City Council Minutes - 07/17/2007 Agenda Item No. 4j , 1
For Agenda of q. ! I D2
TIGARD CITY COUNCIL MEETING
Meeting Minutes
July 17, 2007
Mayor Dirksen called the meeting to order at 7:01 p.m.
Roll Call
Tigard City Council present:
Naive Present Absent
Mayor Dirksen ✓
Council President Sherwood ✓
Councilor Buehner ✓
Councilor Wilson ✓
Councilor Woodruff ✓
Lake Oswego City Council present:
Name Present Absent
Mayor Hamrnerstad ✓
Council President McPeak ✓
Councilor Groznili ✓
Councilor Hennagin ✓
Councilor Jordan ✓
Councilor Johnson ✓
Councilor Turchi ✓
Tigard Intergovernmental Water Board present:
Name Present Absent
Chair Scheiderich ✓
Vice Chair Carroll ✓
Board Member Wlnn ✓
Board Alternate Henschel ✓
Tigard staff present: City Manager Prosser, Public Works Director Koellermeier, Water
Quality Supervisor Goodrich, City Recorder Wheatley.
Lake Oswego staff present: City Manager Schmitz, City Engineer Komarek, Conanunity
Development Director Lashbook, City Attorney Powell.
Special City Council
Meeting Minutes—July 17, 2007 page 1
Also present: Consultant Knudson of Carollo Engineers
Staff introduction: Public Works Director Koellermeier overviewed tine purpose of this
special meeting, which was to hear a presentation from Consultant Knudson regarding the
Lake Oswego Expansion and Water Partnership. The staff report outlining key facts and an
information summary is on file in the City Recorder's office.
In June 2006, the Cities of Tigard and Lake Oswego funded a study to determine the
technical, financial, and political feasibility of a water partnership. The focus of the
discussion at this special meeting was on the Lake Oswego Expansion and Water
Partnership. However, the City of Tigard and the Intergovernmental Water Board are also
evaluating other potential water supplies including the Tualatin Basin Water Supply Project and
development of Tigard-owned water rights associated tvidi the Willamette River Treatment and
Transmission Improvement Project.
City Engineer Komarek also made some introductory remarks and advised that Consultant
Knudson would be reviewing the project objectives for the study.
Consultant Knudson reviewed a PowerPoint presentation; copies of the slides are on file ui the
City Recorder's office.
Consultant Knudson, in response to an observation and inquiry from Council President
McPeak duruig a review of capital costs and timing of die initial supply scenarios, explained
how financial estimates were calculated to reflect future cost escalation and the resultant affect
to water rates.
During the review of the influence of conservation on cost and tithing of a Lake Oswego
only expansion Consultant Knudson responded to a question from Councilor Johnson and
advised conservation measures must be ramped up over time.
Other points reviewed included:
- How the study considered population growth.
- The study chid not consider the possibility of adjusting the Tigard Water District or
the Tualatin Valley Water District boundaries
- The study pointed to the importance of determining the tuning of when and how
much improvements should be made to the water system
- Consultant Knudson affirmed that conservation does help delay the need for
expansion, but there is a need to start conservation efforts now. There is the
potential to "buy about an extra eight years" to plan and snake financial decisions on
a system expansion.
- The overall cost scenarios are based on the amount of water used over the course of
a year (not just peak water use time periods).
- A review of water rights shows that Lake Oswego is ranked 6"' among jurisdictions
for senior water rights of 32 ingd since 1967. Lake Oswego also is ranked 12"' for 6
Special City Council
Meeting Minutes—July 17,2007 page 2
mgd in a jui 'or water right. Water rights under House Bill 3038 shifted significantly.
This Bill sets a new standard requiring"persistence" of fish species and applies to
undeveloped portions of e"Xisting permits to satisfy new instreain flows. Extensions
of water rights must satisfy new criteria. The City of Lake Oswego along with other
Clackamas Basin Water users contracted with Portland State University to create an
extensive modeling to estimate what would happen under different demand and
supply scenarios. Lake Oswego's existing water rights are of relatively high priority
as compared to other municipal users.
Financial questions were reviewed. Consultant l'�'_nudson,in response to the question
of"What is the hest deal for Lake Oswego?" concluded it would be a partnership
with Tigard for 38 mgd. The best deal for Tigard is dependant on llow the Portland
and Willamette options proceed; however, a partrnerslip with Lake Oswego would
result in lower future rates as compared to any other option.
Fuiancial benefits were reviewed: Lake Oswego would realize reduced capital cost,
reduced equivalent annual cost, lower future rate increases, and reduced financial risk
from consideration. Tigard would gain ownership of a long-term water supply and
realize lower rates.
- The next steps recormnended were to:
o Proceed with development of the draft partnership agreement for the Joint
'Water Supply project.
o Initiate a public outreach program.
After the PowerPoint presentation by the consultant, Tigard Mayor Dirksen opened die
floor to discussion.
Lake Oswego Mayor I-Iamrnerstad posed die question that based on the information
available at this time, are we comfortable in taking the next step? Or, should the
assumptions be questioned to the point where d-ie process should be started again?
Lake Oswego Council President McPeak responded that a fair amount of study has been
done on this issue and she hoped to keep moving. The assumptions have brought her to a
fairly clear choice among the alternatives; however, this is not the whole story. She pointed
out there is a tuning issue as well a lot of things that need to be discussed in a smaller sub-
group.
Lake Oswego Councilor Johnson noted her concerns with regard to population projections
including unincorporated areas. Lake Oswego City Engineer Komarek clarified assumptions
for this study,which includes property 111 Lake Oswego's southern service area boundary. If,
in tie future, this area is served by another water provider, then there would be additional
water for other uses in the region. A partnership would provide a larger rate base to share
capital costs.
Lake Oswego Councilor I-Iennagin noted earlier discussion about the benefit of an alternate
water supply. I Ie asked if dis meant there would be a second line from the pump station to
die water treatment or a second Pune parallel widh the existing line. Lake Oswego City
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Meeting Minutes—July 17, 2007 page 3
Engineer Komarek replied: In this partnership scenario there is an opportunity to look at
regional utter-connections not only between Lake Oswego and Tigard but for Lake Oswego
and the Clackamas system, the Portland system, and die Willamette system—all of these
sources could potentially be accessed through a transmission connection between Lake
Oswego and Tigard. Therefore, those sources would literally be connected depending on
other institutional arrangements or other interested parties who inight be willing to
participate in costs and even larger transmission mains could serve to bring water from
alternate sources.
Labe Oswego Councilor Hennagin said he had already sat through the essence of tonight's
presentation and based on the assurnptions presented by Consultant Knudson, the clear-cut
financial choice was to proceed with the partnerslip. He said he had not changed his mind;
however, he agreed with Lake Oswego Mayor F Iarrunerstad's statement that we are not in
the position to challenge Consultant Knudson's assumptions. To challenge tie assumptions
would necessitate hiring another consultant to go through another year of study, which
might reveal a different opinion. However, he doesn't think "we can afford the tune." He
said he came to this meeting with questions fiat were different than financial and some of
those questions have been allayed with reference to water rights and whether other agencies
(i.e., Damascus and Boring) have prior rights. In the future,water will become an
increasingly rartt resource accompanied by moral and philosophical implications, but these
cannot be addressed at flus point. Based on die presentation of the situation to date, he
advised he would be shirking his responsibility as an elected official if he didn't agree to
move ahead with the nest steps based on what he has seen so far.
Lake Oswego Councilor Jordan noted there has been discussion that perhaps Lake
Oswego's needs are not as urgent as Tigard's and to find ways to mitigate the need for Lake
Oswego. It was also questioned whether we are pushing ahead just because Tigard's
timeline is so tight. She said she thought there are defuhitely enough benefits for both cities,
given the assumptions (if tie assumptions are correct) that we need to explore this further.
We want to put into effect conservation measures,which may actually iunpact die size of the
system or the sway that the system can affect Tigard. We won't know how rnuclh that
conservation effort will reap for Lake Oswego until we get unto it. There are definite
reasons to move forward; it is a very positive step to share the water rights Lake Oswego
has. She said she thinks they can do a good job ul managing their current rights and while
sharing with others responsibly.
Lake Oswego Councilor Turchi said an economy of scale has been demonstrated as well as
an economy of sharing,which would be beneficial for both communities. IIe noted an
obligation to continue to explore the partnership. He added he would be interested to find
out how costs would be covered for additional capacity.
Intergovernimental Water Board Member Henschel advised he has been on the Tigard Water
District Board for only two weeks. IIe said he would need a lot more background
information. IIe has looked at tie study and said it was interesting. He advised that many
Special City Council
Meeting Nlunutes—July 17, 2007 page 4
of the other Tigard plater District board members are new and will need to be trained very
quickly.
Tigard Public Works Director Koellermeier responded that conservation in the Tigard water
service area would not impact the Tualatin River flows in Lake Oswego.
Intergovernmental Water Board Member Winn said he was very interested in retaining a
relationship with Lake Oswego and the studies have confirmed his feelings.
Intergovernmental`dater Board Member Carroll noted we are at the same point the were at
ten years ago with the difference being that we now have the opportunity for an
economically and politically feasible partnership. He said he supported continuing the
process, noting that this is the closest we've gotten for a water source.
Intergovernmental Water Board Chair Scheiderich referred to a government study about to
be undertaken for the future of Iagg Lake as well as the Wilsonville/Tualatin Valley Water
District water situation. I Ie said he thought the tiimehne for the Lake Oswego/Tigard
option was too aggressive.
Tigard Councilor Wilson said he was uncomfortable with attempting to precisely predict
demand 40 years from now. I Ie said it was safe to say that Tigard and Lake Oswego will
need more capacity fairly soon. He said he was also uncomfortable with attempting to
predict capital improvements precisely since costs always seem to be higher than estimated.
In response to his question about whether some of the capital construction could be done
incrementally as needed, Consultant Knudson said some construction (i.e., underground
pipes) cannot be done incrementally, but the treatment plant could be constructed in a
modular fashion.
Tigard Councilor Woodruff said he has been a fan of this option since it first came on the
table. While Tigard won't run out of water next year (we have a contract with Portland until
2016), he would feel better if additional water sources were identified. He said he was
pleased that, so far,Lake Oswego in interested 'n proceeding with the next steps on this
option.
Tigard Council President Shenvood noted this is the same option that was on the table 16
years ago and then it fell apart. She noted concern about legislative changes with reference
to water rights that are not used. She supported corning together with wort:groups and
establishing a timeline.
Tigard Councilor Buehner referred to her service on the Tigard Water Board and reviewed
options that had been explored in die past. She urged addressing this issue as quickly as
possible with a final decision made within the nett 18 months on the Tigard/Lake Oswego
partnership. She stated it would be foolish for either city not to go ahead as this is a good
proposal. She said that Tigard needs to make a decision on Hagg Lake. Tigard cannot wait.
Special City Council
Meeting Minutes—July 17, 2007 page 5
Lake Oswego Mayor I ammerstad suggested the formation of a subcommittee to look at a
number of things including governance structure. She said she was uncomfortable with the
timeline because the City of Lake Oswego has issues on an upcoming election that are
unfriendly to the city. The tiFneline is almost overwhelming for Lake Oswego because of
oilier issues they are addressing. She said it appears that this partnership would not be
controversial since it looks as if it could be of benefit in the long nun and represents a
rational way to move forward. She said Lake Oswego would like more time to digest the
material presented.
Tigard Mayor Dirksen said he was encouraged by what he heard tonight from the
consultants, staff, and the representatives of the other jurisdictions. He said there is time to
work through the issues and advised that additional time would give the opportunity to work
some more on conseivation efforts. Tigard does not need to have a water resource until
2016; therefore, the only ding that needs to move fotward quuckly is the political decision to
coinnnit to this path and then develop the partnership agreement. He agreed a task force
should be appointed to discuss any "sticking points." The task force will report its fundings
to the City Councils.
Tigard Public Works Director Koellermeier said the working group needs to address
decisions abouehow to guide the public outreach process. In response to a question from
Tigard Public Works Director Koellermeier,Lake Oswego Councilor Hennagin and Tigard
Mayor Dirksen agreed it would be a good idea for each City Council to jointly forth due
"charge" statement for the task force. There was agreement to create a task force with
membership as follows:
Lake Oswego Councilor Turchni
Lake Oswego Council President McPeak
Tigard Councilor Woodruff
*Tigard Councilor Sherwood
Intergovernmental Water Board Chair Scheiderich
='Intergovernmental Water Board Member Buehner
�J Recorder's Nole. Al rheJp-6,24, 2007, Tigard Cid,Cowicil rneelurg,llllayor-Dirk-sen noted that lbree of
the Liboi)o iri(lri)rtlrral.r aiv TiSanl Ci�y Coirircrl preiribei-s. Il%*oodi-ie, Shenpoo[I eiiid Bitelrrrel. This represents
a grrorn»r of the Tigard Ciy Council and would also need to he policed also as a Tigard City Council
meelirrg. Councilor Sheravaod has agreed tlral she rvorr/d nol serve on this Task Force.
Councilor Woodruff requested that staff review the timeline to determine if there is some
flexibility to move the deadline out a few months. Public Works Director Koellermeier
advised that the staff members would review the ti neline as requested.
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Meeting Minutes—July 17,2007 page 6
Meeting adjourned at 9:12 p.m.
(?C7Lt
Catherine Wheatley, City Recorder
Attest.
Mayor, C4y of Tigard
Date: v
T
Special City Council
Fleeting Nli nutes—.July 17,2007 page 7