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City Council Packet - 11/14/2006 r CITY OF TIGARD CITY COUNCIL r~ will attend the Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO,.OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Deputy City Recorder Date: /J~ Post: Tigard City Hall J Tigard Permit Center Tigard Public Library M LAKE OSWEGO / TIGARD JOINT WATER SUPPLY STUDY POLICYMAKERS WORKSHOP #1 TUESDAY, NOVEMBER 14, 2006 AGENDA 6:00 PM Dinner 7:00 1. Call to Order: Lake Oswego and Tigard City Councils, Intergovernmental Water Board 2. Roll Call 3. Introduction • Welcome Clark Worth • Participant introductions • Purpose of workshop • Review agenda • Electronic polling (warmup) 7:10 4. Background • Current water systems Joel Komarek • L.O. / Tigard Joint Water Supply Study Dennis Koellermeier Purpose Drivers Scope / schedule Current status: where we are now, where we're going Policymaker involvement (role) 7:25 5. Water Supply Options Mark Knudson • Water supply options / scenarios: - Tigard - L.O. - Merger • Pros and cons • Q&A • Electronic polling 8:00 6. Values & Principles to Guide Decisions Clark Worth • Policymaker interviews • Values & Principles • Electronic polling 8:15 7. Preliminary Research Mark Knudson • Intake / raw water facilities • Treatment plant • Finished water facilities • Timing • Environmental / other considerations • Q&A / discussion 8:45 8. Public Participation Clark Worth • Strategic Outreach & Communications Plan • Electronic polling 8:55 9. Next Steps Joel Komarek • West Linn City Council briefing (date?) • Public meetings (dates?) Dennis Koellermeier • Policymakers Workshop #2 (date?) 9:00 PM Adjournment: City Councils and Intergovernmental Water Board City of Tigard, Oregon Affidavit of Posting In the Matter of the Proposed Notification of attendance of the Tigard City Council at Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on Nov. 14, 2006, at 7:00 p.m. STATE OF OREGON ) County of Washington ) ss. City of Tigard / ) I, yaA•6'` A Kvxae~being first duly sworn (or affirmed), by oath (or affirmation), depose and say: That I posted in ➢ Tigard City Hall, 13125 SW Hall Boulevard, Tigard, Oregon ➢ Tigard Public Library, 13500 SW Hall Boulevard, Tigard, Oregon ➢ Tigard Permit Center, 13125 SW Hall Boulevard, Tigard, Oregon a copy of Notification of attendance of the Tigard City Council at Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on Nov. 14, 2006. A copy of said Notice being hereto attached and by reference made a part hereof, on the day of 20 O Signature of Person who Performed Pos g Subscribed and sworn (or affirmed) before me this day of C~c t c~/~ , 20 00 Z), Signature of Notary Public for Ox gon OFFICIAL SEAL CATHERINE D WHEATLEY iAadm\cathy\counci14neeting notices\20061special meeting -061114.doc NOTARY PUBLIC-OREGON COMMISSION NO. 371142 MY COMMISSION EXPIRES AUG. 04, 2007 r CITY OF TIGARD CITY COUNCIL r1 will attend the Lake Oswego/Tigard Joint Water Supply Study Policymakers - Workshop #1 oni November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HAIL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Deputy City Recorder Date: AM/e~ Post: Tigard City Hall Tigard Permit Center Tigard Public Library LAKE OSWEGO / TIGARD JOINT WATER SUPPLY STUDY • POLICYMAKERS WORKSHOP #1 TUESDAY, NOVEMBER 14, 2006 AGENDA 6:00 PM Dinner 7:00 1. Call to Order: Lake Oswego and Tigard City Councils, Intergovernmental Water Board 2. Roll Call 3. Introduction • Welcome Clark Worth • Participant introductions • Purpose of workshop • Review agenda • Electronic polling (warmup) 7:10 4. Background • Current water systems Joel Komarek • L.O. / Tigard Joint Water Supply Study Dennis Koellermeier - Purpose - Drivers - Scope / schedule - Current status: where we are now, where we're going - Policymaker involvement (role) 7:25 5. Water Supply Options Mark Knudson • Water supply options / scenarios: - Tigard - L.O. - Merger • Pros and cons • Q&A • Electronic polling 8:00 6. Values & Principles to Guide Decisions Clark Worth • Policymaker interviews • Values & Principles • Electronic polling 8:15 7. Preliminary Research Mark Knudson • Intake / raw water facilities • Treatment plant • Finished water facilities • Timing • Environmental / other considerations • Q&A / discussion 8:45 8. Public Participation Clark Worth • Strategic Outreach & Communications Plan • Electronic polling 8:55 9. Next Steps Joel Komarek • West Linn City Council briefing (date?) • Public meetings (dates?) Dennis Koellermeier • Policymakers Workshop #2 (date?) 9:00 PM Adjournment: City Councils and Intergovernmental Water Board Y a City of Tigard, Oregon Affidavit of Notification In the Matter of the Proposed Notification of Council attendance at Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on November 14, 2006 STATE OF OREGON ) County of Washington ) ss. City of Tigard ) I, &At!::( e , being first duly sworn (or affirmed), by oath ~Ij (or affirmation), depose and say: That I notified the following people/organizations by fax of Notice of Council attendance at Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on November 14,2006: 0 Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) ❑ Newsroom, The Oregonian (Fax No. 503-968-6061) ❑ Editor, The Regal Courier (Fax No. 503-968-7397) A copy of said Notice being hereto attached and by reference made a part hereof, on the day of rid P1I , 20 y~ . Signature erson who Performed Notifi on Subscribed and sworn (or affirmed) before me this day of OC 20 y4 Signature of Notary Public for Oregon iA;,dm\cathy\conncil\-ting notices\2006\061114.affidavit of notification.doc OFFICIAL SEAL CATHERINE D WHEATLEY NOTARY PUBLIC-OREGON COMMISSION NO. 371142 MY COMMISSION EXPIRES AUG. 04, 2007 10/30/2006 11:31 FAX 5036847297 City of Tigard 0 001 TX REPORT **s ~~k~k~~~k~kacskskxe~sksa~&~~~~c~c TRANSMISSION OK TX/RX NO 1777 CONNECTION TEL 5039687397 SUBADDRESS CONNECTION ID Regal Courier ST. TIME 10/30 11:30 USAGE T 01'10 PGS. SENT 2 RESULT OK CITY OF TIGARD CITY COUNCIL will attend the Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Tithes (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) 10/30/2006 11:30 FAX 5036847297 City of Tigard Q001 TX REPORT *s* TRANSMISSION OK TX/RX NO 1776 CONNECTION TEL 15033712635 SUBADDRESS CONNECTION ID Valley ST. TIME 10/30 11:29 USAGE T 00'33 PGS. SENT 2 RESULT OK CITY OF TIGARD CITY COUNCIL will attend the Lake Oswego/Tigard Joint Water Supply Study Policyrnakers Workshop #1 on November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom. The Oreeonian (Fax No. 503-968-6061) 10/30/2006 11:.29 FAX 5036847297 City of Tigard 2001 8c TX REPORT sss TRANSMISSION OK TX/RX NO 1775 CONNECTION TEL 5039686061 SUBADDRESS CONNECTION ID Oregonian ST. TIME 10/30 11:28 USAGE T 00'26 PGS. SENT 2 RESULT OK L CITY OF TIGARD CITY COUNCIL will attend the Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) CITY OF TIGARD 1 CITY COUNCIL 7 7 will attend the Lake Oswego/Tigard Joint Water Supply Study Policymakers Workshop #1 on FUR 00 -/AA\- ° D November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Deputy City Recorder Date: Iv /J~ Post: Tigard City Hall Tigard Permit Center Tigard Public Library i LAKE OSWEGO / TIGARD JOINT WATER SUPPLY STUDY • POLICYMAKERS WORKSHOP #1 TUESDAY, NOVEMBER 14, 2006 AGENDA 6:00 PM Dinner 7:00 1. Call to Order: Lake Oswego and Tigard City Councils, Intergovernmental Water Board 2. Roll Call 3. Introduction • Welcome Clark Worth • Participant introductions • Purpose of workshop • Review agenda • Electronic polling (warmup) 7:10 4. Background • Current water systems Joel Komarek • L.O. / Tigard Joint Water Supply Study Dennis Koellermeier - Purpose - Drivers - Scope / schedule - Current status: where we are now, where we're going - Policymaker involvement (role) 7:25 5. Water Supply Options Mark Knudson • Water supply options / scenarios: - Tigard - L.O. - Merger • Pros and cons • Q&A • Electronic polling 8:00 6. Values & Principles to Guide Decisions Clark Worth • Policymaker interviews • Values & Principles • Electronic polling 8:15 7. Preliminary Research Mark Knudson • Intake / raw water facilities • Treatment plant • Finished water facilities • Timing • Environmental / other considerations • Q&A / discussion 8:45 8. Public Participation Clark Worth • Strategic Outreach & Communications Plan • Electronic polling 8:55 9. Next Steps Joel Komarek • West Linn City Council briefing (date?) • Public meetings (dates?) Dennis Koellermeier • Policymakers Workshop #2 (date?) 9:00 PM Adjournment: City Councils and Intergovernmental Water Board J CITY OF TIGARD CITY COUNCIL will attend the Lake Oswego/Tigard joint Water Supply Study Policyrnakers r- ~ p Workshop #1 on November 14, 2006 at 7:00 p.m. LAKE OSWEGO CITY HALL LAKE OSWEGO, OREGON Nov. 14 7:00 p.m. Tigard and Lake Oswego City Councils and Intergovernmental Water Board Lake Oswego City Hall is located at 380 A Avenue, Lake Oswego, OR. A draft meeting agenda is attached to this notice. This meeting is in lieu of the regular Tigard City Council Business Meeting scheduled for November 14, 2006. For further information, please contact City Recorder Cathy Wheatley at 503-639-4171, Ext. 2410 or Deputy City Recorder Carol Krager at 503-639-4171, Ext. 2419. Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Deputy City Recorder Date: /I le 61 Post: Tigard City Hall Tigard Permit Center Tigard Public Library LAKE OSWEGO / TIGARD JOINT WATER SUPPLY STUDY POLICYMAKERS WORKSHOP #1 TUESDAY, NOVEMBER 14, 2006 AGENDA 6:00 PM Dinner 7:00 1. Call to Order: Lake Oswego and Tigard City Councils, Intergovernmental Water Board 2. Roll Call 3. Introduction • Welcome Clark Worth • Participant introductions • Purpose of workshop • Review agenda • Electronic polling (warmup) 7:10 4. Background • Current water systems Joel Komarek • L. 0. / Tigard Joint Water Supply Study Dennis Koellermeier - Purpose - Drivers - Scope / schedule - Current status: where we are now, where we're going - Policymaker involvement (tole) 7:25 5. Water Supply Options Mark Knudson • Water supply options / scenarios: - Tigard - L.O. - Merger • Pros and cons • Q&A • Electronic polling 8:00 6. Values & Principles to Guide Decisions Clark Worth • Policymaker interviews • Values & Principles • Electronic polling 8:15 7. Preliminary Research Mark Knudson • Intake / raw water facilities • Treatment plant • Finished water facilities • Tuning • Environmental / other considerations • Q&A / discussion 8:45 8. Public Participation Clark Worth • Strategic Outreach & Communications Plan • Electronic polling 8:55 9. Next Steps Joel Komarek • West Linn City Council briefing (date?) • Public meetings (dates?) Dennis Koellermeier • Policymakers Workshop #2 (date?) 9:00 PM Adjournment: City Councils and Intergovernmental Water Board Agenda Item No. 3 , . Q Meeting of e 6 . /3, -_>00? °i` TARE oS4, CITY COUNCIL REGULAR MEETING MINUTES November 14, 2006 °REWN Mayor Judie Hammerstad called the Regular City Council meeting to order at 7:05 p.m. on November 14, 2006, in the City Council Chambers, 380 A Avenue. Present: Mayor Hammerstad, Councilors Turchi, McPeak, Groznik and Graham; Councilors Peterson and Hoffman were excused; Councilors Elect Jordan, Johnson, Hennagin Staff Present: Doug Schmitz, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Joel Komarek, City Engineer Others: Intergovernmental Water Board Commissioners: Patrick Carroll (representing Durham), Dick Winn (representing King City), Bill Scheiderich (member at-large); Tigard City Councilors: Mayor Craig Dirksen, Sydney Sherwood, Sally Harding, Nick Wilson, Tom Woodruff (also Tigard's IWB representative), Gretchen Buehner, Councilor Elect; Tigard Staff Members: Craig Prosser, City Manager; Dennis Koellermeier, Public Works Director; Tim Ramis, City Attorney; Consultants: Mark Knudson, Clark Worth 3. STUDY SESSION 3.1 Joint Meeting with the Tigard City Council and the Intergovernmental Water Board Mayor Hammerstad provided the introductions. In May 2005 the City of Tigard approached Lake Oswego because it was interested in having a stable source that would satisfy its long-term water interests. The policy considerations would be discussed at this meeting, but no decisions would be made. Each entity hoped to gather information from this meeting and develop an understanding of complementary needs. Tigard desires to secure a long-term water source, and Lake Oswego has an apparent surplus of available water from its water rights in the Clackamas River. Lake Oswego has a high need for infrastructure improvements in the system the cost of which was considerable. If the costs were shared over a larger base, then the improvements would be more affordable. Tigard would not have to seek another water provider and would gain some infrastructure on its own. Lake Oswego needed certainty regarding the access of adequate water supplies and was responding to recent legislation that required Lake Oswego to use its water right or lose it in the future. Mr. Komarek reported that the Cities of Tigard and Lake Oswego entered into an intergovernmental agreement (IGA) to jointly fund the study effort that began June 2006. The preliminary findings of that effort were presented at this meeting. When he and Mr. Koellermeier discussed the scope of work they identified objectives they felt needed to be addressed. First and foremost it was important to talk about securing long-term supplies for Lake Oswego and possibly Tigard. The intent was to identify a preferred supply scenario, its feasibility and costs, and necessary facility improvements and institutional arrangements that would allow for water to be shared between the two cities. The Lake Oswego water supply intake was built in the late 1960's and was located about a mile upstream from the confluence of the Clackamas and Willamette Rivers. The water was pumped through a 27-inch transmission main under the Willamette to the treatment plant located in West City Council Minutes Page 1 of 13 November 14, 2006 Linn. The initial size of the plant was approximately 11 mgd. The water was treated to drinking water standards and pumped through another transmission main to the Waluga Reservoir on the western edge of the service area. The pipeline from the intake to the treatment plant was about 14,000 feet, and the line from the plant to the reservoir was 20,000 feet. In 1980 the treatment plant was expanded to its current capacity of 16 mgd. Water was presently supplied to Lake Oswego residents, a number of special districts located within the urban service boundary (USB), the City of Tigard, and several small subdivisions located in the City of Portland. Some of the drivers from Lake Oswego's perspective had to do with a number of infrastructure improvements needed due to age and demands within the service area. It seemed like an opportune time to consider a partnership between Lake Oswego and Tigard. Even without such a partnership the in-City demands were quickly approaching the current treatment capacity, so it was important to start the planning effort. The major infrastructure was 40 years old and there were vulnerabilities related to the single pipeline crossing the Willamette. The infrastructure needs will be costly, so a partnership could ameliorate some of the rate impacts by spreading those costs over a larger base. HB 3038 presented most entities holding water permits with some uncertainty as to whether or not they would ultimately be able to develop all the water under those permits. Lake Oswego and Tigard have both been members of the Regional Water Providers Consortium since 1995. That effort recognized the benefits of a regional system of transmission mains and interconnected water sources for reliability and opportunities to reduce environmental impacts that certain sources were exhibiting. This was an opportunity to explore regional benefits that had been discussed at the Consortium for a number of years. Mr. Koellermeier described the general boundaries of the Intergovernmental Water Board service area that represented 55,000 people. It was bounded by Hwy 217, the Tualatin River, Scholls Ferry Road, and the urban growth boundary (UGB). For all practical purposes Tigard acquired its water on the spot market which was sometimes a tenuous position. The primary water source at this time was the City of Portland under a ten-year service agreement. That however did not provide all the water needed by Tigard, so water was purchased from several other sources to meet peak usage demands. Tigard was a partner in the Joint Water Commission, but it was structured in such a way that it only allowed the City to access surplus capacity from the other partners. As those partners grew, the capacity was less available. The group was working on a major water supply effort with the Hagg Lake Reservoir Complex which was very expensive and complicated. Tigard would be the farthest customer, and transporting water was very expensive. Shorter transmission generally was a cost-saving factor for any water provider. The City of Tigard had enjoyed a wholesale relationship with Lake Oswego, and before 1994 most of the water in the Tigard District was obtained from the Lake Oswego system. A good share of the infrastructure was designed around that model. Tigard was involved with aquifer storage and recovery (ASR) which was a technique whereby the City purchased water during the winter when it was plentiful and injected and stored in wells for use in the summer. It was not the end all of Tigard's problems, but it was a good stop gap measure for meeting summer demands. Tigard was one of the founding members with water rights on the Willamette River. It was the first community that went through the process and ended up with a charter amendment that required a vote of the people to approve use of Willamette River water. Wilsonville has been using the Willamette River for three years with excellent results. It was important for Tigard to make some decisions. The City was growing while at the same time water sources were scarce. The City wanted to be involved at the ownership level so there would be some certainty and to be able to use the financial mechanisms at hand. Ownership would put part of the financial burden into the SDC structure. Currently Tigard's source issues had to be 100% rate funded. When Tigard negotiated 10-year increment contracts with Portland or other large suppliers the rates were structured in such a way as to ease the cost to the retail City Council Minutes Page 2 of 13 November 14, 2006 customers. Buying water was not a good position to be in because costs were driven up over time. Finally was the issue of timing. Tigard just signed a 10-year agreement with Portland, so it would need to decide whether or not to stay with Portland. Although 10 years may seem like a long time, it takes a long time to develop capital projects. Mr. Koellermeier reported that Tigard had completed the population and demand forecast, evaluated the condition and established needs over time, identified multiple alternatives, identified the permitting and regulating requirements, developed a draft communication plan, and discussed potential governance options that would allow multiple public agencies to work together. If directed, staff would work on finalizing the costs of the improvement options, complete the financial analysis and rate impacts, refine scenarios, costs, and rates for the final document level, prepare a report, and reconvene this group for further direction. The schedule was ambitious, and Mr. Koellermeier anticipated having a draft report by the beginning of the year and reconvening this group in January or February to discuss the options and receive guidance. Commissioner Scheiderich asked if Lake Oswego's 38 mgd right were affected by any other superior rights or in stream flow reservations. Mr. Komarek replied in stream water rights varied depending upon the time of the year. Half of the water permit was certificated but it was in its entirety senior to the in stream water right. There was also a junior permit to the in stream water right. In terms of Western Water Law, the Appropriation Doctrine, and first in time, first in right says if the permit was senior to the in stream water right it took precedence in terms of use. The larger 32 mgd right was senior, and the smaller 6 mgd right was junior. Commissioner Scheiderich asked how far the water reached by gravity or if was it pumped. Mr. Komarek replied all of the water was pumped. To reach Tigard from Lake Oswego the water would be pumped two times to get to the Bonita Station and then once again to get into the distribution system. Commissioner Scheiderich asked the status of the other studies including Hagg Lake and the feasibility study of the pipeline to supply Tualatin Valley Water and Beaverton from Wilsonville. Mr. Koellermeier responded all these data points would come together in a relatively short period of time. In the first few months of 2007 all three of those efforts would at least be in a draft stage. From Tigard's perspective it would need to make some decisions about staying in all three options or winnow out of some. Commissioner Carroll asked the vulnerability to the federal government's requiring a certain in stream flow. Would everyone's water rights be reduced? Mr. Komarek replied the in stream water right was established for the protection of fish and other beneficial uses. He was not aware that the Water Resource Department (WRD) had any plans to seek additional in stream rights. The senior permits would take precedence. Commissioner Carroll understood endangered species protection would trump all water rights. Mayor Dirksen asked the size of Lake Oswego's service district. Mr. Komarek responded the City service area was about 33,000 plus an additional 3,000 to 4,000 customers in areas surrounding the City limits. Mayor Dirksen understood the 16 mgd treated today was in excess of what was needed based on Tigard's uses which in the summer peaked at about 13 mgd. Mr. Komarek replied the City was approaching 88% of its treatment capacity. There was one peak day last summer of 14 mgd. City Council Minutes Page 3 of 13 November 14, 2006 Councilor Graham asked if Tigard had based it projections on full development of Bull Mountain. Mr. Koellermeier replied Bull Mountain was in the planning area and was a separate chapter of the master plan. Mr. Knudson was with Carollo Engineering and had been involved with regional water issues for more than 20 years. They had looked at what it would take in terms of infrastructure, costs, and governance as outlined in the scope of work. He discussed the water needs both today and into the future. The key issue was recognition that a decision needed to be made. Lake Oswego was in a position of either going it alone or potentially forming some kind of agreement. In the go it alone scenario Lake Oswego would be faced with making some significant improvements to its existing system. There were some shortcomings with the current system as it was near the end of its design life in some cases, so there were deficiencies to be corrected. Additionally, the system was very close to capacity that could potentially compromise operational reliability. In the case of the joint entity some kind of expansion would be required, so one of the challenges of this project was how one might go about creating a deal that allowed expansion to occur and determining the logical degree to which the joint facilities would be expanded to maximize benefits. As a first cut, they looked at the service population. It was determined where the entities were in 2005 and where the area would be in 2030 by looking at build out at saturation development. In most cases saturation was being approached in 2045 taking in just the Lake Oswego retail customers. Then Stafford and other wholesalers within Lake Oswego's USB were added excluding Tigard. Right now Lake Oswego was serving 33,000. At build out of both entities the population would be 146,000. Councilor Turchi asked if the current zoning was used to estimate build out. Mr. Knudsen replied it was a saturation of all available land based on the current zoning. Councilor Turchi understood that if he owned a house in the middle of a subdividable lot that it would be considered two housing units for the purpose of build out. This assumed that every piece of property was divided into its smallest buildable unit. Mr. Knudsen explained there was a range of assumption that went along with that having to do with the amount of land preserved for open space and things of that nature. Build out was really a range of numbers, and these figures were what he believed would be the most likely worst case scenario. Councilor Turchi noted that Lake Oswego had discussed density at about 1/3 of the actual zone. He suggested there should be some thought about the need to plan for the actual zone density. Mr. Knudsen responded the attempt was to offer estimates based on the maximum demand in the future to ensure supply. Councilor-elect Buehner asked what kind of relationship the City had with its customers and could those agreements be terminated. Mr. Komarek replied the IGAs were for surplus supply. For the most part the entities were on well supplies and purchased water from Lake Oswego during the summer. Councilor Groznik stated there were some properties in the City, such as Foothills and Avamere, that could have a greater population than current zoning. He was not getting worst case out of this. Mr. Knudsen understood the concern, but no one could predict the future. The figures reflected the current situation or what was known and there might be places where density was higher in the future. They hoped there would be some give and take between the opportunity for preserving open space that has yet to be designated and that not every acre would be developed to City Council Minutes Page 4 of 13 November 14, 2006 its maximum capacity. The population projections were translated into water demands. He looked at what Lake Oswego was currently using and its per capita consumption and did the same thing for Tigard. That was averaged over the past several years and applied to the population projections to estimate demand into the future. Numbers were represented down the last 100,000 mgd. These were projections and forecasts but showed what the overall demands would be. The numbers to 2030 were based on Metro's population projection, and after that the build out number was used. Councilor Turchi asked why Tigard's per capita water consumption was substantially lower than Lake Oswego's. Mr. Knudsen thought part of it had to do with density and more multi-family residential. There was less Greenspace in Tigard, and part of it was likely a lifestyle choice. Mr. Komarek agreed Tigard had more density and there were lifestyle choices to consider such as green lawns and open spaces. Water as a commodity seemed cheap. Mr. Knudsen said it was important to recognize what he said in terms of how the demand numbers were developed. Recent per capita demand consumption was used in projecting the future. Those per person consumption rates would be the same into the future, and that may be an extremely conservative assumption meaning the numbers were likely on the high side in terms of per capita projections. Councilor McPeak noted the assumption at build out did not include any change in conservation efforts. She thought some additional conservation could be assumed but understood this was the worst case. Mr. Knudsen replied that was correct. There was a long discussion at the staff level, and the challenge was that there were a lot of uncertainties beyond just per capita consumption because of conservation. The other wild card was something like global climate change and how that would influence the numbers. There was a band of uncertainty with these numbers, but there needed to be a reference point for planning. Another uncertainty had to do with Lake Oswego providing service to the Stafford Basin. Councilor Graham asked if the projections took into account growth in Happy Valley and Damascus placing additional demands on the Clackamas River. Mr. Knudsen replied the growth was taken into account in terms of water rights. Lake Oswego currently had up to 38 mgd of water rights, so that was treated as available capacity to serve future demands. He had not allocated any demands on these projections for serving those entities on the east side of the Willamette. They were currently developing these same types of agreements through the North Clackamas Water Commission that allowed Happy Valley, Sunrise Water Authority, Gladstone, and Oak Lodge Water to pool their resources and water rights. He reviewed the four identified scenarios: (1) Lake Oswego does nothing and stays with the current infrastructure capacity of 16 mgd; (2) Lake Oswego's ultimate build out demand was projected at 24 mgd including the current wholesalers, so the logical scenario would be that Lake Oswego planned to meet all of its future demands and build the infrastructure accordingly without Tigard's being in the picture; (3) Lake Oswego had 32 mgd in senior water rights which was highly valuable and could be used to serve both Lake Oswego and Tigard in a joint supply scenario; and (4) was the same except the senior water rights of 32 mgd plus the junior water right of 6 mgd for a total of 38 mgd. In the do nothing scenario, Lake Oswego would not have to spend a lot of money up front. However, a lot of the infrastructure was older than 40 years and rapidly approaching the end of its design life. Some capital costs would be required to address demand issues. Based on those projections and the growth curves the capacity of the existing infrastructure would be exceeded within the next three years. Given that there were high operational risks Lake Oswego could be in a situation that if pumps went out or if systems failed or the pipe broke the City would not be City Council Minutes Page 5 of 13 November 14, 2006 able to meet the full capacity for some period of time. That was the worst case scenario, but the City was near redline. Under this scenario, because the water was consumed by Lake Oswego and its current wholesale customers, there was essentially no reliable capacity available for Tigard. In scenario #2 the system would be expanded to 24 mgd which was the ultimate demand of Lake Oswego and its wholesale customers. Under that scenario Lake Oswego's needs were met with some surplus capacity available for Tigard. As Lake Oswego grew, the Tigard capacity would be reduced, but presumably Tigard could be served with available surplus. Given the additional capacity and built in redundancy the risk of failure would be lower. The bad news was that it was a small piece relative to what Tigard's demands were, so Tigard would need some other base supply upon which to draw. Additionally 14 mgd of the existing water right would be left on the table and was in jeopardy of being lost through the HB 3038 process or some other environmental considerations. Given the fact that Tigard was looking at another primary supply, he assumed Tigard would not be an owner in this scenario. There would be no redundancy other than Lake Oswego's primary supply on the Clackamas River. Scenario #3 would capture the full 32 mgd senior water right through a joint Lake Oswego/Tigard agreement. Now that Tigard would realize a firm supply beyond Lake Oswego's needs it was assumed Tigard would become an owner or partner in the process. This was important to the financial modeling that would be discussed next. In the shared ownership scenario the capital costs for the improvements and the annual operating costs were shared by both entities and spread over a wider population base. Lake Oswego's demands were met, and there was a minimum of 8 mgd of firm capacity available for Tigard to meet most of its needs. He pointed out the Bonita pump station and the Waluga Reservoir where there was a major interconnect between the two systems that provided some redundancy. In the event that Lake Oswego lost the Clackamas supply or had diminished capacity for some reason conceivably there was an opportunity to feed back from the Tigard system into the Lake Oswego system to provide some backup. That connection existed now at a very limited capacity, and it would have to be resized for capacity. Theoretically there was redundancy by an existing connection, but it was a very low capacity and was not configured to operate that way. Under this scenario it would be a small effort to ensure flow in either direction to meet both communities' needs. There was redundancy and additional capacity that lowered operational risks. There was still 6 mgd of junior water rights left on the table. This scenario did not meet all of Tigard's needs into the future. Councilor Groznik explained that the water was not being lost; it was going to a different use. He had some problems with the terminology. Mr. Knudsen continued with scenario #4 of 38 mgd. This was similar to the previous scenario and would provide 14 mgd of firm supply to Tigard and meet Lake Oswego's long term demands of 24 mgd. Tigard would assume an ownership position, and the costs would be shared. The redundancy improved with the additional capacity between the two systems. All existing water rights were committed and met all but a very small portion of Tigard's needs. They did not go beyond that because the water rights did not exist to be able to provide all the water under the planning scenario to meet both Tigard's and Lake Oswego's ultimate needs. Councilor-elect Buehner asked if there were any thoughts about the long-term viability of the water rights. Mr. Knudsen replied there was some vulnerability as other development occurred in the Clackamas Basin. A junior water right was conceivably susceptible to curtailment in the future. Mayor Hammerstad said if every water supplier along the Clackamas River were to use their senior and junior water rights to their maximum, were their enough water rights to satisfy the in stream water rights, or would the Water Master step in and curtail that usage by all of the City Council Minutes Page 6 of 13 November 14, 2006 suppliers? She was curious about the water rights of all the other providers on the Clackamas and where that put Lake Oswego. Mr. Knudsen responded the basis of the water rights was first in time. Lake Oswego had a more senior right than others based on the filing date so was protected. The last person with the last water right would be the first one asked to curtail. The significance of junior and senior was based on the filing for the in stream right. The priority would be the senior rights, in stream rights, with the junior rights being the most vulnerable. They had taken a close look at all the users and the rights along the Clackamas River. Basically, it looked like the River was fully allocated which meant that between the existing junior rights, in stream rights, and senior rights there was no additional water left on the Clackamas River. It all depended on what happened in any given year with the weather, so potentially junior rights could be impacted by the Water Master's asking for some curtailment. Mayor Hammerstad was more concerned about growth in Damascus and Happy Valley. Would they be in a position of using water rights superior to Lake Oswego's and where would that leave Lake Oswego? Mr. Komarek replied Lake Oswego's senior water right was fourth in line from the most senior rights on the River. South Fork Water Board held the most senior rights, and CRW had one senior to the in stream right but junior to Lake Oswego's. The sum total of South Fork was about 75 cfs. Councilor Graham asked with all the concerns and development on the east side if conservation efforts would be instituted. Mr. Komarek replied that in order to have access to undeveloped water one had to demonstrate to WRD that everything to which one had access was being used wisely before further access was granted. That was part of the Water Management and Conservation Plan requirement. Lake Oswego had to demonstrate that the 16 mgd was being managed and conserved to the best of the City's ability before asking for more. The City submitted its extension plan and will provide the management plan early next year. Councilor Graham hoped that Lake Oswego users would buy into that program. She asked for an explanation of Water Master. Mr. Knudsen said WRD was responsible for management of the state's waters. One of its roles was to ensure that everyone holding water rights were not taking more than what was allocated under the permit. The Water Master was responsible for ensuring the law was followed. Mr. Komarek added that there were District Water Masters who were called upon to adjudicate the use of water rights under low flow conditions. Mayor Dirksen heard concerns about new development on the east side that would possibly curtail of existing water rights. He asked if newer development and the water rights going along with that would be junior to those already in place. Was it possible that water rights could be transferred to someone else? Mr. Knudsen replied generally not. However, some of those entities had senior water rights. Damascus, Happy Valley, and Sunrise Water Authority did not happen to be any of those entities. The water rights were still limited to a certain mgd. Just because they were senior did not mean they could get more. There was really no more water on the Clackamas River. Councilor Harding asked the unused water rights of the senior holders. What was the capacity they could tap into? Mr. Komarek had that data but had not brought it with him. Lake Oswego for example had more than 50% of its total unused. South Fork Water Board probably had at least 50% of its authorized use undeveloped. City Council Minutes Page 7 of 13 November 14, 2006 Councilor-elect Johnson thought the City was working on the assumption that the senior water rights were secure. How great would the impact need to be to affect Lake Oswego's senior water right. Mr. Komarek did not believe that was known at this time. If one looked at it in terms of permits rather than population, then only so much could be taken from the River. When one talked about how the Water Master might adjudicate permits on the River, then in a worst case scenario where everyone was using their permits South Fork would be protected first then Lake Oswego and on down the line. Those with junior permits would be subject to restrictions because of in stream rights. Mr. Prosser heard a lot of interest in getting more information on water rights. There were a number of technical reports available through the public works departments. Councilor Groznik asked the ranking of Lake Oswego's junior water right. Mr. Komarek said the priority date was 1973, and there were a few permit holders on the river with permits senior to that. Mr. Koellermeier commented this was an interesting issue, and some of the other entities on the Clackamas River were actually investing millions of dollars developing their junior rights. They were betting that by having the infrastructure in place they would be better off when the day came that there was not enough water for everyone. Councilor Groznik asked if the sum of the senior water rights and perhaps duty rights equaled the present flow of the Clackamas River. Mr. Komarek explained right now total municipal permits on the river totaled between 290 and 300 cfs. About 210 cfs of those permits were senior to the in stream right. Last summer the municipal permit holders used a total of about 110 cfs on a peak day. If one looked at last year as an example, one would not say the Clackamas River was over allocated. There was enough water to support the in stream right plus the municipal diversions. That could vary with the year. On average the River flow was from 750 cfs to 1,000 cfs. The in stream right went from 400 cfs part of the year to 640 cfs between September 15 and July 1. Even if more water rights were allocated they would be potentially worthless except during very high flows. Mr. Worth said early in the project a cross section of policy makers was interviewed to determine what information was needed and to identity shared values and principles. In general the policy makers were interested, open-minded, and hopeful that some solution might be found. Cost was one of the main issues. Everyone was willing to look at the proposal because it was evident what motivated the other jurisdictions. They also heard questions about the timing of public involvement. The results of the stakeholder interviews were fashioned into values and principles that captured the collective guidance. Mr. Worth reviewed the statements. Secure Lake Oswego's and Tigard's water future ensuring both communities can meet their long-term growth needs. Demonstrate cost savings and favorable rates when compared with other supply options. Retain or obtain ownership interest in long-term drinking water resources. Retain and perfect Lake Oswego's full Clackamas River water rights. Design the Lake Oswego/Tigard partnership to offer parity, fairness, balance. Develop redundant water resources for backup and emergencies. Promote equitable distribution of natural resources throughout the region. Communicate openly with policy makers and the public education them on the communities' current water sources, water system assets including water rights, future infrastructure needs, and various supply options. Nurture cooperation among Lake Oswego, Tigard, and surrounding communities that is beneficial to drinking water and other public services. Expand Lake Oswego's and Tigard's leadership in regional water supply decision making. Councilor-elect Buehner asked what kind of control West Linn had in terms of expanding the water treatment plant. City Council Minutes Page 8 of 13 November 14, 2006 Mr. Komarek replied some improvements were made to the plant about five years ago, and Lake Oswego had to go through a condition use process. It was in a neighborhood, but the zoning would allow for an expansion of the plant facility subject to conditional use approval. Commissioner Scheiderich asked if Lake Oswego had considered other supply options, and the response was that Lake Oswego was concentrating on its rights on the Clackamas River. Commissioner Carroll asked if Lake Oswego had ever considered relocating its treatment plant. Mr. Komarek replied Lake Oswego was asked that question during the last process with West Linn, and there were some people interested in having the plant go away. No suitable relocation site had been identified because it was tied to the intake site. Mr. Knudsen said that was one of the first questions he had asked since it seemed like a viable concept. Staff took a cursory look and confirmed there was not really another good place. Part of the expansion envisioned to accommodate those demands could be done on the current plant site and in the current footprint to minimize the community impact. Councilor Groznik asked if a conditional use permit were needed if the improvements could be done in the existing footprint. Mr. Komarek replied there would be new faculties on site. Lake Oswego owned a little over six acres, so it looked at least preliminarily that the plant could be expanded to meet the ultimate treatment capacity of the City's total rights. Councilor Graham thought the values and principles glaringly did not include conservation. Councilor Wilson heard two engineers loosely refer to ownership. He understood the water rights could not be sold, but for Tigard the ownership question was a very high priority. Tigard had at least four options for water, so the degree of security in that ownership factored very high. Mr. Koellermeier responded he had not wanted to get hung up on the term `ownership' because there were different ways to get there. From Tigard's perspective ownership had to do with long- term security and the ability to use SDCs. That would be addressed during the governance discussion. Commissioner Carroll suggested that `equity partner' might be a better term. Councilor Harding said that while the values and principles were all good, the usage charts showed that Tigard would not get its total use out of the Clackamas River venture. She found the breakdown confusing and the charts unclear, partly because Tigard did not have a lot of buildable land. All of Tigard's needs would not be met by one source. Mr. Knudsen addressed preliminary results from the technical analysis. Key system components were the Clackamas River intake, the raw water pipeline, the treatment plant, finished water pipeline, Waluga Reservoir, and the Bonita pump station. The pump stations associated with the raw water intake and treatment plant needed to be upgraded. A pump station would also be needed to get the water into the Tigard system. These would not be new pump stations, but they could significantly add to the capacity of the existing pump station. He outlined the intake component needs based on the four scenarios. At the intake in the 16 mgd scenario #1 some upgrading was required to the physical structure and pump capacity increased. Overall the structure could accommodate it, and the screen area was large enough to make this work. In the 24 mgd scenario #2 the pumps would need to be increased, and the pump station would have to be modified. At 32 mgd it became cheaper to build a new intake than to try to rehabilitate and modify the existing intake to handle the capacity. Similarly at 38 mgd a new intake on the Clackamas would be required. He addressed the 27-inch diameter raw water pipeline that was currently sized to handle 16 mgd. It could carry more water with additional pressure but at the expense of using more energy. In the long-term investment it was better to replace the pipeline. At 24 mgd it would need to be City Council Minutes Page 9 of 13 November 14, 2006 replaced with 36-inch diameter pipe and 42-inch pipe for 32 mgd and 38 mgd. In all of these cases he assumed the new pipe would take all the capacity of the scenario, and the existing pipe could be used as a back up. At 16 mgd the treatment plant was at capacity; however, there were some shortcomings with the plant. The discharge pumps needed to be upgraded to increase the pumping capacity and reliability of the pump station. The surge suppression tank needed to be replaced at a large capital cost in any scenario. Scenarios 2 through 4 generally involved expanding the plant within the current plant site. He concluded that conventional treatment made the most sense and was the most cost effective long-term solution. It was possible to get the expanded plant up to 38 mgd on the current six-acre plant site with a fairly compact layout. The finish water pipe was currently capable of handling the 16 mgd, so no significant improvements would be required. A lot of the pipe was in good shape and had the capacity to handle the 24 mgd. There were segments that would need to be paralleled to provide additional capacity. As the mgd increased there would need to be additional, larger parallel pipes. Mr. Knudsen addressed the storage facility. Depending upon other storage in the system one might be able to avoid adding more storage at Waluga. In the 32 and 38 mgd scenarios there were high flows going to Tigard, so a lot of water was going through this site to the pump station. A wide spot in the pipe was needed to change the flow rate and run the treatment plant at a fairly constant rate and provide operational flexibility. Finally, the Bonita Road pump station under the 16 and 24 mgd scenarios would work because there was relatively limited capacity going to Tigard. There might be some minor upgrades at limited capital cost as compared to the 32 and 38 mgd scenarios. In those cases it would be necessary to replace the pump station likely at its current site because of the hydraulics and physical layout. Mr. Knudsen summarized. Each component was run through the different supply scenarios. At 24 mgd to meet Lake Oswego's ultimate demand there were significant system improvements required. Those were essentially the same system improvements required to be able to expand to serve Tigard. Going back to the demand projection graphs and given the limitations, one saw at 16 mgd Lake Oswego would go over the line in about 2009, and at the end of the line was the basis for the 24 mgd scenario. To serve Tigard with a system capacity of 32 mgd, the line was crossed about 2020. Under the 38 mgd scenario the line would be crossed in about 2035. The construction time table for the 32 and 38 mgd scenarios would be more than three but less than five years including design. Mayor Hammerstad asked Mr. Knudsen if he had looked at the capacity of other intakes such as South Fork which was less than 10 years old. Did they have excess capacity? Mr. Knudsen said there was additional capacity available at that intake, but the challenge would be to get it down and across the River. By the time Lake Oswego bought into a share of the capacity, upgraded the facility to increase available capacity, and built the raw water pipeline to connect to the existing system the cost would be about the same as building a new intake. Mayor Hammerstad challenged that Lake Oswego's intake was within a mile of the mouth of the Clackamas River and downstream from the other intakes and perhaps a wastewater treatment plant. If Lake Oswego did go in with another intake farther up the River, there might be less treatment. She would like to know the relationship of cost under the scenarios of building a new intake versus building the transmission pipes. Mr. Knudsen would provide information. From an environmental standpoint there was value in being at the lower end because the water stayed in the River a longer period of time. However, water taken out above was not available downstream. From an environmental and permitting standpoint, the state liked it when water was taken out further downstream even though one was more vulnerable. The next step would be to address the costs of the various scenarios and what City Council Minutes Page 10 of 13 November 14, 2006 that meant in terms of the aggregate alternatives particularly for Tigard as compared to other alternatives. Once those were determined the numbers would be crunched into what that meant in terms of rates. Some assumptions would be made as to how Lake Oswego would be compensated for existing infrastructure and how costs were shared. These assumptions would be a starting point for discussions. He would prepare a draft report to share with staff and the policy makers for direction. Councilor Wilson said in looking at the graphs from Lake Oswego's eyes going alone with 24 mgd the City would be good for 40 years. Almost was much money would be spent as scenario #3, but it could be amortized over 40 years. The green option was obsolete almost the day it opened. He asked if the projections were accurate. He suggested researching the relationship between lot size and per capita consumption. The per capita projection might actually go down. Councilor-elect Jordan asked how Stafford build out was considered as one of Lake Oswego's wholesalers. Mr. Knudsen replied it was essentially treated the same as the rest of the service area based on zoning which resulted in a population of 7,000. Councilor-elect Jordan asked if the City currently owned property next to the Waluga Reservoir. Mr. Knudsen replied that it did. A participant asked when water rights might conceivably be lost. Mr. Komarek responded there was no answer at this time. He did not know of a case in which a municipal water provider relinquished its rights or had been challenged by a third party. Commissioner Carroll thought the intent of the legislature was to move people in this direction. There were areas like Tigard that did not have adequate water supplies, and they were trying to push the `haves' together with the `have nots.' Councilor Groznik did not see public participation mentioned in the next steps and did not understand how a policy decision could be formulated by February. Mr. Worth replied public participation was an open question. Everyone mentioned public education because of the project's complexity. One of the leading questions was when that process should begin. One view was that it should wait until there was actually something to tell the public. Another was that the public education piece should start right away because it was so complicated. One question was how the policy makers felt about those view, and another was where the priority should be. He provided a draft public outreach strategy that tried to harness the suggestions gathered during the interview process. Councilor Groznik thought the process should have already started because there were groups in Lake Oswego who were already concerned. The public was already talking about a number of major infrastructure improvements. Councilor-elect Buehner was concerned about going public before there was much information. Councilor-elect Jordan said one of the biggest concerns was that this was an infrastructure problem for Lake Oswego and Tigard that existed no matter how it was solved. The public needed to know the problem existed, and it needed to be kept out in the open. Councilor McPeak commented that the Lake Oswego Council was just coming up to speed. After the next work shop they might be able to narrow down the options into workable sets of ideas to handle public discussion more productively. Mayor Dirksen said in the corporate world when one went to the boss with a problem one should have a solution. When the public was showed this problem there needed to be some answers. City Council Minutes Page 11 of 13 November 14, 2006 Councilor Groznik did not see that as public involvement but rather as public dictation. Councilor Turchi liked to have time to appreciate the complexity of problems, and he did not feel had had sufficient time to consider this issue. He was surprised about where Lake Oswego was in terms of its own capacity and infrastructure needs and felt he needed a greater understanding. This information needed to be available to the public. The values and principles looked good, but he had not had the time to really think about them or consider their ramifications. He did not want to be pushed to a decision too soon and wanted the public to have a chance to catch up with the Council. Mr. Worth heard embedded in those comments the need to talk with fellow Councilors and discuss Lake Oswego's and Tigard's problems. Mayor Hammerstad observed this was an example of starting with the recognition of a problem and working toward a solution. She had been involved in numerous activities in which problems were identified. People will say they did not know about the problem and ask why they were not included, but this was just the beginning. There were possibilities and limitations, and she thought if a public involvement process were started with the existing information that people would make up their own answers which would be the worst case scenario. Until there was more information about options and costs and responsibilities she did not think the entities were ready for public involvement. This was recognition of Lake Oswego's need to protect and perfect its water rights. Was there a way to do that and solve two entities' challenges? She did not believe there was enough information right now to take out to the public. Councilor Groznik thought the public should be asked if conservation was on the table. That issue had not been addressed. The problem was being attacked with the solution of developing more water rights. Mayor Hammerstad replied Lake Oswego was working on its Water Management Conservation Plan that would identify conservation measures. Councilor Groznik had not seen anything about that, and the citizens have not been asked. He felt the City would be making a dramatic mistake if it did not involve the public now with what it had, and let them own the decision. Councilor McPeak thought Councilor Groznik had some interesting points. However, it seemed as if more issues were being added to an already complex problem. She was concerned if other issues were added, the Council would get nowhere. Commissioner Winn commented as in many things there was too much information. He looked for a simple summary of key points to address which to him was the protection of water rights. Tigard was interested in being part of Lake Oswego's efforts in a mutual way so that Tigard could have water, have some ownership, and help Lake Oswego get its capacity up. He recommended a succinct presentation to the citizens. Councilor Woodruff appreciated the opportunity to meet. This issue was probably more on Tigard's radar screen because Lake Oswego did not have to worry a lot about its water source. Lake Oswego had an issue with its infrastructure. This partnership may work if Tigard can get source and Lake Oswego can get help funding infrastructure improvements. In that case constituent needs were met in both cities. It had to be a solution for both sides so the public could see it as a creative possibility that helped everyone. There would be some sticker shock when people found out how the costs, and they will ask elected officials what they had done to ameliorate the costs. There was an opportunity to do something that was very useful, but a lot of work needed to be done by both Councils. The group commented that this workshop was helpful and recognized that additional work needed to be done in each of the jurisdictions. City Council Minutes Page 12 of 13 November 14, 2006 Mayor Hammerstad thanked all parties for their perseverance and felt this was the beginning of a relationship between the entities that she hoped would result in good decisions for the constituents. The consultants and engineers presented this complex problem in a way that was understandable and encouraged future discussions. It was an opportunity to set an example for cooperative sharing of a limited resource. Mayor Dirksen felt this problem was being addressed in a timely manner so action could be taken before 90% capacity was reached. It was clear this was only a first step and that the policy makers would need to have many more discussions. Some questions were answered while others were raised. It was clear to him another round table such as this was needed in the near future, and offered Tigard as the venue. 4. ADJOURNMENT Mayor Hammerstad adjourned the meeting at 9:10 p.m. Respectfully submitted, Robyn Christie /s/ Robyn Christie City Recorder APPROVED BY THE CITY COUNCIL: ON January 22, 2007 Judie Hammerstad /s/ Fudie Hammerstad, Mayor City Council Minutes Page 13 of 13 November 14, 2006 CITY OF LAKE OSWEGO AGENDA REPORT SUMMARY MEETING DATE: November 14, 2006 SUBJECT: Lake Oswego/Tigard Joint Water Supply Study Motion: No council motion is requested. This meeting of the joint councils of the Cities of Lake Oswego, Tigard and the Intergovernmental Water Board of Tigard is to provide each elected body information about the preliminary findings of a study being conducted to determine the benefits and costs of a possible water supply partnership between Lake Oswego and Tigard. ESTIMATED FISCAL ATTACHMENTS: NOTICED (Date): IMPACT: • 11/8/2006 Komarek STAFF COST: $ Council Report BUDGETED: Ordinance no.' Y N Resolution no.: FUNDING SOURCE: Finance Director approval Previous Council consideration' required for items with a fiscal impact: May 3, 2005; March 6, 2006; May 16, 2006 D RTMENT DIRECTOR CITY MA AGER i signoff/date ' signoff/date OF LAKE OSW fC0 CITY OF LAKE OSWEGO COUNCIL REPORT OREGON TO: Douglas J. Schmitz, City Manager FROM: Joel B. Komarek, P.E., City Engineer SUBJECT: Joint Water Supply Partnership Study with the City of Tigard DATE: November 8, 2006 Action No Council action is requested. This meeting of the joint city councils of the Cities of Lake Oswego, Tigard and the Intergovernmental Water Board (of Tigard) will provide an opportunity for staff and the City's consultant team to present preliminary findings from a study currently underway that is analyzing the costs and benefits of a possible water supply partnership between the two Cities. Background The City of Lake Oswego has a long history of sharing its surplus water supplies with the City of Tigard in addition to other cities and special water service districts operating within or adjacent to our Urban Service Boundary (USB). Tigard historically purchased the bulk of Lake Oswego's surplus water peaking in 1994/95 at about 4.5 million gallons per day (mgd). For a period of time between 2000 and 2005 surplus sales to Tigard ceased primarily due to water purchase contracts Tigard negotiated with other water providers including the City of Portland and Joint Water Commission. In May of 2005, Tigard officials approached the City requesting a resumption of the purchase of surplus water. At a May 6, 2005 meeting the City Council of Lake Oswego authorized resumption of sales to Tigard. Since then Tigard has purchased on average about 1-2 mgd. Discussion The City of Lake Oswego acquired permits from the State of Oregon in 1967 and then again in 1973 to divert water from the Clackamas River for municipal drinking water purposes. These permits allow the City to divert up to 38 mgd from the river. ►.AKE OSwfCO CITY COUNCIL SPECIAL MEETING Tuesday, November 14, 2006 7: 00 p. m. Council Chambers OREGON City Hall City Councilors 380 A Avenue Judie Hammerstad, Mayor Jack Hoffman, Council President Ellie McPeak AGENDA John Turchi Gay Graham Frank Groznik Also published on the internet at: ci.oswego.or.us Lynn Peterson Contact: Robyn Christie, City Recorder E-Mail: rhristie@ci.oswego.or.us Phone: (503) 675-3984 This meeting is in a handicapped accessible location. For any special accommodations, please contact Public Affairs, (503) 635-0236, 48 hours before the meeting. A dinner is scheduled from 6 to 7 p.m. in the Courtroom adjacent to the Council Chambers. 1. CALL TO ORDER 2. ROLL CALL 3. STUDY SESSION 3.1 Joint Meeting with the Tigard City Council and the Intergovernmental Water Board 4. ADJOURNMENT CABLE VIEWERS: This meeting will be recorded and rebroadcast at the following times on channel 28: • Friday, November 17 7:00 p.m. • Sunday, November 19 9:00 a.m. • Tuesday, November 21 12:00 p.m. CITY OF LAKE OSWEGO AGENDA REPORT SUMMARY MEETING DATE: November 14, 2006 SUBJECT: Lake Oswego/Tigard Joint Water Supply Study Motion: No council motion is requested. This meeting of the joint councils of the Cities of Lake Oswego, Tigard and the Intergovernmental Water Board of Tigard is to provide each elected body information about the preliminary findings of a study being conducted to determine the benefits and costs of a possible water supply partnership between Lake Oswego and Tigard. ESTIMATED FISCAL ATTACHMENTS: NOTICED (Date): IMPACT: • 1118/2006 Komarek STAFF COST: $ Council Report BUDGETED: Ordinance no.: Y N Resolution no.: FUNDING SOURCE: Finance Director approval Previous Council required for items with a consideration: fiscal impact. May 3, 2005; March 6, 2006; May 16, 2006 D RTMENT DIRECTOR CITY MA AGER i signoff/date signoff/date LAKE Osk,FCO CITY OF LAKE OSWEGO COUNCIL REPORT OREGON TO: Douglas J. Schmitz, City Manager FROM: Joel B. Komarek, P.E., City Engineer SUBJECT: Joint Water Supply Partnership Study with the City of Tigard DATE: November 8, 2006 Action No Council action is requested. This meeting of the joint city councils of the Cities of Lake Oswego, Tigard and the Intergovernmental Water Board (of Tigard) will provide an opportunity for staff and the City's consultant team to present preliminary findings from a study currently underway that is analyzing the costs and benefits of a possible water supply partnership between the two Cities. Background The City of Lake Oswego has a long history of sharing its surplus water supplies with the City of Tigard in addition to other cities and special water service districts operating within or adjacent to our Urban Service Boundary (USB). Tigard historically purchased the bulk of Lake Oswego's surplus water peaking in 1994/95 at about 4.5 million gallons per day (mgd). For a period of time between 2000 and 2005 surplus sales to Tigard ceased primarily due to water purchase contracts Tigard negotiated with other water providers including the City of Portland and Joint Water Commission. In May of 2005, Tigard officials approached the City requesting a resumption of the purchase of surplus water. At a May 6, 2005 meeting the City Council of Lake Oswego authorized resumption of sales to Tigard. Since then Tigard has purchased on average about 1-2 mgd. Discussion The City of Lake Oswego acquired permits from the State of Oregon in 1967 and then again in 1973 to divert water from the Clackamas River for municipal drinking water purposes. These permits allow the City to divert up to 38 mgd from the river. Council Report Page 2 of 3 32 mgd of that total has a "priority date" that precedes the priority date of the States in-stream water right meaning that in times of low river flows, the City's ability to divert water from the river for municipal use will take precedence over water needs for other beneficial uses in the river basin. In 2001 the City updated its Water System Master Plan. An important element of the plan is the forecasting of future service area population and concomitant water demands. The planning period for the forecasts was through build-out (approximately 2050). The population forecasts relied on data furnished by Metro and our own planning department and included an assumption that approximately 1200 acres of land in the Stafford Basin would come into the City's USB and thus be served by Lake Oswego. Based upon these population forecasts and applying historical per capita water consumption figures to population figures, estimates of water demands for the years 2001, 2020 and build-out were calculated. From this work, it was determined that peak day water demands at build-out for the City's USB including full development of the Stafford area, would approach 26 mgd. These figures have been refined through the conduct of the joint water supply study currently underway and its forecast demands are in the 24-26 mgd range. In 2006 the City's service area water demand for this last summer peaked at 14 mgd representing 88% of our maximum treatment capacity. Including water service to wholesale customers our peak day demands reached 16 mgd - the City's maximum treatment and deliver capacity in the current water system. In order to meet these demands, the City's system is operating at design parameters in excess of good practice 24/7 without any backup systems. The backbone of the City's supply system - its river intake, raw water transmission main, treatment plant and finished water transmission main are 40-years old: well past the halfway point of their design life. The City will need its next increment of new water supply within the next five (5) years. Prior to that time, several million dollars worth of improvements are needed to ensure the existing system components can continue to operate at maximum conditions. To supply the next increment of new water will require new transmission pipelines, river intake pumping and treatment capacity. The costs of these improvements will be substantial and planning and engineering activities necessary to bring this new capacity on-line must begin soon. Summary • The 2006 water demand forecasting effort has affirmed the validity of demand numbers estimated in the 2001 Water Master Plan. Under this premise, 12-14 mgd of water in excess of our build-out needs and authorized under our permits could be shared with others. • The City must begin the planning and engineering work necessary to bring additional new water supplies on-line within the next five years. The cost of improvements to deliver this new supply will be significant. • A goal of the Tigard City Council is to secure a long term source of water supply through an equity partnership rather than its historical practice of wholesale purchase contracts under which it has little or no control over the costs of water or certainty of supply. • Environmental interests are pressuring municipal water providers to relinquish their hold on unused water rights. HB 3038 resulted in new statutes governing the development Council Report Page 3 of 3 and use of water from waters of the state that support threatened and endangered fish stocks. • Municipal water providers must have certainty regarding their ability to access water in response to growing communities and to assure economic development. Sharing water in the region may help resolve the "tug-of-war" between people and fish. In other words, regional and sub regional intersystem connections between water systems may ameliorate environmental impacts and meets the water needs of growing communities. Policy Considerations From the above summary, several policy considerations are evident including: • Recognizing Tigard's desire to secure a long term source of water supply through a partnership arrangement and Lake Oswego's apparent surplus of available water, is a partnership between the two communities an idea whose time has come? • Lake Oswego's need for new water supply infrastructure is imminent. Recognizing that the costs to bring this new capacity on-line will be high, does it make sense to develop an economic strategy that would spread the costs of this new infrastructure over a larger rate base? • Cities need certainty of access to adequate supplies of water for public health and economic development. Within existing constraints to the use of water for public purposes, should communities with excess water rights find ways to share that water with those in need, or return the water to the stream for non-municipal uses? • As part of its overall water supply strategy, should Lake Oswego develop and implement aggressive water management and conservation ordinances, codes and/or programs to ensure sustainability of the resource and that water is used "without waste"? Conclusion Challenges to municipal water providers and water purchasers exist today that will create a paradigm shift in how water is managed and allocated in the Pacific Northwest. These challenges will not lessen with time. Opportunities will be created in response to these challenges. This joint water supply study between the Cities of Lake Oswego and Tigard is already being viewed in the region as a first step toward a holistic approach to meeting the water supply needs of Oregon communities. /jbk H:UOEL_K\TIGARD\COUNCRPT.joint.CC mtg. 11.14.2006.doc ` f,l.AK6pswfCO RrECEIVED November 7, 2006 NOV 0 8 2006 Mr. Chris Jordan, City Manager City of Tigard City Hall Administration 22500 Salamo Road West Linn, Oregon 97068 Re: City's of Lake Oswego and Tigard - Joint Water Supply Study COMMUNITY DEVELOPMENT Dear Chris: DEPARTMENT As you know, the City's of Lake Oswego and Tigard have jointly embarked upon a significant ENGINEERING study effort to evaluate and understand the potential benefits of forming a partnership to develop DIVISION additional water supplies from the Clackamas River basin. As a result of our early work efforts, we have come to realize potential benefits extend far beyond the boundaries of the two cities. By CITY OF example, our study has created interest by other water purveyors in the basin and the region as a LAKE OSWEGO first step toward developing a regional transmission system capable of making water available when and where it's needed by those who have access to sources of supply. Regional 380 A Avenue interconnections to municipal sources of supply are expected to result in more economic transport P.O. Boa 369 of water and improved ability to respond to events, manmade or natural, that might otherwise Lake Oswego disrupt drinking water supplies to local communities. Oregon 97034 503-635-0270 Of course you are aware that a significant portion of Lake Oswego's water supply and treatment Fax 503-635-0269 infrastructure is located within your City. As such, we recognize an obligation - one we willingly www.cioswego.or.us accept - to assist you and your council in understanding how this project could impact your community. To that end and in response to your suggestion, I have prepared the attached memorandum providing historical background and current perspectives regarding water supply issues facing the City's of Lake Oswego and Tigard. This information is intended to be shared with your Council as a general overview of our joint study effort. It will also serve to provide a baseline understanding of why Lake Oswego and Tigard have embarked on this effort and should adequately prepare them for a future, more comprehensive briefing that I and our consultant would like to provide with your approval and at your preferred schedule. If you have any questions Chris, please feel free to call me directly at 503.697.6588 or send me an email at: ikomarek@ci.oswe og or.us Sincerely, oel B. Komarek, P.E. City Engineer c: Doug Schmitz, City Manager /Craig Prosser, City Manager, City of Tigard Mark Knudson, Carollo Engineer's, P.C. Dennis Koellermeier, City of Tigard low /jbk LAKE Os~fCO Memorandum Community Development Department Engineering Division OREGON DATE: November 7, 2006 TO: Honorable Mayor Norm King West Linn City Council Chris Jordan, City Manager FROM: Joel B. Komarek, P.E., City Engineer SUBJECT: Lake Oswego and Tigard Joint Water Supply Study On March 6, 2006 the joint council's of Lake Oswego and Tigard signed an intergovernmental agreement to jointly fund a study of a possible water supply partnership to develop additional supplies of water from the City of Lake Oswego's source, the Clackamas River. The purpose of this memorandum is to provide West Linn council members with background information about the study: its drivers, possible outcomes and a timeline of when the study is anticipated to be complete. An ancillary purpose is to provide you with enough information that you will feel comfortable responding to general questions about the project from your constituents. This is also an offer by staff of the two agencies and our consultant team to provide you a more comprehensive briefing on our study effort at a future date as you may desire. Mindful that this is a busy time for local governments, I've attempted to be brief in the following discourse. If you need more information, please let us know and we'll accommodate your request as best we can. To begin with a short history of Lake Oswego's water system is necessary to set the context for subsequent information. An Historical Perspective on Lake Oswero's water supply • In 1925 the City of Oswego purchased the water supply system assets of the Oswego Lake Water, Light and Power Company for $15,000. The system consisted of 1 reservoir, 1 pump station and approximately 7-miles of pipelines. The source of supply was a spring and several small domestic wells. Council memorandum Page 2 of 4 • In 1965 the City Council commissioned an engineering study to identify a long term source of water supply to replace the system of wells the City had relied on for its drinking water. Source options evaluated included Portland's Bull Run system, the Willamette River, Clackamas River and an expansion of its well system. • In 1966 the Council selected the Clackamas River as its preferred source of supply and in 1967 secured a permit from the Oregon Water Resources Department (OWRD) to divert up to 32.3 million gallons per day (MGD) of water from the river. Later in 1973, a second permit was acquired allowing an additional diversion of 5.8 MGD. • By December 1968, the City had funded construction of its present day river intake structure on the Clackamas River, over 50,000 feet of large diameter water transmission piping, and a 10.8 MGD water treatment plant in West Linn (then unincorporated Clackamas County). These systems are still in service today. • In 1980 the City expanded its water treatment plant to the current day capacity of 16 MGD. The plant property totals 6.05 acres. In the mid-90's the City purchased an additional 3.3 acres to the south of the plant property on Mapleton Drive. • The water systems of West Linn and Lake Oswego are interconnected via an intertie/pump station facility located on Old River Road just north of Kenthorpe Way. This facility was constructed several years ago and jointly funded between the two cities. In 2001, Lake Oswego provided water to West Linn through this intertie for several months while seismic improvements were being made to West Linn's main supply line. • Today Lake Oswego serves water to its city residents and provides water to several water districts and cities through intergovernmental agreements. Wholesale customers are the cities of Portland, Tigard, and Tualatin, the Skylands Water Company, Lake Grove Water District, Rivergrove Water District, Glenmorrie Water Cooperative and the Alto Park Water District. Historically, wholesale sales represent about 3% of total annual consumption excluding sales to the City of Tigard. • The City has been a long standing provider of wholesale water to the City of Tigard. Supply to Tigard peaked in FY 94/95 at 4.5 MGD. Today Tigard receives on average about 1 to 2MGD. "Drivers" for the Study • Aging infrastructure - Lake Oswego's critical supply system components - water intake structure and pumps, raw and finished water transmission mains and water treatment plant - operate at the upper limit of best practices conditions 24/7 during the peak summer season. These components are approaching 40-years old. Recent studies and condition assessments of this critical infrastructure have identified approximately $5M worth of "capital triage" needs to upgrade these facilities. As this infrastructure continues to age, operating costs will also increase. • Retail water demands - Lake Oswego's in-city water demands during the peak season are approaching maximum treatment capacity. With or without Tigard as a partner, next year Council Memorandum Page 3 of 4 of economies of scale and spreading the costs of new capital and operating and maintenance costs over an expanded rate base. • Municipal water rights - HB 3038 upended historic precedent with respect to municipal water rights. New statutory law (ORS Chapter 537) and implementing Administrative Rules (OAR 315) concerning municipal water rights place water systems with undeveloped water rights in positions of grave uncertainty as regards planning for water demand growth, capital facilities needs and securing financing. Please refer to Exhibit `A' for a detailed discussion of the impacts to municipal water providers as a result of HB 3038. • Source options and reliability - Of increasing importance to water providers today are risks of supply interruption due to natural disaster or terrorist acts. Access to an alternate source of supply and system redundancy is a critical strategy that responds to these risks. The City of Lake Oswego currently does not have ready access to an alternate source of drinking water and has identified several potential vulnerabilities to the realiablity of its existing supply system. The "Regional Transmission and Storage Strategy" (RTSS) commissioned by the Regional Water Provider's Consortium (RWPC) in 1998, was developed partially in response to these concerns. The recommended strategy of linking supply sources e.g., Bull Run, Willamette, Clackamas and Trask/Bamey Reservoir system relies on a network of large diameter transmission mains capable of moving water throughout the region: north to south, east to west. The report suggests the best opportunity for developing these linkages will be realized through local partnerships. Lake Oswego and Tigard see this potential partnership as a first step in promoting regional water supply systems. • System ownership and control - Historically Tigard has relied on other purveyors for its water supply secured through wholesale purchase contracts. These contracts have left Tigard vulnerable to uncertain future costs and availability of long-term supplies. For the last several years, Tigard has been exploring opportunities to secure a firm source of supply and acquire ownership in a source of supply and the infrastructure that brings drinking water to their consumers. Relative to other options, a partnership with Lake Oswego may provide Tigard greater benefits. This study will help Tigard in their decision making process. • Regional benefits - A possible joint water supply system serving Lake Oswego and Tigard could provide benefits to others in the region Vis a Vis access to alternate sources of supply through regional transmission systems and opportunities for agencies with excess water rights to deliver their water to those in the region in need of new or supplemental supplies. Next Steps Our consultant has documented the findings of their efforts so far in several draft technical memoranda covering such subjects as: • Existing supply systems - capacity and condition • Current and forecast populations and water demands 0 Water rights and water availability Council Memorandum Page 4 of 4 • Supply system alternatives for source expansion • Source allocation scenarios The councils of Lake Oswego and Tigard will hold a joint study session on November 14`" and receive a presentation on preliminary findings of the study effort (see Exhibit `B' for a copy of the Agenda). This joint meeting will be one of two "policy maker" workshops planned as part of this study. In addition to these workshops, a strategic outreach and communications plan has been prepared to guide the flow and timing of information to study participants' citizens. The proposed plan emphasizes the importance of being inclusive in sharing information with all potential stakeholders including the West Linn council and Robinwood Neighborhood Association and to that end have identified such stakeholders in our communications plan. Our study effort is anticipated to culminate in February or March of next year. Prior to that time, we hope to have had an opportunity to meet with you and with representatives of the Robinwood Neighborhood Association. The development of final study findings will document the result of conversations with and feedback from all stakeholders in this project. Thank you for the opportunity to provide you this information about our study effort and water supply issues of local and regional concern. If you have any questions or need clarification on the subjects discussed herein, please let me know. c: Doug Schmitz, City Manager, Lake Oswego Craig Prosser, City Manager, City of Tigard Dennis Koellermeier, Public Works Director, City of Tigard Mark Knudson, Carollo Engineers, P.C. I EXHIBIT Clackamas River Water Right Permit Holders Detailed Permit Extension Background October 2006 • As early as 1913, the Oregon Legislature recognized the unique needs of municipal water providers and expressly confirmed the right of municipal water providers to acquire and hold water rights for reasonable future growth and for emergencies [ORS 540.610(4)]. For almost 100 years the Oregon Water Resources Department (OWRD) or its predecessor has granted such water rights for future water supplies. • The acquisition of water for future municipal water supply is unique. Municipal water providers are formed to provide a service and are obligated to serve their customers. This requires planning for water sources, treatment, storage and transmission on long- term horizons. Municipal water providers are also bound by Oregon's land use planning statutes, which require public facilities planning; by the requirements of infrastructure financiers; and by stringent environmental regulations such as the Endangered Species Act and the Clean Water Act. • Recognizing the unique circumstance of municipal water providers, Oregon's statutes have not only confirmed the right to acquire water, but they reflect a number of municipal water supplier preferences. In other states these preferences have been labeled by courts as the "Growing Communities Doctrine." In Oregon, the doctrine consists of a number of inter-related statutes that, if read together, provide preferences in the permitting, development, and appropriation of water. • Until recently, Oregon law required the holders of undeveloped municipal water use permits to request an "extension of time" every 5 years. These simple requests were regularly approved by OWRD without question. Over time, municipal water providers have relied on OWRD's actions and expended significant resources on planning, engineering, and legal fees with the expectation that these water right permits could ultimately be fully developed to meet the needs of growing communities and economic development. • In 1997, OWRD received advice from the Attorney General that the 5-year duration of permit extension approvals was not supported in law and that permit extensions should be for the time needed to fully develop the water right permit. Based on this advice, OWRD initiated an effort to develop a revised permit extension process. At the urging of the municipal water providers, OWRD agreed to develop a process that addressed the unique needs of municipal water supply development and established the Community Water Supply Work Group. • In the early stages of the work group process the water providers developed a persuasive legal argument that surface water municipal use permits are not subject to forfeiture or cancellation under Oregon s water right development statutes, and DRAFT 10/4/06 therefore permit extensions may be unnecessary altogether. Despite taking this legal position, the water providers agreed to cooperatively work toward developing a sensible permit extension process. • After 4 years of work group process, during which actions on municipal permit extensions were placed on hold, in November 2002 the Oregon Water Resources Commission adopted administrative rules that provide municipal water providers the opportunity to obtain a long-term permit extension but link access to "undeveloped" amounts of water to development of a comprehensive water management and conservation plan. These water management and conservation plans include a rigorous evaluation of current water management and conservation practices, the development of required water conservation measures and 5-year conservation benchmarks, and an analysis of future needs and water supply alternatives. • In a little over a year after the new permit extension/ water management plan process was implemented, the entire process was derailed. In April 2004 the Oregon Court of Appeals rendered an opinion that called into question OWRD's historic practices associated with the issuance of municipal water use permits. Specifically, the court struck down OWRD's practice of not applying the "start of construction" statutory provision in the granting of municipal water right permits. This ruling called into question the validity of hundreds of municipal water use permits throughout the state and directly impacted municipal water providers that relied on the actions of OWRD. Once again, the path for developing a municipal water use permit was uncertain and the situation begged for legislative action. • In 2005 HB 3038 was developed by the League of Oregon Cities, the Special Districts Association of Oregon, and the Oregon Water Utility Council to resolve the start of construction issue and to provide certainty in the development of existing municipal water use permits.,' n negotiations in the House a number of measures were added, including codification of the requirement to develop a water management and conservation plan as part of the permit extension process. • In the Senate, 11th hour negotiations were held to address the specific concern that use of these undeveloped (existing) municipal water use permits might wipe out a run of listed fish. Despite their water use already being regulated under the state and federal Endangered Species acts, the municipal water providers agreed to add language to HB 3038 requiring municipal permit extension applications (for permits issued prior to November 2,1998) to be reviewed by Oregon Department of Fish and Wildlife (ODFW), with conditions to ensure the undeveloped portion of the permit "maintains the persistence of listed fish species." • The negotiations on HB 3038 and floor statements by Representative Jenson and Senator Ringo regarding the "maintain persistence" language were unambiguous. This provision was to ensure that undeveloped municipal permits would not have a catastrophic impact on a run of listed fish species. As described on the floor of the Senate by Senator Ringo, "the definition of maintain the persistence of fish .....is a forecast of future population health stated in terms of the probability of extirpation." 2 DRAFT 1014106 A • From the start it was clear that implementation of HB 3038 and the "maintain persistence" provision would be difficult. Following passage of the bill, environmental interests party to the HB 3038 negotiations quickly moved away from what was agreed to. In the administrative rule process to implement HB 3038, OWRD was unwilling to adopt a definition of "maintain the persistence" that reflected the legislative intent. And, ODFW, which was charged with providing advice to OWRD on municipal permit extension applications, interpreted the "maintain persistence" provision to mean "do no further harm," and later concluded it meant something more akin to fish recovery. ODFW's interpretation is inconsistent with the legislative intent and inconsistent with past ODFW use of the term "persistence • ODFW's first attempt to review municipal permit extension applications and provide advice to OWRD has not gone well. In the review of nine municipal permit extension requests on the Willamette River, ODFW evaluated whether use of the undeveloped portions of the permits would maintain the persistence of listed species by considering fish recovery "flow targets" developed in an internal memorandum. The recommended target flows raise significant concerns, given the lack of data and the use of weak statistics, the unrealistic nature of the flows when compared to historic flows, and a clear recognition that the "target flows" could only be met through release of water stored in the federal storage projects in the basin. • In its evaluation of the nine municipal permit extension requests for the Willamette River, ODFW suggested there was a deficit fish flow need of 6,000 to 7,000 cubic feet per second in the month of June. Conclusion Significant financial resources have been or will be expended for the continued development of municipal water use permits. A clear and certain path must be established in order to provide water to growing communities. 3 LAKE OSWEGO / TIGARD WATER SUPPLY ANALYSIS EEXHI'BIT POLICYMAKERS WORKSHOP #1 TUESDAY, NOVEMBER 14, 2006 AGENDA 6:00 PM Dinner 7:00 1. Call to Order: Lake Oswego and Tigard City Councils, Intergovernmental Water Board 2. Roll Call 3. Introduction 4. Background Current water systems • L.O. / Tigard Water Supply Analysis 5. Water Supply Options 6. Values & Principles to Guide Decisions • Policymaker interviews • Values & Principles 7. Preliminary Research • Intake / raw water facilities • Treatment plant • Finished water facilities • Timing • Environmental / other considerations • Q&A / discussion 8. Public Participation • Strategic Outreach & Communications Plan 9. Next Steps • West Linn City Council briefing • Public meetings • Policymakers Workshop #2 9:00 PM Adjournment: City Councils and Intergovernmental Water Board H:UOEL_K\TIGARD\Partidpants Agenda_Policymakers Workshop_111406.doc 11/07/06 11:29 AM Lake Oswego / Tigard Water Supply Analysis Values & Principles Secure Lake Oswego's and Tigard's water future, ensuring both communities can meet their long-term growth needs. Demonstrate cost savings and favorable rates when compared with other supply options. Retain / obtain ownership interest in long-term drinking water resources. Retain and perfect Lake Oswego's full Clackamas River water rights. Design the Lake Oswego / Tigard partnership to offer parity - fairness - balance. Develop redundant water sources, for backup and emergencies. Promote equitable distribution of natural resources throughout the region. Communicate openly with policymakers and the public, educating them on the communities' current water sources, water system assets, future infrastructure needs and various supply options. Nurture cooperation among Lake Oswego, Tigard and surrounding communities that is beneficial to drinking water and other public services. Expand Lake Oswego / Tigard leadership in regional water supply decisionmaking. C:\DOCUME-1\Cathy.000\LOCALS-1\Temp\Values and Principles.doc 11/13/2006 11:00:05 AM