conditions. The Authorities' interests
were only to assist in solving a menacing community problem and preserving valuable
affordable housing.
In the past four months, the property has steadily improved with almost a million dollars
committed to interior and exterior improvements, new management as well as a zero
tolerance for drug and criminal activity. Bonita is steadily becoming an asset rather than a
drain on public resources. This remarkable transformation has occurred with revenues
generated with the sale of bonds purchased by private investors.
Department of Y~ousing Services
111 NE Lincoln Street. Suite 200-L. MS 63, Hillsboro, OR 97124-3082
ph (503) 846.4794 • fax (503) 846-4795 9 TTY (503) 846-4793
www.co.washington.or.us/deptmts/hse-serv/housmain.htm
NJ
This development as well as the Housing Authority do not receive local property tax
dollars. In fact, most of the funding for the Housing Authority comes from federal funds
that are earmarked and restricted for specific programs. Such programs do not include
development or acquisition. Unlike nonprofits, the Housing Authority is precluded from
accessing many private foundations and competes along with nonprofits for housing trust
fund and HOME funds. The reality is that a big budget does not translate into resources
available for acquisitions and rehabilitation. Every dollar counts in these areas! The
Housing Authority finances such projects by issuing debt or obtaining bank loans that
must be paid from the revenues of the project. There are not any outside or inside
sources.
Our ability to embark upon difficult community projects depends upon the ability to
maximize whatever resources are available. A few thousand dollars here or there makes a
big differences
Your proposed policy excludes the Housing Authority from receiving assistance and
further limits the kind of projects to exclude rehabilitation. Consider that if the Housing
Authority had not purchased Bonita Villa it is unlikely that the improvements being made
would have occurred. (The existing owner was not making the improvements and the
property had been for sale for some time. Our nonprofit partners had declined the
opportunity to take on the enormous project). In fact, it is likely that the problems would
have only increased over time. We want to be your partner in providing affordable
housing opportunities within The City of Tigard and ask that as our partner you include
us in any programs extended to any other nonprofit within the Tigard community.
Thank you for your consideration.
Sincerely,
Susan A. Wilson, Director
2
OCT 0 7 2002
9 ° P.O. Box 23206 *Tigard, OR 97281-3206
F O R AFFORDABLE H O U S I N G , INC. Tel: 503-968-2724 ° Fax: 503-598-8923 ° www.cpahinc.org
October 7, 2002
Bill Monahan
City Manager
City of Tigard
13125 SW Hall Blvd.
Tigard, OR 97223
Dear Bill,
Community Partners for Affordable Housing is grateful for the opportunity to offer
comments on the Proposed Guidelines for the New Housing Set-Aside. We make
reference to the memorandum dated September 25, 2002 from James Hendryx, Director
of Community Development. This memo referenced proposed Guidelines 1 through 8 and
Guideline Related Issues A through D.
We are very pleased that the city has shown a high degree of commitment to
affordable housing, and would like to share the following observations and suggestions.
Guideline 3. - Target families at or below 50% mfi
We support this priority as a service target. However, to accomplish this priority,
the set aside program must also be available to units targeting households earning at or
below 60% of the median family income as long as such projects also include some units
serving households at or below 50%. 60% affordability is the level used in planning most
affordable housing projects and is an essential element in creation of 50% units. We
understand that the Metro Urban Growth Management Plan prioritizes support for 50%
households, however the realities of development require that in order to achieve the
goals for 50% housing, these 50% units must be "subsidized" by mixing them with 60%
units.
In planning a project, we approach it as having identical units all costing the same
to build and to operate. We then assign some of the units to have rents affordable to
60%, 50%, 40% and 30% households. The lower rent apartments cost the same to build
and operate so we rely on the mix of rents to determine our breakeven point. If it costs
less to build, then we need less debt. With less debt, our overhead is lower and we need
less income. Thus we can charge lower rents on more of the units, making more of them
affordable to 50% and lower households. This is why we create projects with a mix of
affordable rents, and why most public subsidies are available to all units in a qualifying
project. We cannot afford to create the 50% units without help on the 60% units as well.
Page 1 of 4
Guideline 4 - Long term affordability
The requirement of long term affordability is consistent with our goals. Other
public subsidies already require a long term covenant and record the commitment with the
title. In many cases our commitment to affordability goes well beyond the life of the loan,
and as long as 50-60 years.
Guideline 7 - Two years to use the funds
The process of financing affordable housing is very time consuming and expensive.
It commonly takes two years or longer to proceed from pre-development to construction.
Demonstrating local support as early as possible is an important aid in pursuing other
public and private financing resources. If a project takes longer, it would make sense to
have to come back to reapply to the program.
Guideline 8 -(first come, first served applications.
We believe this program will actually work best using a semi-annual application
cycle. Without a process where all applications can be evaluated together, access to
program funds would be driven by the fiscal year rather than by community priorities.
State and other funding allocations for affordable housing follow a semi-annual schedule.
Projects coming together in the second half of the year would experience a distinct
disadvantage over projects applying earlier. A biannual application process would
allow for better management of priorities and would give the city the ability to be sure
it's funds are going where it most wants them to go.
Twice a year allocations would be frequent enough to meet the production cycles
of developer's and their need to demonstrate city commitment. Semi-annual reviews would
minimize administrative burden compared to a monthly or quarterly cycle. It would also
allow for a prioritization of as discussed below.
General Comments on Guideline-Related Issues A through D
It is our strong belief that this program must be available for capital repairs as
well as for housing creation. We also think the fund should be allowed to roll-over in
years when not all the allocation is used and that public and for-profit organizations
should have access at a slightly lower priority as long as funds are available and the
goals of affordable housing creation and preservation are being achieved.
If we look back at the history of development of low income housing in the city,
CPAH is the only non-profit to build any new affordable housing in the city limits in the last
five years. Our ability to continue to afford to operate projects as safe secure and
dignified housing requires a continuing and burdensome outlay of capital improvements.
Very few repairs are of a scale that they require city fees, but if they do, it is reasonable
to expect that they are large and significant enough to pose a major burden to the
project.
Page 2 of 4
Normal market forces do not drive operation of affordable housing. Our
expenses are the same or higher than market housing, but we cannot increase revenues to
cover unforeseen jumps in operating expense. Nationwide and locally, skyrocketing
utilities, insurance and labor costs are threatening existing affordable housing projects
and the viability of the organizations that create and operate them. It is less costly to
preserve and rehabilitate existing affordable housing than it is to build new. Any amount
of assistance with major capital repairs, therefore, is just as important as a subsidy to the
creation of that housing.
We believe that the demand for this program will be such that in most years the
fund will be adequate to accommodate repairs to existing projects that require
permitting, as well as the construction of new units.
Historic levels of development indicate that the fund is likely to be under
subscribed much of the time. If this happens, it would work best for all if the fund were
allowed to roll over and grow beyond the initial $10,000 so that maximum subsidy could
be applied to a larger project when it comes along. If the City is committing these funds
for the promotion of affordable housing, then the funds should be preserved for that use
and not be recaptured for use in the general fund.
We also believe that any organizations that will commit to achieve the goals of
creating and preserving safe affordable housing in the community should have access to
this program. CPAH has developed two projects within Tigard's city limits in the last five
years. We are working on a number of projects but do not anticipate having another
project within city limits for the next few years. It would be a shame to see the fund go
unused if public or private developers plan to create low income affordable units in the
meantime and are willing to commit to the other requirements of the program.
Besides wanting to see the fund rollover and accumulate, we would like to see a priority
system for applications as follows:
1) Creation or conversion of affordable units (60% or less mfi, as long as they include
some 50% or less units in the mix) by private non-profit developers.
2) Repairs or capital improvements (requiring city permitting), to projects serving
60% or less households as long as some of the units are serving 50% or less households,
which are owned by private non-profit organizations.
3) Creation or conversion of affordable units by public or private for-profit
developers.
4) Repairs or capital improvements to affordable housing projects owned and
operated by public or private for-profit organizations.
By including capital repairs and giving other organizations at least some access to
the program, the city maximizes Its goal of creation of affordable housing and it
preserves its existing inventory by incenting owners to maintain that inventory in good and
safe condition.
Page 3 of 4
If one application cycle is over-subscribed, then an applicant can reapply at a
' future cycle following the same priorities. If a cycle is under-subscribed, then we believe
the balance of the fund should be carried over to the next cycle.
Historic and current levels of development in Tigard predict that even including
major capital repairs in the fee waiver program and allowing other than non-profits
access, it is likely that there will be some years when the fund has a balance at the end of
the year and occasional years when need will be greater than the allocation. We think it
is essential that council find a way to preserve these surpluses so they are available for
future years.
The city must maintain a real and substantial commitment to creation and
preservation of housing for its lowest income citizens. Housing creation and maintenance
cycles, like economic cycles, follow multi-year paths. The times for greatest need are
often the times of least resource. By rolling over the fund, the city will be making sure it
will be able to act on its commitment at times of greatest need.
We cannot over-emphasize how expensive it is to build and operate affordable
housing. When the mission is to keep rents as low as possible, there is a very thin the
margin to sustainability. Preserving and maintaining the inventory of affordable housing
in the community is a public priority and will require ongoing and expanding public
investment.
The housing set aside and limited property tax abatement are important steps in
this investment, but more investment at the local level will be needed to achieve the city's
housing priorities and to keep Tigard a healthy and diverse community. Establishing
permanent tax abatement, subsidizing pre-development costs for non-profits, and support
of a county-wide Housing Trust Fund are additional steps that must be taken to ensure that
future development can take place.
The cost of creating and operating housing is getting higher and higher. Tigard's
long term health requires that it have good housing for the citizens who work at all levels
of its economy. CPAH remains committed to act to create good quality affordable
housing, but we cannot do this well without a continuing shared investment from the
community we serve.
Sincerely,
Sheila Greenlaw-Fink Martin Soloway
Executive Director Deputy Director, Housing
Page 4 of 4
Proposed Housing set side Guidelines
rPerated-as a
. Public and private nonprofit organizations and private
for-profit organizations are eligible to apply.
2. Eligible activities include affordable housing development and rehabilitation. Affordable
housing development will receive greater consideration than rehabilitation.
I The proposed project must be consistent with City housing policies and applicable planning and
zoning standards.
4. Only units targeted to households earning at or below 50% of median income are eligible for
City funds. Units targeted to households earning 60% of median income are eligible when the
project includes an equal number of units serving households at or below 50% of median.
5. The organization guarantees that the housing produced or rehabilitated will maintain long-term
affordability, with long-term defined as 20 to 30 25 years, or, if applicable, the life of any State
or Federal loan -attached used to finance the project.
6. The organization guarantees that the project will be enrolled in the City Enhanced Safety
Program (ESP) and maintain ESP certification for the respective (a.) period of long-term
affordability defined in guideline #5 or (b.) the life of the ESP program.
7. Council review and approval of each separate award will be required. This review will include
an in-person presentation to Council by a representative of the organization making the
request.
8. The time limit on the use of the funds is two years.
9. Applications for assistance will be accepted an a TSt eame, fiFst s^^•^ sic twice per year.
Applications shall be submitted on forms provided by the City of Tigard.
10. Should any set aside funds r-emain unspent eF uneemmitted fallewing the fiffit SiX FnGnthS Of the
budget yeaF, the Gity will aGeept applieations fE)F assistance ftem (I.) Washington Geunty
Housing SeFviGes fOF the development eF aGqUiSitiGR ef new units and (2.) fFE)F" EIRY R9R PFEA4
existing unita
10. The maximum amount available is $500 per qualified unit, up to the current set-aside line item
balance.
repose Housing Set-Aside Guidelines
1. The proposed project must be owned and managed by an organization incorporated as a
private, non-profit 501(c) organization.
2. The proposed project must be consistent with City housing policies and applicable planning and
zoning standards.
3. Only units targeted to households earning at or below 50% of median income are eligible for
City funds.
4. The organization guarantees that the housing produced or rehabilitated will maintain long-term
affordability, with long-term defined as 20 to 30 years, or the life of any State or Federal loan
attached used to finance the project.
5. The organization guarantees that the project will be enrolled in the City Enhanced Safety
Program (ESP) and maintain ESP certification for the respective (a.) period of long-term
affordability defined in guideline #4 or (b.) the life of the ESP program.
6. Council review and approval of each separate award will be required. This review will include
an in-person presentation to Council by a representative of the organization making the
request.
7. The time limit on the use of the funds is two years.
8. Applications for assistance will be accepted on a first come, first served basis.
9. Should any set-aside funds remain unspent or uncommitted following the first six months of the
budget year, the City will accept applications for assistance from (1.) Washington County
Housing Services for the development or acquisition of new units and (2.) from any non-profit
housing provider, including Washington County Housing Services, for the rehabilitation of
existing units.
AGENDA ITEM # i~
FOR AGENDA OF Oct. 15, 2002
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE Discussion of the Tigard Municipal Code additions - Chapter 9 - Trees on
Public Property and Tree Manual
PREPARED BY:Matt Stine & Dan Plaza DEPT HEAD OK ITY MGR OK y(
ISSUE BEFORE THE COUNCIL
Discussion on the Tigard Municipal Code additions - Chapter 9 - Trees in Public Property and Tree Manual
for adoption on October 29, 2002.
STAFF RECOMMENDATION
To give direction on the proposed additions to the Tigard Municipal Code - Chapter 9 - Trees on Public
Property and Tree Manual.
INFORMATION SUMMARY
The proposed additions to the TMC - Chapter 9 - Trees on Public Property will provide direction to the City
regarding the planting, maintenance, protection and removal of trees on City property. These code additions
are required for the City to maintain the status of Tree City USA. The adoption of these additions to the
code will also symbolize the City's commitment to preserving, enhancing and maintaining a healthy urban
forest. At the direction of Gary Firestone this ordinance will go under Title 9 - Parks.
The Tree Manual will establish the guidelines by which the TMC will be followed. The Tree Manual will
serve as a reference for determining such things as the correct amount of tree protection, the number of trees
required to replant an area or what protocol must be followed when evaluating and/or removing hazardous
trees.
OTHER ALTERNATIVES CONSIDERED
Reject the additions to the Tigard Municipal Code regarding Trees on Public Property and Tree Manual.
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
N/A
ATTACHMENT LIST
Attached are:
1. Memo to City Council and Mayor Griffith
2. Proposed changes to the Tigard Municipal Code
3. Proposed Resolution and Tree Manual
FISCAL NOTES
The City will not incur any additional cost beyond existing and current operating procedures.
MEMORANDUM
TO: Mayor Griffith & City Council
FROM: Matt Stine I ° T~
RE: Public Tree Ordinance & Tree Manual
DATE: October 2, 2002
For the past two years staff has been planning and developing these additions to the
Tigard Municipal Code. The reasons for the creation and implementation of this
document are to:
• provide direction for the City regarding the planting, care, protection and removal of
trees on City property.
• satisfy the National Arbor Day's requirement to have a Public Tree Ordinance to
become and remain a Tree City USA.
Until now, the City has not had a set of guidelines that clearly outline the policies
affecting trees on City property. This ordinance and manual will provide the necessary
guidelines to avoid possible contradictions on City development projects in the future.
This ordinance and manual assure that every department in the City government will be
following the same guidelines for trees on City property.
Tigard received Tree City USA award from the National Arbor Day Foundation for its
efforts in 2001 regarding the urban forestry program. Tigard received the Tree City
USA honor with the condition that we would develop and implement a Public Tree
Ordinance during the 2002 calendar year. If we do not have the ordinance in place by
the end of the 2002 calendar year Tigard will not receive the Tree City USA award.
During the development of the ordinace and Tree Manual I have received input and
comments from numerous people including, Dan Plaza, Steve Martin, John Roy, Dennis
Koellermeier, Kathy Kaatz, Ed Wegner, Brad Kilby, Matt Scheidegger, Morgan Tracy,
Dick Beweresdorff, Jim Hendryx, Mike Mills, Brian Rager, Gus Duenas, Dee Wise and
Gary Firestone. All of these people helped shape and develop the ordinance and Tree
Manual to insure that the accuracy, completeness and legality of each document were
in order.
At the direction of Gary Firestone, City Attorney's Office, two documents were
developed, the attached proposed Tigard Municpal Code changes - Chapter 9 and a
Tree Manual, which can be adopted by resolution. In the event that standards or
guidelines need to be updated in the Tree Manual we won't have to go through the
laborious task of changing an ordinance.
Essentially, these code changes yvill state that certain measures are required. The Tree
Manual contains the information that specifically addresses how those certain measures
will be carried out.
This Public Tree Ordinance will become part of Tigard Municipal Code, Title 9 - Parks.
CC: Bill Monahan
Cathy Wheatley
Ed Wegner
Dennis Koellermeir
Dan Plaza
Attachment #2
Proposed Changes to TMC - Chapter 9
Chapter XX TREES ON CITY PROPERTY.
Sections:
XX.010 Purpose.
XX.020 Definitions.
XX.030 Tree Planting on City property.
XX.040 Tree Care and Maintenance on City property.
XX.050 Tree Protection.
XX.060 Removal of Hazardous Trees from City property.
XX.070 Tree Removal and Replanting.
XX.080 Enforcement.
XX 010 Purpose.
1. Value of Trees. The City of Tigard recognizes that trees are vital components of the urban forest
environment. Trees reduce air, water, soil and noise pollution, provide energy-reducing shade,
control erosion, supply oxygen to breathe, provide habitat for wildlife, enhance quality of life and
property values in every community, and are sources of pride for the entire city.
2. Purposes.
a. To provide guidance for the planting, maintenance and protection of trees on City property; and
b. To provide a priority system for removal of hazardous trees from City property;
c. To ensure the protection of trees during the development of properties on City property.
3. Authority to Adopt a Tree Manual. The City Council may adopt by resolution a Tree Manual
implementing the provisions of this Chapter and providing detailed standards for tree planting,
maintenance, protection and removal on City property.
XXX.020 Definitions.
The following definitions apply in this chapter:
1. City Forester. Under the direction of the Public Works Director is responsible for planning,
developing and implementing a comprehensive urban forestry program, and providing community
education and advice in support of urban forestry activities.
2. City Property. "City property" includes all land owned by the City and all lands dedicated to the
public and administered by the City, including but not limited to City rights-of-way and City parks.
3. City-owned Property. City property other than the right-of-way.
4. Hazardous Tree. A tree which by reason of disease, infestation, age or other condition presents a
known and immediate hazard to persons or to public or private property.
5. Mitigation. Methods of tree replacement, direct costs, and/or retention used to lessen the
environmental impact of development.
Page 1
Attachment #2
Proposed Changes to TMC - Chapter 9
6. Removal. The cutting or removing of 50 percent (50%) or more of a crown, trunk, or root system of a
tree, or any action which results in the loss of aesthetic or physiological viability or causes the tree to
fall or be in immediate danger of falling.
7. Street Tree. Any tree that is growing along a street within the public right-of-way.
8. Street Tree List. A list of approved tree species that may be planted within the public right-of-way.
9. Tree. A standing woody plant having a trunk(s) two inches or more in diameter when measured four
and a half feet from the ground. If the tree is on a slope, the measure is taken on the uphill side.
10. Tree Manual. The manual governing tree planting, care, maintenance and removal adopted by the
City by resolution pursuant to section XX.XXX.
XX.030 Tree Planting.
1. Tree Planting:
a. No person other than the City shall plant a tree on City property without the written approval of
the City Forester. In approving tree plantings, the City Forester may impose conditions of
approval;
b. Any City department responsible for City property shall consult with the City Forester before
planting trees on City property;
c. The City Forester may grant approval of tree-planting on City property under subsection a of this
section only if the applicant has submitted a tree plan showing compliance with the standards set
forth in the Tree Manual, and has signed a maintenance agreement consistent with the standards
set forth in the Tree Manual. The requirement for a maintenance agreement may be waived if the
tree-planting is voluntary and not required by any City code provision or condition of approval;
d. All tree plantings on City property shall be undertaken in a manner consistent with the approval
of the City Forester and the standards set forth in the Tree Manual;
e. Only trees listed in the Street Tree List or that are specifically approved by the City Forester may
be planted as street trees.
XX.040 Tree Care and Maintenance
1. General Provisions
a. All trees planted pursuant to the written approval of the City Forester under Section XX.040 shall
be cared for and maintained according to the standards set forth in the City Tree Care Manual.
XX.050 Tree Protection
1. Care of Trees on City Property. The City shall follow the Tree Manual in caring for and protecting
trees on City property.
Page 2
Attachment #2
Proposed Changes to TMC - Chapter 9
2. These requirements shall provide for the proper protection of tree roots, trunk(s) (or stem(s)),
branches, and foliage within a tree's critical root zone for any tree on City property during any type of
construction activity or project (excavation, demolition or any other type of disturbance);
XX.060 Removal of Hazardous Trees from City Property
1. Removal Priority
a. When any person reports to the City Forester that a tree on City property is hazardous, the City
Forester, or appointed designee, shall evaluate the condition of the tree. The City Forester shall
establish a removal priority among trees determined to be hazardous and the City shall proceed
with removal of hazardous trees from City property according to the priority established by the
City Forester, subject to the availability of financial and other resources.
2. Removal of Hazardous Trees
a. The removal of hazardous trees from City property shall be performed by City of Tigard
employees or contracted commercial tree care companies with experience in tree removal. The
City Forester shall provide guidance as to the disposition of any wood or debris from any tree
removal on City property.
XX.070 Removal of Trees from City Property
1. Removal of Trees from Ci Property other than Right of Way Prohibited. No person other than the
City or a person acting under contract with the City shall remove a tree from any City park or any
City-owned property. Any person removing a tree from City property other than right of way shall
provide mitigation as specified in the Tree Manual.
2. Removal of Trees from Rights of Way. No person other than the City or a person acting under
contract with the City shall remove a tree from any City right of way without written approval of the
City Forester. As part of the written approval for tree removal from right of way, the City Forester
shall require mitigation as specified in the Tree Manual.
3. Removal of Wood or Tree Debris from City Property. No person shall remove wood or tree debris
from City property without written approval of the City Forester, provided however that the City
Forester may retroactively approve removal of wood or tree debris from City property if the removal
was under emergency circumstances. This section does not prohibit clearing of paths or other clean-
up that leaves wood or tree debris on City property.
XX.080 Enforcement
1. The City Forester may do any or all of the following if the City Forester has reason to believe a
violation of this chapter has occurred:
a. Issue a stop work order pursuant to Tigard Development Code section 18.230;
b. Issue a civil infraction citation pursuant to Tigard Development Code Chapter 1.16;
c. Take any other action allowed by law to abate or obtain compensation for the violation.
Page 3
Attachment #3
Proposed additions to TMC - Chapter 9
CITY OF TIGARD, OREGON
RESOLUTION NO. 02-
A RESOLUTION ADOPTING THE PUBLIC TREE MANUAL
WHEREAS, the Public Tree Ordinance provides direction to the City regarding the planting, maintenance,
protection and removal of trees on City Property; and
WHEREAS, this ordinance is required for the City to maintain its Tree City USA status; and
WHEREAS, the adoption of this ordinance will also symbolize the City's commitment to preserving,
enhancing and maintaining a healthy, urban forest; and
WHEREAS, the Tree Manual establishes the guidelines by which the ordinance will be followed; and
WHEREAS, the Manual will serve as a reference for determining such things as the correct amount of tree
protection, the number of trees required to replant an area or what protocol must be followed when
evaluating and/or removing hazardous trees.
NOW, THEREFORE, BE IT RESOLVED by the Tigard City Council that:
SECTION 1: City Council formally adopt the resolution recognizing the Tree Manual as the official
guideline for the care, maintenance, protection, planting and removal of trees in the City
of Tigard.
EFFECTIVE DATE: This Resolution to be effective upon passage.
PASSED: This day of , 2002.
Mayor - City of Tigard
ATTEST:
City Recorder - City of Tigard
RESOLUTION NO. 02-_
1
Attachment # 3
Proposed Tree Manual
TIGARD TREE MANUAL
Guidelines for the Care, Maintenance, Protection,
Planting and Removal of 'Frees in the
City of Tigard, Oregon
Page 1
Attachment # 3
Proposed Tree Manual
IIndc%:
010 Purpose
020 Definitions
030 Tree Planting
040 Tree Care and Maintenance
050 Tree Protection
060 Hazardous Tree Removal
070 Tree Removal and Replanting
XX.010 Purpase.
1. The purpose of this manual is to provide detailed standards to implement Tigard Municipal
Code Section XX.
XX.020 Definitions.
1. Afforestation. The conversion of open land into forest. See: Reforestation.
2. Caliper. The diameter of a tree trunk measured 6 inches above the soil. If the diameter is
more than four (4) inches then the diameter must be measured at 12 inches above the soil.
3. City Property. "City Property" includes all land owned by the City and all land dedicated to
the public and administered by the City, including but not limited to City rights-of-way and
City parks.
4. City-owned Property. City property other than right-of-way.
5. Critical Root Zone (CRZ). A circular region measured outward from a tree trunk
representing the essential area of roots that must be maintained and protected for the tree's
survival. The CRZ is determined by whichever is greater:
a. The outer edge of the dripline;
b. Measuring a radius outward from the tree equal to one foot for every caliper inch less
than four (4) inches when measured at six inches above the ground;
c. Measuring a radius outward from the tree equal to one foot for very inch at DBH when
the caliper inches are greater than four (4) inches when measured at six inches above the
ground.
6. Diameter at Breast Height (DBH). Diameter of the tree trunk measured four and a half feet
(4 %i feet) from the ground on the uphill side if a slope exists.
7. Large-sized Tree. Any tree that habitually grows in excess of 40 feet in height and has a
canopy spread of more than 35 feet at full maturity.
8. Medium-sized Tree. Any tree that habitually grows between 25 feet and 40 feet in height and
has a canopy spread of 16 to 35 feet at maturity.
Page 2
Attachment # 3
Proposed Tree Manual
9. Mulch. Organic material applied within the root zone of a tree. May include leaf litter, pine
straw, shredded bark, peat moss or wood chips.
10. Prune. The cutting or trimming of a tree in a manner which is consistent with ANSI A300-
2001.
11. Reforestation. The creation of a biological community dominated by trees and other woody
plants containing at least 100 trees per acre with at least 50% of those trees having the
potential of attaining a 2-inch or greater diameter at DBH within seven years. See:
Afforestation..
12. Small-sized Tree. Any tree that habitually grows less than 35 feet in height and has a canopy
spread of 25 feet or less at maturity.
13. Terminal Role. Branch that assumes the dominant vertical position on the top of a tree.
14. Tree Pit. A cut-out area in the sidewalk where a tree is growing.
030 Tree Planting
1. Purpose. The purpose of this section is to establish standards for the proper and appropriate
planting, maintenance, protection and removal of street trees located within City property
and the City right-of-way in order to maintain and improve the survival, safety, aesthetics
and environmental benefits of trees:
a. By planting trees according to the guidelines set forth by the International Society of
Arboriculture;
b. By caring for and maintaining trees according to the American National Standards
Institute (ANSI) guidelines;
2. Tree Planting:
a. The City Forester must approve the planting of any trees planted on City property. This
includes choosing appropriate trees from the Street Tree List or those approved by the
City Forester;
b. All trees shall be planted according to the standards established by the International
Society of Arboriculture;
c. Plant material shall be of high grade, and shall meet the size and grading standards of The
American Standard for Nursery Stock, ANSI Z60.1-1996;
d. Planting diverse types of trees lowers the potential for devastating impacts of insect and
disease outbreaks that many communities have experienced. In order to lower the effects
of insect and disease outbreaks and lessen the burden of tree removal and replacement
efforts on the city, choosing a diversity of appropriate species, genera and families of
trees to plant on public property shall be a priority;
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Attachment # 3
Proposed Tree Manual
e. Planting native tree species shall be the primary goal. However, choosing tree species
that will adapt to the site and reach maturity shall also be a factor when planting trees on
public property;
f. Unless otherwise approved by the City Forester, trees shall have a minimum caliper of
one inch and a maximum of 1.75 inches (when not in conflict with Community
Development Code provisions), when measured 6 inches above grade;
g. Unless otherwise approved by the City Forester, the specific spacing of trees by size of
tree shall be as follows:
(1) Small or narrow-stature trees under 25 feet tall and less than 16-feet-wide
branching at maturity shall be spaced no greater than 20 feet apart and not closer
than 15 feet apart;
(2) Medium-sized trees 25 feet to 40 feet tall, 16 feet to 35-feet-wide branching at
maturity shall be spaced no greater than 30 feet apart and not closer than 20 feet
apart;
(3) Large trees over 40 feet tall and more than 35-feet wide branching at maturity
shall be spaced no greater than 40 feet apart and not closer than 30 feet apart;
(4) Street Trees shall not be planted closer than 20 feet to light poles or utility poles;
(5) Visual clearance must be maintained according to the guidelines set forth in
Chapter 18.795 of the Tigard City Code;
(6) Trees shall not be planted closer than four feet from private driveways (measured
at the back edge of the sidewalk), fire hydrants or utility poles to maintain visual
clearance;
(7) Tree pits shall be located so as to not include utilities (e.g. water and gas meters)
in the tree well;
(8) On-premises utilities (e.g. water and gas meters) shall not be installed within
existing tree well areas;
(9) New light poles or utility poles shall not be positioned closer than 20 feet to the
main trunk of existing street trees except when public safety dictates, then they
may be positioned no closer than 10 feet to the main trunk;
(10) Where there are overhead utility lines, the street tree species selected shall be of a
type which, at full maturity, will not interfere with the lines;
(11) Trees shall not be planted within two feet of any permanent hard surface paving
or walkway;
(a) Space between the tree and the hard surface may be covered by a
nonpermanent hard surface such as grates, bricks on sand, paver blocks
and cobblestones; and
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Attachment # 3
Proposed 'free Manual
(b) Tree pits shall be at least:
1) 4'X4' for small-sized trees;
2) 5'X 5' for medium-sized trees;
3) 6' X 6' for large-sized trees.
h. All persons other than the City who are required to plant trees as a condition of approval for a
tree removal on City property shall provide a binding maintenance agreement for the
minimum length of three complete growing seasons or three calendar years, whichever is
longer.
i. The City may require any person granted a permit for tree planting on City property to
provide a maintenance agreement for the tree. The maintenance agreement shall normally be
waived if the tree planting is voluntary. However, even if voluntary, the City may require a
maintenance agreement to avoid costs of removal of trees that do not survive.
j. The maintenance agreement shall detail how the plantings will be maintained to ensure the
protection and satisfactory survival of trees according to the guidelines in Table 1 in Section
050. Reinforcement plantings shall occur if survival rates drop below the required guidelines
in Table 1 in Section 050.
(1) The maintenance agreement shall include:
(a) An assessment of existing conditions and needs for:
1) Water.
2) Nutrients.
3) Control of competing vegetation.
4) Protection from disease, pests, predators, and mechanical injury.
5) Reinforcement planting provisions if survival rates drop below those outlined
in the tree planting guidelines in Table 1 below.
6) A plan to conduct the needed treatments and monitor results.
7) Evidence of legal right to implement the agreement on the selected site.
8) Certification or agreement by a party responsible for the care and
monitoring.
9) Provision for access and inspection by the City Forester.
050 Tree Planting Requirements
1. Except as otherwise approved by the City Forester, all trees planted on City property, except
street trees, shall be of a species native to the northern Willamette Valley and selected from
the publication "Trees to Know in Oregon", published by Oregon State University and the
Oregon Department of Forestry, or recognized publication identifying native trees and shrubs.
2. Tree planting guidelines:
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Attachment # 3
Proposed Tree Manual
Table 1 '
Survivability
# Required Per Acre Approximate Spacing Requirement After
Size (For Afforestation And (For Afforestation And Three Years Or Three
Reforestation Only) Reforestation Only) Growing Seasons (All
Plantin s
Bare root seedlings or 300 12'X 12" 75%/225
Whips
Container grown (1,2,3 300 12'X 12' 75%/225
gallon)
Container grown (5,7 200 15' X 15' 85%/170
gallon) or 1" caliper
Ball & Burlap B&B
Container grown (15, 25 100 20'X 20' 100%/100
gallon) or 2" caliper
Ball & Burlap &B
NOTES:
• These stocking and survival requirements are the minimum numbers estimated to meet the
definition offorestfrom bare land.
• In certain circumstances any combination of the above mentioned stocking options may be
appropriate strategies to fulfill the requirements of tree mitigation. They will be evaluated on
a case-by-case basis by the City Forester.
• Spacing does not imply that trees or shrubs must be planted in a grid pattern.
060 Tree Care and Maintenance
1. General Provisions
a. This section applies to trees planted on City property by persons other than the City;
b. All trees shall be maintained according to ANSI A300-2001 for proper tree care and
maintenance;
c. All trees planted shall be cared for and maintained for a period of three calendar years or
three complete growing seasons, whichever is longer, after the date of planting;
2. Tree Care and Maintenance
a. Mulch shall be maintained on the Critical Root Zone;
(1) Care shall be taken to avoid placing mulch against the base of the tree trunk;
(2) At least three inches and no more than four inches of mulch shall be placed on
the tree's Critical Root Zone.
b. When feasible, trees shall be watered from May 1 until September 30;
(1) Trees shall be watered at least once a week;
Page 6
Attachment # 3
Proposed Tree Manual
(2) Water shall be placed only within the Critical Root Zone;
(3) The trees shall be watered at a rate of at least ten (10) gallons per week;
(4) Trees shall not be watered more than twice a week during the maintenance
period.
c. If tree stakes and tree ties are installed at the time of planting they shall be removed one
year after planting;
d. Trees shall be maintained for visual and passageway clearance;
(1) Visual Clearance:
Visual clearance must be maintained according to the guidelines set forth in
Chapter 18.795 of the Tigard City Code.
(2) Passageway Clearance:
(a) Sidewalks- trees shall be pruned to provide at least eight feet of clearance
above the walkway;
(b) Local Streets- trees shall be pruned to provide at least 13 feet of
clearance above the roadway;
(c) Collector Street- trees shall be pruned to provide at least 15 feet of
clearance above the roadway
(d) Arterial Street- trees shall be pruned to provide at least 18 feet of
clearance above the roadway.
(e) Topping trees is an unacceptable form of tree care and maintenance and
shall not be practiced on any tree located on City property except in the
case of an emergency. Topping is defined as the severe and
indiscriminate cutting of tree branches back to lateral branches that are
too small to assume the terminal role.
070 Tree Protection
The tree protection provisions in this section apply to the protection of trees on City property.
1. Tree Protection Methods
a. The protection of an individual tree's critical root zone shall be determined by the method
listed below unless otherwise approved by the City Forester:
Trunk Diameter Method - one foot of radial distance for every one inch of tree diameter
(DBH, 4 %2 feet above the ground on the uphill side) under 30 inches DBH. For trees
over 30 inches DBH allow 1-%2 feet per 1 inch of DBH.
Page 7
Attachment # 3
Proposed Tree Manual
b. All tree protection devices shall be located on the Tree Protection Plan. Details and
specifications are required as to how the trees will be protected on site;
c. Tree protection devices shall be installed to protect the root zones of trees located on
adjoining properties if any type of construction activity will be disturbing the critical root
zone unless otherwise approved by the City Forester;
d. A construction sequence shall be provided and shall include:
(1) installation and removal of tree protection devices;
(2) clearing, grading, or installation of sediment and erosion control measures,
(3) other activities that may be required to implement the tree protection measures;
e. Include in the notes on the final set of plans: "Equipment, vehicles, machinery, dumping
or storage, or other construction activities, burial, burning, or other disposal of
construction materials shall not be located inside of any tree protection device.";
f. All tree protection devices shall be:
(1) Visible;
(2) Well-anchored;
(3) Approved in the field by the City Forester prior to clearing, grading, or the
beginning of construction;
(4) Remain in place and maintained until the project has shown compliance with
development requirements from the City's Planning Department;
g. The location of the stockpile and staging areas for construction shall be identified on the
Tree Protection Plan;
h. All tree protection guidelines shall be included in the final Tree Protection Plan's notes or
drawings;
i. Guidelines for replacement. Replacement of a tree shall take place according to the
following guidelines:
(1) A replacement tree shall be an approved species taking into consideration site
characteristics;
(2) If a replacement tree of the size cut is not reasonably available on the local
market or would not be viable, the City Forester shall require replacement with
more than one tree in accordance with the following formula:
The number of replacement trees required shall be determined by dividing the
caliper inches of the tree removed or damaged by the caliper size of the
replacement tree(s) (no less than 1 inch and no more than 1.75 inches). The
caliper inches shall be measured at six inches above the ground, on the uphill
Page 8
Attachment # 3
Proposed Tree Manual
side if there is a slope. If the diameter is larger than four (4) inches in diameter at
six inches above the ground then the measurement sliall be taken at DBH. If this
number of trees cannot be viably located on the subject property, the City
Forester may require one or more replacement trees to be planted on other
property within the City, either on City property or, with the consent of the
owner, on private property;
(3) The planting of a replacement tree shall take place according to the guidelines set
forth by the International Society of Arboriculture.
080 Hazardous Tree Removal
1. The standard used by the City Forester for evaluating a tree's condition will be the
International Society of Arboriculture's "Tree Hazard Evaluation Form";
2. Above-ground parts of a felled tree on City property should normally be removed from the
site by the City or its contractor. The wood may be left on site if it does not create a
hazardous condition. No person other than the City or its contractor shall remove wood from
City property without the approval of the City Forester.
090 Replacement Trees
This section applies to the replacement of trees and trees planted as mitigation as required by
Tigard Municipal Code, Chapter XX.
1. Existing non-hazardous trees removed by development projects or other construction
activities shall be replaced with types of trees approved by the City Forester according to the
tree plan requirement below;
2. Tree plan required. A tree plan for the removal, planting, and protection of trees six inches at
DBH or greater prepared by an International Society of Arboriculture Certified Arborist shall
be provided for any development on public property. Widening of existing public streets will
be exempted from tree mitigation requirements. Construction of new streets and extension of
existing streets as shown in the Transportation System Plan maps are likewise exempted from
the tree mitigation requirements. Protection is preferred over removal.
a. Plan requirements. The tree plan shall include the following:
(1) Identification of the location, size and species of all existing trees six inches
DBH and larger;
i
(2) Identification of a program to save existing trees six inches DBH or greater
i and/or mitigate tree removal over 12 inches DBH. Mitigation must follow the
replacement guidelines set forth in the Guidelines for Replacement in the City
Tree Care Manual., in accordance with the following standards and shall be
exclusive of trees required by other development code provisions for
landscaping, street trees and parking lots:
(a) Retention of less than 25% of existing trees over 12 inches DBH requires
a mitigation program in accordance with the Guidelines for Replacement
in the City Tree Care Manual;
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Attachment # 3
Proposed Tree Manual
(b) Retention of 25% to 50% of existing trees over 12 inches DBH requires
that two-thirds of the DBH of those trees to be removed be mitigated in
accordance with the Guidelines for Replacement in the City Tree Care
Manual;
(c) Retention of 50% to 75% of existing trees over 12 inches DBH requires
that 50 percent of the DBH of those trees to be removed be mitigated in
accordance with the Guidelines for Replacement in the City Tree Care
Manual;
(d) Retention of 75% or greater of existing trees over 12 inches DBH
requires no mitigation.
(3) Identification of all trees that are proposed to be protected;
(4) A protection program defining standards and methods that will be used by the
applicant to protect trees during and after construction shall be provided.
3. All trees to be protected and retained must be evaluated by an International Society of
Arboriculture Certified Arborist and deemed of acceptable risk, free of significant insect and
disease problems and be in an overall healthy condition;
4. Guidelines for replacement. When replacement of a tree is required as a condition of a tree
removal approval, replacement shall take place according to the following guidelines:
a. A replacement tree shall be an approved species taking into consideration site
characteristics;
b. If the number of replacement trees cannot be viably located on the development site, the
City Forester may require some or all of the replacement trees be planted on another site
within Tigard on City property or, with the consent of the owner, on private property;
c. The planting of a replacement tree shall take place according to the guidelines set forth
by the International Society of Arboriculture.
5. In lieu-of payment. In lieu of tree replacement under Section XX.070.2 above, a party may,
with the consent of the City Forester, elect to compensate the City for its costs in performing
such tree replacement for the caliper inches at DBH that were removed. The replacement
cost to plant a one inch caliper tree shall be based the total of the costs listed below.
a. Average wholesale cost of one, 1 inch caliper tree.
b. Average hourly cost for two City employees to plant one, 1 inch caliper tree.
c. Average cost of materials required for two City employees to plant one, 1 inch caliper
tree.
d. Average hourly cost of equipment and equipment operation by City employee to plant
one, 1 inch caliper tree.
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Attachment # 3
Proposed Tree Manual
e. Average cost for two City employees to handle and transport one, 1 inch caliper tree.
1
Page 11
AGENDA ITEM # Co
• FOR AGENDA OF 10/15/02
CITY OF TIGARD, OREGON
COUNCIL AGENDA ITEM SUMMARY
ISSUE/AGENDA TITLE Discussion on Metro's UGB Expansion
PREPARED BY: Beth St. Amand DEPT HEAD OK 06 ITY MGR OK
ISSUE BEFORE THE COUNCIL
Metro is currently reviewing the 20-year land capacity of the Urban Growth Boundary (UGB) and assessing
potential expansion sites for a December 2002 decision. This decision involves the existing and future supply of
industrial, commercial and residential land. Council's position on three key issues will determine Tigard's
involvement in this process and will be reflected in specific comments submitted to Metro by November 1. The
worksession will focus on specific questions to aid Council in its discussion.
STAFF RECOMMENDATION
No action necessary.
INFORMATION SUMMARY
Over the last year, Metro has been analyzing the current urban growth boundary's ability to absorb projected
employment and population growth for the next 20 years. State law requires Metro to maintain a 20-year supply of
urbanizable land in the UGB, and Metro must demonstrate this capacity every 5 years and designate future expansion
lands if needed. Metro Executive Officer Mike Burton made his expansion recommendation in August; the final
decision is expected in December 2002, with open houses/hearings in October.
Burton recommended the Metro Council consider expanding the UGB by 17,341 acres, which includes 2,234 acres for
industrial/employment needs. It included two sites adjacent to Bull Mountain for residential expansion. The
recommendation has raised a number of issues regionally; for Tigard, there are three key issues for consideration:
1) Regional: Support for the Westside to include more "large size" industrial parcels;
2) Commercial: Conversion of Hwy 217 industrial corridor to mixed commercial;
3) Tigard's Borders: Urban edge issues in Bull Mountain, including density/target numbers, provision of open space,
and designating neighborhood commercial areas.
These issues were briefly reviewed at the 9/24/02 Council study session; this meeting provides an opportunity to
discuss these complex issues at length. The attached questionnaire will form the basis of the discussion and the City's
formal comments to Metro.
OTHER ALTERNATIVES CONSIDERED
N/A
VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY
Growth and Growth Management Goal #1: Growth while protecting the character and livability of new and
established areas while providing for natural environment and open space throughout the community.
Growth and Growth Management Goal #2: Urban services are provided to all citizens within Tigard's urban
growth boundary and recipients of services pay their share.
ATTACHMENT LIST
Attachment 1. Memo. "Questionnaire for 1/15/02 Council Worksession on the UGB Expansion"
Attachment 2. Memo. "Burton's UGB Recommendations/Comments"
Attachment 3: Memo. "Metro's Methodology for Determining Dwelling Unit Capacity in UGB Expansion
Areas"
Attachment 4: Memo. "Burton's UGB Recommendations and their Impact on Tigard Open Space/Parks"
Attachment 5: Questionnaire. "The UGB Expansion: Questions for Tigard"
Attachment 6: Map. "Proposed UGB Lands Adjacent to Bull Mountain"
FISCAL NOTES
N/A
\\TIG333\USR\DEPTS\LRPLN\beth\UGB\Council AIS 10 15 02.doc
Attachment 1
CITY OF TIGARD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: Mayor Griffith and City Council
FROM: Jim Hendryx
DATE: October 1, 2002
SUBJECT: Questionnaire for 10/15/02 Council Worksession on the UGB Expansion
Council was briefed on September 24th on the upcoming Urban Growth Boundary decision. At that
time, Council requested to have the matter return for a more in-depth discussion. I have included
background information that staff prepared, laying out various issues associated with the
expansion, methodologies, and specific issues for Tigard's consideration.
There are three major issues for City Council to consider regarding Metro's upcoming UGB
decision. Council's position will determine the extent of Tigard's involvement, which will be
reflected in specific comments submitted to Metro by November 1.
The Issues:
1) Regional: Support for the Westside to include more "large size" industrial parcels;
2) Commercial: Conversion of Hwy 217 industrial corridor to mixed commercial;
3) Tigard's Borders: Urban edge issues in Bull Mountain (density/target numbers, open space,
neighborhood commercial).
These issues are outlined and discussed in Attachment #5 - "The UGB Expansion: Questions for
Tigard"
Attachment 2
IBM%
CITY OF TIGARD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: Jim Hendryx
FROM: Barbara Shields
DATE: September 13, 2002
SUBJECT: Burton's UGB Recommendations/Comments
The objective of this memo is 1) to review the Executive Officer Recommendation to expand the
region's Urban Growth Boundary within the context of its impact on Tigard; and 2) to recommend
an effective approach to forward Tigard's concerns to the Metro Council before its final decision in
December.
Metro Executive Mike Burton recommended the Metro Council consider expanding the UGB by
17,341 acres, which includes 2,234 acres for industrial/employment needs.
It seems that at least three major issues need to be considered to structure the extent and scope
of Tigard's involvement in the upcoming Metro's decision on UGB:
1) Support for Westside to include more "large size" industrial parcels;
2) Conversion of Hwy 217 industrial corridor to mixed commercial;
3) Urban edge issues in Bull Mountain (density/target numbers, open space, neighborhood
commercial).
GENERAL POLICY CONTEXT
1. The concept of the "long-term economic development strategy" versus industrial
land policies
Metro estimated a deficit of nearly 5,700 acres of industrial need to meet the region's job
needs during the next 20 years. The shortage of parcels of 50 acres or larger is particularly
acute. Burton recommended adding 2,234 acres of industrial land at this time and
advocated a close examination of plans to convert existing industrial lands to other uses,
including commercial.
I:\LRPLN\Barbara\Mctro\UGB\Burtonanalyspts.doc 1
Burton's overall recommendation is significantly influenced by the concept of the "long-term
economic development strategy." Specifically, Burton declined to recommend converting
prime farmland to industrial use until the region has a long term, sustainable economic
strategy in place. As a remedy to this "oversight", Burton proposes to supplement the
current UGB work program with a series of new tasks ("Task 3"), which would allow Metro to
address the long term economic development strategy, including two groups of policies to
be examined in the context of the demand and supply of employment land.
9. Protection of "key industrial areas" (key industrial areas must be protected from non-
industrial uses that do not support industrial uses).
So far, the regional and subregional discussion has been focused primarily on the
scope and impact of industrial zoning restrictions and the type of uses that encroach
on the industrial viability of key industrial areas. Since there are no "key industrial
areas" (Attachment 1) that have been identified by Metro in Tigard, the outcome of
this discussion is likely not to have any immediate impacts on Tigard. However, as part
of the Metro region, Tigard's economic base is inseparable from the "big picture"
economic consideration.
The "industrial policy" discussion seems to oscillate around the two major efforts:
Economic Development Partners (alliance of public and private economic
development professionals). Their focus is on expanding additional industrial land.
They call for a very specific and detailed study/research to prove that Metro's analysis
is not adequate and does not reflect the "real" economic factors.
Westside Economic Alliance. Primarily Washington County jurisdictions. Their focus
is on large industrial tracts in Washington County. They identified four industrial parcels
for Metro's consideration.
Question: Does Tigard support the overall concern about the shortage of "ready-to-go"
industrial area as part of this year UGB expansion?
2. Conversion of old and "outdated" industrial areas (Metro indicates that some industrial
areas are no longer viable for industrial jobs and could be readily converted to mixed-
use development. Hwy 217 corridor areas are mentioned by Burton as likely
candidates for the future mixed-use conversion).
• Both Burton's report and associated/supporting ancillary research documents, do
not contain any discussion of how the conversion of old industrial uses to mixed
use development may potentially impact the integrity of regional centers, which, at
the same time, continue to be viewed as "quality mixed-use places" in Metro's
reports. Also, there has not been any significant regional/subregional discussion
that would examine the relationship between the "industrial conversion" and the
"center-style" mixed use concept.
• Tigard's portion of the "outdated Hwy 217industrial corridor" is a combination of
several industrial zones in Tigard. The prevailing development pattern seems to
gravitate to industrial campus or mixed industrial with little-to-none manufacturing.
Also, the area is fully developed, with a few potential redevelopment sites.
1:\LRPLN\Barbara\Mctro\UGB\D urtonanalyspts.doc 2
Questions: 1) Should "old, outdated industrial areas" along Hwy 217 continue to be part of
the regional discussion on industrial-to-mix use commercial conversions?
2) What wbL ld be the optimal combination of uses for this area, given the
existing pattern of old and new developments?
3) Given the proximity of the Washington Square Regional Center Plan and
Hwy 217 corridor industrial areas, should Tigard initiate/lead the discussion on
the relationship between the centers and mixed-use postindustrial areas? How
to balance the mixed-use nature of regional centers with corridors and
industrial conversion areas (What should be the optimal mix of uses for the
converted industrial areas and centers?)
II. Future Topics for Policy Discussion in the Region
Burton identifies three key areas that "warrant future policy discussion" in the region: 1) farm
land protections versus urban boundaries; 2) physical form of the region (relationship
between 2040 centers and urban edge and its impact on urban form); and 3) development
of regional economic policy.
Since Tigard's physical identity is largely determined/affected by its westerly boundary (Bull
Mountain) and the presence of the Washington Square Regional Center, it seems logical
that Tigard's efforts and contribution to the regional discussion should focus on the
relationship between the regional centers and planning at the edge (Bull Mountain
development).
Question: How should Tigard balance its primary interest related to the edge/center
locations with Washington County/Westside's primary focus on
employment/industrial land distribution?
URBAN FORM:
Tigard's Choices: Planning at the Urban Edge
1. Summary of UGB recommendations affecting Tigard
Two areas, 63 and 64, (Bull Mountain area) have been determined to be suitable for
urban development and inclusion within Tigard's Urban Growth Boundary. Both areas
(63 and 64) are approximately 480 acres in size, with the Metro-projected/target
number of 1735 residential units (Attachment 3).
Metro's analysis indicates that this recommendation is based on the following
conclusions, based on 2040 Fundamentals:
• these areas have been developed for rural residential uses and, in general, have the
capacity to develop at urban densities;
• these areas will result in land additions at the edge and due to their small size have
limited potential to be developed as more balanced communities although they may
support development in nearby Town Centers;
• they meet enough of the Fundamentals to have beneficial effects on the nearby cities
by increasing the market areas by providing more opportunities for parks.
1:\LRl'LN\Barbara\Mctro\UGB\13urtonanalyspts.doc 3
2. Impact on Bull Mountain
Given the size, configuration and location of the proposed UGB areas in relation to the
existing and planned transportation system network, both proposed areas are likely not
to develop as "balanced" and distinct communities. Nevertheless, their proximity to the
Bull Mountain area may significantly affect the sensitive character of the ongoing efforts
to develop a coherent and consistent development strategy for Bull Mountain.
Therefore, they should be built to complement and enhance the Bull Mountain
community. Care must be taken to integrate these land additions so that they do not
result in visually distinct and disruptive "tank-ons."
Several factors may be considered in evaluating the impacts of the proposed UGB
expansions on Bull Mountain:
• Transition and distribution of residential densities at "the edge"
The UGB expansion areas are proposed by Metro at 9.6 dwelling units/net developable
acre. In Tigard's code, this most closely approximates the R-12 zoning designation. R-12
allows for a minimum lot size of 3,050 sq. ft. for both multi-family and single-family units.
It is intended to provide for a "full range of housing types," which includes both attached
and detached dwelling units. Currently, R-7 is the dominant zoning in Bull Mountain, with
a minimum lot size of 5,000 sq. ft. Applying the minimum lot size achieves a density of
6.98 dwelling units per net acre. Few roads exist at the edge, making a seamless
transition even less likely. In order to integrate the existing and future development
pattern in this area, an overall analysis of preferred density distribution is needed and
must be addressed as part of the overall development strategy for Bull Mountain.
Question: Flow to deal with both density transition and density distribution at the edge of
Bull Mountain? Currently, "the edge" (the UGB) does not have a
corresponding natural or man-made visual component. If the 9.6 du/ac is
applied to the entire expansion area, these two different densities will meet in
a disjointed seam, marking the edge by their different densities.
o Impact on Open Space/Parks
There is a gap between Metro's calculations and City standards which totals 86.24 acres
(Attachment 4). Due to this parks deficiency, the dwelling unit calculations need to be
revised downward as they do not reflect the parks situation. The calculations should
deduct enough acreage to meet the areas' park needs. Without the revision, the City will
be responsible for density levels that will result in an area with few parks and
compromised livability-not only for these new expansion areas, but the adjacent Bull
Mountain area as well.
Question: When and how should the City tackle the open space/parkland shortage
problem? (Policy alternatives: Consider securing some areas outside the
City before they get amended? Not accept projected targets/land
expansions? Lower the standard for parks?)
Neighborhood-oriented commercial uses versus development at "the edge"
I:\l_RI'l.N\Barbara\Mctro\UGB\Burtonanalyspts.doc 4
The expansion areas' odd configurations and small sizes do not allow them to develop
as their own distinct, balanced community. Therefore, they should be built to
complement and enhance the Bull Mountain community. Despite an expected population
of 10,235 to 12,905 residents in Bull Mountain, and expected 5,066 residents in the
expansion areas, these residents have only one existing neighborhood commercial
center, located northeast of the Bull Mountain area. This area requires the majority of
residents to utilize a car. With more than 15,000 residents expected in this area, the
zoning and calculations must allow for an additional neighborhood commercial center to
increase local trips and prevent additional trips on already-congested Pacific Highway.
This neighborhood commercial center could also perform another function. Currently,
"the edge" does not have a corresponding natural or man-made visual component. If the
9.6 du/ac is applied to the entire expansion area, these two different densities will meet
in a disjointed seam, marking the edge by their different densities. A better way to
integrate the two communities could be to create a neighborhood-oriented commercial
center at "the edge," with higher residential densities nearby to support this commercial
use. Adding a neighborhood commercial center would reduce automobile trips and build
a sense of community between the current UGB area and expansion areas, leading to a
more cohesive and livable community.
Question: When and how should the City address the neighborhood commercial
need?
In short, the major question is how to balance the "edge" issues with the "balanced"
community issues in the Bull Mountain area. Specifically, Tigard's response to Metro
should address the following issues:
• Estimate of needed/additional open space versus (or lowering the acceptable
service of open space);
• Consideration of additional NC land
I:\LIZPLN\Barbara\Mctro\UGB\Burtonanalyspts.doc 5
Attachment 3
CITY OF TIGARD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: Barbara Shields
CC: Jim Hendryx
FROM: Beth St. Amand
DATE: September 13, 2002
SUBJECT: Metro's Methodology for Determining Dwelling Unit Capacity in
UGB Expansion Areas
This memo summarizes Metro's methodology in determining dwelling unit capacity in UGB
expansion areas.
Tigard's Interest
UGB expansion areas 63 and 64 are adjacent to Bull Mountain. The Alternatives Analysis
calculated that Area 63 (south and west of Bull Mountain) could support 688 dwelling units in this
218-acre area. Area 64 (west of Bull Mountain) was estimated to support 1,047 units on 262 acres.
The Calculations
As a point of comparison, we performed a basic net buildable acres calculation. This calculation
deducts 20% of gross buildable acres for right-of-way, streets and facilities, converts acres to
square feet, applies the minimum lot size for R-7 zoning (zoning on Bull Mountain today), and
takes 80% of the final number to reflect minimum density (or, the underbuild factor). We also
applied the same calculation with Metro's du/ac.
Metro Trad. Calc. Trad. Calc.
9.6 6.96 du/ac 9.6du/ac
du/net (5000 sgft (3050 sqft
ac lots lots
63 688 1215 1992
64 1047 1461 2395
Figure 9. Calculations for Sites 63 and 64
However, the basic calculation does not deduct for sensitive lands, Bull Mountain's extensive park
needs or other large-scale needs requiring extensive acreage. It also assumes all single-family
development to simplify the calculation.
Metro's Methodology
It becomes evident in the above table that Metro's methodology involves other factors or steps.
Metro's consultant performed its analysis on each individual parcel contained in the Site Area,
instead of a broad-brush approach. The following was applied to each parcel individually:
1. Dwelling Units: 9.6 dwelling unit/ net ac v. the adjacent Bull Mountain area's prevalent
R-7, or 6.96 du/ net ac. This is based on Metro Code density
requirements.
2. Street Deductions: Parcels greater than 1 ac: 18.5%
Parcels between 1 ac and 3/8 acre: 10%
Parcels less than 3/8 acre: No deduction
3. Parks Deductions: Flat rate of 2.2%; applies toward active parks only. Does not take into
account specific situations; i.e., Bull Mountain deficit.
4. Schools Deductions: Flat rate of 2.9%; no specific needs taken into account. Would there be
a high school needed in this area? These specific requirements were
not addressed.
5. Removal of Parcels
W/ High-Value Buildings: Partially vacant parcels with a building value meeting or exceeding
$250,000 were removed.
6. Steep Slopes: Land removed from inventory.
7. Title 3: If Title 3 impacts an entire parcel, 1 du/parcel was applied. If partially
impacted, the calculation gets more complex to allow for transferable
development rights.
8. Partially Vacant Lots: Based on aerial photography from July 2000. If a lot has a dwelling and
the parcel's vacant area is greater than'/2 acre, that area is considered
vacant.
9. Underbuild Factor Apply 20% underbuild factor, assuming residential development will be
built at Metro Code requirement of 80% of maximum density.
10. Facilities Although our areas did not have any public facilities counted, Metro did
allow for reservoirs and other needs on sites where identified by public
works departments.
Fine-Tuning the Numbers
Metro does not plan on doing additional refinements of these numbers. However, because the
calculations did not account for our areas' specific needs and used standard deductions, this
density may be too high for this area and unachievable. These calculations did not account for any
parks needs for Bull Mountain, which are extraordinary, or any future high-school needs (which
would consume approximately 40 acres of land). Also, this calculation does not allow for any
neighborhood commercial deductions.
While we have notified Metro regarding our parks concerns, which have been duly noted by Metro
in the August 2002 "Applying 2040 Policies to Potential Expansion Areas," it must be emphasized
that the calculations did not account for this need. We should continue to respond to Metro
regarding our specific concerns and monitor the density projections for these sites.
lAlrpln\beth\memo on methodology 9 13 02.doc
Attachment 4
CITY OF TIG.t RD
Community Development
Shaping A Better Community
MEMORANDUM
CITY OF TIGARD
TO: Barbara Shields
CC: Jim Hendryx
FROM: Beth St. Amand
DATE: September 13, 2002
SUBJECT: Burton's UGB Recommendations and their Impact on Tigard Open Space/Parks
Metro has acknowledged the City's concern that expansion areas 63 and 64 need to
accommodate enough park lands to serve future residents and Bull Mountain.
However, this acknowledgement is not reflected in the projected number of dwelling
units used in the Alternatives Analysis. Metro used a flat rate of 2.2% for active parks
deductions. This rate does not take into account these two areas' extraordinary parks
needs, due to Bull Mountain's current deficiency of 58 acres and the inability to meet
this need because of high land acquisition costs within the UGB.
The following chart demonstrates the gap between Metro's methodology and the
areas' parks needs by applying the City's current park standards:
Parks in UGB Expansion Areas Area 63 Area 64
No. of gross acres 218 262
Apply Metro's 2.2% for arks 4.80 ac 5.76 ac
Metro's est. # of units 688 units 1047 units
Est. # residents* 2009 residents 3057 residents
Park need by City Standards 15.3 ac 23.2 ac
(Apply 7.6 ac/1000 people)
Metro deficiency (city standard - Metro 2.2% 10.5 ac 17.44 ac
Apply Bull Mtn. Need 29.15 ac 29.15 ac
58.3; divide between both areas
Full Metro parks deficiency in Expansion 39.65 ac 46.59 ac
Areas
"Applied median household size on Bull Mountain: 2.92
I:\LRPLN\Barbara\Mctro\UGB\OSmen,oattach I .doc
In Metro's Buildable Lands Analysis, Metro estimated future park acres for Tigard and
the region using a Fiscal Resource approach. (Note: these specific estimates were not
applied to the site-specific alternatives analysis.) This approach based its calculations on
existing fiscal resources available to purchase new lands; i.e., parks system
development charges (SDCs). Metro calculated that Tigard could acquire 81 ac of
parkland at $75,000/ac and 30 ac at $150,000/ac. The lower cost estimate of 81 ac,
while it differs from the total City of Tigard estimate of 96.8 ac, is on a similar scale.
However, as the above chart demonstrates, the gap between Metro's calculations and
City standards totals 86.24 acres. Due to this parks deficiency, the dwelling unit
calculations need to be revised downward as they do not reflect the parks situation. The
calculations should deduct enough acreage to meet the areas' park needs. Without the
revision, the City will be responsible for density levels that are unachievable and will
result in an area with few parks and compromised livability-not only for these new
expansion areas, but the adjacent Bull Mountain area as well.
\\TIG333\USR\DEPTS\LRPLN\Barbara\Mctro\UGB\OSmcmoattach l .doc
Attachment 5
The UG13 Expansion: Questions for Tigard
Re ionai issues
Industrial Land: Deficit
Metro estimates a 5,700-acre deficit of industrial land for the region's job needs during
the next 20 years, with the greatest need for large-size parcels (over 50 acres). Metro
Executive Officer Mike Burton recommended adding 2,234 acres of industrial land now
and advocated examining plans to convert existing industrial lands to other uses,
including commercial.
Industrial Expansion
Most recommended industrial parcels are on the Eastside (Damascus area) because
Westside expansion would convert farmland for industrial use. (State law requires
expansion on marginal or exception lands before agricultural land.) Burton does not
support farmland conversion until a long-term economic strategy is in place.
Concerns about Metro's Industrial Recommendation
The Economic Development Partners (alliance of public and private economic
development professionals) want to expand industrial land; the group has called for a
specific study to prove that Metro's analysis is not adequate and does not reflect the
"real" economic factors. The group is concerned about the regional economic effect of
having few ready-to-go sites for development, as many have significant development
constraints. The group's recommendation identifies additional exception and marginal
land sites, but also proposes inclusion of farmland for 2,605 total acres. The group
believes a strong case can be made under state law for the farmland.
The Westside Economic Alliance (primarily Washington County jurisdictions)
recommends the inclusion of four Washington County large tracts to accommodate
industrial; none are in Tigard.
1 a Does Tigard support the overall concern about the shortage of
"ready-to-go" industrial areas on the Westside for this year's
UGB expansion?
I
Commercial Issues
Industrial Protection and Conversion
Burton proposes protecting "key" industrial areas through increased zoning restrictions.
Since there are no "key industrial areas" that have been identified by Metro in Tigard,
the outcome of this discussion is likely not to have any immediate impacts on Tigard.
However, Metro also indicates that some industrial areas are no longer viable for
industrial jobs and could be readily converted to mixed-use development. Burton's
recommendation states that relaxing zoning restrictions in old or outdated industrial
areas would allow a variety of uses to better support market demands for
redevelopment. Hwy 217 corridor areas are mentioned by Burton as likely candidates
for the future mixed-use conversion.
Today, the Hwy 217 corridor consists of these uses: industrial campus, mixed
industrial, minimal manufacturing. It is almost fully developed. The reports do not
discuss how the conversion of old industrial uses to mixed-use development may
potentially impact the integrity of regional centers; in Tigard's case, Washington
S uare and its proximity to 217.
1. Does the City want another mixed-use area besides the
Regional Center?
Should these industrial areas along 217 be included in the
conversion discussion?
3. Should Tigard initiate/lead the discussion on the relationship
between the centers and mixed-use areas?
Ti ard's Borders
Additions and Density Projections
Burton's recommendation includes Sites 63 and 64, which are adjacent to Bull
Mountain. Metro's analysis acknowledges that these areas will result in land additions
at the edge, and, due to their small size, have limited potential to be developed as
more balanced communities although they may support development in nearby Town
Centers. These areas will need to be integrated into the larger Bull Mountain area.
Metro projects this area as residential, with no allowance for commercial or industrial.
Metro estimates 1,735 dwelling units on 480 total acres by applying a 9.6 dwelling
unit/net acre ratio. Tigard's equivalent is R-12 zoning, , which is 11.44 du/net acre.
Currently, R-7 is the dominant zoning in Bull Mountain, with a minimum lot size of
5,000 sq. ft. Applying the minimum lot size achieves a density of 6.98 dwelling units
per net acre. R-7 accommodates attached, detached single-family homes. R-12
accommodates single and multi-family units.
Both R-7 + R-12 are considered medium-density residential districts:
R-12 lot minimum = 3,050 sq. ft.
R-7 lot minimum = 5,000 s q. ft.
7 . Should the City accept the varying densities between Bull
Mountain and expansion areas or should it propose a flexible
alternative?
c
H
ai
i
Parks
Metro has acknowledged the City's concern that expansion areas 63 and 64 need to
accommodate enough park lands to serve future residents and Bull Mountain.
However, this acknowledgement is not reflected in the projected number of dwelling
units used in the Alternatives Analysis. Metro used a flat rate deduction of 2.2% for
active parks. This rate does not take into account these two areas' extraordinary parks
needs, due to Bull Mountain's current deficiency of 58 acres and the inability to meet
this need because of high land acquisition costs within the UGB.
There is a gap between Metro's calculations (2.2%) and what City standards would
require (7.6 ac/1000 people), which totals 86.24 acres.
How should the City tackle the open space/parkland shortage:
Have Metro revise our calculations downward or reject
proposed targets;
Secure parkland outside the City in near-term; or
Lower the parks standard?
Neighborhood Commercial
With an expected population of 10,235 to 12,905 residents in Bull Mountain at build-
out, and an expected 5,066 residents in the expansion areas, these residents will have
only one existing neighborhood commercial center, located northeast of the Bull
Mountain area. This area requires the majority of residents to utilize a car.
A neighborhood-oriented commercial center at "the edge" (where Bull Mountain today
meets the expansion lands) with higher residential densities nearby to support this
commercial use, could integrate the two communities. The current projections for the
expansion areas do not deduct land for neighborhood commercial .
Does the City want neighborhood commercial in the Bull
Mountain expansion areas? If so, should Metro revise the
dwelling unit projection to deduct acreage for commercial
purposes?
Questions for Metro or City staff:
IALRPLN\beth\UGB\Questionnaire 10 15 02.doc
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METRO UGB EXPANSION:
REGIONAL, ISSUES
•
Estimated Regional Industrial Deficit = approx. 5,700 ac.
Greatest need for large-size parcels (over 50 ac)
Recommendation = only 2,234 acres
Most parcels are on the eastside because westside
expansion would convert farmland for industrial use.
Burton does not support conversion until a long-term
economic strategy is in place.
o e • • •
Economic Development Partners want to expand industrial
land; call for specific study to prove Metro wrong
Westside Economic Alliance wants more Washington
County large tracts; identified 4, none in Tigard.
~ e e e •
Does Tigard support the overall concern about the shortage
of "ready-to-go" industrial areas as part of this year's UGB
expansion?
METRO UG EXPANSION:
COMMERCIAL ISSUES
To accommodate growth within today's UGS, convert
"old/outdated" industrial areas into mixed-use areas.
The areas would allow for commercial.
Hwy 217 corridor named as potential candidate
Current uses: industrial campus, mixed industrial, minimal
manufacturing
Almost fully developed
• No Metro analysis of the conversion's effect on nearby
Regional Centers; i.e., Washington Square
• • , •
101ATM
1) Does the City want another mixed-use area besides the
Regional Center?
2) Should these industrial areas along 217 be included in the
conversion discussion?
3) Should Tigard initiate/lead the discussion on the relationship
between the centers and mixed-use areas?
UGB ExPANSION:
TIGARD'S BORDERS
" o oo°
Metro recommends Sites 63 and 64 as expansion areas.
These areas are adjacent to Bull (Mountain.
o
Metro estimates 1,735 dwelling units on 480 total acres.
Metro applied a 9.6 dwelling unit/acre ratio.
Tigard's equivalent is R-12 zoning, for single and multi-family.
Predominant zoning on Bull Mountain is R-7
Accommodates attached, detached single-family homes.
Both R-7 + R-12 are considered medium-density residential
districts:
=:>R-12 lot minimum = 3,050 sq. ft.
R-7 lot minimum = 5,000 sq. ft.
UG EXPANSION:
I IGARD'S BORDERS
s C
Integration with Bull Mountain area.
Accounting for Parks Needs.
Providing neighborhood commercial for 10,000-12,000
new residents.
m ® ® • •
Should the City accept the varying densities between Bull
Mountain and expansion areas or should it propose a flexible
alternative?
How should the City tackle the open space/parkland shortage:
Have Metro revise our calculations downward or reject
proposed targets;
Secure parkland outside the City in near-term; or
Lower parks standard?
Should the City participate in developing regional policy for
neighborhood commercial areas?
I
i
Item No..~..~
For Council Newsietter dated ~O • • o
CITY OF TIGARID
MEMORANDUM
CITY OF TIGARD
TO: Bill Monahan
FROM: Margaret Barnes,~~
DATE: October 10, 2002
SUBJECT: Conceptual Site and Design Plans for the New Library
As you know, the New Library Resource Team met with SRG Architects on September
9 and September 30 to discuss the design of the new library. In addition to these
meetings, Councilor Craig Dirksen along with City Staff and SRG Architects toured the
Beaverton Library and the West Linn Library on September 19. SRG Architects has
also met several times this past month with City Staff to review the design concepts for
the new library.
As a result of these meetings, SRG Architects has developed a conceptual site plan and
design for the new library. Please find attached a copy of the conceptual site and design
plans. Note these plans illustrate a different design concept than the architectural
model. This new conceptual design reflects the input of the New Library Resource
Team. Staff and SRG Architects will be prepared to review these conceptual plans with
the City Council on Tuesday, October 15 at the Council Workshop.
H
1
1
7
Proinrvl Vision Statement
"The New Tigard Library will be a center for learning, discovery, and community,
integrated into the unique natural beauty of the site demonstrating environmental
stewardship, and expressing the values and spirit of the community."
Center for learning, discovery, Integration of the unique natural
and community beauty of the site demonstrating
Strengthens the mission of the Library of providing environmental stewardship
"world class information and traditional library ® Preserves and exhibits the site and its natural setting
services" ® Exhibits sustainable design practices and solutions in
® Creates a center providing meeting space, multi- the site and building design
cultural activities, and life-long learning for all ages ® Demonstrates environmentally responsible design
* Establishes a community and civic presence on the and practices
site physically and symbolically setting a foundation
for future civic growth Expressing the values and
spirit of the community
® Fosters community involvement and community pride
® Creates longterm value for the City and community.
Provides a functional, flexible, efficient, accessible,
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MEMORANDUM
TO: Mayor Jim Griffith
Tigard City Council
FROM: Craig Prosseainance Director
Margaret Barnes, Library Dii Ive
RE: LEED Certification for the New Tigard Library
DATE: October 15, 2002
The City is planning to include "green building" technologies in the design for the new
Tigard Library. These technologies include a variety of energy saving and renewable
resource features to make the building more environmentally responsible. The City will
design and build the building so that it will qualify for LEED Silver certification (that is,
meet all the program criteria), but at this point has not planned to actually apply for and
obtain the certification. At issue is the cost of obtaining the certification.
In order to obtain certification, the City must take some steps in addition to actually
installing the new features in the building. These steps include items such as hiring a
LEED commissioning agent to verify to proper functioning of the green building features
and documenting actual energy savings. In addition, obtaining LEED certification would
require additional work on the part of the project architect. This additional work is not
part of the current contract and would represent an additional cost to the City. Staff are
currently trying to obtain good estimates of the additional cost that the City would incur
to obtain the LEED certification. Very rough, early estimates.place these costs in the
range of $50,000 to $60,000.
Under Oregon tax laws, LEED certified buildings qualify for credits on state income
taxes owed. Since the City does not pay taxes, it cannot use these tax credits directly.
State law, however, allows the City to partner with a private, tax-paying business to (in
effect) sell the tax credit to the partner. In this way, the City would get a benefit
equivalent to the tax credit. Attached to this memo are two memos, one from Craig
Prosser and one from project architect, Skip Stanaway, explaining the two options for
tax credits that the City has under state law.
As the two attached memos indicate, one estimate of the potential tax credit that the
City would receive for being LEED certified is $50,250. Since this is equal to or less
than the potential cost of obtaining the certification, staff have not planned to pursue
LEED certification at this time.
Councilor Craig Dirksen has identified a point of discussion about not obtaining LEED
certification. Councilor Dirksen has suggested that the City may want to obtain the
certification if the cost of doing so is near to the amount of tax credit that could be
received. This would demonstrate the City's commitment to green building technologies
and would have the City lead by example.
It would be helpful for Council to discuss these issues and to provide guidance on
obtaining the LEED certification. If Council decides that the City should obtain LEED
certification, it would be helpful for Council to discuss the cost/benefit ratio parameters
for that decision. Since we do not have hard cost estimates at this time, it would be
helpful to think in terms of the following scenarios:
A. Cost of obtaining the certification is less than the tax credit to be received.
B. Cost of obtaining the certification is equal to the tax credit to be received.
C. Cost of obtaining the certification is 25% more than the tax credit to be received.
D. Cost of obtaining the certification is 50% more than the tax credit to- be received.
E. Cost of obtaining the certification is 75% more than the tax credit to be received.
F. Cost of obtaining the certification is 100% more than the tax credit to be received.
G. Cost of obtaining the certification is greater than 100% more than the tax credit to be
received.
Margaret Barnes will be available at the Council meeting this evening to aid in the
discussion of this issue. Alternatively, Council may decide to schedule this discussion
at a later time. It is important to address this issue soon, however, so that the decision
can easily be incorporated into the project work plan.
CC: William A. Monahan, City Manager
MEMORANDUM
TO: Library SteeriRinance Committee
FROM: Craig Prosse Director
RE: Library Pass-Through Tax Credits
DATE: September 26, 2002
1 have continued to research the benefit of possible pass-through energy tax credits that
we may generate in the construction of the new Library. I have spoken with Richard
Manning of PGE's energy conservation program (503-603-1651) and Glenn Hansen of
the Oregon Office of Energy (503-373-7562). 1 have discovered that there are two ways
to calculate a possible energy tax credit: the first is for buildings that have achieved a
minimum of the LEED silver certification and the second is the traditional Business
Energy Tax Credit. LEED certified buildings may opt for either method; non-LEED
certified building may only use the second method.
Both Richard and Glenn agreed that the LEED certified method would probably not be
cost-effective for Tigard because of the cost of obtaining the LEED certification. Under
this method, buildings that have attained at least a LEED silver certification are eligible
for a tax credit equal to $1.25 per square foot for the first 25,000 square fee plus $0.90
per square foot for all footgae more than 25,000. For a building with 47,500 square
feet, this would result in a tax credit of $50,250. Since the cost of obtaining the LEED
certification is in the range of $50,000 to $60,000, this is clearly not cost effective.
(Parenthetically, Glenn mentioned that by 2004, the process and documentation for
obtaining LEED certification is expected to be revised and simplified, with the result that
the cost of the certification should be less than it is now.)
Under the second method, the Business Energy Tax Credit, the building owner is
eligible for a tax credit of 35% of the incremental costs of improving the energy
efficiency of a building above Building Code requirements. This tax credit may be used
over a period of time. To qualify for this credit, the building owner must document all
incremental costs that improve energy efficiency of the building above code
requirements and commission a study to substantiate those energy savings. Glenn said
that he advises owners not to spend more than 20¢ per square foot on this study. (In
Tigard's case, that translates to $9,500.) There is no way to calculate the value of the
tax credit without know the cost of the energy-saving features of the building.
Glenn indicated that one option to obtain a "substantiation study" may be PGE.
According to Glenn, PGE offers a number of energy conservation incentives.
Apparently PGE will offer the incentives or pay for the study, but not both. Since I
spoke to Glenn after I spoke with Richard, I have not followed up on this point with PGE.
For public building owners, which of course do not pay taxes, the program allows them
to pass-though the tax credit to a private, tax-paying partner. Under this program, the
public agency identifies a partner early in the building process and enters into an
agreement to "sell" the tax credit to them. The Oregon Office of Energy calculates the
net present value of the 35% tax credit, and the private partner must pay the public
entity at least that amount. The net present value of the tax credit is currently 27%.
(Rather than recovering 35% over time, the City could recover 27% immediately upon
completion of the tax credit application.) The private partner can offer to pay more than
the 27%, but can never pay less.
I asked Joe Barrett to check to see whether the City would have to bid out the "sale" of
this tax credit. We would not have to. According to Joe's research, only one public
agency that he found'bid out this opportunity (the Port of Portland). All other agencies
that have taken advantage of this program have found partners through informal
solicitations.
I asked Glenn why a company might be willing to become a pass-through partner,
particularly since the net present value calculation of the tax credit, in theory, normalizes
the financial impact of the tax credit. Glenn reported that the primary motivation was the
"feel-good" factor - they support energy conservation and they like having their name
associated with a particular project. In addition, there may be financial benefits as well.
The net present value is based upon an assumed average rate of return. A company
may have an opportunity to achieve a higher rate of return, particularly if the partnership
payment is made late in their tax year.
At this point, we need to decide whether we want to pursue the pass-through of the
Business Energy Tax Credit. This may have some potential for us, but we cannot
determine that without an estimate of the incremental cost of any energy reducing
features of this new building. Glenn indicated that many participants in this program
have worked with both SRG Partners and Hoffman Construction, and both firms are
excellent in dealing with energy issues. I recommend that we communicate with both
SRG and Hoffman to let them know that we are interested in further research on the
Business Energy Tax Credit. We should ask for a rough estimate of the incremental
cost of the energy saving features of the building once that information is available. At
that point, we will be able to determine whether this is something we should pursue.
On a final note, Glenn indicated that should we decide to go ahead with the Business
Energy Tax Credit, that he would be more than happy to help us on a volunteer basis to
put together the paperwork to apply for the tax credit.
WE"
SRG Partnership, PC MEMORANDUM
PROJECT NAME: CITY OF TIGARD NEW LIBRARY SRG PROJECT NO.: 2216
TIGARD, OREGON DATE: Sept. 27, 2002
TO: New Library Resource Team
FROM: Skip Stanaway
SUaJECT: Energy Tax Credits
DISTRIBUTION:
ATTACHMENTS:
The Oregon Office of Energy's (OOE) Business Energy Tax Credit (BETC) program provides a credit against state
income taxes for any qualified Oregon project that invests in energy conservation, recycling, renewable energy
resources, and less polluting transportation fuels. The payback of the energy efficiency measure must typically be
15 years or less. The tax credit is 35% of eligible project costs, which are the incremental costs of the systems or
equipment beyond the cost of a code minimum system. For governmental agencies and organizations that don't
pay state income taxes, there is a Pass Through Option, which allows the tax credit to be purchased by an outside
party. The value of the Pass Through Option is currently 27% of eligible project costs. For the Tigard Library a
local business might be interested in becoming a Pass Through Partner. The Pass Through Partner is eligible to
receive the full 35%.
A new program also exists for Sustainable Buildings. The amount of the tax credit depends on the size of the
building and the LEEDT`I rating. In addition, to the credit requirements for the LEEDT`I Silver rating, the Office of
Energy requires: At least two credits are earned for energy efficiency. At least one credit for additional
commissioning beyond the LEEDT"I prerequisite requirements, and; A report on the amount of solar radiation to
be received by the building annually.
Application for the BETC tax credit must be made before the project starts construction. Review by the Office of
Energy will take 4 to 6 weeks. A Preliminary Certificate will be issued, stating approval to begin the project, and
how much of the estimated project costs qualify for the tax credit.
An estimate for the Pass Through Tax Credit for the Tigard Library is $40,000 to $60,000. The proposed energy
study with PGE Earth Advantage would help us gain and understanding of which items in the project might
qualify for the tax credit, and how much of the costs of the items would be eligible for the credit. If the project
pursued a LEEDT`I Silver rating it would eligible for a tax credit of 551,000 and $76,000 for a LEEDT`I Gold rating.
Additional information can be found at:
www.dsireusa.ort~ and http://~,,,%%•w.energv.state.or.us/bus/tax/-taxcdt.litm
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