07/09/2008 - Packet Completeness Review
for Boards, Commissions
and Committee Records
CITY OF TIGARD
Intergovernmental Water Board
Name of Board, Commission or Committee
S 2ocD
Date o Meeting
To the best of my knowledge this is the complete meeting packet. I was not the meeting
organizer nor did I attend the meeting;I am simply the employee preparing the paper
record for archiving.This record came from Greer Gaston's office in the Public Works
Building.
Kristie Peerman
Print Name
ALC�� E"4,�
Signature
3 /2-8/.2o,3
Date
Intergovernmental Water Board — Agenda
SERVING TIGARD, KING CITY, DURHAM AND THE UNINCORPORATED AREA
MEETING DATE: Wednesday,July 9, 5:30 p.m.
MEETING LOCATION: Tigard Public Works Building
8777 SW Burnham Street
Tigard, OR 97223
1. Call to Order, Roll Call and Introductions
Call the meeting to order, staff to conduct roll call.
2. Approval of Minutes —June 11, 2008
Action: Motion to approve the June 11, 2008 minutes.
3. Public Comments
Call for comments from the public.
4. Public Hearing - Consider a Resolution Recommending the City of Tigard Approve the
Water Partnership Intergovernmental Agreement Regarding Water Supply Facilities, Design,
Construction, and Operation, Between the City of Tigard and the City of Lake Oswego -
Dennis Koellermeier
a. Open Public Hearing
b. Summation by Public Works Department
C. Public Testimony
d. IWB Discussion
e. Close Public Hearing
f. IWB Consideration: Resolution No. 08-01
5. Discussion on Rewriting/Revising 1993 Intergovernmental Agreements between Durham
and the City of Tigard, King City and the City of Tigard, and the Tigard Water District and
the City of Tigard - Continued - Commissioner Carroll
Action: No action required.
6. Water Supply Update - Mr. Goodrich
7. Informational Items
■ Update on Tigard Water District/City of Tigard Lawsuit
8. Non-Agenda Items
Call for non-agenda items from Board.
INTERGOVERNMENTAL WATER BOARD AGENDA—JULY 912008
City of Tigard 1 13125 SW Hall Blvd.,Tigard,OR 97223 1 503-639-4171 1 www.tigard-or.gov I Page 1 of2
9. Future Agenda Items
■ Consider making a recommendation on the First Restated Intergovernmental Cooperative
Agreement Creating the Willamette River Water Coalition.
■ Presentation by Washington County planning staff regarding Areas 63 and 64.
■ Policy regarding extension of water services outside existing Tigard Water Service Area
boundaries.
■ Review:
- Proposed revisions to the credit for leak policy.
- Proposed revisions to the Billing and Collection of Utility Charges section of the Tigard
Municipal Code.
- The billing insert policy.
10. Next Meetings:
■ August 13, 2008, 5:30 p.m.
Tigard Public Works Building, 8777 SW Burnham Street, Tigard, Oregon
11. Adjournment
Action: Motion for adjournment
Executive Session
The Intergovernmental Water Board may go into Executive Session. If an Executive Session is called to
order, the appropriate ORS citation will be announced identifying the applicable statute. All discussions are
confidential and those present may disclose nothing from the Session. Representatives of the news media
are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose any
information discussed. No Executive Session may be held for the purpose of taking any final action or
making any final decision. Executive Sessions are closed to the public.
INTERGOVERNMENTAL WATER BOARD AGENDA—JULY 99 2008
City of Tigard 1 13125 SW Hall Blvd.,Tigard,OR 97223 1 503-639-4171 1 www.dgard-or.gov I Page 2 oft
Sign-in Sheet
Intergovernmental Water Board Meeting
Date: 7,"*/0'A Sao"
Name Do you wish If yes, please give your address
please print to speak to
the Board?
John Q. Public Yes 13125 SW Hall Blvd.
Tigard OR 97223
Intergovernmental Water Board (IWB)
Meeting Minutes
July 9, 2008
Tigard Public Works Building
8777 SW Burnham Street
Tigard, OR 97223
Members Present:
Gretchen Buehner Representing the City of Tigard
Patrick Carroll Representing the City of Durham
Julie Russell Representing the Tigard Water District (Arrived 5:35 p.m.)
Bill Scheiderich Member At-Large (Arrived 6:15 p.m.)
Dick Winn Representing the City of King City
Members Absent: None
Staff Present: Public Works Director Dennis Koellermeier
Water Quality & Supply Supervisor John Goodrich
IWB Recorder Greer Gaston
Note: Agenda items are recorded in the minutes in the order they were
considered. This order varies from the agenda, thus the discrepancy in
numbering.
1. Call to Order, Roll Call and Introductions
Commissioner Carroll called the meeting to order at 5:33 p.m.
2. Approval of Minutes —June 11, 2008
Commissioner Buehner motioned to approve the June 11, 2008 minutes; Commissioner
Winn seconded the motion. The minutes were approved by unanimous vote of the
Commissioners present, with Commissioners Buehner, Carroll, and Winn voting yes.
3. Public Comments: None
8. Non-agenda Items
Commissioner Buehner presented two non-agenda items.
She distributed correspondence between Tigard City Manager Craig Prosser, Tigard
Water District (TWD) Chair Ken Henschel, and herself regarding consideration of the
Tigard/Lake Oswego water partnership intergovernmental agreement (IGA). The
correspondence is on file in the IWB record.
Note: Commissioner Russell arrived at 5:35 p.m.
Intergovernmental Water Board Minutes July 9,2008
1
Commissioner Buehner expressed concern that Mr. Henschel said he did not
understand how the process of considering the IGA worked. She suggested he should
be aware of the procedure since he had participated in previous meetings where the
same process had been followed.
Commissioner Buehner mentioned Mr. Prosser attended the TWD's Monday night
meeting, waited quite some time while the TWD was in executive session, and ultimately
went home. Commissioner Buehner said she had informed Mr. Henschel that Mr.
Prosser would be in attendance. Commissioner Russell replied the TWD was not aware
of Mr. Prosser's presence until the TWD came out of executive session.
Commissioner Buehner's second non-agenda item related to a legal opinion prepared by
the City of Tigard's attorney. Commissioner Buehner summarized the opinion. With
regard to which member jurisdiction(s) should sign the water partnership
intergovernmental agreement, the attorney advised the City of Tigard is the appropriate
entity to execute the agreement since the agreement involves real property outside the
original district. She continued by saying ownership interest needed to be tied to the
bondable entity; no credible bonding agency would issue bonds where there's ownership
by a jurisdiction that is not able to be bonded.
The Board briefly discussed whether the TWD and the Cities of Durham and King City
could be bonded. Commissioner Russell said the TWD has bonding authority.
Commissioner Buehner questioned this statement and suggested bond counsel should
be consulted.
4. Public Hearing - Consider a Resolution Recommending the City of Tigard
Approve the Water Partnership Intergovernmental Agreement (IGA) Regarding
Water Supply Facilities, Design, Construction, and Operation, Between the City of
Tigard and the City of Lake Oswego
a. Open Public Hearing
Commissioner Carroll opened the public hearing.
b. Summation by Public Works Department
Mr. Koellermeier said the City of Tigard staff recommendation was for the IWB to
execute Resolution 08-01 and for the IWB member jurisdictions to execute their
respective resolutions in support of the water partnership IGA. Mr. Koellermeier
summarized documents related to the agreement.
The Board discussed:
■ Providing the rate comparison data to member jurisdictions.
■ How the existing Portland water contract will work in conjunction with
bringing the Tigard/Lake Oswego water source online.
■ How the bonding process might work. Bonds will likely be issued as the
money is needed. The City of Tigard will seek the advice of bond counsel
to determine the best financing strategy.
■ All components in the water system will be built to accommodate 32
million gallons of water per day (mgd) and critical components will be built
to 38 mgd.
• Current water rate increases of seven percent annually may be sufficient
to cover the cost/bonds for the next two years. There will be a rate
package associated with the bonds.
• The fact that Tigard would still be purchasing water from Portland while
also financing the water partnership project. Once the water partnership
projects are completed and Tigard's water source switches to Lake
Intergovernmental Water Board Minutes July 9,2008
2
Oswego, Tigard will be begin paying operation and maintenance costs.
However, the City will no longer need to purchase water from Portland.
Operation and maintenance costs are expected to be less than the cost of
purchasing water from Portland.
■ A water conservation management plan related to Lake Oswego's water
rights and conservation pricing will be required by the state.
Note: Commissioner Scheiderich arrived at 6:15 p.m.
■ The sale of surplus water in Article 11. The water partnership provides for
the right to sell surplus water. Each partner has the right of first refusal to
purchase surplus water from the other. The partnership can also sell
excess water to other entities. The details of an outside a sale were
discussed.
■ The methodology used in Exhibit 7, Allocation of System Improvement
Costs to Parties.
c. Public Testimony
Phil Decker, 14540 SW 148th Place in unincorporated Bull Mountain, said he
attended the Tigard Water District (TWD) meeting on Monday night. He reported
the TWD discussed ways to "bust, or interfere with, or get some, some leverage"
regarding its role in the water partnership. Aside from a few minor details, the
TWD's attorney referred to the agreement as well-written and comprehensive.
The attorney advised against attempts to derail the agreement.
Commissioner Russell countered the TWD had not sought to derail the
agreement. She said the TWD had called a special meeting because she was
not comfortable, nor did she think state law allowed her to act without a vote of
the TWD. She confirmed the TWD's attorney said the agreement was well-written
and very comprehensive. Commissioner Russell distributed a list, dated July 9,
2008, of issues and concerns regarding the agreement on behalf of the TWD.
This list is on file in the IWB record. She said the TWD had authorized her to
move forward with the agreement.
e. Close Public Hearing
Commissioner Carroll closed the public hearing.
d. IWB Discussion
Commissioner Russell inquired about member jurisdiction liability and if member
jurisdictions were indemnified. Commissioner Scheiderich responded the
provider assumes responsibility.
Commissioner Russell inquired whether the Tigard City Council would hold
hearings on the rate structure. Commissioner Buehner said opportunities for
public comment on the rate structure would occur at the IWB and at the City of
Tigard's Budget Committee meeting. Mr. Koellermeier said IWB meetings would
be the appropriate place to hear public comment on this topic.
Commissioner Russell inquired about section 15.1 of the agreement allowing for
the agreement to be reviewed three years after initial expansion and for the
creation of an intergovernmental "Supply Agency." Commissioner Buehner
replied it was simpler to operate under an IGA as opposed to forming an agency.
However, at some point it may make sense to create an agency and this section
of the agreement leaves the option open. Mr. Koellermeier added operating
Intergovernmental Water Board Minutes July 9,2008
3
under an agency now might be awkward since Lake Oswego is using the existing
system.
Commissioner Buehner said it was a fair agreement which solidifies what was
discussed at the joint meeting with Lake Oswego.
f. IWB Consideration: Resolution No. 08-01
Commissioner Carroll read the title of Resolution 08-01, A RESOLUTION
RECOMMENDING THE CITY OF TIGARD APPROVE THE WATER
PARTNERSHIP INTERGOVERNMENTAL AGREEMENT REGARDING WATER
SUPPLY FACILITIES, DESIGN, CONSTRUCTION, AND OPERATION,
BETWEEN THE CITY OF TIGARD AND THE CITY OF LAKE OSWEGO.
Commissioner Winn motioned to approve the resolution; Commissioner
Scheiderich seconded the motion. The resolution was approved by unanimous
vote, with Commissioners Buehner, Carroll, Russell, Scheiderich and Winn
voting yes.
Commissioner Russell asked if future agenda items could be scheduled to allow
time for the item to go before the TWD prior to IWB consideration. She said the
TWD had already passed the sample water partnership resolution provided to
member jurisdictions.
6. Water Supply Update
Mr. Goodrich reported:
■ 231 million gallons of water are stored in aquifer storage and recovery wells, or
107 days of water at the 15,000 gallons per minute (gpm) rate.
■ Tigard is taking about 1250 gpm from the City's groundwater supply.
■ Current demand is between 9 to 10 million gallons per day, normal for this time of
year.
■ The observation well at Tigard High School has been capped, with only a few
punch list items remaining.
• The well on Titan Lane has been properly abandoned.
Commissioner Carroll requested the Water Supply Update item be placed earlier on the
agenda at future meetings. This way Mr. Goodrich would not have to wait to the end of
the meeting to give his report. This agenda item will follow the Public Comments item on
future agendas.
5. Discussion on Rewriting/Revising 1993 Intergovernmental Agreements (IGAs)
between Durham and the City of Tigard, King City and the City of Tigard, and the
Tigard Water District and the City of Tigard - Continued
Commissioner Russell said the Tigard Water District's (TWD's) attorney had proposed
some possible IGA revisions.
Commissioner Buehner said she would like to discuss how the agreement's expiration
date might be addressed. Commissioner Carroll proposed various options, and
Commissioner Russell suggested making the expiration date similar to language in the
Tigard-Lake Oswego water partnership intergovernmental agreement. Mr. Koellermeier
said that agreement was perpetual, unless either party decided to withdraw. The
Commissioners expressed support for a perpetual agreement. As an alternate
perspective, Mr. Koellermeier asked if the member jurisdictions would want to commit to
a perpetual agreement given Tigard's self-imposed restriction of not going to the
Intergovernmental Water Board Minutes July 9,2008
4
Willamette River without voter approval. Commissioner Carroll said he was not
concerned about this restriction and noted there was a procedure in place to get out of
the IGA if a member jurisdiction chose to do so.
Mr. Koellermeier suggested those Commissioners who had not submitted written
comments should do so. The comments would be organized and complied for further
review.
Commissioner Russell said the role of the IWB needs to be more clearly defined. She
questioned whether the IWB was a legal entity.
Commissioner Carroll advocated for the creation of a single IGA between the City of
Tigard and the member jurisdictions (TWD, Durham, and King City). The Commissioners
expressed support for this idea.
Commissioner Russell pointed out that the existing ICAs differ in terms of extending
service outside current boundaries.
Commissioner Carroll summarized the following issues to be resolved:
■ Term of the agreement
■ Points of ownership
■ Assets
■ Operate as independent water source so all benefits return to the rate payers
■ Disposition of property
Commissioner Russell distributed the Tigard Water District's Review and Initial
Comments for Amendment of the Tigard-IWB Member IGA dated July 9, 2008. This
document is on file in the IWB record.
7. Informational Items
■ Regarding the Tigard Water District/City of Tigard lawsuit, Mr. Koellermeier
reported the judge ruled in favor of the City. There is a 30-day appeal period.
■ With post tensioning completed, steps to finalize the new reservoir include:
- Covering the reservoir with gunite and an asphalt sealer.
- Chlorinating and testing.
- Backfilling and grading.
- Planting the area surrounding and atop the reservoir.
9. Future Agenda Items
• Presentation by Washington County planning staff regarding Areas 63 and 64.
Mr. Koellermeier reported Washington County has not scheduled this yet.
■ Consider making a recommendation on the First Restated Intergovernmental
Cooperative Agreement Creating the Willamette River Water Coalition.
Mr. Koellermeier reported revisions to this agreement are basically
housekeeping issues resulting from the departure of two partners from the
group.
■ Policy regarding extension of water services outside existing Tigard Water
Service Area boundaries.
■ Review:
- Proposed revisions to the credit for leak policy.
Mr. Koellermeier said this item was pending.
Intergovernmental Water Board Minutes July 9,2008
5
- Proposed revisions to the Billing and Collection of Utility Charges section of
the Tigard Municipal Code.
- The billing insert policy.
■ Commissioner Buehner inquired about the tenancy in common agreements. Mr.
Koellermeier said legal descriptions were being prepared.
10. Next Meeting
■ August 13, 2008, 5:30 p.m.
Tigard Public Works Building, 8777 SW Burnham Street, Tigard
11. Adjournment
At 7:14 p.m. Commissioner Buehner motioned to adjourn the meeting; Commissioner
Scheiderich seconded the motion. The meeting was adjourned by unanimous vote, with
Commissioners Buehner, Carroll, Russell, Scheiderich and Winn voting yes.
C"O
IWB Chair Greer A. Gaston, IWB Recorder
Date: /D,. ;2,000
Intergovernmental Water Board Minutes July 9,2008
6
I
Agenda Item No.: Z-
IWB Meeting Date: -7
Intergovernmental Water Board (IWB)
Meeting Minutes
June 11 , 2008
Tigard Public Works Building
8777 SW Burnham Street
Tigard, OR 97223
Members Present:
Gretchen Buehner Representing the City of Tigard
Patrick Carroll Representing the City of Durham
Julie Russell Representing the Tigard Water District
Bill Scheiderich Member At-Large
Dick Winn Representing the City of King City
Members Absent: None
Staff Present: Public Works Director Dennis Koellermeier
Water Quality & Supply Supervisor John Goodrich
IWB Recorder Greer Gaston
1. Call to Order, Roll Call and Introductions
Commissioner Carroll called the meeting to order at 5:36 p.m.
2. Public Comments: None
3. Update on the Lake Oswego/Tigard Intergovernmental Agreement (IGA)
Regarding Water System Facilities, Design, Construction, and Operation -
Dennis Koellermeier
Mr. Koellermeier summarized a Tigard/Lake Oswego water partnership calendar which
was distributed to the Board. The calendar is on file in the IWB record. He advised
negotiations on the intergovernmental agreement (IGA)were proceeding nicely, but the
timeline had been pushed back a month. Mr. Koellermeier noted the delay was due to
Tigard and IWB scheduling issues and did not represent any indecision on Lake
Oswego's part. Tigard's final approval has been moved to early August. IWB member
jurisdictions are now scheduled to consider the IWB's recommendation on the IGA as
follows:
King City July 16
Durham July 22
Tigard Water District July 28
The Board briefly discussed water rights as they pertain to a May 15, 2008 Tigard Times
article entitled, "Tigard tied to Lake Oswego water protests." The article is on file in the
IWB record.
Intergovernmental Water Board Minutes June 11,2008
1
4. Discussion on Rewriting/Revising 1993 Intergovernmental Agreements (IGAs)
between Durham and the City of Tigard, King City and the City of Tigard, and
the Tigard Water District and the City of Tigard
Commissioner Scheiderich provided the Board with written comments on the Durham
IGA. These comments are on file in the IWB record.
The Board's discussion is summarized as follows:
Staff Member/ Comment
Commissioner
Carroll Suggested system assets and other assets (pipes, storage, buildings)
should all be considered water system assets. Should any of these
Section 4.A.(2) assets be sold, the proceeds should go back to the waters stem.
Scheiderich Advised the differentiation between system assets and other assets
was taken from state law related to withdrawal of territories from water
Section 4.A.(2) districts upon annexation of territory to a city. However, this is not
Section 4.6. exactly what occurred, because the whole area was not annexed, and
the Tigard Water District became a partner on the IWB.
Pointed out Section 4.B. contradicts Section 4.A.(2), where it says other
assets pledged to the use of the system. There is some logic to have
assets pledged to the member jurisdictions in which they reside. For
example, if a member jurisdiction leaves the partnership, that
jurisdiction will probably want to retain transmission lines, etc.
Said if everything were a system asset, it would take action of each
member jurisdiction to dispose of it. If a member jurisdiction planned to
go off on its own as a water supplier, or wanted to use a facility for a
different purpose, then it would not be in their best interest to turn
everything into a system asset or pledge everything to the use of
Tigard.
Carroll Asserted if all the ratepayers have paid for an asset, then the asset
should benefit the waters stem.
Scheiderich Said, on the other hand, jurisdictions maximize their discretion by
calling it an other asset.
Koellermeier Added member jurisdictions would likely not want assets obtained by
donation to be considered system assets.
Buehner Said the majority of the cost of infrastructure improvements
(transmission lines, meters, etc.) was borne by developers and
builders.
Carroll Countered ratepayers subsidize the system to some degree.
Asked if the agreement could be written to:
■ Consider everything a system asset provided all member
jurisdictions are participating. He suggested using the tenants in
common approach that was employed for the water building and
Canterbury property.
• Establish rules for how system assets are treated should a
member jurisdiction withdraw.
Koellermeier Said the existing IGAs spell out how assets should be treated if a
member jurisdiction withdraws.
Intergovernmental Water Board Minutes June 11,2008
2
Winn Questioned why the Board wanted to change the existing IGAs, and
suggested the member jurisdictions may not be able to reach
agreement and working through the changes may be more trouble than
it's worth.
Buehner Stated real property (land) and personal property (transmission lines)
are treated differently under the law.
Koellermeier Said if everything were considered a system asset, the transmission
lines within the various member jurisdictions would be jointly owned via
a tenancy in common agreement by all the partners.
Advised assets were described in the 1994 Tigard Water District
System Assets and Liabilities Final Report.
Carroll Suggested adding language to the new agreement stating proceeds
from the sale of surplus property would be placed in the water capital
improvement fund.
Koellermeier Countered if a member jurisdiction wanted to privatize the operation
and maintenance of their water system, it would not be in their best
interest to place proceeds into the water capital improvement fund.
Suggested the Board proceed by hearing all the concerns of the
member jurisdictions. Those concerns could then be shared with legal
staff, who could draft language to address the concerns.
Russell Advised the Tigard Water District was reviewing the IGAs.
Carroll Brought up the duration of the agreement and suggested the
agreement be extended.
Russell Proposed the extension be tied to the upcoming Tigard/Lake Oswego
water partnership IGA. The assets resulting from that agreement also
need to be addressed, since member jurisdictions will not sign the
Tigard/Lake Oswego water partnership IGA.
Koellermeier Suggested member jurisdictions would be included in the Tigard/Lake
Oswego water partnership either:
■ Through their recommendation of the IGA based on an
amendment to the capital improvement plan.
■ Through their recommendation on a long-term water contract.
Winn Said the IWB was advisory to the City of Tigard.
Koellermeier Suggested the definition and role of"advisory board" be further clarified
in the new agreement.
Scheiderich Explained the existing voting requirements were the same whether the
Tigard/Lake Oswego water partnership IGA was considered as an
amendment to the capital improvement plan or as a long-term water
contract.
The Board entered into a discussion about who would own the assets and supply
contract associated with the Tigard/Lake Oswego water partnership IGA. Mr.
Koellermeier reported each member jurisdiction would be asked to consider a resolution
supporting the agreement. It was determined three of the four member jurisdictions
would need to approve the IGA. Commissioner Carroll said in this role, the IWB served
as more than an advisory board.
Commissioner Russell noted the existing IGAs say the capital improvements become
the property of the jurisdiction in which they are located. Commissioner Buehner
explained Tigard would have a tenants in common interest in the Lake Oswego facilities.
Intergovemmental Water Board Minutes June 11,2008
3
With regard to the Tigard/Lake Oswego water partnership IGA, Mr. Koellermeier said
Tigard will be contractually obligated by the 1993 IGAs to provide water to all the
member jurisdictions equally. Since ratepayers from all member jurisdictions would fund
the improvements associated with this agreement, Commissioner Carroll asked why
each member jurisdiction wouldn't own a percentage of the assets. He also asked if a
member jurisdiction withdrew, why would they not be compensated for their share of the
cost of the improvements.
Mr. Koellermeier responded Lake Oswego had been clear that it only wanted to deal
with Tigard. Tigard cannot assign its liabilities. Should a member jurisdiction choose to
withdraw, the agreement recognizes they have ownership need use of the existing
systems. The parties would need to agree upon a way to co-use the system.
Commissioner Scheiderich added the agreement does not allocate percentages of
ownership.
Note: Commissioner Scheiderich left the meeting at 6:39 p.m.
Commissioner Buehner confirmed Commissioner Carroll was suggesting everything be
considered as a system asset; no city would own any percentage of any of the assets
individually. Commissioner Carroll added ownership would only be significant if a
member jurisdiction wanted to convert their ownership to some monetary value.
Commissioner Carroll reiterated everything in the water system today should remain in
the system in some form. If a member jurisdiction withdraws, there needs to be a
mechanism in place to assign value for the system assets the member jurisdiction paid
for.
Since assets created by virtue of the Tigard/Lake Oswego water partnership IGA are
outside the Tigard Water Service Area boundaries, Commissioner Buehner suggested
the assets could be addressed by an amendment to the existing IGAs. With regard to
these assets, she proposed the amendment discuss how ownership interest, less
depreciation, would be calculated in the event a member jurisdiction decided to
withdraw.
Commissioner Carroll commented on the existing 1993 IGAs:
Staff Member/ Comment
Commissioner
Carroll Requested the contradictory language in these two sections be
reconciled.
Section 4.A.(2)
b. &
Section 4.13.
Note: Later in the meeting, (See Item #9), the Board reopened this discussion and
talked about how to submit changes to the IGAs and extending the agreements
indefinitely.
Mr. Koellermeier pointed out a discussion of assets should also include a discussion of
liabilities. With regard to Commissioner Buehner's suggested amendment, he said
member jurisdictions would be responsible for the liability that Tigard incurs on their
behalf. If a member jurisdiction wanted to withdraw, they would be responsible for the
Intergovernmental Water Board Minutes June 11,2008
4
liability. Commissioner Russell countered Tigard does not have taxing authority for any
of the other member jurisdictions.
As an example of the relationship between assets and liabilities, Mr. Koellermeier
provided the following theoretical scenario:
• A group buys an asset in another city.
■ As a member of the group, partner A has a proportional interest in the asset.
■ A $50 million revenue bond is sold to finance the asset.
Five years later, partner A decides to withdraw from the group.
■ There is another 15 to 20 years of debt service remaining on the revenue bonds
and partner A has terminated their revenue stream.
Commissioner Carroll inquired whether this meant there was a trade-off between having
ownership in an asset and avoiding liability.
Note: Later in the meeting, (See Item #9), the Board reopened this discussion.
Commissioner Winn said the City of Tigard delivers water to King City through a
contractual agreement (1993 IGA); Tigard is King City's water source. He advocated for
a "hands off' or "arms length" relationship with Tigard. Commissioners Russell and
Carroll advocated for a more active role with regard to the water supply.
The Board briefly discussed whether the 1993 IGAs represented a water contract or
some other type of agreement.
5. Water Supply Update
Mr. Goodrich reported:
■ Consumption has returned to normal (6 million gallons per day) following a short
period of hot weather.
■ Four million gallons per day of groundwater were used during the hot weather.
■ Water quality is tested before any source is brought online.
6. Informational Items: None
7. Non-Agenda Items: None
8. Future Agenda Items
■ Make a formal recommendation on the Lake Oswego/Tigard intergovernmental
agreement.
■ Presentation by Washington County planning staff regarding Areas 63 and 64.
■ Policy regarding extension of water services outside existing Tigard Water
Service Area boundaries.
■ Review:
- Proposed revisions to the credit for leak policy.
- Proposed revisions to the Billing and Collection of Utility Charges section of the
Tigard Municipal Code.
- The billing insert policy.
Intergovernmental Water Board Minutes June 11,2008
5
9. Next Meeting
■ July 9, 2008, 5:30 p.m.
Tigard Public Works Building, 8777 SW Burnham Street, Tigard
In response to an inquiry, Mr. Koellermeier suggested the Commissioners and/or their
legal counsel send comments on the 1993 IGAs to Tigard staff who would combine the
comments into one document.
Commissioner Buehner asked if all the member jurisdictions were in favor of extending
the existing agreements indefinitely. Commissioner Russell said the Tigard Water
District had not considered this matter, so she couldn't comment. The other
Commissioners asked Commissioner Russell to obtain an answer from the Tigard Water
District. All other member jurisdictions committed to extending the agreement.
Commissioner Carroll requested legal counsel be consulted on the Lake Oswego asset
ownership versus liability issue. Commissioner Russell added changes or amendments
to the 1993 IGAs could also affect this matter.
10.Adjournment
At 6:47 p.m. Commissioner Carroll motioned to adjourn the meeting; Commissioner
Russell seconded the motion. The meeting was adjourned by unanimous vote, with
Commissioners Buehner, Carroll, Russell, and Winn voting yes.
IWB Chair Greer A. Gaston, IWB Recorder
Date:
Intergovernmental Water Board Minutes June 11,2008
6
Agenda Item No.: 4
IWB Meeting Date: 7- 9- 08
® MEMORANDUM
TIGARD
TO: Intergovernmental Water Board,City of Tigard,City of King City, City of Durham,
Tigard Water District
FROM: City of Tigard Public Works Director Dennis Koellermeier
RE: July 1,2008
DATE: City of Tigard/Lake Oswego Water_Partnership Agreement
The cities of Tigard and Lake Oswego have been working on a possible water partnership for the
past several years.The negotiations recently culminated in the development of a water partnership
agreement, known as the IntergovernmentalAgreement Regarding Water Supply Facilities, Design, Construction,
and Operation. Under the agreement,Tigard and Lake Oswego would jointly:
■ Expand Lake Oswego's water treatment facility.
■ Replace the existing river intake.
■ Construct a reservoir.
■ Upsize transmission lines.
■ Develop existing water rights and permits on the Clackamas River.
The improvements would allow Tigard and Lake Oswego to produce up to 38 million gallons of
water per day. Of this amount,Tigard would receive between 14 and 20 million gallons per day.
The Intergovernmental Water Board (IWB) and IWB member jurisdictions have been asked to
make a recommendation regarding the water partnership agreement.The following documents are
attached for your review:
1. City of Tigard Staff Report on the Tigard/Lake Oswego Water Partnership Agreement
2. The "Water Partnership Agreement" formally known as the Intergovernmental Agreement
Regarding Water Supply Facilities,Design,Construction,and Operation
3. A Summary of Lake Oswego-Tigard Water Agreement
4. Proposed Intergovernmental Water Board Resolution No. 08-01
5. Sample Resolution for IWB Member Jurisdictions
The water partnership agreement item is currently scheduled for final action by both the City of
Tigard and the City of Lake Oswego on August 5,2008.
The following additional items are available online at www.tigard-or.gov/waterpartnership:
1. Map of the Tigard Water Service Area
2. Water Supply Feasibility Project Study
3. Joint Water Supply System Analysis
4. An Executive Summary of the Joint Water Supply System Analysis
5. Minutes from Tigard/Lake Oswego/Intergovernmental Water Board Joint Meetings
1�
City of Tigard Staff Report on the
Tigard/Lake Oswego Water Partnership Agreement
The following staff report:
■ Provides a staff recommendation.
■ Summarizes the major benefits of the water partnership.
■ Gives some basic facts on the Tigard Water Service Area's future water needs and options
that were studied.
■ Supplies the history of our relationship with Lake Oswego on this project.
City of Tigard Staff Recommendation
Staff recommends the Intergovernmental Water Board execute Resolution No. 08-01 and IWB
member jurisdictions also execute their respective resolutions recommending the City of Tigard
approve the water partnership intergovernmental agreement.
Benefits of the Water Partnership
■ Quantity
Depending upon future water demand, this source, along with Tigard's groundwater and
aquifer storage and recovery wells, is expected to produce enough water to meet the needs
of Tigard water customers from the year 2016 to approximately 2035.
■ Quality,Taste and Appearance
Under the water partnership agreement,Lake Oswego's existing water treatment plant will
be transformed to a state-of-the-art facility. The new facility will:
- Employ the latest water treatment technologies.
- Provide greater control over water quality.
- Be better equipped to address future testing/treatment requirements and issues
related to aesthetics, such as taste and appearance.
The Clackamas River is an excellent raw water source and has a 100-year history of
supplying water to an ever-increasing population. This source,when coupled with a state-of-
the-art water treatment facility,will provide Tigard water customers with a reliable, high-
quality water supply for years to come.
■ Cost and Rates
Developing a new water source will be costly. The projects associated with the water
partnership are estimated to cost$136 million. Tigard's share of the improvements and cost
to buy into Lake Oswego's existing system is estimated to be $81 million. Although
expensive, the Lake Oswego waterpartnership is the least expensive option of all those
considered.
By developing our own infrastructure (treatment plant, transmission pipes,intake, etc.), a
portion of the project costs can be collected from future development. Although this will
help to offset steep increases in water rates,Tigard water customers can expect rates to
City of Tigard Staff Report on the Page] of 3
Tigard/Lake Oswego Water Partnership Agreement
nearly double over the next ten years as improvements are brought online. Following the
initial ten-year investment,water rates are expected to stabilize or even decrease slightly. In
comparison, if Tigard simply continued to purchase water via the Portland Water Purchase
Agreement,water customers could expect to see their water rates triple over the same time
period.
Future Water Needs and Options Studied
The Tigard Water Service Area (TWSA) includes the cities of Durham, King City, two-thirds of
Tigard and unincorporated areas to the south and west of Tigard. The City of Tigard is the water
provider for the TWSA and entities within this partnership are represented by the
Intergovernmental Water Board.
Tigard water customers excel at water conservation;over the past year, they have actually decreased
their water consumption from 88 to 84 gallons per person per day. But as the area's population
continues to grow, future water demand will be too great to simply conserve our way out of the
problem.
The TWSA's peak water demand can reach 13 million gallons a day,but as the population continues
to increase, that number is expected to reach 20 million gallons a day by the year 2040. Currently,
the service area receives its water from several sources, but these sources aren't capable of meeting
the growing demand for water.
The City of Tigard and Intergovernmental Water Board partners (Durham, King City and the Tigard
Water District) have studied these potential drinking water sources:
■ Lake Oswego Expansion &Water Partnership
Water Source: Clackamas River
■ Tualatin Basin Water Supply Project (Also known as the Hagg Lake Dam raise project)
Water Source: Trask and Tualatin Rivers
■ Willamette River Treatment&Transmission Improvement Project
Water Source: Willamette River
■ Purchase City of Portland Water
Water Source: Bull Run Watershed
Of these options, the Lake Oswego Expansion& Water Partnership appears to hold the most
promise of supplying the majority of our future water needs.
History behind the Water Partnership
September 2005
The Cities of Tigard and Lake Oswego completed the Water Supply Feasibility Project study. This
study concluded that it would be possible for Lake Oswego and Tigard to jointly develop Lake
Oswego's capital infrastructure and remaining water rights. Both parties would benefit from such a
partnership. Tigard would establish ownership in a future water source;Lake Oswego would protect
its water rights and reduce costs since Tigard would fund a portion of the improvements.
City of Tigard Staff Report on the Page 2 of 3
Tigard/Lake Oswego Water Partnership Agreement
March 2006
The Cities of Tigard and Lake Oswego funded the Joint Water Supply System Analysis.This plan
investigated the technical, financial and legal issues influencing the potential partnership. Ultimately,
the plan concluded Tigard and Lake Oswego would each benefit from jointly expanding the Lake
Oswego water system.
November 2006
The Cities of Tigard and Lake Oswego and the Intergovernmental Water Board held a joint meeting
to have a preliminary discussion of the water partnership and provide input on the Joint Water
Supply System Analysis.
July 2007
The Cities of Tigard and Lake Oswego and the Intergovernmental Water Board held a joint meeting
to receive the preliminary results of the Joint Water Supply System Analysis. Based on the analysis,
these agencies recognized the potential advantages of the water partnership. Representatives from
each of the parties formed a work group to further explore the water partnership.
December 2007
The Cities of Tigard and Lake Oswego and the Intergovernmental Water Board entered into a
Memorandum of Understanding (MOU) developed by the work group. The MOU:
■ Committed the parties to work cooperatively, through staff, to develop an agreement
detailing the terms of a water supply partnership.
■ Identified specific issues for discussion.
• Committed to a mutually agreeable recommendation by June 2008.
■ Pledged mutual support of Lake Oswego's efforts to secure extensions of its water rights.
April 2008
The Cities of Tigard and Lake Oswego and the Intergovernmental Water Board held a joint meeting
to discuss the major points of the water partnership agreement.
May 2008
The City of Tigard held an open house to educate and seek the input of Tigard water customers.
July 2008
The Intergovernmental Water Board will hold a public hearing and make a recommendation on the
water partnership agreement on Wednesday,July 9 at 5:30 p.m., in the Tigard Public Works
Building, 8777 SW Burnham Street,Tigard.
August 2008
The Cities of Tigard and Lake Oswego are scheduled to consider the water partnership agreement
on August 5, 2008.
City of Tigard Staff Report on the Page 3 of 3
Tigard/Lake Oswego Water Partnership Agreement
SUMMARY OF LAKE OSWEGO-TIGARD WATER AGREEMENT
Following the Joint Council presentation on April 15,2008,respective City Staff
have continued to negotiate a draft agreement to capture the points discussed by the
Councils. The following are outline points for a two-party intergovernmental agreement
to proceed with phased design,permitting,and construction of water system
improvements. The first phase will take the parties through construction of the Initial
Expansion. After construction and a short period of operation,the parties will meet to
discuss whether a governance structure should be modified. Long Term Expansion or
other projects are left to the future depending on demand.
PHASE 1 (2008-2016)
A. Project Description(Definitions,Article VI, Article IX)
• Identification of current water supply assets;
0 Identification of assets to be built(Carollo Report); and
• Initial Buy-in by Tigard of approximately$2 million. If Initial Expansion
Facilities not built,Agreement ends and Lake Oswego repays Tigard
amount invested plus interest at LGIP rate. Tigard has no further interest.
• Proportional system ownership upon completion.
• Definition of Planned System Expansion. The Initial Expansion Project,
as detailed in the Lake Oswego and Tigard Water Service Area Joint
Water Supply System Analysis, dated July,2007,will increase capacity to
32 mgd by 2016. At the completion of Initial Expansion,the Lake
Oswego allocation would be 18 mgd and the Tigard allocation would be
14 mgd.
• Long Term Expansion would be an expansion to 38 mgd, depending on
demand. The Long Term Expansion is presumed.for Lake Oswego, but
Lake Oswego has options to sell all or part or make it available to Tigard
until such time as Lake Oswego needs it.
• The Parties may elect to alter this schedule.
• Recognition of Tigard's Portland Contract expiration date is 2016 and
need to complete Initial Expansion.
B. Managing Agency(Articles III,VI, VII)
• Lake Oswego as Managing Agency for design, construction, operation,
maintenance,repair and replacement of System
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• Perform work with own forces and repayment through approved budget
for actual, incurred charges.
• Contracting Party with consultants and contractors.
• Permit Applicant with Federal, State,and Local Agencies.
• Day-to-day management during and post construction, insurance, bills
(invoices, books and records, staffing)
• Lake Oswego may propose an outside Project Manager, but all parties
must agree.
• Budget preparation.
• Asset Management Program.
• No third party operator without Council consent.
C. Technical Committee(3.2)
• Technical representatives from each City. The Technical Committee will
review all design,permitting, and construction issues and make
recommendations to the Managing Agency or Oversight Committee as
required or necessary.
• analysis of requests for proposals;
• direction to the consultant teams;
• whether a traditional design-bid-build method should be used or
alternate contract delivery method should be used;
• schedules
• The Technical Committee shall meet as necessary to keep project on
schedule;
• Lake Oswego may propose an outside Project Manager, but all parties
must agree
D. Oversight Committee(3.3)
• Two members appointed at the pleasure of each party;
• Meets as necessary to keep the project on schedule, but not less than
quarterly;
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• Review proposed projects and related matters and make recommendations
to the Managing Agency or City Councils as required or necessary;
• Review and recommend all proposed budgets during design, construction,
and operation, and prior to submission to the respective city councils
E. Council Decisions(3.6)
• Budget
• Capital Improvement Program
• Property Matters
• Operational Protocols
• Initial and Long Term Expansion
• New Partners
• Modification, Amendment, Dissolution
• Third-Party Operator.
F. Land (Articles IV, V)
• Transfer of identified the Lake Oswego properties to a joint tenancy in
common ownership with Tigard via a warranty deed at conclusion of
Initial Expansion construction. Until completion,Tigard has equitable
property interest.
• Proportionate to Supply Facility ownerships(5.1);
• Valuation by MAI Appraisal;
• Additional land will be acquired in the same ultimate ownership
proportions as in the Supply Facilities
• If Project does not go forward,cessation of Tigard Interest.
G. Design of Facilities (Article VI)
• Procurement by Lake Oswego procedures with Lake Oswego as the
Managing Agency for the selection of design firms;
• Tigard must approve design firms;
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• Technical Committee will develop parameters with the consultant for
improvements to all components of the Supply Facilities (6.3)
• Designs recommended by Technical Committee and Oversight Committee
for approval by the respective Councils.
H. Permitting(6.2)
• Lake Oswego,with the advice and consent of Tigard,will be the
responsible permitting agency to obtain all permits, either through the
consultant, contractor, or its own forces;
• Review and approval by Tigard;
• The anticipated or potential permits necessary are:
➢ Section 404 Permit under the Clean Water Act,
Division of State Lands/Army Corps of Engineers
➢ Any Oregon Division of State Lands Permit in addition to the 404
Permit
➢ Water Resources Department
Oregon Department of Fish and Wildlife, United States Fish &
Wildlife, or NOAA through consultation, under Endangered Species
Act
Y Any design review or other land use permit
Z Any other permit or approval required for the project
I. Construction Management(6.3)
• Lake Oswego as Managing Agency;
• In conjunction with the Oversight Committee and Technical Committee,
recommendation will be made to each Council regarding the contracting
methods to be used for construction;
• Lake Oswego shall employ its Local Contract Review Board Rules and
other purchasing rules for the projects and process.
• Progress payment requests,change orders,punch list items and
construction in general.
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• Change order approval authority without necessity of Council review
and approval is Lake Oswego's purchasing rules (3.1).
J. Design and Construction Payments (6.3.2)
• As progress payments requests are received during design and
construction, Lake Oswego will pay
• Lake Oswego will bill Tigard according to the allocation of assigned
capacity of the components of the system. Tigard pays within 30 days
unless disputed.
• Any disputed amount shall be resolved according to a dispute resolution
process.
• No dispute will cause cessation or delay of work by the contractor. If the
contractor threatens to suspend or terminate work because of a dispute
over nonpayment, the parties agree to make such payments so that Lake
Oswego can resolve the contractor issues and keep the project moving,
and expressly reserve all rights regarding ultimate allocation of costs for
obligations paid to the contractor.
• Resolution of claims by designers or contractors shall require the consent
of both parties
• Post construction, the Technical Committee and Oversight Committee
shall meet as needed to review and recommend to matters related to
warranty or other contract performance issues.
• Lake Oswego shall continue as the Managing Agency for operation,
maintenance, repair, and replacement of the Supply Facilities Initial
Expansion.
K. Allocation of Proportionate Interest (Article IV, VH)
• Initial Expansion Interest(4.2 and Exhibit)
• Allocation of costs based on proportionate capacity will be reviewed and
adjusted by parties, as necessary (Article VII).
• Amenities or community improvements resulting from the permitting
process will be a project cost. Amenities not required by the permitting
process and not related to the water system will be paid for at the sole
expense of the party requesting such amenities. (Affects O&M costs as
Nvell)
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• Capital Improvements Based upon Future Regulatory Matters. If
additional construction to meet new regulatory requirements occurs, Lake
Oswego will coordinate financing,design, and construction of those
improvements,which will be distributed on the basis of proportionate
capacity ownership.
• Long Term Expansion or other approved Projects will allocate costs as
negotiated.
L. Long Term Expansion or Other Expansion of the System (Article IX)
• Use of the system should be accomplished first by utilizing the existing
capacity to serve the parties
• Expand only after all capacity is projected to be used within a reasonable
planning horizon
• Leasing (Article X)
• Planning document($.2)
o Submitted at least every five years
0 10 year horizon for capacity and demand
• New opportunities for the system shall first be brought to the Parties for
consideration and joint action.
• If one party chooses not to participate,the other party may proceed.
• A party may propose expansion to the other.
o If the party declines,the proposing party may proceed, so long as
no adverse operational or financial impacts.
o If each party agrees,then they shall negotiate a project to allocate
costs and responsibilities.
• Long Term Expansion presumed for Lake Oswego, but depends on
demand as to when built. Tigard or Lake Oswego may propose expansion.
Lake Oswego must choose:
o Sell all or a portion of 6 mgd to Tigard.
o Lake Oswego builds 6 mgd and leases to Tigard.
o Tigard builds 6 mgd subject to Lake Oswego's ability to buy back
all or a portion,
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o Other mutual agreement.
M. Leasing
• A party shall be required to lease to the other such unused capacity in the
system to the extent available according to the planning document.
• The term of the lease shall be not less than one year nor more than ten,
upon such conditions as the parties agree.
• The lease shall be a short-term ineasure that allows the party to defer
expansion or new construction of system components and to provide the
parties with a near term, stable planning horizon.
• Lease payment shall be based upon formula unless parties mutually agree
otherwise(10.5).
N. O&M Payments (Article VII)
• The budget will provide for each party's anticipated share of operation and
maintenance based upon utility cost of service principles
• Approval by both parties.
• Operation and maintenance shall be charged based on the amount of water
use in efs multiplied by the O&M expense rate.
• Renewal,replacements, and system upgrades shall be made proportional
to ownership and billed based upon need.
• Special allocation for site amenities
• Payment is due 30 days after invoice.
O. Sales or Lease to Others{,Article XI)
• Except for existing wholesale customers and existing mutual aid
agreements,no party may contract for sale or lease of water to third parties
without the approval of the other party.
• Sales will be joint with net revenues to each party in proportion to
ownership
• A party may add wheeling charges
P. Operations Committee/Operations Manual (Article XII)
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• Within six months from the date of substantial completion of the Initial
Expansion, the parties shall agree on an Operations Manual for the system.
• The parties shall appoint at least one person technically proficient in the
utility system operations to the Operations Committee. The Operations
Committee shall report to the Oversight Committee not less often than
quarterly
S. Total or Partial Termination and Withdrawal or Sale of Assets (Article
XIII)
• Either party may elect
• Effective date would be two years from the date of notice unless otherwise
agreed to.
• The parties shall meet for the purpose of establishing the purchase price.
o Unless the parties agree otherwise,the sale price is depreciated
replacement cost value
• The nonwithdrawing party may purchase all or a portion of the
withdrawing partner's ownership. If not,the withdrawing partner shall
have the right to sell, assign or lease to another governmental entity.
Remaining Party has to consent to a new player.
o Sale or assignments to nonpartner entities are not subject to the
valuation formula of this section regarding negotiated price.
o Criteria for consent.
• Lake Oswego's existing water rights excluded.
• Payment shall be due on the effective date of termination or withdrawal or
sale unless the parties agree otherwise.
• Other Material Breach
o Monetary penalties
o Specific performance of obligations
• Dissolution of the Partnership (13.1)
o If the parties mutually agree,the Partnership may be dissolved and
the parties shall agree on a plan of dissolution
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o All debts and obligations are paid or each party shall assume its
proportionate share of debts and obligations unless otherwise
provided
o Hold harmless to others
o The parties shall execute those documents necessary to vest
proportionate ownership of the Supply Facilities in each party and
execute a post-dissolution management agreement
o Tigard shall always be fissured of having a source to provide 14
mgd per day water supply to the extent it retains the Supply
Facilities following dissolution and uses the water in its service
area. A Water Supply Agreement must be negotiated.
Q. Dispute Resolution(Article XIV)
• Negotiation by the City Managers and ratified by the City Councils
• Mediation (Nonbinding/Approved by Councils)
• Arbitration: Three arbitrators.
➢ Panel of three unless the parties agree on a single arbitrator
➢ Nonbinding
• Clackamas County Circuit Court.
• Each party bears its own legal costs,witness fees,and other costs
R. Other Provisions(Article XVID
• No assignment or transfer without consent of the other party
• Extension of Party's water supply service by the identified Supply Facility
to an area beyond that area identified for each party in the Carollo Report
shall require the prior consent of the other party, and shall not be
unreasonably withheld considering capacity and demands and other
system factors
• Annexations or service to identified areas in the Carollo Report shall not
require consent
• Each party agrees to indemnify the other from its own acts or negligence.
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S. 2016 And Beyond(Article XV)
(1) Future Agreements and Governance(2018)
• Within three years after completion of Initial Expansion construction
• Oversight Committee will meet and in good faith negotiate whether this
agreement shall be amended or a new agreement executed
• If not, continue this agreement with periodic modifications as deemed
necessary by the parties, or
• Replace this Agreement with a new Agreement; or
• Create a Supply Agency via:
➢ an intergovernmental under ORS Ch. 190
➢ Members appointed by each Council
➢ May provide for transfer of assets to the new entity
➢ Agreement on what powers are vested by each city in the new entity
➢ Method of voting and decision making
■ Decisions made at the intergovernmental entity level
■ Decisions retained at the Council level
➢ Consent to Joinder of New Partners
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INTERGOVERNMENTAL AGREEMENT REGARDING WATER SUPPLY
FACILITIES,DESIGN,CONSTRUCTION,AND OPERATION
DATED , 2008
BETWEEN
THE CITY OF LAKE OSWEGO
AND
THE CITY OF TIGARD
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TABLE OF CONTENTS
Page
RECITALS ................................................................................................................I
ARTICLE I Definitions..............................................................................................3
ARTICLE II Warranties and representations of the Parties......................................11
ARTICLE III Management.........................................................................................12
ARTICLE IV System Ownership...............................................................................19
ARTICLE V Property; Creation of Tenancy in Common.........................................21
ARTICLE VI Design and Construction of Supply Facilities .....................................24
ARTICLE VII Operation and Management.................................................................28
ARTICLE VIII Supply Facilities...................................................................................32
ARTICLE IX Expansion Rights and Requirements...................................................36
ARTICLEX Leasing.................................................................................................40
ARTICLE XI Sales to Others.....................................................................................43
ARTICLE XII Operations Manual...............................................................................44
ARTICLE XIII Withdrawal, Termination of Membership, Sale of Assets and
Dissolution...........................................................................................46
ARTICLE XIV Dispute Resolution...............................................................................51
ARTICLE XV Completion of Initial Expansion of the Supply Facilities....................53
ARTICLE XVI Notices.................................................................................................54
ARTICLE XVII General Provisions...............................................................................55
i
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LIST OF EXHIBITS
Exhibit 1 Existing Real Property, Supply Facility Components and Valuation
Exhibit 2 Service Areas
Exhibit 3 Map of Supply Facilities
Exhibit 4 Surface Water Rights
Exhibit 5 Supply Facilities Capital Improvement Program (to be adapted by
Councils)
Exhibit 6 Determination of Tigard Buy-In
Exhibit 7 Allocation of System Improvement Costs to the Parties
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This Intergovernmental Agreement Regarding Water Supply Facilities, Design,
Construction, And Operation is dated , 2008 (the "Agreement"), by
and between the City of Lake Oswego ("Lake Oswego'), an Oregon municipal
corporation and the City of Tigard ("Tigard"), an Oregon municipal corporation. Lake
Oswego and Tigard may also be referred to individually herein as a "Party" and
collectively as the"Parties."
RECITALS
WHEREAS, the City of Tigard operates a municipal water supply utility under
ORS 225, with transmission, storage and distribution facilities to deliver potable water to
Customers within the area of the Cities of Tigard, King City, Durham, and the remainder
of the Tigard Water District;
WHEREAS, the City of Lake Oswego operates a municipal water supply utility
under ORS 225, which treats and distributes potable water to Retail Customers and sells
water at wholesale to the Lake Grove Water District, the River Grove Water District,
Skylands Water Company, Glenmorrie Cooperative Association and Alto Park Water
District (the"Existing Wholesale Customers");
WHEREAS, Lake Oswego has existing water intake and water treatment
facilities, transmission, storage facilities (hereinafter "Supply Facilities") together with
distribution facilities and water rights;
WHEREAS, the Supply Facilities require capital improvements to repair and
replace existing assets and to construct new improvements, all at a significant cost;
WHEREAS, Tigard desires to acquire an ownership interest in the Supply
Facilities to obtain a permanent source of raw water and treatment facilities for potable
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water and also needs to make capital improvements for storage and transmission
facilities; and
WHEREAS, the Parties jointly funded a study by Carollo Engineers known as the
Lake Oswego and Tigard Joint Water Supply System Analysis dated July, 2007 ("Carollo
Report"); and
WHEREAS, the Parties agree that, based upon the Carollo Report, there are
significant benefits by jointly taking action to perfect existing water rights, construct,
repair, replace, expand and otherwise improve the Supply Facilities infrastructure
necessary to supply that water to the Parties and to realize or mitigate potential
environmental impacts and benefits;and
WHEREAS, prior to the execution of this Agreement, the Parties worked in a
collaborative, open, and participative manner to select an operating framework that best
serves the needs of the Parties, and this Agreement incorporates those precepts;
WHEREAS, the Parties agree that creation of this Intergovernmental Agreement
and investment by the Parties shall provide the Parties with stability and local control
over the source of supply, build ownership equity in the Clackamas River System,
provide for flexibility in the use and allocation of water, provide for flexibility for
management of water resources for enhanced costs and operation efficiency, create
opportunities to share and trade staff resources, expertise and technological capabilities,
and being fully advised,
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Parties agree as follows:
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ARTICLE I
DEFINITIONS
1.1 Definitions
As used in this Agreement, the following terms when capitalized shall have the
following meanings:
1.1.1 Agreement—this Agreement
1.1.2 Book Depreciation Life — the years used to depreciate an asset in
accordance with Generally Accepted Accounting Principles.
1.1.3 Capacity — capability from the various components of the Supply
Facilities to produce or deliver water; measured in cubic feet per second
(cfs), gallons, gallons per day (gpd), gallons per minute (gpm), million
gallons per day (mgd), or other comparable measurement and available
based on current operating conditions consistent with generally accepted
engineering and operating practices.
1.1.4 City of Lake Oswego — an Oregon Municipal Corporation in Clackamas,
Multnomah, and Washington Counties, Oregon.
1.1.5 City of Tigard— an Oregon municipal corporation in Washington County,
Oregon.
1.1.6 Clackamas River Intake Pump Station— an existing structure comprised of
a reinforced concrete building and all equipment and materials contained
therein or any future expansion, modification or replacement thereof that
allows water to be withdrawn from the Clackamas River and pumped
through the raw water transmission line to the Water Treatment Plant
Facilities. The Clackamas River Intake Pump Station ownership and its
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agreed value are more fully described in Exhibit 1 which, exhibit may be
updated and revised by resolution of the Parties.
1.1.7 Curtailment Plan — A written plan developed for curtailment of water
service in accordance with OAR Chapter 690 Division 86 rules.
1.1.8 Demand—the amount of water used or projected to be used by a Party and
imposed on the Supply Facilities to serve a Party's Retail Customers its
Existing Wholesale Customers and ultimate service area measured in cfs,
gallons, gpd, gpm, mgd, or other appropriate measurement. The basis for
determining Demand may be waived or modified by the Parties due to
unusual circumstances such as a fire, emergency, etc.
1.1.9 Depreciated Replacement Cost value — the value calculated in the current
year by multiplying the original cost of the asset times the index in the
Engineering News Record Construction Cost Index 20-City Average,
1913=100 as published in the Engineering News Record for the year of
evaluation. The products shall be divided by Engineering News Record
Construction Cost Index 20-City Average, 1913=100 as published in the
Engineering News Record for the year placed in service. The result shall
then be depreciated from the year placed in service to the year of
evaluation using the Book Depreciation Life. The formula* is expressed
as follows:
DRC=(CC*ENR' / ENR-) *(1-(Ye-Yo)/BDL))
Where:
DRC=Depreciated Replacement Cost Value.
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CC =Construction cost.
ENR'= Engineering News Record Construction Cost Index for the
year of evaluation.
ENR' = Engineering News Record Construction Cost Index for the
year placed in service.
Y'=Year of evaluation.
Y'=Year placed in service.
BDL= Book Depreciation Life.
1.1.10 Existing Wholesale Customers — the Lake Grove Water District, River
Grove Water District, Skylands Water Company, Glenmorrie Cooperative
Association, and Alto Park Water District who are served at wholesale by
Lake Oswego as if they were a Retail Customer of LO under the terms and
conditions of this Agreement. The Cities of King City and Durham and
the Tigard Water District are contractually served by Tigard and for
purposes of this Agreement shall be defined as existing wholesale
customers. The parties recognize that the status of these entities are
contractual and may change over time as determined by the affected Party
to this agreement and the existing wholesale customer.
1.1.11 Fiscal Year—the time period as defined under ORS 294.311(17).
1.1.12 Local Government Investment Pool (LGIP) — The Oregon State
Treasurer's Local Government Investment Pool, subject to regulatory
oversight by the Oregon Secretary of State and administered by the
Oregon State Treasury.
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1.1.13 Municipal Bond Index — The rate as published by the State of Oregon
Treasury Department entitled "Oregon Bond Index — Oregon A Rated 20
Year" for the first date after the beginning of the fiscal year. Should said
rate cease to be published, then the Parties shall determine another
comparable index. The date used for determination of the rate may be
modified by the Parties in the event of unusual market circumstances
(such as declaration of war by the United States).
1.1.14 Planning Forecast— the document submitted by the Parties in accordance
with Article 8.2 which shows the Demands of each Party to be imposed on
the Supply Facilities and the Capacity owned or leased by each Party in
such facilities.
1.1.15 Project — The design, permitting and construction of new and expanded
Supply Facilities, as generally described in the City of Lake Oswego and
Tigard Water Service Area Joint Water Supply System Analysis dated
July, 2007 by Carollo Engineers ("Carollo Report") to provide 32 million
gallons per day capacity by 2016 (the Initial Expansion) with the
capability to further expand up to 38 million gallons (Longterm
Expansion) per day when it appears the water demands of the Parties will
exceed 32 mgd. At the completion of Initial Expansion, the Lake Oswego
allocation shall be 18 million gallons per day and the Tigard allocation
shall be 14 million gallons per day.
1.1.16 Property— Property shall be parcels of real property owned in fee simple,
by easement or other interest over, under or upon which the supply
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Facilities are or will be located as part of the Initial Expansion or Long
Term Expansion. Property currently held by Lake Oswego will remain in
the name of Lake Oswego until completion of the Initial Expansion. Until
completion of the Initial Expansion, Tigard shall have an equitable interest
as if it were a vendee under a land sale contract. Additional properties
acquired as part of the Initial Expansion or the Long Term Expansion shall
be acquired as tenants in common in proportion to the Parties' allocation
of capacity.
1.1.17 Retail Customers — A user within the Party's service area boundary to
which users may be added from time to time by annexation, extra-
territorial extension of service, merger and/or consolidation or by
intergovernmental agreement among the Parties pursuant to ORS 190. A
municipal corporation or other entity, which purchases water for resale,
shall not be considered a Retail Customer.
1.1.18 Service Area — The existing and future service area for each Party as
identified in the Carollo Report, as set forth on Exhibit 2, and as may be
modified by the Parties or pursuant to Section 17.8.3 of this Agreement.
1.1.19 Summer Period—June 1 through October 31.
1.1.20 Supply Facilities — the facilities utilized by the Parties identified in the
Carollo Report consisting of Water Treatment Plant Facilities,
Transmission Facilities, Water Storage Facilities, and other facilities
necessary for treatment and conveyance of potable water to the Parties. A
map of the Supply Facility components is provided in Exhibit 3, which
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exhibit may be updated and revised by resolution of the Parties. The map
is for illustrative purposes only and shall not be considered a legal
description of the Supply Facilities
1.1.21 Surface Water Rights—those water rights held by Lake Oswego registered
with the State of Oregon Water Resources Department, which allow for
diversion of water for use at the Water Treatment Plant Facilities. The
Surface Water Rights are more fully described in Exhibit 4, which exhibit
may be updated and revised by resolution of the Parties.
1.1.22 Transmission Facilities — the raw water transmission line connecting the
Clackamas River Intake Pump Station to the Water Treatment Plant
Facilities and the finished water transmission line connecting the Water
Treatment Plant Facilities to Lake Oswego's Waluga Reservoir as
identified in the Carollo Report. The Transmission Facilities, ownership
and their agreed value are more fully described in Exhibit 1 which, exhibit
shall be updated and revised by resolution of the Parties.
1.1.23 Water Treatment Plant Facilities — the pumping stations and treatment
plant, which treat raw water and produce potable water for conveyance by
the Transmission Facilities. The Water Treatment Plant Facilities,
ownership, and their agreed value are more fully described in Exhibit 1,
which exhibit shall be updated and revised by resolution of the Parties
within 30 days after the execution of this Agreement, following
completion of an updated appraisal.
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1.1.24 Water Storage Facilities — the existing Waluga Reservoir which receives
potable water from the Water Treatment Plant Facilities as conveyed
through the Finished Water Transmission Facilities and any future
expansion, modification or replacement thereof. The Water Storage
Facilities, ownership, and their agreed value are more fully described in
Exhibit 1, which exhibit shall be updated and revised by resolution of the
Parties.
1.1.25 Winter Period—November 1 through May 31.
1.2 Interpretation
In this Agreement, unless a clear contrary intention appears: (a) reference to any
person includes such person's successors and assigns but, if applicable, only if
such successors and assigns are permitted by this Agreement, and reference to a
person in a particular capacity excludes such person in any other capacity; (b)
reference to any gender includes each other gender; (c) reference to any
agreement (including this Agreement), document or instrument means such
agreement, document or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof and, if applicable, the terms
hereof; (d) reference to any Article, Section, Schedule or Exhibit means such
Article, Section, Schedule or Exhibit to this Agreement, and references in any
Article, Section, Schedule, Exhibit or definition to any clause means such clause
of such Article, Section, Schedule, Exhibit or definition; (e) "hereunder,"
"hereof," "hereto," "herein," and words of similar import are references to this
Agreement as a whole and not to any particular Section or other provision hereof,
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(f) relative to the determination of any period of time, "from" means "from and
including," "to" means "to but excluding" and "through" means "through and
including"; (g)"including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such term;
(h) reference to any law (including statutes and ordinances) means such law as
amended, modified, codified or reenacted, in whole or in part, and in effect from
time to time, including rules and regulations promulgated hereunder; and (i)
"will" and"shall' are mandatory terms.
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ARTICLE II
WARRANTIES AND REPRESENTATIONS OF THE PARTIES
2.1 Warranties of the Parties
The Parties hereto warrant and represent that they have the legal authority to enter
into this Agreement.
2.2 Approval of the Governing Bodies
The Parties to this Agreement hereby certify that they have undertaken the
necessary public procedures to approve and authorize the signatories to this
Agreement to act on behalf of the Party executing this Agreement.
2.3 Obligation of Good Faith and Fair Dealing
The Parties each covenant to deal fairly and in good faith with the other to fulfill
the covenants and requirements of this Agreement. Tigard has an existing water
supply contract with the City of Portland that expires on July 1, 2016 unless
extended. Costs of water will increase after July 1, 2016, because Portland is
expected to embark on a large-scale capital improvement program and the rate to
wholesale customers will increase to account for this capital construction. Also,
the timing and method of withdrawal after July 1, 2016 will leave Tigard with less
flexibility in extricating itself from the Portland contract. For these reasons,
having the initial expansion project complete by July 1, 2016 is of paramount
importance to Tigard. Lake Oswego recognizes Tigard's circumstances and
agrees it will undertake its best efforts in good faith to meet this schedule for the
initial expansion project.
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ARTICLE III
MANAGEMENT
3.1 Managing Agency
Lake Oswego shall be the Managing Agency to manage the operation,
maintenance, repair and replacement of the existing Supply Facilities and to
manage the planning, design and construction of the Initial Expansion of the
Project. Lake Oswego shall be the contracting agency with consultants and
contractors, and the named party on permits required from local, state, and federal
regulatory agencies. Lake Oswego shall have the power to a) approve contracts
and change orders subject to its purchasing rules, b) take such actions reasonably
necessary during an emergency and c) other such powers as may be granted by
the Parties from time to time. Lake Oswego shall be responsible for conducting
the day-to-day business affairs including: payment of invoices, accounting,
budgeting, operation and maintenance of the Supply Facilities, planning, project
management, maintaining records, and other such duties as required. Tigard shall
pay its share of costs in accord with the terms and conditions of this Agreement.
3.2 Technical Committee
Each Party shall appoint two technical representatives to meet at intervals deemed
appropriate for communication and coordination, and to keep the Project on
schedule. The Technical Committee shall review all methods of contracting,
requests for proposals, contracts, value engineering, designs, permit applications
and costs. The Technical Committee will endeavor in good faith to make
recommendations to the Managing Agency or Oversight Committee as the
Technical Committee deems appropriate or where required by this Agreement. If
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the Technical Committee cannot agree on a recommendation and is at impasse,
the matter will be referred to the Oversight Committee. The Technical
Committee must review and recommend to the Oversight Committee any
proposal by Lake Oswego to retain an outside project manager.
3.3 Oversight Committee
Lake Oswego and Tigard shall each appoint two persons to the Oversight
Committee. The members shall serve at the pleasure of the appointing Council.
The Committee shall meet as deemed necessary by the Managing Agency or
Technical Committee to keep the Project on schedule, but in no event less often
than quarterly. The Oversight Committee shall review and the individual
members of the committee shall present to their respective Councils proposed
projects as identified in the Carollo Report or other proposed projects and related
matters and budgets or funding requests. The Oversight Committee will endeavor
in good faith to make recommendations to the Managing Agency or to the City
Councils as the Oversight Committee deems appropriate or where required by this
Agreement. If the Oversight Committee cannot agree by majority, then the tie
vote shall be deemed a no vote so that no recommendation is made. The
respective City Councils will then consider and vote on the matter. The Oversight
Committee must review and approve any proposal to retain an outside project
manager. Nothing herein shall be deemed a waiver of a Party's right to submit
these matters to Dispute Resolution under Article XIV. The Managing Agency
shall be responsible to staff and assist the Oversight Committee to comply with
public meetings law and notice requirements as necessary.
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3.4 Budgeting and Accounting
The Managing Agency shall prepare a budget specific to the capital and operating
needs of the Supply Facilities for each Fiscal Year. The budget shall include an
estimate of direct and indirect costs of personnel from either Party who are
anticipated to provide services as part of the ultimately approved budget. A draft
budget shall be prepared and distributed to the Technical Committee by March 1St
for comment. A draft budget shall be prepared and distributed by the Managing
Agency to the Oversight Committee by April 30th. The final budget must receive
approval by each Party by June 30"'. If any Party uses a biennial budget cycle, the
dates above shall remain the same for the applicable budget preparation year and
that Party shall update the budget amounts anticipated for the off year for the
benefit of the other Party's budget process.
Each Party's proportionate share of the expenses of operation and maintenance of
the Supply Facilities, including reserves for repair and replacements, permitting,
design and construction and other expenses as may be incurred, shall be
estimated, and set forth in the annual budget, and the amount estimated shall be
recommended to be included as operating expenses, in each Party's individual
adopted budget. If the budget includes accumulation of funds designated for a
particular purpose or future use, such amounts shall be accumulated in a restricted
or earmarked fund. The Managing Agency shall maintain an independent budget
control procedure and provide budget reports at least quarterly to each of the
Parties not later than 30 days after the end of each quarter. This report shall show
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s
expenditures and receipts by budget item for each transaction through the last
working day of the preceding quarter.
3.5 Asset Management Program
Within one year following substantial completion of the Initial Expansion, the
Managing Agency shall create a thorough inventory all of the assets associated
with the Supply Facilities, including physical facilities and real estate holdings.
The inventory shall describe the current conditions of these Supply Facilities,
their current value (replacement cost less depreciation), and repairs and
replacements that may be necessary. The inventory shall include a schedule for
repairs and replacement. The Technical Committee may propose policies to the
Oversight Committee that guide, schedule and fund the repair and replacement of
the assets and suggest amendments to the Supply Facilities Capital Improvement
Program. The Oversight Committee shall then forward the draft inventory, any
proposed policies and amendments to the Supply Facilities Capital Improvement
Program to the Council of each Party for its approval. The program and policies
shall be based on prudent utility practices and industry standards. Annually, the
inventory shall be reviewed for additions and deletions.
3.6 Council Decisions
Approval by the Councils of each Party is required for:
3.6.1 Any sale, transfer, lease, exchange, or other disposition of any Property
over, under, or upon Supply Facilities are located;
3.6.2 Entry to any mortgage, pledge, encumbrance or refinance of the Property
or Supply Facilities;
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3.6.3 Approval of any budget;
3.6.4 Approval of any nonemergency expenditure by the Managing Agency that
has not previously been approved and budgeted and that exceeds the
Managing Agency's authority under its purchasing rules to make the
expenditure without the approval of its Council, or a capital improvement
project not listed on the Supply Facilities Capital Improvement Program.
If a capital improvement project has been budgeted and is part of the
supply Facilities Capital Improvement Program, the Managing Agency
shall be authorized to contract for all work necessarily related to deliver a
complete and functioning project;
3.6.5 Approval of any decision to burden the Property or Supply Facilities with
additional easements, licenses, or other encumbrances or to use the
property for non-water related purposes.
3.6.6 Approval of any decision to change the use or the operation of the
Property or Supply Facilities beyond adopted operational protocols;
3.6.7 Approval of the Initial Expansion or Long Term Expansion;
3.6.8 Approval of amendment of the Agreement to allow a new Party to join;
3.6.9 Approval of modification, alteration or dissolution of this Agreement;
3.6.10 Approval of a Supply Facilities Capital Improvement Program and
amendments. When adopted, it will become Exhibit 5 and made part of
this Agreement.
3.7 Use of Employees
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To the extent that any Party uses its own employees in the performance of its
duties under this Agreement, that entity shall be responsible for complying with
all applicable state and federal laws and for all employment related benefits and
deductions, workers' compensation premiums and pension contributions.
Decisions regarding employees shall be the sole responsibility of the Party who
employs him or her.
3.8 Audit Record g,
Keep in • Access to Records
The Managing Agency shall cause an annual audit to be conducted pursuant to the
requirements of ORS 207.425, 297.455, 297.465 and 297.466. The Managing
Agency shall maintain its books and records in such manner that the Supply
Facilities and expenditures related thereto are separately stated and capable of
review without being combined or mixed with the nonsupply facility assets.
The Managing Agency shall maintain all fiscal records relating to the Supply
Facilities and Project in accordance with generally accepted accounting
principles. In addition, the Managing Agency shall maintain any other records
pertinent to the Supply Facilities and Project in such a manner as to clearly
document the Managing Agency's performance hereunder. All such fiscal
records, books, documents, papers, plans, and writings shall be retained by the
Managing Agency and kept accessible as required by law.
The Managing Agency agrees that the other Party and its authorized
representatives shall have access to all books, documents, papers and records of
the Managing Agency which are directly related to the Supply Facilities and
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Project for the purpose of making any audit, examination, copies, excerpts and
transcripts.
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ARTICLE IV
SYSTEM OWNERSHIP; ALLOCATION OF CAPACITY
4.1 System Ownership
Upon execution of this Agreement, Tigard shall pay Two Million Fifty Four
Thousand, Two Hundred Twenty-Six Dollars ($2,054,226.00) or such amount
based on the valuation analysis set forth in Exhibit 1 to Lake Oswego which Lake
Oswego agrees to dedicate as working capital to the Project. Upon payment,
Tigard shall be granted by this Agreement an equitable interest in the Supply
Facilities as if it were a vendee under a land sale contract. Title shall transfer
upon completion of the Initial Expansion of the existing Supply Facilities. The
Parties shall each then own undivided interests in the Supply Facilities and
Property. Such ownership shall be a percentage ownership in the Supply
Facilities component as set forth in the exhibits in this Agreement. At the time of
execution of this Agreement, the existing assets shall be valued as shown on
Exhibit 1 and the contributing partner shall receive a credit for the asset value. If
the current appraisals of the assets are not available at the time of execution of
this Agreement, the Councils shall approve amendments to the exhibits to reflect
updated valuation information when received and Tigard shall pay the difference
to Lake Oswego as provided above. If the Initial Expansion is not constructed,
Lake Oswego shall refund the amount of Tigard's payment to Lake Oswego plus
interest at the LGIP rate within 30 days of the decision to abandon the Project and
Tigard shall have no further ownership or equitable interest in the Lake Oswego
Supply Facilities and Property. Tigard will execute any document required by
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Lake Oswego to convey any interest Tigard may have in Lake Oswego Supply
Facilities and Property.
Tigard's purchase of its percentage share of the Supply Facility assets shall be by
capital contribution, mutually approved in kind contributions or payment of
design, permitting and construction costs for the system expansion so that upon
completion of the Initial Expansion, Tigard's contribution shall equal its
percentage ownership as shown in Exhibit 7. Lake Oswego's percentage as
shown in Exhibit 7 is based on its contributed assets, financial contribution to the
Initial Expansion, mutually approved in kind contributions and other mutually
agreed factors.
4.2 Anticipated Ownership
At the completion of the Initial Expansion, the Parties' percentage ownership
shall be allocated as set forth on Exhibit7, attached hereto and incorporated by
reference.
4.3 Allocation of Capacity
At the completion of the Initial Expansion, Tigard's allocation of Capacity shall
be 14 million gallons of water per day, and Lake Oswego's allocation of Capacity
shall be 18 million gallons per day.
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ARTICLE V
PROPERTY; CREATION OF TENANCY IN COMMON
5.1 Creation of Common Ownership
Title to or easement rights to all properties over, under or upon which Supply
Facilities are or shall be located (Property) shall remain in the name of Lake
Oswego until the completion of the Initial Expansion. Tigard shall have an
equitable interest as if it were a vendee under a land sale contract. Within 90 days
following completion of the Initial Expansion, Lake Oswego will, by Warranty
Deed, convey to Tigard an undivided proportionate interest as tenant in common
in the Property as set forth on Exhibit 7, attached hereto and incorporated by
reference. The Parties agree the Property owned by Lake Oswego as of the date
of this Agreement shall be valued in 2008 dollars. Property acquired after the
date of this Agreement shall be acquired proportional to the Parties' respective
allocations of Capacity, according to the purchase price paid. Closing costs for
the Lake Oswego transfer to Tigard shall be shared equally.
5.2 Ownership Interest/Use
5.2.1 Title to the Property held in the name of Lake Oswego until transfer shall
be held in part for the use and benefit of Tigard to the extent of Tigard's
interest as set forth in this Agreement. Lake Oswego water rights shall not
be transferred under any of the real property transfers. Upon transfer, title
to the Property shall be held in the name of each of the Parties in their
respective undivided interest. The Parties agree that except as provided
herein, the Property is dedicated for water supply purposes. The Parties
intend that their relationship, with respect to the Property, be a tenancy in
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common. A Tenancy in Common Agreement shall be executed and
recorded at the time of transfer.
5.2.2 The Parties' responsibility for all maintenance, insurance and other land
costs, shall be:
5.2.2.1 Until completion of the Initial Expansion and transfer of an undivided
interest to Tigard, the existing Supply Facilities shall be used by Lake
Oswego at its sole risk and cost to accommodate water supply uses.
5.2.2.2 Following transfer, Lake Oswego and Tigard shall be responsible for all
costs related to the Property in proportion to their respective interests as
set forth on Exhibit 7. Such costs shall be included in the monthly
invoices under Section 7.1.4.
5.3 Covenant
The Parties declare that the Property is and shall be held, conveyed, hypothecated,
encumbered, leased, rented, occupied and improved subject to the limitations,
restrictions, covenants and conditions set forth in this Agreement, all of which are
declared to be in furtherance of a plan established for the purpose of constructing
and operating the Supply Facilities. All such limitations, restrictions, covenants
and conditions are intended to run with the Property, and to inure to the benefit of
and be binding upon all parties having or acquiring any right, title, interest or
estate therein. Other incidental uses shall be limited or restricted to the extent
they conflict with water supply purposes.
5.4 Partition
Following transfer and so long as this Agreement is in effect, no Party shall seek
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or obtain through any legal proceedings a judicial partition of the Property or sale
of the Property in lieu of partition, without the prior written consent of the other
Party.
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ARTICLE VI
DESIGN AND CONSTRUCTION OF SUPPLY FACILITIES
6.1 Preliminary Planning and Desmon
Tigard and Lake Oswego, by this Agreement, commit to design and construct the
Initial Expansion, which shall include initially Water Treatment Plant, Clackamas
River Intake Pump Station and Transmission Facilities with a design capacity of
32 mgd as generally described in the plan prepared by Carollo Engineers
("Carollo") dated July, 2007, and to achieve completion by July 1, 2016,
immediately commence:
6.1.1 Participation in necessary joint planning sessions for the Supply Facilities;
6.1.2 Contribution of their proportionate share of costs of preliminary design,
preliminary engineering, permitting, and other fees as necessary and as set
forth on Exhibit 7, attached hereto and incorporated by reference. The
Supply Facilities shall accommodate subsequent expansion up to 38 mgd
(Long Term Expansion). The general configuration map of the Property
attached to the Agreement as Exhibit 3 shall allow the Parties to expand
the treatment plant in the future. Lake Oswego shall retain a project team
for permitting, design, and construction management of the Initial
Expansion of the Supply Facilities.
6.2 Permit Applications
Lake Oswego, as the Managing Agency, shall be the lead agency in negotiating
required permits for construction of the Supply Facilities.
6.2.1 Lake Oswego shall be responsible to obtain all other permits such as:
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6.2.1.1 Section 404 Permits under the Clean Water Act through the Division of
State Lands and the Corps of Engineers;
6.2.1.2 Any permit necessary from the Oregon Division of State Lands for use of
submerged or submersible lands for intake and transmission, if that is in
addition to the 404 Permit;
6.2.1.3 Any permit with the Water Resources Department regarding permit
extension, amendment of a Water Management and Conservation Plan, or
application of water to beneficial use in the Service Areas identified in the
Carollo Report;
6.2.1.4 Any permit necessary from the Oregon Department of Fish & Wildlife,the
United States Department of Fish & Wildlife or the National Marine
Fisheries Service through consultation; and
6.2.1.5 Any other permit required for the project.
6.2.2 Lake Oswego shall be responsible for obtaining necessary land
development permits. The Parties agree that improvements imposed by
the land use permitting body shall be a Project cost. Additional amenities
not required by the land use permitting body shall be paid for at the sole
expense of the party requesting them. Lake Oswego, in its proprietary
capacity, further agrees to, in good faith, assist and support Tigard in its
efforts to secure the issuance of all permits for pumping and transmission
facilities from locations within the Lake Oswego City limits and to enable
Tigard to provide water from the Supply Facilities to Tigard users. The
Parties acknowledge, however, that this Agreement cannot bind Lake
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Oswego with relation to acts or decisions occurring in its regulatory
authority, including, without limitation, the exercise of its regulatory
authority to issue permits.
6.3 Construction
6.3.1 Project Management. During construction, Lake Oswego will, as
Managing Agency, convene the Technical Committee at least bi-weekly to
review project schedules and performance, progress payment requests,
change orders and punch list items. Tigard may attend all contractor and
consultant meetings.
6.3.2 Progress Payments. Progress payments, during design and construction,
shall be billed monthly by Lake Oswego according to the proportionate
allocation of system improvement costs for individual components of the
Supply Facilities as set forth on Exhibit 7. For a construction contract or
contract that materially includes construction within its scope that is
included in the Supply Facilities Capital Improvement Program and
approved budget, the Managing Agency may award such agreements after
giving prior notice to each Council of the Project Engineer's estimate.
Contracts not within the foregoing description or where the bid or
proposed price exceeds the Engineer's estimate by 10% may not proceed
unless each Council has approved. Within 30 days of invoice from Lake
Oswego, Tigard shall remit the amount due, unless disputed. Any
disputed amount shall be resolved in accordance with the Dispute
Resolution Procedures of Article 14 below. However, notwithstanding the
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foregoing, during construction no dispute between the Parties shall cause
cessation or delay of work by the contractor. If the contractor threatens to
suspend or terminate work because of a dispute over nonpayment, the
Parties hereto agree to make such payments to Lake Oswego to resolve
contractor issues and shall expressly reserve all rights regarding the
ultimate allocation of costs or obligations paid to the contractor which
shall be resolved by dispute resolution.
6.3.3 Post Construction. Following construction, the Technical Committee
shall meet as needed to review and recommend to the governing bodies on
matters related to warranty or other contract performance issues.
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ARTICLE VII
OPERATION AND MANAGEMENT
7.1 Supply Facilities
7.1.1 Management. Lake Oswego shall have responsibility as Managing
Agency to manage, operate, repair and replace the Supply Facilities until
such time as the Parties agree otherwise. The Managing Agency may
perform work with its own forces and charge the other Party therefore or
by contract with another party. Additional work or charges outside the
approved budget shall require unanimous consent of the Parties.
7.1.2 Operation and Maintenance Costs. The costs of operation and
maintenance shall be allocated between the Parties according to water
delivered from the water treatment plant to each Party's connection point
to their distribution systems measured in hundred cubic feet (ccf) imposed
on the Supply Facilities multiplied by the operations and maintenance
expense rate in $/ccf. The method for calculating the rate and water use
determination of payment shall be agreed to by the Councils based on the
budget and anticipated water use considering the previous 12 months'
water use.
For the first year when Tigard draws water, the Parties will not have prior
usage data from Tigard's use of the Supply Facilities. Therefore, the
Parties agree that an estimated cost per ccf shall be determined based upon
the budget and applied to all Tigard volumes with invoice on a monthly
basis. At the end of the first year, actual unit costs will be calculated and
reconciled as set forth in 7.1.4.
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7.1.3 Renewal, Repair and Replacement Costs. The Parties shall budget for
renewal, repair and replacement costs as provided in Section 3.4. The
Parties shall make those payments as required for renewals, repair and
replacement proportional to that Party's ownership interest in the Supply
Facility component.
7.1.4 Billing and Payment. Each Party shall receive an invoice monthly from
the Managing Agency representing one-twelfth of the allocated operations
and maintenance budget amount for that Party. The invoice may also
include required payments for renewal, repair, and replacement under
Section 7.1.3 or the Managing Agency may send a separate invoice.
Payment is due to the Managing Agency within 30 days of receipt of the
invoice. On March 1" of each year, the Managing Agency will send an
invoice calculating actual water usage as compared to estimated
annualized expenditures in the budget and reconcile them. The respective
Parties will pay (or receive credit for overpayment toward the next
invoice) based upon this reconciliation. As soon as reasonably possible
after June 30th of each year, the Managing Agency will conduct a similar
reconciliation and the Parties will pay or receive credit for overpayment as
appropriate on the next invoice in the new fiscal year.
7.2 Property Management.
The Parties agree that the property over, under, or upon which the Supply
Facilities are constructed shall be operated and managed as follows:
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7.2.1 Duties of the Managing Agency. The Managing Agency shall have the
responsibility and authority to perform the following functions and may
make decisions with respect to such matters as to the Property unless
otherwise provided in this Agreement,
7.2.1.1 Operation, Maintenance, Repair, and Replacement. To contract for
maintenance, repair and cleaning of the Property pursuant to an
approved budget, contract, or other approval of the Parties as may be
required by the terms of the Agreement.
7.2.1.2 Insurance. To obtain or renew a policy of property insurance insuring
the Property against loss or damage by fire and other hazards covered by
a standard policy of fire insurance with extended coverage endorsements
written for the full replacement value of the Property. The Parties shall
also obtain or renew a policy or policies of public liability and property
damage insurance with a single limit of not less than $2,000,000. The
policies shall name the Parties as co-insureds.
7.2.1.3 Assessments. To collect and deposit the assessments and other charges
due from the Parties into an account established for the Property; to mail
written notice to any Party who is more than 30 days delinquent in
payment of any assessments or charges; and to mail written notice to the
Parties for additional assessments whenever it appears that the funds on
hand shall be insufficient to cover future expenses.
7.2.1.4 Payment of Expenses. To pay when due the expenses of the Property,
and all other expenses or payments duly authorized by the Parties.
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7.2.1.5 Records. To maintain complete and accurate records of all receipts and
expenditures for the Parties.
7.2.1.6 Reimbursement of Expenses. Unless approved in writing by the
Oversight Committee, no Party shall be compensated for services related
to nonbudgeted matters where contingency or other funds in the
approved budget are available. Otherwise, approval by each Council is
required. However, a Party shall be reimbursed for out-of-pocket
expenses.
7.2.1.7 Payment of Costs. Amounts owed by each Party for expenses related to
the Property shall be invoiced as provided in Section 7.1.4.
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ARTICLE VIII
SUPPLY FACILITIES
8.1 Use of Supply Facilities
The Parties shall each use the Supply Facilities in a manner consistent with
prudent water utility practices and to minimize interference with each other's use
of its respective share of Capacity to meet its demands. Prudent practices shall
include a mutual commitment to conservation and use of water without waste
implemented in each Party's Water Management and Conservation Plan. When
the Initial Expansion is completed and the Parties are using the Supply Facilities,
the Parties anticipate that instances of overuse of Capacity by a Party will be rare
and the Parties shall resolve such instances on a case-by-case basis. If a new
member is added or if a third party is supplied by the Supply Facilities so that
additional demands or capacity are placed thereon, then, unless caused by system
operation conditions not caused by the overusing party, any use of 10% or greater
by either Party (or third party user) than its share of Capacity for two consecutive
years or three out of five years shall be overuse. The overusing Party (or third
party user) shall compensate the other party at a lease rate as may be fairly and
equitably agreed upon by the parties. In lieu of the above lease rate or in
combination with it, the Parties may agree to construct the Long Term Expansion
of the Project or reduce demand so that overuse shall cease to occur.
8.2 Mutual Forecast Submittal
In order to make timely, reasonable and prudent judgments concerning meeting
respective demands for capacity, the need to lease capacity, the ability to lease
capacity, and the terms and conditions of any such Lease, the Parties shall each
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submit to the other commencing February 1, 2016 and February 1 of each fifth
year thereafter, a 10-year planning forecast. The planning forecast shall set forth
the respective projected water demands, capacity to serve that demand, and
identify any deficiencies in capacity by year for the 10-year period. Demand shall
include any sale of water from capacity agreed to or reasonably anticipated within
the ten-year time frame. The capacity requirement for the Supply Facilities shall
consist of the average of five consecutive days containing the highest average
peak day demands (mgd) imposed by the Parties, for the summer period of May
15 to October 31. The Parties shall agree on an appropriate course of action as
they deem reasonably available and prudent, under the forecasted circumstances,
including, but not limited to, leasing capacity from one to the other, both within
and without the timeframe of such planning forecasts.
8.3 Surface Water Rights
Surface Water Rights shall remain in the name of Lake Oswego. By execution of
this Agreement, Lake Oswego agrees to hold these permits or certificates for the
benefit of Tigard and Lake Oswego to the extent of the rights of each under this
Agreement. Development and beneficial use by the Parties of water authorized in
the Surface Water Rights of Lake Oswego, but undeveloped as of the date of this
Agreement, shall accrue to the benefit of all Parties, to the extent of their rights
under this Agreement, without regard to ownership.
8.4 Water Treatment Plant Facilities
Except during a curtailment event for any reason, each Party shall have or obtain
Capacity in the Water Treatment Plant Facilities, to serve the Demand of the Party
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during the Summer Period and the Winter Period up to the respective allocations.
The Capacity requirement for Water Treatment Plant Facilities shall consist of the
average of the five (5) consecutive days containing the peak day demand (mgd)
imposed on the Supply Facilities by the Party for each Summer Period and Winter
Period. Capacity in the Water Treatment Plant Facilities may be obtained by
purchase of excess existing Capacity, capacity expansion of the Water Treatment
Plant Facilities and/or leasing of Capacity from another Party.
8.5 Transmission System
The Parties agree to maximize the use of the existing Transmission System for
the benefit of the Parties before construction of new transmission facilities.
The Parties have agreed on connection points for delivery of water from the
Transmission System as set forth in Exhibit 3, which exhibit may be updated and
revised by resolution of each Party's Council. To the extent that a Party needs
additional Capacity in the Transmission System, the Parties agree to sell or lease
available Capacity in the Transmission System prior to construction of new
transmission facilities. When expansion of the Transmission System is required,
the Parties shall follow the procedures as set forth in Article 9.
8.6 Finished Water Storage
The Parties agree to construct shared storage facilities where efficient and
economic for both Parties. Notwithstanding this provision, each Party shall
construct and operate separate adequate finished water storage within its
distribution system to meet their respective operating and emergency conditions
as set forth in the Operations Manual as required under Article 12. To the extent
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that a Party cannot do so, it may make a request to the other Party for
supplemental storage. If the Party providing supplemental storage agrees to
provide such storage, then the Party receiving such supplemental storage shall
compensate the other Party as mutually agreed.
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ARTICLE IX
EXPANSION RIGHTS AND REQUIREMENTS
9.1 Expansion Requirements
The Parties agree that use of the Supply Facilities by the Parties should be
accomplished first by utilizing the Capacity in the Supply Facilities to serve the
needs of the Parties. The Supply Facilities should be expanded only after the
Parties are projected to be using all Capacity, within a reasonable planning
horizon or at such other times as the Parties deem appropriate. In determining the
appropriate time to begin expansion of the Supply Facilities, the Parties shall
consider the time required to provide for environmental reviews, design, permits
and construction. Therefore, the Parties agree to lease Capacity to another Party
as provided for in Article 10 to reasonably and prudently defer capital
improvements and costs thereof.
9.2 New Surface Water Rights and Expansion
The Parties agree that finding opportunities to acquire new water rights (surface
or ground) may be of great significance to their long range needs. This may
include the purchase of existing Surface or Ground Water Rights or application
for permits for surface, ground or stored water rights. The Parties agree that new
sources shall be acquired jointly in proportion to the Party's ownership interest in
the Supply Facilities. If a Party elects not to participate in the acquisition of
additional water, the other Party may proceed individually.
9.3 Expansion Rights in the Supply Facilities
The Parties shall use reasonable and prudent utility standards in determining as to
when and to what size the Supply Facilities should be expanded. Such
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determination shall take into consideration the Demand requested by the Parties,
the Capacity of the Water Supply Facilities, prudent utility planning standards and
the available Surface Water Rights, and Transmission System owned or capable
of being leased or expanded by the Parties. Based on the Planning Forecast of
Section 8.2, a Party shall provide written notice to the other Party of its desire to
expand the Supply Facilities. The Parties shall place the proposed project on the
Capital Improvement Program. The intent of the Parties is to place the proposed
project on the CIP for a period of five years. In the third year of the CIP, the
Parties shall each decide whether to accept or reject participation in the
expansion. Notice by a Party to participate in an expansion shall be in writing and
specify the percent participation in the expansion. Each Party shall have the right
to participate in the expansion in at least the same percentage level as the Party's
percent ownership in the Supply Facilities at the time of the proposed expansion.
A party may proceed individually if the other elects not to participate so long as
the non-participating Party is held harmless from financial obligation.
9.3.1 Long Term Expansion of Water Treatment Plant. Notwithstanding Section
9.3 on expansion of the Supply Facilities, the Parties recognize that Lake
Oswego has or will contribute to design and construction of Supply Facility
components to achieve capacity of up to 38 mgd. If either Party proposes
such Long Term Expansion of the Treatment Plant, Lake Oswego will
determine if it wishes to participate and the amount of Capacity it desires,
which may be the entire expansion amount. Lake Oswego will notify Tigard
of its decision, which shall be conclusive. Depending upon Lake Oswego's
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decision, the Parties will then negotiate a Project Agreement for the Long
Term Expansion, which shall specify, among other things,
a. whether all or any portion of the expanded capacity is sold to
Tigard; or
b. whether Lake Oswego builds the expanded capacity with its funds
and leases the capacity to Tigard upon such terms and conditions as the
Parties agree; or
C. whether Tigard builds the expanded capacity with its funds subject
to Lake Oswego's option to buy back all or part of the expanded capacity
upon three years' written notice at the depreciated replacement cost of the
expansion plus interest at the Municipal Bond Index from the date of
substantial completion; and
d. Such other mutually agreeable terms including adjustment of
ownership interests in other Supply Facility components to match
treatment plant capacity allocations of the Parties.
9.4 Other Assets
There may arise other improvements which do not directly in and of themselves,
provide for expansion of the Supply Facilities. In such circumstances, the Parties
shall mutually determine the appropriate financial participation by each of the
Parties. They shall consider the purpose for the construction of the asset and the
benefits to be received by each of the Parties from the asset in determining the
financial participation requirement of each. A party may proceed individually if
the other elects not to participate so long as the non-participating Party is held
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harmless from financial obligation.
9.5 Bonita Road Pump Station
Tigard's Bonita Road Pump Station is or will be capable of providing water from
Tigard to Lake Oswego if necessary. The Parties acknowledge this is beneficial
to Lake Oswego in those circumstances, but the frequency is difficult to predict.
If this Pump Station is used for the benefit of Lake Oswego as the Parties agree,
Lake Oswego shall pay Tigard's costs to supply water, including Tigard's costs to
purchase water from other entities, as if it were a short-term lease. Tigard will
invoice Lake Oswego on a monthly basis in such circumstances.
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ARTICLE X
LEASING
10.1 Leasin>?
As provided for in Article 8, the Parties shall lease to the other Capacity in the
Surface Water Rights and Supply Facilities to the extent available according to
the planning forecast.
10.2 Purpose
The purpose of this Article is to acknowledge the rights of the Parties to lease
from each other the unused portion of their respective 14 mgd and 18 mgd
allocations of the total 32 mgd Capacity of Initial Expansion to be constructed, to
establish the conditions under which such leasing may occur and to acknowledge
the right to lease future capacity from each other based on future expansion of the
Supply Facilities depending upon conditions and circumstances then and there
existing and when future shares of capacities are known. This section is not
intended to limit the Parties from otherwise agreeing on leasing of supply capacity
to each other. If the Supply Facilities are expanded to 38 mgd, these lease
provisions shall apply to the second increment of capital improvement.
10.3 Right to Lease
Lake Oswego shall have the right to lease to Tigard and Tigard to lease from Lake
Oswego such unused capacity of its 18 mgd as may be determined by Lake
Oswego to be reasonably available and prudent to be leased to Tigard pursuant to
section 8.2 or as they may otherwise agree. Tigard shall have the right to lease to
Lake Oswego and Lake Oswego to lease from Tigard the unused capacity portion
of its 14 mgd capacity as may be determined by Tigard to be reasonably available
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and prudent to be leased to Lake Oswego pursuant to section 8.2 or as they may
otherwise agree.
10.4 Term
The term of any lease for Supply Facilities shall be for a minimum of one(1) year
and a maximum of ten (10) years and upon such conditions for renewal as the
Parties determine. A lease shall be a short-term measure that allows the Parties to
defer expansion or new construction of Supply Facility components and to
provide Parties with a near-term stable planning horizon. The Parties do not
intend to have perpetual renewal terms.
10.5 Lease Payments
The lease payment for Supply Facilities shall be determined by utilizing the
Depreciated Replacement Cost Value of the asset amortized over the remaining
Book Depreciation Life of the asset at an interest rate equal to the Municipal
Bond Index rate plus 200 Basis Points at the year of the lease payment or a
comparable index. The lease payment shall be fixed for lease terms of five (5)
years or less. For lease terms of greater than five (5) years, the lease payment
shall be recalculated every five(5) years in accordance with this Section 10.4.
10.6 Effective Date of Leases
The effective date for leases set forth in this Article 10 shall be on April 1,
following the adoption of this Agreement and every April 1,thereafter.
10.7 Curtailment of Leasing Capacity
The Parties agree that a condition of any lease shall be that the lessee Party shall
be provided Capacity to the same extent that Capacity is available to serve the
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lessor Party's Demand. Curtailment of Capacity resulting from reduced
availability of water for all new water supplies developed after the effective date
of this Agreement shall be shared equally among the parties.
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ARTICLE XI
SALES TO OTHERS
Except for the Existing Wholesale Customers, existing mutual aid agreement, or
extension of service to service areas identified in the Carollo Report, neither Party may
contract for the sale or use of the Supply Facilities to any other entity or person who is
not a Retail Customer of any Party without the approval of the other Party and
compliance with the terms of this Agreement. Any revenues derived from the sale of
water to another entity shall be paid to the Managing Agency. Net proceeds from such
sales shall be credited back to the Parties based on a method as mutually agreed. Net
proceeds shall be those proceeds remaining after expenses, renewals and replacements
and contingencies are paid.
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ARTICLE XII
OPERATIONS MANUAL
12.1 Operations Manual
Not later than 180 days from the date of Substantial Completion of the Initial
Expansion, the Parties shall adopt an Operations Manual for the Supply Facilities,
which shall include, but not be limited to, agreed protocols and methodology to
provide for water quality, treatment standards and protocols, and for the equitable,
effective and efficient operation of the Supply Facilities in accordance with
generally accepted utility practices regarding the operation, management, capital
improvements, and expansion of all aspects of the Supply Facilities. The
Operations Manual may be updated as required. The Operations Manual shall
also provide for an Operations Committee ("Operations Committee"), which shall
consist of one designee of each of the Parties, as set forth in Section 12.2 below.
Not more than 30 days after substantial completion of the Initial Expansion each
Party shall appoint one person to develop the Operations Manual.
12.2 Operations Committee
Each Party shall appoint at least one person technically knowledgeable in utility
system operations or engineering to the Operations Committee. A Party may
allow other attendees, but in no event shall a Party have more than one vote in
making a recommendation to the Oversight Committee created under Section 3.3.
The Operations Committee shall report to the Oversight Committee not less often
than quarterly. The Parties may choose to designate the Technical Committee as
the Operations Committee.
12.3 Curtailment
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The Operations Manual shall reference each Party's Water Management and
Conservation Plan. The Parties agree that if an emergency or water shortage
requires restriction on the deliverable supply of new Capacity developed after the
effective date of this Agreement , the reduction in available water shall be shared
equally among the Parties.
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ARTICLE XIII
WITHDRAWAL, TERMINATION OF MEMBERSHIP, SALE OF
ASSETS AND DISSOLUTION
13.1 Complete or Partial Termination of Interest
Any Party may elect to terminate all or part of its participation in this Agreement
and withdraw from the Supply Facilities as designated (full or partial) by giving
written notice of its desire to terminate to the remaining Party(ies), and stating a
date for termination which shall be not less than two (2) years from the date of
notice. The remaining Party receiving notice of termination shall have the first
option to purchase the terminating interest. If Tigard terminates in whole or in
part, the purchase price shall not include any value for water as those water rights
remain with Lake Oswego. If Tigard completely terminates from this Agreement,
it shall not receive water unless Lake Oswego agrees in writing. If Tigard
partially terminates, its 14 mgd capacity shall be adjusted to reflect its retained,
proportionate interest. The Parties shall meet for the purpose of establishing the
price for the terminated interest. The meeting shall be held within 90 days
following receipt of notice of termination.
Notice to the selling Party of the other Party's intent to buy all or a portion of the
terminating interest shall be given no later than three (3) months after receipt of
the written notice of the Party's desire to terminate. If the remaining Party
purchases less than the full portion of the terminating interest, the Parties also
agree that any unpurchased interest may be sold to another local government party
so long as that other local government party becomes subject to all terms and
conditions of this Agreement. The terminating Party shall use best efforts to find
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another local government partner to buy the remaining unpurchased interest or to
assign or lease capacity so as not to unduly burden the remaining party. Consent
by the remaining Party for another local government party to purchase, take
assignment or lease the Supply Facilities to this Agreement shall not be
unreasonably withheld. Any assignment or lease of an unpurchased interest to
another local government shall not relieve the Party from its obligations under this
Agreement. Negotiations of the terms of sale, assignment or lease to another
local government Party shall include the non-terminating Party as to those terms
which directly impact its operational and financial interest.
13.2 Sale of Assets
A Party may offer to sell to the other Party its ownership interest in an identified
portion of the Supply Facilities (e.g., a percent of the Transmission System).
Notice of the proposed sale shall be given to the other Party by the Party wishing
to sell. Such notice shall specify the material terms and conditions of the sale.
The terms and conditions of Section 13.1 shall apply. The Party may also assign
or lease the unpurchased interest to another local government Party. Consent to
such assignment or lease shall not be unreasonably withheld or relieve the Party
from its obligations under this Agreement.
13.3 Valuation of Interest
The Parties shall meet to agree upon a price within 90 days of the receipt of notice
under Sections 13.1 or 13.2. The price shall be fixed by determining the
terminating/selling Party's interest in the subject assets using the Depreciated
Replacement Cost Value. Nothing herein shall prevent the Parties from agreeing
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upon a price through negotiation and unanimous consent. Sales, assignments or
leases to third parties are not subject to the valuation formula of this Section.
13.4 Payment
The payment price for the subject interest shall be paid in full on the date of
termination set forth in the notice of intent to terminate/sell or award of arbitration
or court. Interest shall commence to accrue from the date of agreement arbitration
or judgment at the Local Government Investment Pool rate. If a Party fails to pay
the purchase price in full at the date of termination, then the terminating/selling
Party shall have the right to sell or transfer or assign the subject interest to any
other government entity as provided in Section 13.1 or 13.2.
13.5 Default and For Cause Termination
The failure of a Party to perform any duty imposed upon it by this Agreement
shall constitute a default. The non-defaulting Party shall have the right to give the
defaulting Party a written notice of default, which shall describe the default in
reasonable detail and state the date by which the default must be cured, which
date shall be at least 60 days after receipt of the notice of default, except in the
case of a failure to advance funds, in which case the date shall be 30 days after
receipt of the notice of default.
13.5.1 Opportunity to Cure. If within the applicable period described in Section 13.5
the defaulting Party cures the default, or if the failure is one (other than the
failure to make payments) that cannot in good faith be corrected within such
period and the defaulting Party begins to correct the default within the
applicable period and continues corrective efforts with reasonable diligence
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until a cure is effected, the notice of default shall be inoperative, and the
defaulting Party shall lose no rights under this Agreement. If, within the
specified period, the defaulting Party does not cure the default or begin to cure
the default as provided above, the non-defaulting Parties at the expiration of
the applicable period shall have the rights specified in Section 13.5.2.
13.5.2 Rights Upon Default. If the defaulting Party has not cured the default as
provided in Section 13.5.1, it shall have no voting rights under this
Agreement until the default has been cured. In addition, the non-
defaulting Party may pursue any other remedy available at law or in equity
against the defaulting Party, including but not limited to, an action for
damages, costs of obtaining substitute water or other performance.
13.6 Dissolution of the Agreement
This Agreement may be dissolved by mutual agreement. Upon dissolution, the
Parties shall agree on a Dissolution Plan and schedule to wind down and dissolve
the business affairs. Unless modified by the Dissolution Plan, the dissolution
shall be effective only after all debts and obligations are paid or provision for
payment is made. Each Party shall assume a share of the debts and obligations in
proportion to their ownership in the Supply Facilities unless the instrument or
transaction that created the debt or obligation specified otherwise. The Parties
shall execute those documents necessary to vest proportionate ownership of the
Supply Facilities and Property in each Party and execute a post dissolution water
supply agreement and a management agreement for the Supply Facilities and
Property. Nothing herein shall prevent a Party from accepting cash or other
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consideration in lieu of continued proportionate ownership in the Supply Facilities
and Property. The cost of dissolution shall be treated as an operation and
maintenance expense.
13.7 Post Initial Expansion Water for Tigard.
After substantial completion of the Initial Expansion, if Lake Oswego elects to
terminate this Agreement, or if the Parties mutually agree to dissolve this
Agreement, Lake Oswego agrees to provide Tigard with treated water sufficient
to supply 14 million gallons per day so that Tigard is always assured of having
sufficient source to supply its capacity share and usage of the Supply Facilities. If
Tigard is allocated additional capacity in the Supply Facilities by the Long Term
Expansion, the provisions of this section shall apply to that increment of water.
Negotiation of a mutually agreeable water supply agreement shall be a condition
precedent to any tennination of this Agreement by Lake Oswego or Dissolution
Plan.
13.8 Unreasonable Withholding of Consent.
Unreasonable withholding of consent shall be those reasons other than financial
considerations, availability of alternate water sources, water usage characteristics,
water service territory, water demand forecasts, technical or operational expertise,
history as a recognized local government water service provider, ownership,
control or operation by or for a private entity or person, and other relevant matters
considered in reasonable and prudent utility management.
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ARTICLE XIV
DISPUTE RESOLUTION
14.1 Dispute Resolution
The Parties hereby agree that resolution of any disputes shall follow the steps as
set forth in Section 14.2. However, nothing shall prevent the disputing parties
(Disputing Parties) from waiving any of the steps by mutual consent.
14.2 Dispute Resolution Steps
Step One: (Negotiation)
The City Manager or other persons designated by each of the Disputing Parties
shall negotiate on behalf of the Party they represent and attempt to resolve the
issue. If the dispute is resolved at this step, there shall be a written determination
of such resolution, signed by each City Manager or other designated persons and
ratified by the governing bodies, which shall be binding upon the Disputing
Parties.
Step Two: (Mediation)
If the dispute cannot be resolved within thirty (30) days at Step One, the
Disputing Parties shall submit the matter to non-binding mediation. The
Disputing Parties shall attempt to agree on a mediator. If they cannot agree, the
Disputing Parties shall request a list of five (5) mediators from an entity or firm
providing mediation services. The Disputing Parties shall mutually agree on a
mediator from the list provided. Any common costs of mediation shall be borne
equally by the Disputing Parties. If the issue is resolved at this step, a written
determination of such resolution shall be signed by each City Manager or other
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designated persons, and ratified by the governing bodies, which shall be binding
on the Disputing Parties.
Step Three (Arbitration)
After exhaustion of the preceding processes, all disputes or claims arising out of
this Agreement shall be submitted to binding arbitration under the rules and
processes of U. S. Arbitration and Mediation of Portland, Oregon or similar
mutually agreed process. Each Disputing Party shall select an arbitrator and the
two shall appoint a third arbitrator. All costs of arbitration shall be borne equally.
The Oregon Rules of Civil Procedure relating to discovery and the Oregon
Evidence code shall apply. The decision of the panel shall be binding. Nothing
herein shall prevent the Disputing Parties from selecting a single arbitrator by
agreement.
14.3 Legal Fees
Each Disputing Party shall bear its own legal and expert witness fees at all stages
of proceedings, including any appeals.
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ARTICLE XV
COMPLETION OF INITIAL EXPANSION OF THE SUPPLY
FACILITIES
15.1 Modification to Agreement
Within three years after completion of the Initial Expansion, the Oversight
Committee shall undertake a review of all agreements and operations and to
consider the need for any modification to the terms and conditions of this
Agreement. At the recommendation of the Oversight Committee, the Councils
for the Parties may consider:
15.1.1 Modification to the existing Agreement(s);
15.1.2 Replacement of existing Agreement(s) with a new Agreement;
15.1.3 Creation of a Supply Agency under ORS Chapter 190.
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ARTICLE XVI
NOTICES
Any notice herein required or permitted to be given shall be given in writing and
effective when actually received by hand delivery or by the United States mail, first class
postage prepaid, addressed to the Parties as set forth below. The Parties shall notify the
Managing Agency of any change of address or title for receipt of notices under this
Agreement.
LAKE OSWEGO: The City of Lake Oswego
Attention: City Manager
380 A Avenue
P.O. Box 369
Lake Oswego, OR 97034
TIGARD City of Tigard
Attention: City Manager
13125 SW Hall Blvd.
Tigard, OR 97223
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ARTICLE XVII
GENERAL PROVISIONS
17.1 Instruments of Further Assurance
From time to time, at the request of a Party, each Party shall, without further
consideration, execute and deliver such further instruments, and shall take such
further action as may be reasonably required to fully effectuate the purposes of
this Agreement.
17.2 Entire Agreement
This Agreement embodies the entire agreement and understanding between the
Parties hereto with respect to the Supply Facilities and supersedes all previous
agreements and understandings relating to the Supply Facilities except as
provided herein. The Parties agree that the existing Agreement for Water Service
effective July 1, 1983 shall terminate as of the date Initial Expansion is
substantially complete.
17.3 Assignment, Sale or Transfer
No Party shall have the right to sell, transfer or assign its interest in this
Agreement (or any portion thereof) or asset(s), without the prior written consent
of the other in accordance with requirements of this Agreement. No Party may
sell, transfer, assign its interest or sell water to an existing wholesale customer in
the other Party's service area as set forth on Exhibit 2 without the prior written
consent of the other Party in accordance with the requirements of this Agreement.
17.4 Severability
In case any one or more of the provisions contained in this Agreement shall be
invalid, illegal, or unenforceable in any respect, the validity, legality and
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enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
17.5 Counterparts
This Agreement may be executed in any number of counterparts and by the
Parties or separate counterparts, any one of which shall constitute an Agreement
between and among the Parties.
17.6 Headings
The Article, section and subsection headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.7 Force Majeure
No Party shall be considered in default in the performance of its obligations under
this Agreement to the extent that the performance of any such obligation is
prevented or delayed by any cause, existing or in the future, which is beyond the
reasonable control of the affected Party, including, but not limited to, Acts of
God, earthquake, labor disputes, civil commotion, war events beyond the
reasonable control of the Parties, such as regulatory restrictions or requirements,
permit issuance, and the like. In the event a Party claims that performance of its
obligations was prevented or delayed by any such cause, that Party shall promptly
notify the other Parties of that fact and of the circumstance preventing or delaying
performance. Such Party so claiming a cause of delayed performance shall
endeavor to the extent reasonable to remove the obstacles which preclude
performance.
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17.8 Consolidation, Merger, Annexation
17.8.1 Change of organization is defined as the consolidation or merger of a
Party with another city under ORS 222.610 et seq.
17.8.2 Any new entity created by change of organization involving a Party to this
Agreement shall require prior consent of the other Party as to the
successor or surviving entity's entitlement to be an owner of the Supply
Facilities, based on the entity's legal, financial and technical ability to
assume the original Party's obligations under this Agreement. Such
consent shall not be unreasonably withheld. If the surviving or successor
entity is approved, the original Party/Parties' obligations and rights
hereunder shall be binding upon and inure to the benefit of the surviving
or successor entity, and that entity shall be subject to all obligations of this
Agreement.
17.8.3 Annexation of or provision of service to an area beyond that area
identified for each party in the Carollo Report, and any transfer of a
Party's territory to a Water Authority formed by one or more cities, water
districts, or both, shall require the prior consent of the other Party, which
shall not be unreasonably withheld considering capacity and demands and
other system factors. Annexations or service to identified areas shall not
require consent.
17.9 Survival of Covenants
Any provision of this Agreement which, by its terms has or may have application
after the expiration or earlier termination of this Agreement, including all
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covenants, agreements, and warranties, shall be deemed to the extent of such
application to survive the expiration or termination of this agreement.
17.10 Indemnity
To the extent permitted by the Constitution and laws of Oregon, each Party agrees
to defend, indemnify and hold harmless the other from and against any and all
actual or alleged claims, damages, expenses, costs, fees, including but not limited
to attorney, account, paralegal, expert and escrow fees, fines, environmental costs
and/or penalty (collectively "costs"), which may be imposed upon, claimed
against, or incurred or suffered by the Party, unless and to the extent it was
resulting from an individual Party's negligence or willful misconduct.
17.11 No Third Party Beneficiaries
The Parties hereto are the only Parties to this Agreement and the only persons or
entities entitled to enforce its terms.
rN WITNESS WHEREOF the Parties have dated and signed this Agreement.
CITY OF LAKE OSWEGO CITY OF TIGARD
Mayor Mayor
Dated Dated
Attest
City Recorder City Recorder
Dated Dated
City Attorney City Attorney
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Exhibit 1
1 interim Supply to Lake Oswego (not allocated) Existing Real Property, Supply
2 Raw water intake (not allocated) Facility Components and Valuation
3 Raw water Transmission
4 Water Treatment Plant: Land
5 Water Treatment Plant: Structures & Equipment (not allocated)
6 Finished Transmission Main (not allocated)
7 waluga Reservoir: Land (Reservoir Property)
8 Waluga Reservoir: Structures & Equipment (not allocated)
9 Bonita Pump Station (not allocated)
10 Computer System/Software
11 General Plant
Current Year 2008 Assumed Escalation „,
May 2008 ENR CCI 8140 Pro cted July 2008 ENR CCI 8,208
Acquisition Acquisition Original July Today Acquisition Useful Life Depreciation
Allocation Asset Description Date Amount ENR CCI 2008 CCI Amount in ears Amount Value Today
Water Treatment Plant Land 1,155 8,208
4 Plant Site 6/30/1968 $ 8::,797 $ 595,491 Land $ - $ 595,491
Sub Total $ 83,797 $ 595,491 $ - $ 595,491
Raw Water Transmission ',2K 8,208
3 Raw Water Transmission 6/30/1969 $ 590,137 $ 3,816,979 100 $ 1,488,622 $ 2,328,357
3 Pipieline Easements 6/30/1969 $ 22,000 $ 142,295 100 $ 55,495 $ 86,800
Sub Total $ 612,137 $ 3,959,274 $ 1,544,117 $ 2,415,157
Distribution Storage
7 Reservoir Property 6/29!1980 $ 8,416 3.237 8,208 $ 21,340 Land $ - $ 21,340
Waluga Reservoir 3/301!983 $ 11 281.427 x.066 8,208 $ 2,586,753 100 $ 646,688 $ 1,940,065
Sub Total $ 1,289,843 $ 2,608,093 $ 646,688 $ 1,961,405
Computer SVstems/Software
10 SCADA System Upgrade 6/30!1991 $ 180.722 4,835 8,208 $ 306,791 20 $ 260,773 $ 46,019
10 Scada Software Upgrade 6/30/1999 $ 33 500 6,059 8,208 $ 45,381 20 $ 20,421 $ 24,959
Sub Total $ 214,222 $ 352,172 $ 281,194 $ 70,978
General Plant
11 Other 618/1982 $ '+7-000 3,825 8,208 $ 36,479 20 $ 36,479 $ -
Vehicles 8/8/1986 $ 24.000 4.295 8,208 $ 45,864 20 $ 45,864 $ -
11 Vehicles 6'30%1999 $ 20,500 6,059 8,208 $ 27,770 20 $ 12,497 $ 15,274
Sub Total $ 61,500 $ 110,114 $ 94,840 $ 15,274
Land Additions 2006 RMV(land Only)
7 Waluga Res#1 1976 $ 329,841 Land $ - $ 329,841
4800 Carmen Or 1992 $ 237,346 Land $ $ 237,346
7 Vacant Parcel 1992 $ 253,485 Land $ - $ 253,485
4 4260 Kenthorpe Way 1966 $ 680,014 Land $ $ 680,014
4 WTP Property 1979 $ 132,652 Land $ - $ 132,652
4 4245 Mapleton Dr 1989 $ 258,916 Land $ - $ 258,916
4 4305 Mapleton Or 1995 $ 258,916 Land $ $ 258,916
4 4315 Mapleton Or 1989 $ 258,916 Land $ $ 258,916
4 South of Plant Site 1989 $ 47,430 Land $ $ 47,430
Clackamas River Intake&Pump Station
Structure 6/30/1969 $ 121,980 1,269 8,208 $ 788,961 60 $ 512,825 $ 276,136
Pumps&equipment 6/30/1969 $ 50,825 1,269 8,208 $ 328,734 40 $ 320,515 $ 8,218
Piping and Valves 6/30/1969 $ 20,330 1,269 8,208 $ 131,494 60 $ 85,471 $ 46,023
Electrical,I&C.HVAC 6/3011969 $ 10.165 1,269 8,208 $ 65,747 40 $ 64,103 $ 1,644
Seismic Upgrades 1980 $ 131,000 6,538 8,208 $ 164,458 60 $ 76,747 $ 87,711
Pumps 1980 $ 40,000 3,237 8,208 $ 101,425 40 $ 70,998 $ 30,428
Pumps No.4 2002 $ 153,833 6,538 8,208 $ 193,123 40 $ -28,968 $ 164,154
Intake Fish Screens 2002 $ 1,352,600 6,538 8,208 $ 1,698,060 20 $ 509,418 $ 1,188,642
Piping and Valves 1980 $ 10,000 3,237 8,208 $ 25,356 60 $ 11,833 $ 13,523
Electrical and HVAC 1980 $ 21,000 3,237 8,208 $ 53,248 40 $ 37,274 $ 15,974
Intake Land
Water Treatment Plant
Site Work 6/30/1969 $ 155,915 1,269 8,208 $ 1,008,451 60 $ 655,493 $ 352,958
Concrete and Buildings 6/30/1969 $ 479.739 1,269 8,208 $ 3,102,930 60 $ 2,016,904 $ 1,086,025
Pumps 6/30/1969 $ 4,197 1,269 8,208 $ 27,146 40 $ 26,467 $ 679
Mechanical Equipment 6130/1969 $ 125,931 1,269 8,208 $ 814,516 40 $ 794,153 $ 20,363
Piping and Valves 6/30/1969 $ 191,895 1,269 8,208 $ 1,241,168 60 $ 806,759 $ 434,409
Electrical,I&C,HVAC 6/30/1969 $ 191,895 1,269 8,208 $ 1,241,168 40 $ 1,210,139 $ 31,029
Filter Media,and Underdrains 6/30/1969 1,269 8,208 $ - 40 $ - $ -
Chemicai Addition 6/30/1969 1,269 8,208 $ 40 $ $
Clear Well 6/30/1969 1,269 8,208 $ 60 $ $
Solids Dewatering Facilities 6/30/1969 1,269 8,208 $ - 60 $ $
Miscellaneous 6/30/1969 $ 11,993 1,269 8,208 $ 77,570 20 $ 77,570 $
Engineering 6/30/1969 1,269 8,208 $ - 60 $ - $ -
Expansion 1980 $ 80,221 3,237 8,208 $ 203,411 60 $ 94,925 $ 108,486
Site Work 1998 $ 510,000 5,920 8,208 $ 707,094 60 $ 117,849 $ 589,245
Expansion 1980 $ 333,224 3,237 8,208 $ 844,933 60 $ 394,302 $ 450,631
Seismic/ADA/Code 2000 $ 498,498 6,221 8,208 $ 657,706 60 $ 87,694 $ 570,012
Expansion: 1980 $ 86,391 3,237 8,208 $ 219,056 60 $ 102,226 $ 116,830
Pumps and Equipment 1999 $ 507,925 6,059 8,208 $ 688,061 40 $ 154,814 $ 533,248
Expansion 1980 $ 67,879 3,237 8,208 $ 172,116 60 $ 80,321 $ 91,795
Mechanical 2001 $ 641,126 6,343 8,208 $ 829,616 40 $ 145,183 $ 684,433
Expansion 1980 $ 357,906 3,237 8,208 $ 907,517 60 $ 423,508 $ 484,009
Expansion 1980 $ 178,954 3,237 8,208 $ 453,761 60 $ 211,755 $ 242,006
Electrical 1999 $ 66,247 6,059 8,208 $ 89,742 40 $ 20,192 $ 69,550
Electrical&Instrumentation, 2001 $ 568,564 6,343 8,208 $ 735,721 40 $ 128,751 $ 606,970
Expansion 1980 $ 83,923 3,237 8,208 $ 212,798 60 $ 99,306 $ 113,492
Filters&Structural Work 2001 $ 416,886 6,343 8,208 $ 539,450 40 $ 94,404 $ 445,046
Sodium Hypochlorite System 1998 $ 282,793 5,920 8,208 $ 392,081 40 $ 98,020 $ 294,061
Lime 5otrage/Feed System 1998 $ 1.000,158 5,920 8,208 $ 1,386,677 40 $ 346,669 $ 1,040,008
CO2 Storage/Feed System 1998 $ 238,357 5,920 8,208 $ 330,472 40 $ 82,618 $ 247,854
Alum Sotrage/Feed System 1998 $ 522,800 5,920 8,208 $ 724,840 40 $ 181,210 $ 543,630
Clear Well Baffle 1996 $ 107.293 5,622 8,208 $ 156,642 40 $ 46,993 $ 109,650
Solids Dewatering Lagoons 1999 $ 1,084,518 6,059 8,208 $ 1,469,144 40 $ 330,557 $ 1,138,587
Expansion 1980 $ 45,664 3,237 8,208 $ 115,787 60 $ 54,034 $ 61,753
Engineering 1998 $ 311,460 5,920 8,208 $ 431,826 60 $ 71,971 $ 359,855
Engineering 1999 $ 120,000 6,059 8,208 $ 162,558 60 $ 24,384 $ 138,174
Engineering 2000 $ 126,653 6,221 8,208 $ 167,103 60 $ 22,280 $ 144,822
Engineering 2001 $ 332,000 6,343 8,208 $ 429,608 60 $ 50,121 $ 379,487
Finished Water Transmission
24-inch Finished Water Main 6/30/1969 $ 473.456 1,269 8,208 $ 3,062,292 100 $ 1,194,294 $ 1,867,998
WTP Transmission Main 6/30/1969 $ 42,618 1,269 8,208 $ 275,651 100 $ 107,504 $ 168,147
:Norte Shore-Iron Mtn.Pipelines 6/30/1970 $ 534,142 1,381 8,208 $ 3,174,619 100 $ 1,206,355 $ 1,968,264
Upper Dr.-Iron Mtn,24 Inch Pipeline 6/30/1985 $ 575,398 4,195 8,208 $ 1,125,810 100 $ 258,936 $ 866,873
Cathodic Protection System 4/1/2000 $ 486,097 6,221 8,208 $ 641,344 40 $ 128,269 $ 513,075
Sub Total $ 13,754,449 $ 34,828,504 $ 13,665,082 $ 21,163,422
Calculated Total Current
Acquisition Value 2008 Value Depreciation Value
TOTAL ASSETS $ 16,015,948 $ 42,453,649 $ 16,231,922 $ 26,221,727
Exhibit 2
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"" LAKE OSWEGO SERVICE AREA
Lo707f1.1-7525.ai JOINT WATER SUPPLY SYSTEM ANALYSIS
CITY OF LAKE OSWEGO AND TIGARD WATER SERVICE AREA
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TIGARD WATER SERVICE AREA
i
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JOINT WATER SUPPLY SYSTEM ANALYSIS
Lo507fl.2-75254 CITY OF LAKE OSWEGO AND TIGARD WATER SERVICE AREA
EXHIBIT 3 - Map of Supply Facilities �`���
Waluga Reservoir
Bonita Pump
Station
•
Lake Oswego
WaterTreatment Plant
Clackamas River Intake
Legend
Existing and Proposed
Parallel Pipeline
0 2
Miles
Exhibit 4
City of Lake Oswego Water Rights Summary
Permitee Application/Permit# Authorized Authorized Amount Amount Priority Source
amount place of developed/certificate# undeveloped Date water
(cfs/m d) use cfs/m d (cfs/m d)
City of S43365/S32410 50/32.32 City of Lake 25/16.16/C78332 25/16.16 3/14/1967 Clackamas
Lake Oswego and River
Oswego City of
Tigard'
City of S50819/S37839 9/5.81 City of 0 9/5.81 7/5/1973 Clackamas
Lake Tualatin and River
Oswego Tigard
Water
District'
Notes: 1. The City of Lake Oswego is currently seeking extensions of time to fully use all water authorized under permit Nos. S32410,
S37839 and S43246. Proposed Final Orders(PFO) approving the City's request are pending at Water Resources Department
(WRD)in Salem. It is expected protests will be filed on the PFO's once they are issued for public comment.
2. The City has submitted its water management and conservation plan to WRD and no public comments on the plan were filed
during the 30-day public comment period. An approved WMCP is required before the City can access any portion of
undeveloped water noted above.
' Permit Amendment T-8358 amended Permits 532410 and S37839 to include the City of Tigard as authorized places of use.
2 Permit S37839 was granted to the City of Lake Oswego for the benefit of the Cities of Tualatin and the Tigard Water District.
Exhibit 5
Supply Facilities Capital Improvement Program
(To be added following adoption by each Council)
EXHIBIT
DETERMINATION OF TIGARD BUY-IN
Net Tigard
Original Cost Reproduction u Tigard Share
Asset Tax Map Tax Lot Clackamas Co.Deed Cost Allocation /o
Clackamas River Intake&Pump Station $ 1,911,733 $ 1,832,454 0.00% $ -
Clackamas River Intake Land* 2 2E 20CA 15001 Bk 173,Pg 900-902 $ $ 14/38 $
Computer System/Software $ 214,222 $ 70,978 14/38 $ 26,150
Finished Water Transmission $ 2,111,711 $ 5,384,358 0.00% $ -
General Plant $ 61,500 $ 15,274 14/38 $ 5,627
Raw Water Transmission $ 612,137 $ 2,415,157 14/38 $ 889,795
Waluga Reservoir $ 1,281,427 $ 1,940,065 0.00% $
Waluga Reservoir:Land
Reservoir Property 2 1 E 07 AD 03100 Doc 72-06414 $ 8,416 $ 21,340 14/38 $ 7,865
Waluga Res#1* 2 IE 07AD 00700 Doc 76-36977 n/a $ 329,841 14/38 $ 121,520
4800 Carmen Dr* 2 IE 07AD 00900 Doc 92-063461 n/a $ 237,346 14/38 $ 87,443
Vacant Parcel* 2 IE 07AD 01000 Doc 92-063461* n/a $ 253,485 14/38 $ 93,389
Water Treatment Plant $ 9,731,005 $ 11,489,095 0.000/0 $ -
Water Treatment Plant Land
4260 Kenthorpe Way-parcel 1" 2 1E 24BD 00300 Bk 688,Pg 581 $ 83,797 $ 595,491 14/38 $ 219,391
4260 Kenthorpe Way-parcel 2* 2 IE 24BD 00401 Doc 79-35248 n/a $ 680,014 14/38 $ 250,531
xxxx Mapleton Dr* 2 IE 24BD 01200 Doc 89-10200 n/a $ 132,652 14/38 $ 48,872
4245 Mapleton Dr* 2 1 E 24BD 01400 Doc 89-13210 n/a $ 258,916 14/38 $ 95,390
4305 Mapleton Dr* 2 1E 24BD 01300 Doc 95-33429 n/a $ 306,346 14/38 $ 112,864
4315 Mapleton Dr* 2 IE 24BD 01500 Doc 89-13210 n/a $ 258,916 14/38 $ 95,390
Totals *less 2006-108190 $ 16,015,948 $ 26,221,727 $ 2,054,227
-Net reproduction cost for thea properties are based on an assessor's 2006 real market value(RIv1V).These costs are not included in the total ongiml cost
Tigard and LO will need to complete an updated appraisal of land values,and resolve which parcels are material to this agreement before determining the final buy-in cost.
Allocation%based on 14 mgd of 38 mgd capacity allocated to Tigard.
Net Reproduction Cost includes escalation by ENR less depreciation.
EXHIBIT_7_
ALLOCATION OF SYSTEM IMPROVEMENT COSTS TO THE PARTIES
Cost of Lake Oswego Tigard
Improvement Allocation Allocation
(in 2006 $) * (a/o) Share($) (%) Share($)
Water Treatment Plant
-Existing Plant n/a 100.00% n/a 0.00% $ -
-32 mgd Expansion $ 39,430,000 2/16 $ 4,928,750 14/16 $ 34,501,250
- 38 mgd Expansion n/a 100% ** n/a 0.00% $ -
Raw Water Intake and
Pump Station $ 4,440,000 24/38 $ 2,804,210 14/38 $ 1,635,789
Raw Water
Transmission Main $ 23,920,000 24/38 $ 15,107,368 14/38 $ 8,812,633
Finished Water
Transmission Main
-Reaches 7-10 $ 38,220,000 24/38 $ 24,138,947 14/38 $ 14,081,053
-Reaches I 1-12 $ 17,020,000 8/22 $ 6,189,091 14/22 $ 10,830,909
Storage(MG) $ 4,010,000 1.0/2.5 $ 1,604,000 1.5/2.5 $ 2,406,000
Bonita Road Pumping
Station $ 1,700,000 0.00% $ - 100.00% $ 1,700,000
Total Costs $ 128,740 000 42.54% $ 54,772,366 57.46% $ 73,967,634
•-Project costs are presented in 2006 dollars.Actual cost will depend on project start and completion dates.
••-Second(6 mgd)expansion is currently assigned to Lake Oswego. Contract provides for potential reallocation by agreement.
.........................................................................................................y
SAMPLE RESOLUTION FOR
IWB MEMBER JURISDICTIONS
Please tailor to your own format and delete
highlighted references to other member jurisdictions.
...........................................................................................................:
TIGARD WATER DISTRICT/
CITY OF KING CITY, OREGON
CITY COUNCIL/
CITY OF DURHAM, OREGON
CITY COUNCIL
RESOLUTION NO. 08-
RESOLUTION RECOMMENDING THE CITY OF TIGARD APPROVE THE WATER
PARTNERSHIP INTERGOVERNMENTAL AGREEMENT REGARDING WATER SUPPLY
FACILITIES, DESIGN,CONTSTRUCTION, AND OPERATION, BETWEEN THE CITY OF
TIGARD AND THE CITY OF LAKE OSWEGO
WHEREAS, the Tigard Water District("District")/City of King City("City")/City of Durham
and the City of Tigard ("Tigard")are voting members of the Intergovernmental Water
Board created by way of an intergovernmental agreement dated December, 1993; and
WHEREAS, Tigard and the City of Lake Oswego desire to enter into an intergovernmental
agreement("Proposed IGA")regarding water supply for the purpose of jointly obtaining a
permanent non-contract source of raw water; and
WHEREAS, the and Tigard have agreed that it is in the public's best interest for the
to review the Proposed IGA; and
WHEREAS, the Proposed IGA is supported by sound engineering analysis, is in the best interest
of water customers within the original water district and is consistent with the goal of working
together to provide all of the residents and property with a clean,economical water supply;and
WHEREAS, in July 2007 an engineering study known as the Lake Oswego and Tigard Joint
Water Supply System Analysis was performed by Carollo Engineers and was funded by the
ratepayers of the Tigard Water Service Area and the City of Lake Oswego.
NOW, THEREFORE,BE IT RESOLVED b the
that:
SECTION 1: The hereby
recommends to Tigard that the Intergovernmental Agreement Regarding Water
Supply Facilities,Design and Construction and Operation Between the City of
Lake Oswego and the City of Tigard be approved by the City of Tigard; and
SECTION 2: This resolution is effective immediately upon passage.
Page I - RESOLUTION NO.08-_
PASSED: This day of ,2008.
Mayor, City of King City
Mayor, City of Durham
ATTEST:
Tigard Water District Recorder
City Recorder, City of King City
City Recorder, City of Durham
Page 2 - RESOLUTION NO.08-
INTERGOVERNMENTAL WATER BOARD
RESOLUTION NO. 08-01
RESOLUTION RECOMMENDING THE CITY OF TIGARD APPROVE THE WATER
PARTNERSHIP INTERGOVERNMENTAL AGREEMENT REGARDING WATER SUPPLY
FACILITIES,DESIGN,CONTSTRUCTION,AND OPERATION,BETWEEN THE CITY OF
TIGARD AND THE CITY OF LAKE OSWEGO
WHEREAS,the City of Tigard("Tigard")and the City of Lake Oswego desire to enter into an
Intergovernmental Agreement("IGA")regarding water supply for the purposes of obtaining a
permanent non-contract source of raw water;and
WHEREAS,the Intergovernmental Water Board was created by way of intergovernmental
agreements in December, 1993,and under these agreements,has authority to make
recommendations to Tigard relative to certain water service matters,and as to any other matters
which the Intergovernmental Water Board may feel to be for the good of the water system,the
overall public interest and for the benefit of the consumer; and
WHEREAS,the proposed IGA is supported by sound engineering analysis, is in the best interest
of water customers within the original water district and is consistent with the goal of working
together to provide all of the residents and property with a clean,economical water supply;and
WHEREAS, in July 2007 an engineering study known as the Lake Oswego and Tigard Joint
Water Supply System Analysis was performed by Carollo Engineers and was funded by the
ratepayers of the Tigard Water Service Area and the City of Lake Oswego.
NOW,THEREFORE,BE IT RESOLVED by the Intergovernmental Water Board that:
SECTION 1: The Intergovernmental Water Board hereby recommends to Tigard that the
Intergovernmental Agreement Regarding Water Supply Facilities,Design and
Construction and Operation Between the City of Lake Oswego and the City of
Tigard be approved by the City of Tigard; and
SECTION 2: This resolution is effective immediately upon passage.
PASSED: This day of ,2008.
Chair,Intergovernmental Water Board
ATTEST:
IWB Recorder
Page 1 - RESOLUTION NO. 08-01
Submitted at the IWB Meeting
By: jai"" leu CV11L_
July 9, 2008
Date: 7- 7 - CS Agenda Item No.: `f
Issues and concerns regarding the Lake Oswego/Tigard IGA, from the Tigard Water District:
1. The City of Tigard and the City of Lake Oswego are the only parties to the agreement. However,
because of the 1994 IGA between the District and Tigard, the District and the other parties to the
IWB likely would be deemed third-party beneficiaries under the Tigard/Lake O agreement. We
do have a concern in the fact that our rate payers will be paying for new infrastructure, paying for
it with new higher rates, and not have ownership.
2. Similarly, because the activities being undertaken pursuant to this IGA relate to the supply and
distribution of water, including supply and distribution within the District's service area, the District
is potentially liable for any harm or damages occurring pursuant to the activities described in the
agreement. For example, if Lake Oswego supplied contaminated water, and that was distributed
by the City of Tigard to the District's service area, anyone harmed by it could name all three
entities in a legal action. Ideally, the indemnification provisions in the water supply IGA would
require Lake Oswego to indemnify Tigard for Lake O's negligence, and the TWD/Tigard IGA
would require Tigard to indemnify the District for any of Tigard's negligence. Thus, any claim
against the District could probably be fairly easily dispatched, but the risk should be
acknowledged.
3. Pursuant to Section 1.1.10, the members of the IWB are identified as "existing wholesale
customers." Given Tigard's management role in distributing water to the District, we think that the
relationship is, on the whole, more that of owner-agent than seller-buyer. But for purposes of the
Tigard/Lake O agreement, there does not appear to be any harm identifying the District as a
"wholesale customer."
4. Tigard's financial obligation under this agreement is in excess of$73 million. Under section
7.1.2, the parties also will divvy up the costs of operation and maintenance of the new facilities.
Tigard will raise water rates to help fund these costs and these increases (per the District's IGA
with Tigard) will extend to the District's customers, as well. Tigard should be holding hearings if
they intend to raise rates, and District customers should bring their concerns to the City Council
at that time, or before.
5. Section 3.5 requires an inventory of each party's physical facilities and real estate holdings.
Tigard's interest in many of its properties is as a part owner in co-tenancy. We just want to verify
that Tigard will only be claiming their percentag< of ownership of any properties in which the
District and other members of the IWB have an ownership interest. These properties do not
"belong" to Tigard, and it would be inappropriate of Tigard to claim 100 percent of their value in
the inventory process. If the properties are to be pledged as collateral or used in any other way
that could potentially result in their loss or diminished value, the rest of the IWB members need to
prevent this from happening. According to Section 3.6, the agreement requires only that the
respective City Council approve sales, transfers, leases, exchanges, other disposition of, or
encumbrances on, these properties. At minimum, to the extent the jointly owned properties are
involved, Tigard should first be coming to the IWB for a vote before taking it to the City Council.
6. Section 12.1 requires adoption of an operations manual to address treatment standards, etc.
Because these issues have an impact on the members of the IWB, we would like to request the
opportunity to review this.
7. Section 13.6 allows the IGA to be dissolved by mutual agreement, and Section 13.7 requires the
parties to work out their respective supply needs upon termination. If dissolution is being
considered, the IWB members should be among the first to know, given that loss of the water will
likely impact your customers.
8. Section 15.1 calls for this agreement to be reviewed three years after initial expansion [est.
20161, to see if it should be replaced or modified. Interestingly, this section also allows for
consideration of the creation of an intergovernmental "Supply Agency." The District's 1994 IGA
with Tigard is due to expire in 2018, if it isn't modified or terminated before that. The estimated
time for possible creation of an intergovernmental Supply Agency is by 2019. (Is this something
Tigard is planning on?)
Sign-in Sheet
Intergovernmental Water Board Meeting
Public Hearing
on the
Resolution Recommending the City of Tigard Approve the Water Partnership
Intergovernmental Agreement Regarding Water Supply Facilities, Design,
Construction, and Operation, Between the City of Tigard and the City of Lake Oswego
July 9, 2008
Due to time constraints,the Board may impose a time limit on public testimony.
Name Do you wish If yes, please give your address
please print to speak to
the Board?
�L
Note: This is a public meeting, subject to the State of Oregon's public meeting and records laws.
All written and oral testimony becomes part of the public record. The names and addresses of
persons who attend or participate in public meetings will be included in the meeting minutes, which
is a public record.
Tigard Water District's Review and Initial Comments for Amendment of the Tigard- IWB
Member IGA (Tigard Water District) for the IWB Meeting of July 9, 2008 by Julie Russell, �I
Member.
�
o
ek< z
Position Statement: a) E
The Tigard Water District is interested in amending the "Intergovernmental Agreement
Between the City of Tigard and the Tigard Water District for Delivery of Water Service to m ca
Territory Within the District Boundaries" to reach a better partnership with Tigard and the 3: I
other IWB Members that is fair, equitable and meets the Mission Statement to provide "a 0,
clean, economical water supply." ` Q
c�
Recitals
Page 1 #5. "...Tigard will receive revenue from water users in Tigard, King City, Durham and
the District, and with that revenue Tigard will provide the funds to pay for expenses incurred in
providing water service."
Comments: The District would like Tigard to provide, at no additional cost to the District, an Z,
annual report to accompany payment to the District which shows the methodology used in
determining the District's 1%, detail on the revenue and payment streams. Additionally, the
District would like the rights to review the billing procedures to water users to ensure that the m
most cost effective and efficient system is being implemented to provide billing to the users at
the lowest cost possible. Tigard would provide IWB members with an analysis of billing
procedures and providers biannually so the IWB can determine the best billing provider.
Page 2 V. "The Parties shall continue to prepare independent tax coordination plans."
Comments: The District is in need of clarification as to what this recital means.
Page 2 #2. Term
"This agreement shall be in full force and effect until December 31, 2018, unless sooner
terminated by one or both parties."
Comments: The District recommends removing the expiration date and making the term and
language in this section similar to and corresponding with the Lake Oswego/COT Water Source
IGA.
Page 2 #3. Intergovernmental Water Board
Pg. 2 Format of the IWB
Comments: The District would like the IWB to become an official, legal entity registered with
the State of Oregon. As a legal entity the IWB could serve as more than an advisory board for
its members and have more authority in actions on their behalf and in the partnership
relationship. In addition, official status would help to formalize procedures to insure compliance
with state public meetings law, the IWB's ability to sign contracts, hold hearings, etc. In addition,
the IWB should have its own website.
Questions have been raised about the scope of authority of the Intergovernmental Water Board:
There are two primary purposes for intergovernmental agreements under ORS Chapter 190.
The first is essentially a collaborative agreement to share or delegate services, to share staff or
facilities, or to otherwise cooperative in a common effort. This type of agreement does not
create a separate legal entity, but instead creates mutually binding legal obligations on each
participant. The District's IGA with Tigard appears to be this type of agreement.
1
In comparison, ORS 190.010(5) permits the creation of a separate intergovernmental entity by
agreement, provided each participating public entity ratifies the formation of the entity by
ordinance before the agreement takes effect [ORS 190.085]. According to ORS 190.080, if
provided for in the agreement creating the entity, an intergovernmental entity may: (a) Issue
revenue bonds or enter into financing agreements to accomplish the public purposes of the
parties to the agreement, after completing certain formalities: (b) enter into agreements with
vendors, trustees or escrow agents for the installment purchase or lease, with option to
purchase, of real or personal property for up to 20 years: and (c) adopt all rules necessary to
carry out its powers and duties under the intergovernmental agreement. The intergovernmental
entity is governed by a board or commission appointed by, responsible to and acting on behalf
of the units of local government that are parties to the agreement, according to a governance
document established by the participating agencies. As a free-standing legal entity, it may enter
into contracts and make other legally binding decisions, within the authority granted in the
governing document.
Thus, if the participating local governments' intentions in created the IVV.9 were to create an
intergovernmental entity with separate authority to act, at least two steps would be required.
First, each participating government entity would be required to ratify the creation of the IWB by
ordinance. Second, the IWB would need a "governance document" describing the scope of its
authority, and any actions taken would need to be authorized in that governance document.
ALTERNATIVELY, Currently.. the role of the IWB is to 'make recommendations to the Tigard
City Council on water services issues." Amend the agreement to beef up the IWB's role, by
requiring the IWB to approve all the things it currently "makes recommendations" on. We would
propose some language like, "The Parties acknowledge that the IWB is not an independent
legal entity, but a consortium of local water providers. Therefore, the members of the IWB shall
be permitted at any time to obtain consent from their respective governing bodies for, and shall
be required to approve by unanimous vote, the following activities by the City of Tigard:" And
then list them, including all the things the current agreement requires "recommendations" on, if
appropriate.
Pg. 2, 3.A. "...District !!nincorporated Area — U. I_:tuber At Large — Gr r, Member selected by
a majority vote of the other Members."
Comments: The at-large member position shall be advertised every two years, applicants shall
be interviewed by the Board, and then the position shall be filled by a majority vote of the Board.
Pg. 5, #4. Division of Original District Assets
Comment in General: With an equitable partnership between the entities, all properties have
an equitable division of assets between all entities.
4.A.(2)a. Other Assets...
Comment: If the Members truly want to be joined at the hip, all system assets in all Member
jurisdictions should be jointly owned in tenancy-in-common agreements, not just those that are
under title to the TWD.
4.6. All system assets and other assets shall be pledged by the Cities and the District to
Tigard."
Comment: This section unnecessary if changed as above.
2
4.C. Termination formula
Comment: Add a provision requiring that the members of the IWB must unanimously agree on
apportionment of System Assets upon termination.
4.11). "Upon termination of this Agreement, other assets shall become the property of the
jurisdiction in which the asset is located"
Comments: Add the word "immediately" following the word "shall." Also, it's time for an
inventory of all "system assets" and "other assets."
Comments on this Entire Section: This whole section needs to be rewritten to find a more fair
proportional interest in the assets. Depreciation is an accounting term, and should not be used
as a basis for asset ownership. If an asset is fully depreciated, then its value is $0 to
everybody? This makes no sense.
5. Asset Ownership/Water Rates/Revenues
S.A. "...The District's ownership interest in the assets shall remain though the assets are being
utilized by Tigard, unless transferred to Tigard by agreement or operation of law. Tigard will
maintain and insure the real and personal property assets it utilizes."
Comments: A public accountant's opinion, or that of some recognized authority, is needed to
determine the question Bill Sheiderich raised concerning this section of "Should each member
have a stated value for assets within that jurisdiction for purposed of General Accounting
Standards Board rules?"
S.B. "...Any higher fees, rates and charges imposed for providing water service shall be
reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to
covering the actual costs of providing such service..."
Comments: Change language to. "shall be reviewed and approved by a majority vote of the
IWB."
5.C.(4). SDCs
Comments: I igard contemplates changing the SDC rate. the IWB should be informed, an ' ,
majority vote should be necessary by the IWB.
5.D.(1)(b) "The capital improvement program must be approved by the governing bodies of one
less than the number of jurisdictions holding an ownership interest in the water system."
Comments: The District would like clarification as to whether this is referring to capital
improvements or supply source issues.
5.D.(3) "...The depreciated value shall be based upon the useful life of capital improvement
under generally accepted accounting principles using a straight line method of depreciation..."
Comments: Depreciated value should be deleted and replaced with proportional interest based
on the fair market value of the asset, as determined by an average of two qualified appraisers.
5.D.(4) "...a sum equal to the Jurisdiction's Proportionate Interest in the depreciated value of
such system asset."
Comments: Replace depreciated value with fair market value as above.
5.F. '`The District shall receive an annual rebate equal to 1% of the previous years water sale
revenue within the District for District expenses."
Comments: An annual rebate equal to 1% is not sufficient for the District to provide for the
operating services of the District, contingencies, or the education and water conservation
programs it would like to provide or be involved in for its constituents. The District has needs
that differ from the other Members, as the rebate is our sole source of revenue. The annual
3
rebate should be increased to 3% of the previous year's water sale revenue. Also, change
from "water sale revenue" to "water sale revenues, system development charge revenue,
franchise fee charges and other revenues derived within the District" for District expenses.
5.G.(1) "...Tigard shall use generally accepted accounting principles applicable to utility
enterprises for the recording and identifying of all revenues and expenditures made for the
water system. The Intergovernmental Water Board shall review such allocation and
methodology."
Comment: Change from "The Intergovernmental Water Board shall review such allocation and
methodology." to "The Intergovernmental Water Board shall review and approve such allocation
and methodology."
6. Indebtedness
6.113. "Tigard may incur, without the consent of the District..."
Comment: Change to "Tigard may not incur, without the consent of the District..."
7. Services Provided By Tigard
7.A. "Tigard will provide water to properties and customers in all jurisdictions equally."
Comments: The District needs clarification on "equally".
7.13. "...Tigard is under no obligation to provide such water services to areas annexed to the
District subsequent to this agreement."
Comment: This sentence is not in the King City and Durham Agreements so it is not an
equitable statement. Either all three jurisdictional IGAs should share this provision, or none
should. Otherwise, a financial inequity exists between the Members.
7.C. "District agrees that Tigard is empowered to use any right of condemnation possessed by
the District that is necessary to provide water services consistent with the terms of this
Agreement,..."
Commmit: The District agree- -.vith Bill Schiederich's issue statement. "Delegating a city's
power to condemn to another city may be impermissible. Better wording would be that
Durham/other members would agree to consider condemnation of property within their
jurisdiction if that entity decides condemnation is required for the water supply system, and
allow Tigard to represent the city or district in court."
7.E. "To the extent that Tigard charges other governmental..."
Comment: Eliminate this line and note, "Tigard agrees to allow the District use of the Richard
Brown Auditorium at no cost to the District and such consent for use of space shall not be
withheld if the space is available and the District provides at least 24 hours notice."
7.F. "Tigard agrees to assist the District in preparation of budgets, organization and noticing of
meetings, other administrative duties at the request of the District. The District agrees to
compensate Tigard a reasonable amount for such assistance."
Comment: The District would like the last line removed. Add, "Tigard will respond within five (5)
business days to requests for public and financial records relating to services provided in, and
expenditures made to and on behalf of, the Tigard Water District." Such requests will be
handled at no charge.
8. Rules and Regulations
8.13. "...The Intergovernmental Water Board is empowered to make a continuing review of any
and all rules and regulations....''
4
Comments: The District would like "continuing" removed and replaced with "annual".
9. Extension of Service
9.A and 9.13
Comments: The District would like 9.A and 9.13 enforced.
10. Employee Benefits/Personnel
Comments: The District would like this entire section removed because it is obsolete.
11. Annual Meeting
Comments: The District would like this section enforced.
Additional:
New water system assets built or procured need to have joint ownership also, as the funds to
build or procure these facilities are likely coming from Water CIP funds or from rate increases,
which affect all IWB Member jurisdictions. Or if joint ownership is not possible (i.e. Lake Oswego
Agreement) perhaps the individual ICAs could include a provision that if a Member leaves, then
Tigard payx that Member fair market value of that asset in the same proportion as the other
typical joint tenancy percentages.
Closing Comments:
The District appreciates this opportunity for new consideration to be given in regards to
the Agreements Tigard holds with each of the entity's of the IWB. It anticipates that
refining the Agreements in place will make for better working relationships, fair
equitability and ultimately for the good of all the water service areas of the Agreements.
5
City of Tigard, Oregon • 13125 SW Hall Blvd. • Tigard, OR 97223
July 3, 2008 Submitted at the IWB Meeting 0
By: �re�e�r�-� OUL{MI-r'"
Mr. Ken Henschel _
Tigard Water District �x
g Date: ��9 U� Agenda Item No.:
P.O. Box 230281
Portland OR 97223-8144
Re: Proposed Lake Oswego Water Partnership Agreement
Dear Mr. Henschel:
Thank you for sharing your concerns regarding the upcoming decision on the Tigard/Lake
Oswego water partnership agreement in your letter of July 2, 2008. I concur that it would have
been preferable to have the agreement finalized earlier. However, there were minor points within
the draft agreement requiring further clarification from both Lake Oswego and Tigard, thus
preventing the release of the final agreement until July 2, 2008. The agreement was shared with
the District within hours of being finalized.
I must correct your statement that, ". . . our District has not even seen a preliminary copy of the
proposed agreement . . ." In fact each member of the District was sent a draft of the agreement by
way of the May 15, 2008 Intergovernmental Water Board (IWB) packet. Subsequent revisions to
the agreement were technical in nature and did not affect the main body of the agreement
regarding the percentage of ownership and water supply, cost sharing, timeframe, managing
authority, etc.
District representatives had the opportunity to attend, and in fact participated in:
■ IWB meetings where the agreement was discussed.
■ Several joint meetings (with the IWB and the Tigard and Lake Oswego City Councils).
■ An open house regarding the agreement.
Information on the legal ramifications of the agreement and its effect on ratepayers was provided
at several of these venues.
The process employed to develop this agreement is not new. This is in fact the same process we
employed when Tigard entered into the Portland water contract a few years ago, and to my
knowledge it is the process we have always followed-in short because it makes sense. IWB
representatives, acting as liaisons to their respective member jurisdictions, are considered the
"experts" on water matters. These representatives have worked on the issue of securing a future
water source for many years. If viewed from this perspective, it seems only logical that the
recommendation of the experts is sought prior to the issue going before IWB member
jurisdictions. On July 9, the TWD's representative to the IWB, not the Tigard Water District, is
being asked to vote on the agreement as one member of the M.
Phone: 503.639.4171 . Fax: 503.684.7297 .. www.tigard-or.gov . TTY Relay: 503.684.2772
I am pleased that the District recognizes the importance of the water partnership agreement.
Many individuals, including those from the Tigard Water District and the Cities of Tigard, King
City and Durham have worked tirelessly to develop this agreement to the benefit of all water
customers within Tigard Water Service Area. This agreement represents a monumental
accomplishment.
Sincerely,
L�CI.r
Craig Prosser
City Manager
c: Tigard City Council
King City City Manager David Wells
King City City Council
Durham City Manager Roland Signett
Durham City Council
Intergovernmental Water Board Commissioners
Tigard Water District Commissioners
Tigard Water District
P.O. Box 230281
Portland, OR 97281-0281
www.Ti_qardWaterDistrict.org
July 2, 2008
Mayor Craig Dirksen
City of Tigard
13125 SW Hall Blvd.
Tigard, OR 97223-8144
Re: Proposed Lake Oswego Water Agreement
Dear Mayor Dirksen:
Our District has an issue with the upcoming July 9, 2008 Intergovernmental Water
Board (IWB) vote to advise the City of Tigard as to the IWB's recommendation on
endorsing the proposed water agreement with Lake Oswego. The Tigard Water
District's Board of Commissioners has asked me to write this letter on their behalf.
The IWB vote is set to take place before any of the affected jurisdictions (King City,
Durham, Tigard, or the Tigard Water District) have had a chance to publicly review
the proposed agreement with their respective governing bodies. As of today (one
week before the IWB vote) our District has not even seen a preliminary copy of the
proposed agreement, let alone had a chance to discuss it in public session, subject it
to legal scrutiny, or bring it before the District's electors for comment.
We do not know the legal ramifications of the proposed agreement nor$
the long-term affects to our ratepayers. Yet our representative to the IWB is being
asked to vote in one week to advise the City of Tigard as to the merits of the
proposed agreement.
We have voiced our concerns in an email to Greer Gaston (attached),
and Dennis Kollermeier responded (attached) with an offer to educate
our Board any time between July 10th and July 28th (our Board's next
scheduled regular meeting). Noticeably, the dates of that offer are
subsequent to the proposed IWB vote.
The upcoming vote on the proposed Lake Oswego agreement is one of the most
important issues to come before our District in decades. We are extremely .
uncomfortable with the methodology by which we are being asked to participate in
the IWB vote. Although we understand the timeliness issues regarding the proposed
agreement itself, our IWB representative should not be forced into the position of
having to vote on such an important agreement before our Board has had a chance
for a thorough review. It would not surprise me if the other jurisdictions might have
similar concerns, as the dates that the City of Tigard proposes to brief those
jurisdictions (King City on July 16th and Durham on July 22Id) are also subseque0 "''
the July 91h IWB vote. Unless another timeline is determined, our representative to
the IWB will have no choice but to regrettably abstain from this very important vote.
To do otherwise would be abdicating our Board's responsibility.
We welcome any reasonable solution to this "cart-before-the-horse" dilemma.
Best regards,
I e4v 1
Ken Henschel
Chairman-Board of Commissioners
Tigard Water District
CC: Mayor Ron Shay-City of King City
Mayor Gery Schirado-City of Durham
Bill Scheiderich-IWB Member-At-Large
Board of Commissioners-Tigard Water District
attachments
2
July 3, 2008 Tigard Times
July 3, 2008 The Oregonian
NOTICE
of
Public Hearing
Notice Is Hereby Given
That the Intergovernmental Water Board
At a Meeting on
Wednesday,July 9, 2008 at 5:30 p.m.
In the Tigard Public Works Building
8777 SW Burnham Street
Tigard, OR 97223
Will Conduct A Public Hearing to Consider the:
CITY OF LAKE OSWEGO/CITY OF TIGARD
WATER PARTNERSHIP AGREEMENT
"Intergovernmental Agreement Regarding Water Supply Facilities,
Design, Construction, and Operation"
Under the agreement, the City of Tigard and Lake Oswego would jointly expand and upgrade
Lake Oswego's existing water system,and develop Lake Oswego's existing water rights and
permits on the Clackamas River. When complete, the project would supply the Tigard Water
Service Area with approximately 14 million gallons of water per day.
Botb public oral and written testimony is invited.
For more information, contact Greer Gaston at The City of Tigard, Public Works
Department, 13125 SW Hall Blvd.,Tigard, Oregon 97223, 503-718-2595, greer dgard-
or.gov.
1AIRMathMotice Informational Hearing-Greer Revised.doc
COMMUNITY
NEWSPAPERS NOTICE OF PUBLIC HEARING
6605 SE Lake Road, Portland, OR 97222•PO Notice Is Hereby Given that the Intergovernmental Water Board
Box 370• Beaverton, OR 97075 At a Meeting on Wednesday,July 9,2008 at 5:30 p.m.
Phone: 503-684-0360 Fax: 503-620-3433 In the Tigard Public Works Building, 8777 SW Burnham Street,,
Tigard,OR 97223
Email: Will Conduct A Public Hearing to Consider the:
legaladvertising@commnewspapers.com CITY OF LAKE OSWEGO/CITY OF TIGARD
WATER PARTNERSHIP AGREEMENT
"Intergovernmental Agreement Regarding Water Supply Fa-
AFFIDAVIT OF PUBLICATION cilities,Design,Construction,and Operation"
State of Oregon, County of Washington, SS Under the agreement, the City of Tigard and Lake Oswego
would jointly expand and upgrade Lake Oswego's existing wa-,
I, Charlotte Allsop, being the first duly sworn, ter system, and develop Lake Oswego's existing water rights'
and permits on the Clackamas River.When complete,the proj-
ect would supply the Tigard Water Service Area with approxi-
Manager of The Times (serving Tigard, mately 14 million gallons of water per day.
Tualatin & Sherwood), a newspaper of Both public oral and written testimony is invited.
general circulation, published at Beaverton, in FOR MORE INFORMATION, CONTACT GREER GASTON
the aforesaid county and state, as defined by AT THE CITY OF TIGARD, PUBLIC WORKS DEPARTMENT,,
ORS 193.010 and 193.020, that 13125 SW HALL BLVD., TIGARD, OREGON 97223, 503-718-
2595, reerna.tigard-or.gov. Publish 7/3/2008TT11171
City of Tigard
Notice of Public Hearing
TT11171
A copy of which is hereto annexed, was
published in the entire issue of said
newspaper for
1
Successive and consecutive weeks in the
following issues
July 3, 2008
C1ta(Lore 0_tt4L_,2
Charlotte Allsop (Accounting Managel)
Subscribed and sworn to before me this
July 3, 2008
L\,X1&V�a- 1�),
OTAR PUBLIC FOR OREGON
My commission expires�(1Wl �g t 1XI)'
Acct#10093001
City of Tigard
Twila Willson OFFICIAL SEAL
SUZETTE I C
13125 SW Hall Blvd R
NOTARY PUBLIC-OREGON
Tigard, OR 97223 COMMISSION NO.422M
MY COMMISSION EXPIRES NOVEMBER 28,2011
Size 2x3
Amount Due $50.10
*remit to address above
INTERGOVERNMENTAL WATER BOARD
RESOLUTION NO. 08-01
RESOLUTION RECOMMENDING THE CITY OF TIGARD APPROVE THE WATER
PARTNERSHIP INTERGOVERNMENTAL AGREEMENT REGARDING WATER SUPPLY
FACILITIES, DESIGN,CONTSTRUCTION,AND OPERATION, BETWEEN THE CITY OF
TIGARD AND THE CITY OF LAKE OSWEGO
WHEREAS, the City of Tigard("Tigard")and the City of Lake Oswego desire to enter into an
Intergovernmental Agreement("IGA")regarding water supply for the purposes of obtaining a
permanent non-contract source of raw water; and
WHEREAS,the Intergovernmental Water Board was created by way of intergovernmental
agreements in December, 1993,and under these agreements,has authority to make
recommendations to Tigard relative to certain water service matters, and as to any other matters
which the Intergovernmental Water Board may feel to be for the good of the water system,the
overall public interest and for the benefit of the consumer; and
WHEREAS,the proposed IGA is supported by sound engineering analysis, is in the best interest
of water customers within the original water district and is consistent with the goal of working
together to provide all of the residents and property with a clean, economical water supply;and
WHEREAS, in July 2007 an engineering study known as the Lake Oswego and Tigard Joint
Water Supply System Analysis was performed by Carollo Engineers and was funded by the
ratepayers of the Tigard Water Service Area and the City of Lake Oswego.
NOW,THEREFORE, BE IT RESOLVED by the Intergovernmental Water Board that:
SECTION 1: The Intergovernmental Water Board hereby recommends to Tigard that the
Intergovernmental Agreement Regarding Water Supply Facilities, Design and
Construction and Operation Between the City of Lake Oswego and the City of
Tigard be approved by the City of Tigard; and
SECTION 2: This resolution is effective immediately upon passage.
PASSED: This day of TU L-y ,2008.
Chair, Intergovernmental Water Board
ATTEST:
I Recorder
Page 1 - RESOLUTION NO. 08-01
City of Tigard
13129 SW Hall Blvd. .
Tigard, OR 97223
74
Phone: 903-639-4171
TIGARD
FAX TRANSMITTAL
Date July 3, 2008
Number of pages including cover sheet 3
To:
X00%City of King City (Fax No. 503-639-3771)
X The City of Durham (Fax No. 503-598-8595)
From: Greer Gaston
Co: City of Tigard
Fax#: 503.684.8840
Ph#: 503.718.2595
SUBJECT: Intergovernmental Water Board Meeting Notice and Agenda
MESSAGE:
Please post the attached agenda for the upcoming meeting of the Intergovernmental Water Board.
Thank you.
l ,
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Log for
City of Tigard PW
5036848840
7/3/2008 12 : 03PM
Last Transaction
Date Time Type Identification Duration Pages Result
07/03 12 : 02p Fax Sent 5035988595 1 : 03 3 OK
hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner
Log for
City of Tigard PW
5036848840
7/3/2008 12: 01PM
Last Transaction
Date Time Type Identification Duration Pages Result
07/03 12: 00p Fax Sent 5036393771 0: 53 3 OK