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08/08/2007 - Packet
Completeness Review : for Boards, Commissions and Committee Records CITY OF TIGARD Intergovernmental Water Board Name of Board, Commission or Committee AAL8 Eoo:j 'j Date of 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 Signature 3/2-(, /43 Date Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and the Unincorporated Area AGENDA Wednesday, August 8, 2007 City of Tigard Water Auditorium 5:30 p.m. 8777 SW Burnham Street Tigard, Oregon 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call 2. Approval of Minutes —July 11, 2007 Motion from the Board to approve the minutes 3. Public Comments Call for comments from the public 4. Consider a Water Building Lease with the City of Tigard— Dennis Koellermeier Motion to approve the water building lease with the City of Tigard 5. Discuss City of Durham Request for Clarification of the Tenancy in Common Agreements - Dennis Koellermeier 6. Consider Making a Recommendation to Owner Jurisdictions Regarding a PGE Easement on the Water Building Property- Dennis Koellermeier Motion recommending an easement be granted to PGE on the water building property. 7. Review the Working Draft of the Tualatin Project Title Transfer and Tualatin Basin Water Supply Project Principles of Agreement- Dennis Koellermeier 8. Water Supply Options - Dennis Koellermeier 9. Informational Items-Dennis Koellermeier 10. Non-Agenda Items Call for non-agenda items from Board. 11. Next Meeting - September 12, 2007, 5:30 p.m. City of Tigard Water Auditorium, 8777 SW Burnham Street, Tigard, Oregon 12. Adjournment 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. Questions? Contact the City of Tigard at 503.639.4171 Sign-in Sheet Intergovernmental Water Board Meeting :7--NDate: '� -9 - 6 :7-- Name ame Do you wish If yes, please give your address I please print to speak to the Board? John Q. Public Yes 13125 SW Hall Blvd. Tigard OR 97223 (P)3q( Ia ,A Aje A © y 0 Intergovernmental Water Board (IWB) Meeting Minutes August 8, 2007 City of Tigard Water Auditorium 8777 SW Burnham Street Tigard, OR 97223 Members Present: Patrick Carroll Representing the City of Durham Gretchen Buehner Representing the City of Tigard Julie Russell Representing the Tigard Water District Bill Scheiderich Member at Large Dick Winn Representing the City of King City Members Absent: Patrick Carroll Representing the City of Durham * Joined the meeting by speakerphone for items 4 and 5. 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 Scheiderich called the meeting to order at 5:36 p.m. 2. Approval of Minutes —July 11, 2007 Commissioner Buehner motioned to approve the July 11, 2007, minutes; Commissioner Winn seconded the motion. The minutes were approved by unanimous vote, with Commissioners Buehner, Russell, Scheiderich, and Winn voting yes. 3. Public Comments: None Note: Commissioner Carroll participated in the meeting via speakerphone for agenda items 4 and 5. 4. Consider a Water Building Lease with the City of Tigard Mr. Koellermeler briefed the Board on this Item which had been tabled at the Boards last meeting. He explained two items had been updated: ■ Language was added which requires adjustments in rent at five year increments. ■ A miscalculation was corrected to reflect the fact that improvements were annualized for a term of eleven and one-half years, instead of twelve and one- half years. Commissioner Buenher motioned to approve the water building lease; Commissioner Winn seconded the motion. Intergovernmental Water Board Minutes August 8,2007 1 At the request of Commissioner Russell, Commissioners Buehner and Winn amended their motion to incorporate the "Background Information on Rental Calculations for the Water Building Lease" document in the lease. Note: Commissioner Russell inquired about agenda item 5. The Board discussed agenda item 5. The Board returns to agenda item 4 following this discussion. 5. Discuss City of Durham Request for Clarification of the Tenancy in Common Agreements Report on the Adoption of Intergovernmental Agreement Amendments In response to a question from Commissioner Russell, Commissioner Buehner advised improvements (buildings) are typically depreciated through various methods, while real property does not depreciate. Mr. Koellermeier summarized Mr. Ramis' memo. Mr. Koellermeier referenced the depreciation schedule in the 1994 report by Economic and Engineering Services, Inc., which assigns a 33 year, straight-line depreciation method for buildings. Real property, which does not depreciate, would be appraised at the time of transaction. Commissioner Scheiderich added that if a building were to be sold to an outside party, it would be appraised and the IWB jurisdictions would share in the proceeds. However, if the building were sold to an IWB member jurisdiction, the value of the water building would be based on language in the tenancy in common agreement. This says the value of the building depreciates over time. Commissioner Carroll confirmed that at the end of 33 years, if one of the IWB member jurisdictions wanted to terminate its intergovernmental agreement, then that owner's share in the value of the building would be zero. Commissioners Scheiderich and Winn concurred. Commissioner Buehner added all buildings have a lifetime. She noted the money the City of Tigard had spent to bring the water building up to code. Commissioner Russell asked what happens if the City of Tigard wanted the water building property. Commissioner Scheiderich and Carroll responded this could occur if the IWB member jurisdictions agreed to it. In this scenario the City of Tigard would be considered an outside party. The property would be appraised and the IWB would determine the sales price. Note: The Board returned to agenda item 4. 4. Consider a Water Building Lease with the City of Tigard - Continued The motion, under agenda item 4, was repeated. Commissioner Buehner motioned for approval of the water building lease as amended; Commissioner Winn seconded the motion. The motion was approved by 4-to-1 vote, with Commissioners Buehner, Carroll, Scheiderich, and Winn voting yes. Commissioner Russell voted no. Note: Commissioner Carroll concluded his participation (via speakerphone) in the meeting. Intergovernmental Water Board Minutes August 8,2007 2 6. Consider Making a Recommendation to Owner Jurisdictions Regarding a PGE Easement on the Water Building Property Mr. Koellermeier briefed the Board on PGE's request for an easement on the water building property. He noted the memo incorrectly listed the size of the easement as 6- feet long by 14-inches wide. The correct size is 6-feet long by 14-feet wide. The Commissioners made the following requests/suggestions: ■ Add language that should the easement no longer be needed, it can be terminated ■ Add language "for use only as" ■ Make the easement subject to relocation to prevent a permanent blockage of the property. The proposed language was "subject to relocation as Grantor deems necessary" Mr. Koellermeier said these modifications would be made and resolutions would be prepared for each IWB member jurisdiction's consideration. 7. Review the Working Draft of the Tualatin Project Title Transfer and Tualatin Basin Water Supply Project Principles of Agreement Mr. Koellermeier briefed the Board on the draft principles of agreement. He explained if a title transfer from federal to local government was pursued, the local government and its structure needed to be created. The principles of agreement reflected an attempt to define this local government. Mr. Koellermeier added liability issues raised by Commissioner Buehner have been addressed in the document. He also explained even if the dam raise project does not take place, the existing operation could still be transferred to local jurisdiction. It was noted the first ten principles would take place irrespective of the water supply project, but the three additional principles are tied to the project. The Commissioners made the following comments/suggestions regarding the draft principles of agreement: ■ Requested attorneys Tim Ramis and/or Clark Balfour review the document. ■ Address the fact that the irrigation district serves smaller net area. ■ Place some kind of constraints on rates the irrigation district could charge partners for water it is not using. • Concerns that the dam has depreciated over time and the partners are paying to rebuild it. ■ Concerns over perpetuating a power subsidy to the irrigation district without making them investigate whether they really need that power. • Concerns over whether the irrigation district is using power wisely. ■ Concerns over subsidizing an inefficient irrigation system that may be obsolete. ■ Concerns Washington County wants to be made whole for the park. Suggested at most to make them whole for net revenue. ■ Proposed a ban on motorized watercraft in the reservoir. Mr. Koellermeier stated the Scoggins Dam facility is not generating any power. Power generation was evaluated some time ago and did not make economic sense. This will be reevaluated. Mr. Koellermeier reported the next draft of the principles will probably be available in October. Intergovernmental Water Board Minutes August 8,2007 3 8. Water Supply Options Mr. Koellermeier reported on the Lake Oswego water partnership: ■ Meeting representatives from the IWB, City of Tigard, and Lake Oswego have been identified. The IWB representatives are Commissioners Scheiderich and Buehner. • Lake Oswego is generating meeting dates. ■ Lake Oswego's City Manager is leaving the city. This may impact work on the partnership. Mr. Goodrich reported the following: • Unusually cool weather has resulted in lower water demand ■ Demand peaked at 12.4 million gallons per day (mgd) in July • Demand in recent weeks has been in the 8 to 9 mgd range ■ There is 60 day water supply in ASR 2 • One native groundwater well has been shut down due to the lower demand Mr. Goodrich summarized a Daily Water Demand chart that had been provided to the Commissioners. The chart is on file in the IWB record. Over the last five years, there has been a 9.2 increase in service connections and a 6 percent decrease in water demand. Commissioner Scheiderich asked for information on disconnecting down spouts from the stormwater system. He inquired about incentives for such a disconnection. The Board discussed whether stormwater run off is connected to the sanitary sewer system. Mr. Goodrich responded to a question raised at a previous IWB meeting regarding the distribution of a Water Smart Rebate pamphlet. He advised the City of Tigard recently mailed two information pieces: a Water Rate Changes brochure and a Consumer Confidence Report (CCR). The Water rate Changes brochure was sent to every water account in the Tigard Water Service Area (TWSA), and, at a cost of over $10,000, the CCR was sent to every household in the TWSA. Both items contained information on the current water smart rebate. Commissioner Scheiderich suggested a rebate brochure could be included as an insert in the first water bill of the fiscal year and also requested a date comparison of customer water usage be provided on water bills. 9. Informational Items: None 10. Non-Agenda Items Commissioner Russell inquired about adding a discussion of the Grabhorn trash dump to a future IWB or Tigard Water District meeting. There has been some discussion this dump site has affected the Tualatin River and the water supply. Mr. Koellermeier will provide a status report on this topic at an upcoming meeting. 11. Next Meeting - September 12, 2007, 5:30 p.m. City of Tigard Water Auditorium, 8777 SW Burnham Street, Tigard, Oregon 12, Adjournment Commissioner Scheiderich adjourned the meeting at 6:39 p.m. Intergovernmental Water Board Minutes August 8,2007 4 Greer A. Gaston, IWB Recorder Date: Intergovernmental Water Board Minutes August 8,2007 5 Agenda Item No.: 2- IWB Meeting Date: 8'13-0'+ Intergovernmental Water Board (IWB) Meeting Minutes July 11 , 2007 City of Tigard Town Hall 13125 SW Hall Blvd. Tigard, OR 97223 Members Present. Gretchen Buehner Representing the City of Tigard Julie Russell Representing the Tigard Water District Bill Scheiderich Member at Large Dick Winn Representing the City of King City Members Absent. Patrick Carroll Representing the City of Durham Staff Present. Public Works Director Dennis Koellermeier Water Quality & Supply Supervisor John Goodrich Accounting Supervisor Amanda Bewersdorff lWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions Commissioner Scheiderich called the meeting to order at 5:36 p.m. 2. Approval of Minutes—June 13, 2007 Commissioner Buehner motioned to approve the June 13, 2007, minutes; Commissioner Winn seconded the motion. The minutes were approved by unanimous vote, with Commissioners Buehner, Russell, Scheiderich, and Winn voting yes. 3. Public Comments: None 4. Autumn Park Homeowners Association - Credit for Leak Request Ms. Bewersdorff provided background information regarding this credit for leak request. Based upon the prescribed process, a credit of$1,486.80 was calculated. Credits exceeding $500 require lWB approval. Commissioner Buehner motioned to approve the adjustment as submitted; Commissioner Winn seconded the motion. The Board briefly discussed the credit for leak policy, and Mr. Koellermeier offered to provide the Board with additional information on this topic. Commissioner Scheiderich requested a report on the matter. The motion was approved by unanimous vote, with Commissioners Buehner, Russell, Scheiderich, and Winn voting yes. Intergovernmental Water Board Minutes July 11,2007 1 5. Report on the Adoption of Intergovernmental Agreement Amendments Commissioner Scheiderich reported the City of Durham had approved the resolution to execute the tenants in common agreements and the bargain and sale deeds, and to amend the 1993 intergovernmental agreement. However, the Durham City Council asked for clarification in the two tenants in common agreements where it states valuation shall be in accordance with the 1994 Economic and Engineering Services (EES) study. Commissioner Scheiderich said the Durham City Council wondered if valuation of a future sale was confined to the dollar value as opposed to the percentage of ownership. He added the value of the assets in 1994 will likely differ from the value of the assets at the time of any action. Mr. Koellermeier referenced a handout containing a section from the EES study. This handout is on file in the IWB record. He called the Board's attention to page 8, "Utility Plant in Service," which detailed the methodology used to determine the value of fixed assets (other than land) based on a depreciation schedule. Since land does not depreciate, it would be appraised at the time of action. Commissioner Scheiderich responded that the City of Durham was not questioning the depreciation of personal property; this value is fixed. It was noted the EES study lists a 33 year depreciation schedule for buildings. Commissioner Winn confirmed that the methodology for calculating the percentage of ownership had not changed. However, based on the application of the methodology, the actual percentage of ownership will fluctuate over time. To address the City of Durham's concern regarding the agreements, Commissioner Scheiderich suggested modifying the reference to the EES study. The modification could indicate the percentage of ownership should be adjusted based on the methodology. Based on Board consensus, Commissioner Scheiderich directed staff to have Tigard's city attorney clarify the tenancy in common agreements by adding language regarding valuation according to the 1994 EES study at the request of the Durham City Council. This could be accomplished by revising the agreements and initialing the changes or as an addendum. Commissioners Buehner and Winn reported the City of Tigard and the City of King City had also adopted the resolution. Commissioner Russell stated that the Tigard Water District (TWD) voted to adopt the resolution as well. She added there was a possible issue regarding public meeting notice and the TWD's decision may be challenged. 6. Consider a Water Building Lease with the City of Tigard Mr. Koellermeier informed the Board two changes had been made to the lease since they last reviewed it. Section 2.2-Escalation was added which requires adjustments in rent at five year intervals. The second change occurred on Exhibit B and under section 2.1-Base Rent and 2.3-Rent Credits where a miscalculation was corrected to reflect the Intergovernmental Water Board Minutes July 11,2007 2 fact that improvements were annualized for a term of eleven and one-half years, instead of twelve and one-half years. This change affected some of the earlier calculations. To address questions on how the rent was determined, Mr. Koellermeier called the Board's attention to a document entitled, "Background Information on Rental Calculations for the Water Building Lease." This handout is on file in the IWB record and describes the process used to determine rental rates. Commissioner Buehner motioned to approve the commercial lease between the IWB and the City of Tigard for the Water Building; Commissioner Winn seconded the motion. Ken Henschel, 14530 SW 144th Avenue, TWD Commissioner-Elect, commented that he thought the TWD had tabled the issue of the lease at its June meeting. Bert Cornick, 14640 SW 141"Avenue, Tigard, Oregon, TWD Commissioner-Elect, added that he had not heard the TWD authorize the lease. He raised the issue of due diligence. Mr. Cornick also expressed concern that the City of Tigard had drawn up the lease and that the lease had not been properly reviewed. He questioned Mr. Koellermeier's knowledge in establishing the rental value. Commissioner Russell expressed a desire to review the background information with the TWD. The motion failed, with Commissioners Buehner and Winn voting yes, and Commissioners Russell and Scheiderich voting no. The lease will be considered at the IWB's next meeting. 7. Consider a Recommendation to the Tigard City Council Regarding an Amendment to the Joint Funding Agreement for the Tualatin Basin Water Supply Project (Hagg Lake Dam Raise) Mr. Koellermeier briefed the Board on this item, explaining title transfer work had been added to the project. This addition has driven up the cost and accelerated the schedule. The Board has supported the initial agreement, and a subsequent first amendment. A second amendment to the agreement was withdrawn. In order to remain in the project, the City of Tigard needs to execute the third amendment and continue to pay its share. Commissioner Winn motioned to approve the amendment; Commissioner Buehner seconded the motion. The motion was approved by unanimous vote, with Commissioners Buehner, Russell, Scheiderich, and Winn voting yes. 8. Consider a Recommendation to the Tigard City Council Regarding Participation in an Oregon Water/Wastewater Agency Response Network (ORWARN) Mutual Aid and Assistance Agreement Mr. Koellermeier briefed the Board on this item. He explained an Oregon-based group, ORWARN, was being formed. The group's mission is to promote statewide emergency preparedness, disaster response, and mutual assistance for public and private water/wastewater utilities. The agreement is voluntary and doesn't obligate the Board in Intergovernmental Water Board Minutes July 11,2007 3 any way, but does establish a framework for providing or accepting assistance. Most Portland area agencies have executed the agreement, including the City of Portland. Commissioner Buehner motioned to recommend the City of Tigard enter into the Oregon Water/Wastewater Agency Response Network; Commissioner Winn seconded. The motion was approved by unanimous vote, with Commissioners Buehner, Russell, Scheiderich, and Winn voting yes. 9. Water Supply Options Mr. Goodrich provided the following information: ■ The area is experiencing high temperatures and water consumption has been in the 12 to 13 million gallons per day (mgd) range. ■ ASR 2 is back online. ■ Native groundwater wells are on. ■ Water sources are as follows: - Per the City of Tigard contract, 6 mgd is coming from the Portland Water Bureau - 1.5 mgd is coming from the Joint Water Commission - 1 mgd is coming from Lake Oswego Commissioner Scheiderich requested a weekly or daily graphic representation of water consumption, by source if available. The Board discussed conservation efforts. Ken Henschel, 14530 SW 1441h Avenue, Tigard Water District Commissioner-Elect, inquired about how water smart rebates were publicized. Mr. Goodrich responded that he would look into it and check on mailing costs. Mr. Koellermeier reported ASR 3 was at depth. Once the design of the casing is completed, production testing will take place. Work should be completed by mid-August. 10. Informational Items Mr. Koellermeier informed the Board the new reservoir is in the land use process. The timeline is to advertise the construction project in August, award the bid in September, and begin the earthwork in October. Mr. Koellermeier gave a brief update on the progress of the water building renovation. 11. Non-Agenda Items: The Board discussed appointing a representative from the IWB to serve on a task force related to the Lake Oswego/Tigard partnership. Commissioner Scheiderich stated the Board would hold off on making this appointment until Commissioner Carroll was in attendance. Mr. Koellermeier said Clean Water Services was working on a response to a citizen request regarding the use of reclaimed water in the downtown area. There are permitting and cost issues to be researched and this issue with come back to the Board at a future meeting. Commissioner Scheiderich inquired about irrigating with creek water. Mr. Koellermeier discussed water rights through the Willamette River Water Coalition (WRWC). The state has given the application a favorable recommendation. Intergovernmental Water Board Minutes July 11,2007 4 WaterWatch, who challenged the application, has withdrawn most of their concerns. The water rights have been consolidated and will ultimately be assigned to the WRWC. Tigard is guaranteed 22 mdg of these water rights. Mr. Koellermeier reported the Tualatin Valley Water District's (TVWD) current preferred water source option is the Joint Water Commission. The TVWD is in the process of reviewing and updating costs. 12. Next Meetings— ■ July 17, 2007 6 p.m. — Dinner with Tigard and Lake Oswego City Councilors and Staff 7 p.m. - Joint Meeting with the Tigard and Lake Oswego City Councils City of Tigard Town Hall, 13125 SW Hall Blvd., Tigard Oregon ■ August 8, 2007, 5:30 pm Location to be announced 13.Adjournment: Commissioner Scheiderich adjourned the meeting at 6:50 p.m. Greer A. Gaston, IWB Recorder Date: Intergovernmental Water Board Minutes July 11,2007 5 Agenda Item No.: :' Revised 6/26/07 1WB Meeting Date: S-B-n-4- COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning (HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board, the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building, the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property(the "Premises") on the terms and conditions stated below: The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street,Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018, unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a) the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased"As Is". Tenant agrees to accept the Premises in the current"as is" condition. Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B describing rental costs and credits as agreed upon between Landlord and Tenant. As set forth in said Exhibit B, at the commencement of the Lease and through the duration of the initial term, Tenant shall pay Landlord $58,751.63 annually. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building 2.2 Escalation. The base rent provided in Section 1 shall be adjusted in the first month of year 5 and the first month of year 10 of the lease term by a percentage equal to the percentage change in the Consumer Price Index published by the United States Bureau of Labor Statistics of the United States Bureau of Labor, for the corresponding rental term. Comparisons shall be made using the index entitled U S City Average—All Items and Major Group Figures for all Urban Consumers, or the nearest comparable data on changes in the cost of living of such index is no longer published. 2.3 Rent Credits. Tenant has paid $177,379.00 for improvements to the building and shall receive an annual credit of$15,424.26 against the total annual rent of$74,175.89 for said expenses as shown in attached Exhibit B and in Section 2.1 above. If the Lease is terminated before the expense has been fully amortized, Landlord and Tenant shall agree to a method for allocating the remaining unamortized expenses. 2.4 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. 2.5 Payment of Rent. Rent is due and payable annually in advance on July 15 of each year. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use, but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use,handling, and storage of Hazardous Substances and shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither parry shall be liable to the other (or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein, real property taxes includes any fee or charge relating to the ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable, Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income,profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including(but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment,Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss, or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned,mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease (other than the payment of rent or other charges) within 15 days Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN(15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs,the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter, take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease,upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately,without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup,refurbishing,removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 %per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option,become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease, to place and maintain upon the Premises notices for leasing or selling the Premises. 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due, bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300) the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts, their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties,but each party shall pay its own attorney fees incurred in connection with the arbitration. Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three(3) out of four(4) of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II,Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property,the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGAR.D CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE LEASED BUILDING AND PARKING PREMISES G E OR GARAGE L E OP BAY BAY BAY BAY BAY CREW M EZZ SHOP HALL IC L( H S FFICE FFICE FF E OFFICE L HALL FFIC FFIC M C FFIC FIC FFI FFIC OPEN OFFICE LOUNG ONF LOBBY HALL ti I AUDITORIUM TORAG P IN OT SC E) EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Ti and(COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 Total annual COT Credit for Owner improvements, annualized $15,424.26 Total Annual Rent from COT after Credits $58,751.63 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation.Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing RenovatioNUpgrade $177,379.00 Annualized for term of lease, 11.5 years, $15,424.26 IJuly 1, 2007, until Dec 31, 2018 Agenda Item No.: S IWB Meeting Date: 5'8-n-+- RAmis Distributed to IWB Members 8'3.67 CREW Via: )(E-mail []Mail []In-person at meeting CORRIGAN, LLP Attorneys At Law MEMORANDUM 1727 NW Hoyt Street Portland,Oregon 97209 (503)222-4402 Fax: (503) 243-2944 TO: Dennis Koellermeier FROM: Tim Ramis DATE: August 3, 2007 RE: Questions from Bill Scheiderich Regarding Improvement Valuation of IWB Properties Upon Sale to the City of Tigard Under the TIC Agreements and In Response to Durham City Council Request for Clarification This memorandum addresses your questions about the method of valuation of the Canterbury and Water Building improvements upon the sale to the City of Tigard, under the provisions of the Tenants In Common Agreements governing both properties. Questions Presented 1. Does the reference to the value of the improvements"as set forth in"the study mean that the improvements will be deemed to have zero value as of the end of each improvement's "life" per the depreciation schedule? 2. Or, does the reference to the value of the improvements "as set forth in"the study mean that the 1994 value is depreciated according to the schedule and then that value subtracted from the current replacement value? Summary The TIC agreements for both the Water Building and Canterbury improvements are consistent in using the straight-line depreciation approach to valuation of the improvements on both properties as set forth in the EES report,upon their sale to the City of Tigard. Accordingly, the answer is yes to Question 1., and no to Question 2. If the parties wish to use an alternative method of valuation for either or both properties' improvements upon sale of the properties to the City of Tigard, the respective TIC agreements would need to be amended. Memorandum re: Clarification of TIC Agreements August 3, 2007 Page 2 Discussion Regarding Question 1., the current language of both TIC agreements with respect to valuation of the improvements to both the Canterbury and Water Building properties upon sale to the City of Tigard refers to the EES Report, in which a 1994 value was established according to straight-line depreciation of these improvements. Under this method the improvements would have no value at the end of each improvement's functional and economic life. The agreements contain no reference at all to an appraisal-valuation of the improvements upon sale to the City of Tigard, but instead point to straight-line depreciated valuation as set forth in the report. In both TIC agreements, only the values of the land, not the improvements, are subject to appraisal of market value upon sale to the City of Tigard. Regarding Question 2., using depreciated replacement-cost-new (RCN) for establishing valuation upon sale to the City of Tigard is not consistent with the EES Report's use of straight- line depreciation of the improvements, and is therefore inconsistent with the TICs' provisions for improvement valuation upon such sale. RCN of improvements is typically used for the purpose of developing depreciation tables generated through structure-mortality studies and sales of similar types of properties, and are used to estimate the loss in value from the property's new condition. These values are most often used to establish values of new construction in mass appraisal or to ascertain an insurance company's cost to replace a damaged or destroyed building, and are not related to straight-line depreciation valuation. All provisions under the current language of the study refer solely to straight-line depreciation, rather than to a depreciation schedule developed through studies that uses depreciated replacement-cost-new values. Agenda Item No.: (P IWB Meeting Date: V MEMORANDUM TO: Intergovernmental Water Board Commissioners FROM: Public Works Director Dennis Koellermeier RE: PGE Easement Request DATE: August 2, 2007 Attached please find a draft anchor easement. In conjunction with the commuter rail project, PGE has installed a power pole just beyond the water building property.They are requesting the easement in order to locate one of the pole's anchors and guy wires on water building property.The easement being requested is 6 feet long by 14 inches wide. Procedurally, under our new "Tenancy in Common" relationship, each of the owner Jurisdictions (King City,Durham, and Tigard City Councils, along with the Tigard Water District),will need to authorize this easement by resolution. Since this process will take some time, I have granted PGE a revocable right of entry to begin work If the IWB recommends granting the easement, staff will prepare a generic resolution for consideration by each of the owner jurisdictions. I have reviewed PGE's request and recommend granting the easement. After recording Return to: Portland General Electric Company Attn:Property Services 121 SW Salmon St, IWTC-04 Portland,OR 97204 pl. t ANCHOR EASEMENT For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,Tigard Water District ("Grantor")hereby convey to PORTLAND GENERAL ELECTRIC COMPANY("PGE"),an Oregon corporation, a perpetual easement over,under, upon and across the following described property(the"Property"), situated in Washington County, State of Oregon,being a strip of land more particularly described as follows: Situated in the northeast quarter of Section 2,Township 2 South,Range 1 West,Willamette Meridian. The northwesterly 6 feet of the northeasterly 1.4 feet of that tract of land as described in Fee No. 84025846 in the William Graham D.L.C. No. 39 and the George Richardson D.L.C.No. 38 in the NE 1/4 of Section. 2,Township 2 South,Range l West Willamette Meridian,Washington County, State of Oregon. SEE ATTACHED DRAWING TERMS,CONDITIONS,AND COVENANTS 1. PGE shall have the non-exclusive right to enter upon the Property and to install,maintain, extend and locate anchors and guy wires over, under,upon and across the Property to support electric line structures and poles, and all uses directly or indirectly necessary thereto. 2. The consideration acknowledged herein is accepted by the Grantor as full compensation for all damages incidental to this easement, including,but not limited to the value of all growing crops,brush, timber, or structures on the Property damaged or removed during any installation,repairs or reconstruction. 3. Grantor shall have the right to use the Property for all purposes not inconsistent with the uses and purposes of this easement, except Grantor shall not allow any encroachments which could interfere with or compromise PGE's ability to exercise its rights under this easement. In the event any such encroachment occurs,Grantor shall have no right to claim additional compensation based upon the removal or damage to the source of the encroachment. 4. The Grantor warrants that it has fee title to the Property and that PGE may peaceably enjoy the rights and benefits of this easement. 5. As used herein, the singular shall include the plural and vice versa. 6. This easement inures to the benefit of and binds the parties hereto, their respective heirs,devisees, administrators, executors, successors and assigns. IN WITNESS WHEREOF, the Grantor has executed this easement this day of 2007. Grantor Title Grantor Title State of Oregon ) ss. County of ) On the day of 2007, the above-named personally appeared before me and acknowledged the foregoing instrument to be their voluntary act and deed. Notary Public for Oregon My Commission Expires:_ ANCHOR EASEMENT e Y / Ip. 4� ci 9 oP . 0;x- PORTLAND ,xPORTLAND Gr~Nf~RAL. �f-�GTF�IC Go, PRQP.FiTY RFAAFiTMENT PORTLAND,OREc1DN DATE 0 .PREPARED IlY' BEGTION.Z,_,,TWP Z s RAND A Qui SEc DOUNTY M WOLS IJU ro C� y1 17 T OR. Z�. I FriRi I, rnf;n►rlfxI►I , M Agenda Item No.: IWB Meeting Date: —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— JULY 27, 2007 TUALATIN PROJECT TITLE TRANSFER AND TUALATIN BASIN WATER SUPPLY PROJECT Water Supply Partners Governance Task Group Benefits Statement Principles of Agreement Background on the Project The Tualatin Partnership currently comprises the cities of Beaverton, Forest Grove, Hillsboro and Tigard,Clean Water Services, the Tualatin Valley Water District, the Tualatin Valley Irrigation District, Washington County, and the Lake Oswego Corporation. These nine partners are working together over the course of the next several months to develop a governance agreement that will enable them to assume ownership of Scoggins Dam and its associated facilities from the federal Bureau of Reclamation. While there are benefits that will be achieved through title transfer alone, a number of the partners are actively pursuing, and hope to invest in, a project that would raise the level of Scoggins Dam, and which would provide a substantial new source of water supply. This dam raise is referred to as the water supply project throughout this document. The governance agreement currently under development would also serve as the management framework for the water supply project and for the longer-term working agreement among all of the partners. This new,yet-to-be-developed structure is referred to as the governing entity or managing entity throughout this document. The partners have each appointed representatives to the Tualatin Title Transfer Governance Task Group, which began working together in June 2007 to collaborate on the governance structure process.The Task Group developed these draft Principles of agreement during July 2007. This is the first product generated by the Task Group, and the Group will continue to work collaboratively on the governance agreement throughout August and September 2007. In order to better understand the Principles of Agreement that have been crafted by the Task Group,it is useful to first understand the interests of the various partners. Drafl Benefits Statement&Principles of Agreement 1 Working Draft:July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— Currently,The Tualatin Valley Irrigation District (TVID) is contracted to use 51%of the stored water in Hagg Lake(the water reservoir behind Scoggins Dam).TVID is satisfied with its existing contracts with the Bureau. TVID does not need additional water and has no plans to invest in the new water supply project. Likewise, the Lake Oswego Corporation,which has an existing contract with the Bureau for about 1%of the stored water volume,does not need an additional source of supply and has not committed funding toward the new water supply project. Washington County does not have contracts for any of the stored water in Hagg Lake, but it does lease property from the Bureau of Reclamation for county park facilities. It does not plan to invest in the water supply project, and will want assurances that the park can be maintained as is by the new governing entity, or that those park facilities will be replaced if the dam is raised. These three entities are commonly referred to as "repayment contractors," since they have remaining loan payments to, and existing contracts with, the Bureau of Reclamation. The remaining partners plan to invest in the new water supply project,which is currently estimated to cost between$400-$500 million. The Tualatin Valley Water District proposes to invest the most money;current plans are for the TVWD to own up to 44%of the new water supply project.The other new investors in the water supply project include the cities of Hillsboro, Beaverton,Tigard and Forest Grove, as well as Clean Water Services. With the exception of Tigard, all of these entities also have existing water supply contracts with the Bureau of Reclamation for water stored in Hagg Lake. The proposed percentage of their new investments in the water supply project vary from 3-18%of the water that will be available once the dam is raised. The Water District, Hillsboro,Beaverton, and Tigard are in need of new water supplies in the immediate future, ranging from 2016 to 2020. Forest Grove will not need additional water, however, for an estimated 30-35 years. Clean Water Services does not supply water to its customers, but it is responsible for ensuring that the Tualatin River is in compliance with the Clean Water Act, meaning that it must have a supply of water adequate to keep the river temperature cool enough and the water levels high enough for fish species. CWS is currently under contract with the Bureau for 23.5%of the stored water at Hagg Lake. In a sense, then,it is useful to view the partners through two different lenses—those with existing contracts and no immediate need for additional supplies—the"repayment contractors,"and those we might term"new investors," which are the entities that are actively pursuing both the title transfer and the water supply project. Draft Benefits Statement&Principks of Agreement 2 Working Draft:July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— Benefit Statements and Principles of.Agreement The Tualatin Task Group met and worked together throughout July to create these Principles ofAgreement that will serve as a framework for how the nine partners will work together over the long-term to manage the water supply provided by Scoggins Dam and its associated facilities. These Principles ofAgreement should be viewed as a starting point for the more detailed governance and operating structure that will be developed over the next several months. The Task Group also developed a number of benefit statements associated with the title transfer and water supply project. Benefit Statement: What will the Tualatin Basin gain through title transfer? Even without the new water supply project, title transfer of the Tualatin Project will be beneficial: ➢ It will provide the participating entities with local control over the source of supply. ➢ It will build ownership equity in the Scoggins Dam system.The local partners will own the system,rather than lease water from the Bureau of Reclamation. ➢ It allows for the entities with existing contracts, and some amount of excess water, to buy, sell,lease and/or trade that water directly to the other partners. This will increase the profitability of those transactions, because funds will not be directed back to the Bureau of Reclamation. ➢ Title transfer enables the participating partners to greatly increase the flexibility with which they can manage their water resources,enabling them to move water where and when it is needed the most for a wide variety of needs, ranging from drinking water to irrigation to the improvement of water quality in the Tualatin River. ➢ Local ownership will allow the Tualatin Partners to integrate the operation of Scoggins Dam and the Barney Reservoir for enhanced efficiency. ➢ Title transfer allows the partners to obtain ownership of a water supply system at a very low relative cost. It is also likely to allow those partners to make structural and other improvements to the existing dam at costs that are lower than what could be achieved now through the current arrangement with the federal government. ➢ In general,title transfer will enable the partners to manage the dam and its associated facilities with greater cost and operational efficiency, freeing those partners from the reporting,approval, and other requirements that are imposed by the federal contract. ➢ Local ownership will enable the partners to significantly increase their ability to share and trade staff resources, expertise, and technological capabilities between all of the entities involved. Draft Benefits Statement&Principles of Agreement 8 Working Draft July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS-- Benefit Statement:What will the Tualatin Basin gain through the new water supply project? If the new water supply project is built, all of the benefits associated with title transfer will continue to remain in effect. In addition, the water supply project will benefit the partners by: It will significantly increase the volume of water available to the entities which need that water. ➢ The project will enhance the overall reliability of the water supply, and will greatly increase operational flexibility—there will be more supply to meet the myriad needs of a growing Tualatin Basin. ➢ Design and construction of the new dam can be achieved at a substantial cost and time savings if it is accomplished through a locally-controlled management authority. Current estimates are that the project can be designed and built within six years,which is estimated to be three years shorter in duration than the construction time required with the federal government in control. Current estimates of the potential cost savings achievable through local control range from$30-$40 million. Ten Principles of Agreement for the Title Transfer The nine participating partners have tentatively agreed to the following ten principles related to title transfer: 1) All partners will be made whole. The benefits and costs of each partner's participation in the long-term water supply partnership will be thoroughly evaluated.All partners will be made whole—that is, no partner will be asked to sacrifice an existing water supply,pay a disproportionate share for their water,or otherwise'lose" any existing benefit by participating in the partnership. By joining the partnership for the long term, no single entity is going to be worse off than they are today,and the ultimate goal of the partnership is to ensure that those entities enjoy substantial benefits. Action Steps to Implement this Principle:This does not require"action"per se,but it is a bottom-line criterion for the overall process.Any subsequent agreements made as the partnership moves forward will be subject to this question: Have all of the partners been made whole as we are moving ahead? S) The new entity will provide liability protection. Existing repayment contractors will be protected against liability to the same degree they are currently protected through the Bureau of Reclamation. For example, under the current contracts, those repayment contractors are protected from lawsuits that could occur related to earthquake or flood damage. Protection against those disasters,as well as any other risk protection currently provided by the Bureau,will be maintained by the new governing entity. Some risks are not currently protected by the Bureau,and those risks will continue to remain unprotected. For example, if drought conditions prohibit the dam from being filled,neither the Bureau nor the Tualatin Valley Irrigation District can be held liable for the financial losses that might be associated with crop failure.Likewise, the new Draft Benefits Statement&Principles of Agrement ¢ Working Draft-July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— governing entity will not provide any type of liability protection that is currently not provided by the Bureau of Reclamation. Existing responsibilities will also remain in force and will not be covered by the new governing entity. For example,Washington County is responsible for insuring itself against any lawsuits that could arise if park users are injured while using park facilities. Washington County's risk responsibilities, as well as the current risk responsibilities of any of the other entities, will not change under the title transfer. Bottom line: Liability risks that are currently protected by the Bureau of Reclamation will continue to be covered by the new entity.Liability risks that are currently the responsibility of the individual partner entities will remain the responsibility of those entities. Action Steps to Implement this Principle:Research is already underway regarding insurance policies that can provide the level of coverage necessary. Work will continue throughout August and September to further define the risks, liabilities,and insurance possible to manage the liability risks associated with title transfer. S) Power costs will remain stable. Federal law allows the Tualatin Valley Irrigation District access to power from the Bonneville Power Administration at cost,plus a fee for wielding the power to the TVID by a local utility.This is a significant cost benefit for the TVID,and one that will continue to be maintained in the future.The new managing entity will work closely with the Bureau of Reclamation to understand the options related to power supply costs as the title transfer transaction is developed. Through these negotiations, the new managing entity will find a way to assure the TVID of its current power rate,plus or minus any normal changes to the BPA and wielding costs. This is implicit through Principle #1, which is to make all of the partners whole. Action Steps to Implement this Principle: Investigations are underway now to determine whether the BPA subsidy will be available after title transfer. If this is not possible, the Partnership will work to determine how those power costs can be assumed as part of the overall project costs under the new managing entity. 4)Access to fundamental water supplies will be protected. Every participating entity will have guaranteed access to the same proportion of water it now has under contract with the Bureau. Furthermore, that access will be guaranteed in the same priority order currently in place through the Reclamation contracts. Various mechanisms to ensure this protection will be evaluated, including how the water right will be held, as well as the possible contractual arrangements between the partners that will be most effective in protecting this access. Action Steps to Implement this Principle: The Bureau of Reclamation will want to know that its existing repayment contractors are being fully protected, and this will be a requirement of the title transfer process. Details of this agreement will be worked out over the next few months;this is a necessity before the Bureau will agree to the transfer. 6) Regulatory and other obligations will be fulfilled. The Bureau of Reclamation currently abides by a number of regulatory mandates that govern how the dam is managed and operated.These include federal and state statutes, Draft Benefits Statement&Principles of Agreement 5 Working Draft July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— as well as a number of environmental obligations, for example habitat mitigation and the protection of fish species and elk herds.Any and all regulatory obligations currently fulfilled by the Bureau of Reclamation will continue to be fulfilled by the new managing entity. Action Steps to Implement this Principle: The Bureau of Reclamation will want reassurance that regulatory obligations will be met.These details will be worked out over the next few months; this is a necessity before the Bureau will agree to the title transfer. sl Public access and Washington County Park facilities will be maintained. Currently, the public has access to the land around Hagg Lake, and Washington County also maintains important park facilities in the area. Under title transfer, the new managing entity will guarantee that public access, as well as park operations, continue to be maintained. Likewise, a strong communication efforts with homeowners in close proximity to the lake.Public access,in combination with this communication effort, have been instrumental in sustaining positive relationships with the public. Action Steps to Implement this Principle:Although the Bureau of Reclamation may not require the new managing entity to maintain public access and communication,it has historically been the case that title transfer processes have run into significant hurdles if the public believes they will be denied access. The managing entity will prevent any ill will by maintaining the park and other public access opportunities as they are currently provided. 7) The managing entity will establish conservation and drought plans. A central question for the partnership is what happens if and when Scoggins Dam cannot be completely filled due to drought conditions. Which of the partners will take cuts in their water allocations,and how will those decisions be made? The managing entity will create a fully detailed conservation and drought plan that will identify how the partners will respond should drought conditions be present in the future. Action Steps to Implement this Principle: Key elements of this conservation plan will be established during August-September 2007,with more detailed work on this plan to follow.An important"first step"in this regard is to review the historical performance of the dam in years of water shortage(for example, 2001), to more fully understand how a limited water supply can be most equitably allocated among the participating entities. S)Water sales and transfers will be facilitated through the partnership One of the major benefits of the partnership is to share and transfer water to where it is needed the most among the various partners.The partnership agreement will be structured in a way that allows for the easy sale, transfer, and wheeling of water from one partner to another.With local control and collaboration, it is anticipated that the partners will be able to more readily move water to accommodate the needs of the region as a whole—whether it be for drinking water,other municipal water uses, irrigation,or water quality in the Tualatin River. Action Steps to Implement this Principle:This core element of the agreement will continue to be worked on in more detail over the next several months. The Partnership Draft Benefits Statement&Prinaples of Agreement 6 Working Draft:July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— will eventually establish a methodology that will be used to price water for sales and leasing, ranging from long-term to"spot market"pricing. 9)Partners can enter and exit as necessa y. Although the title transfer is being accomplished through the nine partners currently at the table, it is anticipated that new partners may be added to the managing entity as time passes,and especially if the water supply project is pursued.The governance agreement adopted for the partners over the long-term will be flexible enough to allow for new partners to join.Likewise, the governance agreement will provide the flexibility to enable partners to sell their shares and to exit the partnership should they find it necessary to do so. Action Steps to Implement this Principle:This principle will continue to be refined, and details added, as the governance model takes shape over the next several months. 10)Partners will have the first right of refusal. This will occur on two different levels. First,if any of the partners have excess water to lease or sell,the governance agreement will require that entity to offer the water first to the other partners,rather than go to outside buyers in an attempt to sell that water. Secondly, if an entity wishes to exit the partnership altogether,the governance agreement will require that the entity offer its ownership shares first to the other partners before offering them to an outside buyer. Action Steps to Implement this Principle: This principle will continue to be refined, and details added, as the governance model takes shape over the next several months. Three Additional Principles of Agreement for the Water SuJ2plTject The nine participating partners have tentatively agreed to the following three principles related to the water supply project: 1) Title Transfer principles will remain in force. All of the principles that have been agreed to for the title transfer will be adhered to for any new projects or other improvements associated with Scoggins Dam. Q) Park reconstruction costs will be paid for by the new entity. If the dam is raised,Washington County will lose its park facilities at Hagg Lake. The Partnership agrees that it will pay for the design and construction costs to replace these park facilities.The managing entity will also compensate Washington County for any revenue losses it experiences during construction of the new dam and new park facilities. Action Steps to Implement this Principle:Details of the financing,design,and construction required for park replacement will be determined as part of the overall cost estimating for the dam raise. S)"New water/old water"agreements will be forged in advance of the dam raise. If the dam is raised,there will be a significant new amount of"new water" available to the partners.A primary concern among the partners has been the way in which water rates for the existing entities vs. the new investors would be determined.Another concern has been the overall reliability of the new supply—what happens in those years Dra fl Benefits Statement&Principles of Agremwnt 7 Working Draft Judy 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS-- when we cannot completely fill the dam?Would those entities with existing contracts be fully guaranteed their supplies, and would the supply for new investors be interrupted as a result? To answer this concern, the partners are exploring the feasibility of forging an agreement between the repayment contractors and the new investors according to the following two tiers: Tier 1 This first tier proposes that those current contract holders with the Bureau of Reclamation receive priority for the water in Hagg Lake based on the amount for which they currently contract. Under this tier,these current contract holders as individual agencies may or may not participate in the expansion of the Scoggins Dam. Regardless, if the dam is raised, these current contract holders—in exchange for the guarantee of the same amount of water for which they currently contract—will not receive any benefits that accrue through the dam raise,including carry over, the pump back,or the raw water pipeline. If they participate in the expanded project, the benefits of the expanded project will accrue only for that portion of the expanded project. In exchange for a guarantee of their currently-contracted supply, these entities will be subject to the reliability of the project in its current form prior to the dam raise with no benefit of carry over. In this tier,those existing customers will also be subject to the original flood control curve and will not be able to take advantage of a relaxed curve because of additional storage. New partners under this tier will receive benefit for their improvements, but only after the Tier 1 group's demands are satisfied from the existing project. Tier 2 A new project is created and blends the existing contract holders with the new partners. In this case everyone shares in the reliability of the entire dam, including those partners that do not participate in the expansion of the lake through a dam raise. Carry over shall apply to all water in lake,and release will be based on demands, not on who had rights to the water first. The flood control curve will likely change as a result of the larger lake and everyone will benefit. Everyone will also benefit from the pump back and raw water pipeline. In the event that there is not enough water, then everyone will share in a cutback based upon a percentage of their amount of water in the project. Action Steps to Implement this Principle: Details of these proposed tiers and how they might work over the long-term will continue to be discussed as the governance agreement takes shape.An important"first step" in this regard is to review the historical performance of the dam in years of water shortage (for example, 2001), to more fully understand how a limited water supply can be most equitably allocated among the participating entities.Likewise, information and discussion sessions will take place regarding the degree of reliability that is anticipated once the dam raise has been completed.Although the details of old and new water allocation can be determined after title transfer has occurred, several of the partners have said they want reassurances about how this might be determined prior to completion of the title transfer.Therefore, Draft Benefits Statement&Principles of Agreement 8 Working Draft:July 27,9007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— a considerable level of detailed agreement will be developed over the next several months. Draft Benefits Statement&Principles of Agreement 9 Working Draft:July 27,2007 —WORKING DRAFT FOR DISCUSSIONS WITH POLICY MAKERS— Next Steps for the Governance Model The Task Group will work during August 2007 to determine which type of governance model they want to adopt for the title transfer and water supply project.The Group has agreed to compare and contrast four existing models: the Joint Water Commission, the Barney Reservoir Joint Ownership Agreement, the Bull Run Regional Drinking Water Agreement, and the Cascade Water Alliance. Regardless of which model is selected, the partners agree, in principle, to the following: ➢ The model must accommodate the thirteen Principles of Agreement outlined in this document. ➢ The governing entity has to operate efficiently.The entity will evaluate the possibility of joint management of Barney and Scoggins Dams,which will increase operational efficiency. ➢ While the current JWC and other models are likely to serve well for the initiation of the partnership,it is hoped that the agreement will be structured in a way that allows for greater efficiency and flexibility in the future.The governance model must be able to be enhanced/changed as circumstances dictate—"We reserve the right to be smarter tomorrow than we are today." Draft Benefits Statement&Principles of Agreement 10 Working Draft;July 27,2007 Submitted at t /L 711[_ 1 YVi a cwt Daily Demand Chart By: J"ah tl-7a0d-'-tc�h_ Date: oZ-G Agenda Item No.: Tigard Water Service Area Daily Water Demand January 1 -July 31, 2007 14 110 100 12 90 10 80 D 8 70 3 m a � c 60 3 6 -n T C ° 50 4 40 2 30 0 20 1/1 1/6 1/15 1122 1/29 2/5 2/12 2119 2/26 3/5 3/12 3119 3/25 4/2 419 4116 4123 4/30 5/7 5114 5121 5126 614 6/11 6/16 6/25 7/2 719 7/16 7/23 7130 Water Demand Temperature Page 1 2007 Tigard Water Purchases (purchases per source) 200.00 180.00 - 160.00 — 140.00 ------- - 120.00 - N G 100.00 -- -- - --- -- G _ 80.00 - 60.00 0.00 60.00 --— - ----- --- 40.00 — 20.00 - 0.00 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 ■Portland ❑Lake Oswego ■JWC ■ASR#2 ■ASR#1 ■Well#2 ■TVWD Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-111 ASR-211 Total MG MG in Demand in MGD MGD ASR-1R ASR-2R MGD MGD /TVWD- MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG Injection in Injection in MGD 1/1/07 0.494112 3.779072 4.273184 17.71 4.533184 1/2/07 0.497952 4.708352 5.206304 17.51 4.244203 1.162101 1/3/07 1.041121 5.284608 6.325729 17.89 4.121428 1.824301 1/4/07 0.417984 5.279041 5.697025 17.69 4.131906 0.132918 1.632201 1/5/07 0.938304 5.322112 6.260416 18.11 4.130115 1.710301 1/6/07 1.037376 5.322816 6.360192 18.28 4.345091 1.845101 1/7/07 1.050624 5.341056 6.39168 18.39 4.442379 1.839301 1/8/07 1.478496 5.335744 6.81424 18.59 4.227795 0.551344 1.835101 1/9/07 1.469568 5.329152 6.79872 18.49 4.185998 0.882721 1.830001 1/10/07 1.476864 5.337088 6.813952 18.48 4.11647 0.881281 1.826201 1/11/07 1.478592 5.319296 6.797888 18.41 4.166086 0.878401 1.823401 1/12/07 1.484544 5.337472 6.822016 18.39 4.143654 0.876961 1.821401 1/13/07 1.481952 5.333312 6.815264 18.28 4.379182 0.874081 1.672001 1/14/07 1.485696 5.342081 6.827777 18.16 4.570655 0.865521 1.511601 1/15/07 1.475616 5.329856 6.805472 17.82 4.61461 0.869761 1.661101 1/16/07 1.462656 5.354624 6.81728 17.81 4.218898 0.866881 1.741501 1/17/07 1.444032 5.365056 6.809088 17.93 4.288906 0.866881 1.533301 1/18/07 1.462272 5.355136 6.817408 18.1 4.337406 0.861201 1.448801 1/19/07 1.490304 5.354688 6.844992 18.47 4.20483 0.862761 1.407401 1/20/07 1.487232 5.318206 6.8054382 18.59 4.418136 0.861201 1.406101 1/21/07 1.471488 5.293632 6.76512 18.51 4.573638 0.866881 1.404601 1/22/07 1.471201 5.208192 6.679393 18.22 4.406531 0.869761 1.693101 1/23/07 1.455648 5.261441 6.717089 18.25 4.257787 0.851201 1.578101 1/24/07 1.482624 5.304064 6.786688 18.56 4.236872 0.849115 1.390701 1/25/07 1.456512 5.291328 6.74784 18.62 4.152871 0.847568 1.687401 1/26/07 1.458624 5.350592 6.809216 18.62 4.180552 0.847363 1.781301 1/27/07 1.476961 5.291521 6.768482 18.54 4.360986 0.848095 1.639401 1/28/07 1.463136 5.328961 6.792097 17.93 4.401315 0.846681 2.154101 1/29/07 1.464768 5.396544 6.861312 18.98 4.338921 0.63329 0.839101 1/30/07 1.522272 5.279232 6.801504 19.73 4.332282 0.865221 0.854001 1/31/07 1.048224 5.246912 6.295136 19.56 4.367673 0.308062 1.789401 TOTALS 40.42676 162.7012 0 0 0 0 0 0 0 203.1279 568.62 133.4304 19.76515 48.34243 AVES 1.304089 5.248425 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6.552514 18.34258 4.304205 0.790606 1.611414 Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASRAR ASR-2R Total MG MG in Demand in ASRAR ASR-211 MGD MGD ITVWD- MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG Injection in Injection in MGD MGD MGD 2/1/07 1.053121 5.233088 6.286209 19.7 4.358908 1.787301 2/2/07 0.961728 5.128064 6.089792 19.85 4.091591 1.848201 2/3/07 0.952032 5.079552 6.031584 19.71 4.299083 1.872501 2/4/07 0.949632 5.084608 6.03424 19.41 4.466239 1.868001 2/5/07 0.972384 5.187136 6.15952 19.52 4.185519 1.864001 2/6/07 0.951744 5.239616 6.19136 19.77 4.081259 1.860101 2/7/07 0.762241 5.220224 5.982465 19.79 4.106464 1.856001 2/8/07 0.769152 5.202112 5.971264 19.83 4.078463 1.852801 2/9/07 0.771936 5.168896 5.940832 19.9 4.0783 1.792532 2/10/07 0.766944 4.979841 5.746785 19.52 4.354529 1.772256 2/11/07 0.761376 4.904321 5.665697 18.95 4.466416 1.769281 2/12/07 0.787104 4.896576 5.68368 18.58 4.337776 1.715904 2/13/07 0.759936 5.126144 5.88608 18.6 4.137408 1.728672 2/14/07 0.756961 5.102016 5.858977 18.55 4.098129 1.810848 2/15/07 0.756961 5.144448 5.901409 18.49 4.117057 1.844352 2/16/07 0.761184 5.149504 5.910688 18.52 4.157792 1.722896 2/17/07 0.764832 5.214656 5.979488 18.45 4.33704 1.712448 2/18/07 0.764161 5.214144 5.978305 18.35 4.363744 1.714561 2/19/07 0.779041 5.151488 5.930529 18.17 4.397888 1.712641 2/20/07 0.779904 5.233344 6.013248 18.32 4.150224 1.713024 2/21/07 0.784512 5.230336 6.014848 18.47 4.14472 1.720128 2/22/07 0.770401 5.206784 5.977185 18.63 4.094369 1.722816 2/23/07 0.765792 5.168641 5.934433 18.75 4.093921 1.720512 2/24/07 0.760416 5.206016 5.966432 18.8 4.199951 1.716481 2/25/07 0.779232 5.154816 5.934048 18.62 4.401024 1.713024 2/26/07 0.781441 5.172032 5.953473 18.65 4.195089 1.728384 2/27/07 0.781921 5.161856 5.943777 18.75 4.092929 1.750848 2/28/07 0.777504 5.159744 5.937248 18.8 4.10424 1.783008 TOTALS 22.78359 144.12 0 0 0 0 0 0 0 166.9036 531.45 117.9901 0 49.67352 AVES 0.8137 5.147143 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/01 #DIV/01 5.960843 18.98036 4.213931 #DIV/0! 1.774054 Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-1R. ASR-2R Total MG MG in Demand in ASR-1R ASR-2R MGD MGD /TVWD- MGD MGD MGD Recovery Recovery Pur.IProd. Storage MG Injection in Injection in MGD MGD MGD 3/1/07 0.762336 5.169536 5.931872 18.87 4.052368 1.809504 3/2/07 0.761281 5.214081 5.975362 18.93 4.100961 1.814401 3/3/07 0.759456 5.208128 5.967584 18.73 4.346943 1.820641 3/4/07 0.766944 5.198144 5.965088 18.37 4.50848 1.816608 3/5/07 0.780961 5.217281 5.998242 18.29 4.264418 1.813824 316/07 0.776256 5.239616 6.015872 18.29 4.204448 1.811424 3/7/07 0.777504 5.294272 6.071776 18.52 4.106384 1.735392 3/8/07 0.760704 5.282624 6.043328 18.69 4.115184 1.758144 3/9/07 0.764352 5.300288 6.06464 '18.9 4.101776 1.752864 3/10/07 0.753121 5.302592 6.055713 18.91 4.296592 1.749121 3/11/07 0.745152 5.286784 6.031936 18.71 4.486175 1.745761 3/12/07 0.748992 5.191841 5.940833 18.63 4.278317 1.742516 3/13/07 0.752448 5.300609 6.053057 18.74 4.175025 1.768032 3/14/07 0.760704 5.285376 6.04608 18.85 4.145296 1.790784 3/15/07 0.766368 5.281216 6.047584 18.92 4.190063 1.787521 3/16/07 0.764832 5.279041 6.043873 18.95 4.229617 1.784256 3/17/07 0.767521 5.216192 5.983713 18.63 4.522721 1.780992 3/18/07 0.759361 5.251136 6.010497 18.25 4.613056 1.777441 3/19/07 0.773376 5.237248 6.010624 18.16 4.358992 1.741632 3/20/07 0.771552 5.230401 6.001953 18.23 4.207505 1.724448 3/21/07 0.779521 5.241792 6.021313 18.3 4.228785 1.722528 3/22/07 0.770496 5.220481 5.990977 18.33 4.225009 1.735968 3/23/07 0.766081 5.250944 6.017025 18.43 4.150529 1.766496 3/24/07 0.751392 5.247041 5.998433 18.39 4.274625 1.763808 3/25/07 0.759168 5.253441 6.012609 18.3 4.341105 1.761504 3/26/07 0.759936 5.264192 6.024128 '18.4 4.166272 1.757856 3/27/07 0.748704 5.264192 6.012896 18.55 4.108495 1.754401 3/28/07 0.752641 5.252352 6.004993 18.7 4.102225 1.752768 3/29/07 0.752641 5.252352 6.004993 18.7 4.252225 1.752768 3/30/07 0.755041 5.258176 6.013217 18.97 3.973456 1.769761 3/31/07 0.753696 5.240961 5.994657 18.91 4.267809 1.786848 TOTALS 23.62254 162.7323 0 0 0 0 0 0 0 186.3549 576.55 131.3949 0 54.85001 AVES 0.762017 5.24943 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6.011447 18.59839 4.238544 #DIV/O! 1.769355 Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-1R ASR-2R Total MG MG in Demand in ASR-1R ASR-2R MGD MGD fNWD- MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG Injection in Injection in MGD MGD MGD 4/1/07 0.748608 4.929728 5.678336 18.39 4.48896 1.709376 4/2107 0.758608 5.249216 6.007824 18.25 4.365776 1.782048 4/3/07 0.741601 4.601728 5.343329 18.38 4.334641 0.878688 4/4/07 0.752448 3.513728 4.266176 18.32 4.326176 0 4/5/07 0.751968 3.608448 4.360416 18.24 4.440416 0 4/6/07 0.760608 3.686528 4.447136 18.07 4.617136 0 4/7/07 0.755521 3.686656 4.442177 17.94 4.572177 0 4/8/07 0.773952 3.686272 4.460224 17.82 4.580224 0 4/9/07 0.768961 3.883904 4.652865 18.1 4.372865 0 4/10/07 0.771841 3.943808 4.715649 18.58 4.235649 0 4/11/07 0.760992 3.760384 4.521376 18.85 4.251376 0 4/12/07 0.763968 3.686272 4.45024 19.14 4.16024 0 4/13/07 0.751968 3.686401 4.438369 19.28 4.261217 0.037152 4/14/07 0.751296 3.686401 4.437697 19.31 4.407697 0 4/15/07 0.753696 3.686401 4.440097 19.09 4.660097 0 4/16/07 0.494592 3.197824 0.432601 4.125017 18.81 4.405017 0 4/17/07 0.490272 2.948864 0.938752 4.377888 18.91 4.277888 0 4/18/07 0.506881 2.948736 0.751256 4.206873 18.8 4.316873 0 4/19/07 0.509952 2.948992 1.172641 4.631585 19.06 4.371585 0 4/20/07 0.502848 2.948608 0.627184 4.07864 18.84 4.29864 0 4/21/07 0.513504 2.944641 0.663121 4.121266 18.55 4.411266 0 4/22/07 0.514944 2.948864 1.174481 4.638289 18.46 4.728289 0 4/23/07 0.511008 2.949121 1.174216 4.634345 18.6 4.494345 0 4/24/07 0.507264 2.969728 1.174216 4.651208 18.96 4.291208 0 4/25/07 0.503712 3.042688 1.174048 4.720448 19.28 4.400448 0 4/26/07 0.505056 3.003904 1.022624 4.531584 19.34 4.471584 0 4/27/07 0.513984 2.980096 0.790808 4.284888 19.14 4.484888 0 4/28/07 0.504384 2.978176 1.174241 4.656801 19.02 4.776801 0 4/29/07 0.505152 2.982784 1.170656 4658592 18.53 5.148592 0 4/30/07 0.506976 3.001601 1.171856 4.680433 18.36 4.850433 0 TOTALS 18.95657 104.0905 0 0 0 0 0 14.6127 0 137.6598 560.42 133.8025 0 4.407264 AVES 0.631886 3.469683 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.97418 #DIV/0! 4.588659 18.68067 4.460083 #DIV/0! 0.146909 r � Bradley Crnr Baylor Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-1R ASR-2R Total MG MG in Demand in ASR-1R Temp in F To 8 From Comments MGD MGD /TVWD- MGD MGD MGD Recovery Recovery Pur.IProd. Storage MG Injection in Storage MG MGD MGD 511/07 0.479521 3.003136 0 0 0.586576 0 4.069233 17.84 4.589233 61 0.52 5/2/07 0.503521 3.006336 0 0 0.799024 0 4.308881 17.65 4.498881 56 0.19 5/3/07 0.499681 3.005696 0 0 1.172616 0 4.677993 17.81 4.517993 57 -0.16 514/07 0.500928 2.999424 0 0 1.169144 0 4.669496 18.05 4.429496 56 -0.24 5/5/07 0.505632 2.982912 0 0 1.164784 0 4.653328 18.06 4.643328 60 -0.01 5/6/07 0.508224 2.989824 0 0 1.164016 0 4.662064 17.93 4.792064 65 0.13 5/7/07 0.505921 3.256321 0 0 1.171192 0 4.933434 17.67 5.193434 80 0.26 5/8/07 0.512448 4.381056 0 0 0 0.378032 0 5.271536 17.82 5.121536 78 -0.15 5/9/07 0.513504 4.792576 0 0 0 0 0 5.30608 17.93 5.19608 68 -0.11 5/10/07 0.514752 4.867201 0 0 0 0 0 5.381953 17.93 5.381953 71 0 5111/07 0.515904 4.959872 0 0 0 0 0 5.475776 17.94 5.465776 69 -0.01 5/12/07 0.502561 4.992256 0 0 0 0 0 5.494817 18.06 5.374817 59 -0.12 5/13/07 0.507552 4.995584 0 0 0 0 0 5.503136 18.21 5.353136 59 -0.15 5114/07 0.525408 4.999296 0 0 0 0 0 5.524704 17.71 6.024704 81 0.5 5115/07 0.515232 5.096832 0 0 0 0.782064 0 6.394128 17.52 6.584128 86 0.19 5116/07 0.518688 5.107456 0 0 0 1.173936 0 6.80008 18.15 6.17008 69 -0.63 5/17107 0.513696 5.058176 0 0 0 1.173792 0 6.745664 18.55 6.345664 71 -0.4 5/18/07 0.529344 4.966401 0 0 0 1.032928 0 6.528673 18.93 6.148673 74 -0.38 5/19107 0.518496 4.995584 0 0 0 0 0 5.51408 18.5 5.94408 63 0.43 5/20/07 0.523104 5.049984 0 0 0 0 0 5.573088 18.4 5.673088 55 0.1 5121/07 0.504096 5.071104 0 0 0 0.400384 0 5.975584 18.88 5.495584 60 -0.48 5/22107 0.499008 5.035904 0 0 0 0 0 5.534912 18.92 5.494912 66 -0.04 5/23/07 0.506112 5.024512 0 0 0 0.385056 0 5.91568 18.96 5.87568 72 -0.04 5/24/07 0.777504 4.999168 0 0 0 1.174112 0 6.950784 19.43 6.480784 77 -0.47 5/25/07 0.762048 4.989441 0 0 0 1.174176 0 6.925665 19.4 6.955665 79 0.03 5/26107 0.782881 5.021824 0 0 0 1.173696 0 6.978401 19.36 7.018401 74 0.04 5127/07 0.771264 5.021824 0 0 0 0.855521 0 6.648609 19.71 6.298609 60 -0.35 5/28/07 0.774721 5.039361 0 0 0 0.655616 0 6.469698 18.38 7.799698 68 1.33 5/29/07 0.791424 5.057152 0.172131 0.420718 0 1.173776 0 7.615201 17.43 8.565201 87 0.95 5130/07 0.775201 5.074048 0.493653 0.674546 0.5 1.172304 1.017061 9.706813 17.85 9.286813 90 -0.42 ASR2 EST 5/31/07 0.755616 5.070081 0.238481 0.670706 0.51 1.152432 1.78365 10.180966 18.82 9.210966 85 -0.97 ASR2 EST TOTALS 17.91399 140.9103 0 0.904265 1.76597 0 1.01 21.08518 2.800711 186.39046 567.8 185.9305 0 -0.46 AVES 0.577871 4.545495 #DIV/0! 0.02917 0.056967 #DIV/0! 0.042083 0.680167 0.090346 6.0125954 18.31613 5.997757 #DIV/0! 69.54839 -0.014839 Bradley Crnr Baylor Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-1R ASR-2R Total MG MG in Demand in ASR-1R ASR-2R MGD MGD /TVWD- MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG Injection in Injection in MGD MGD MGD 6/1/07 0.777696 5.083392 0.668482 0.51 1.151376 1.821601 10.01255 19.49 9.342547 6/2/07 0.778464 5.044481 0.667922 0.51 1.151336 1.821601 9.973804 19.54 9.923804 6/3/07 0.801601 4.990336 0.667922 0.52 1.151456 1.821601 9.952916 19.6 9.892916 6/4/07 0.757441 5.024001 0.203106 0.51 1.151201 0.55407 8.199819 19.31 8.489819 6/5/07 0.784128 5.079936 0 0.51 0.990368 0 7.364432 19.59 7.084432 6/6/07 0.775584 5.131776 0.136568 0.51 0.717072 0 7.271 19.78 7.081 6/7/07 0.757248 5.108608 0.155178 0.51 0.513296 0 7.04433 19.67 7.15433 6/8/07 0.764256 5.140992 0.095054 0.52 0.78456 0 7.304862 18.92 8.054862 6/9/07 0.754848 5.139841 0 0.53 0.673792 0.819721 7.918202 19.75 7.088202 6/10/07 0.756001 5.133184 0 0.52 0 0 6.409185 19.33 6.829185 6/11/07 0.759072 5.141504 0.064441 0.51 0 0 6.475017 18.82 6.985017 6/12/07 0.780576 5.133312 0.447278 0.51 0.044641 0 6.915807 18.18 7.555807 6/13/07 0.749184 5.168001 0.416438 0.52 0.961792 0 7.815415 17.91 8.085415 6/14/07 1.025856 5.139841 0.374614 0.52 1.151201 0.417451 8.628963 18.16 8.378963 6/15/07 1.002336 5.155841 0.244712 0.91 1.151392 0 8.464281 18.7 7.924281 6/16/07 0.978528 5.117568 0 1.07 1.150848 0 8.316944 19.13 7.886944 6/17/07 0.870048 5.115392 0 1.07 1.150432 0 8.205872 19.26 8.075872 6/18/07 1.006368 5.117312 0.129792 1 1.078512 0 8.331984 18.87 8.721984 6/19/07 0.999168 5.090944 0.307708 1 1.151184 0.531301 9.080305 18.74 9.210305 6/20/07 0.977088 5.248256 0 1 1.151056 1.130911 9.507311 18.76 9.487311 6/21/07 1.000608 5.213824 0.326824 1 1.150992 1.191631 9.883879 19.48 9.163879 6/22/07 1.001856 5.328896 0.430464 1 1.150928 0 8.912144 19.41 8.982144 6/23/07 1.033056 5.265152 0.528444 1 1.150144 0 8.976796 19.56 8.826796 6/24/07 0.998976 5.264768 0.380941 1 0.862161 0 8.506846 20.43 7.636846 6/25/07 1.006081 4.772736 0.110232 1 0.072544 0 6.961593 19.58 7.811593 6/26/07 1.021248 5.230592 0.432372 1 0.798128 0 8.48234 18.86 9.20234 6/27/07 0.981408 5.349761 0.271068 1 1.151248 0 8.753485 18.55 9.063485 6/28/07 0.992928 5.367041 0.165848 1 0.702752 0 8.228569 19.2 7.578569 6/29/07 1.009728 5.346688 0.316724 0.91 0.226272 0 7.809412 19.83 7.179412 6/30/07 1.011744 5.311104 0 0.87 0.396336 0 7.589184 19.02 8.399184 TOTALS 26.91312 154.7551 0 0 7.542132 0 23.04 24.93702 10.10989 247.2972 575.43 247.0972 0 0 AVES 0.897104 5.158503 #DIV/O! #DIV/0! 0.251404 #DIV/0! 0.768 0.831234 0.336996 8.243241 19.181 8.236575 #DIV/0! #DIV/0! Bradley Crnr Baylor Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in ASR-1R ASR-2R Total MG MG in Demand in ASR-1R ASR-2R MGD MGD ITVWD- MGD MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG Injection in Injection in MGD I I I MGD MGD 7/1/07 1.047841 5.347712 0 1.04 0.842881 8.278434 17.99 9.308434 7/2/07 1.016641 5.427968 0.143421 0.433344 1.35 1.152048 1.275121 10.798543 17.95 10.83854 7/3/07 0.984324 5.682048 0 0.659276 1.53 1.151264 1.821601 11.828513 19.43 10.34851 7/4/07 0.994848 6.006016 0 0.657128 1.53 1.150801 1.563541 11.902334 20.19 11.14233 7/5/07 0.982464 6.057856 0 0.655148 1.53 1.148448 0 10.373916 19.96 10.60392 7/6/07 0.991296 6.080001 0 0.655536 1.52 1.147121 0 10.393954 19.66 10.69395 7/7107 0.981888 6.062976 0 0.655501 1.53 1.141856 0 10.372221 19.36 10.67222 7/8/07 0.983904 6.066944 0 0.654016 1.52 1.141904 0.789361 11.156129 19.38 11.13613 7/9/07 0.946464 6.023681 0 0.654016 1.51 1.129792 0.796951 11.060904 18.56 11.8809 7/10/07 0.969408 6.182784 0 0.653961 1.51 1.130528 1.180801 11.627482 17.79 12.39748 7/11/07 0.969408 6.158721 0 0.651936 1.5 1.128672 2.304001 12.712738 18.35 12.15274 7/12/07 0.957696 6.144641 0 0.649512 1.54 1.128464 2.304001 12.724314 19.72 11.35431 7/13/07 0.934368 6.070272 0 0.420284 1.5 0.695601 1.545601 11.166126 20.34 10.54613 7/14/07 0.973152 6.068096 0 0.650868 1.5 0.887664 0 10.07978 19.23 11.18978 7/15/07 0.967392 6.088704 0 0.648321 1.5 1.111681 1.593601 11.909699 20.07 11.0697 7/16/07 0.528672 6.066304 0 0.648028 1.54 1.134448 0.714001 10.631453 19.86 10.84145 7/17/07 0.942048 6.124416 0 0.197524 1.58 0.476832 0 9.32082 20.74 8.44082 7/18/07 0.738816 6.054656 0 0 1.58 0 0 8.373472 21.19 7.923472 7/19/07 0.039168 6.006401 0 0 1.59 0 0 7.635569 21.07 7.755569 7/20/07 0.070656 6.002688 0 0.014064 1.58 0 0 7.667408 21.08 7.657408 7/21/07 0 5.770496 0 0 1.59 0 0 7.360496 21.06 7.380496 7/22/07 0 5.853824 0 0 1.58 0 0 7.433824 20.08 8.413824 7/23/07 0.971904 6.053376 0 0 1.57 0.493201 0 9.088481 20.3 8.868481 7/24/07 0.952704 6.065152 0 0 1.56 0.285184 0 8.86304 20.51 8.65304 7/25/07 0.963936 6.064384 0 0 1.54 0.900832 0 9.469152 20.03 9.949152 7/26/07 0.963456 6.073344 0 0 1.5 1.150576 0 9.687376 19.92 9.797376 7/27/07 0.960001 6.094081 0 0 1.5 1.025856 0 9.579938 19.22 10.27994 7/28/07 0.950688 6.113152 0 0 1.5 0.439648 1.176192 10.17968 19.95 9.44968 7/29/07 1.011552 6.077312 0 0 1.5 0 1.377216 9.96608 20.5 9.41608 7/30/07 1.021536 6.063104 0 0 1.5 0.842752 0 9.427392 19.64 10.28739 7/31/07 1.000608 6.067584 0 0 1.5 1.145552 0 9.713744 19.24 10.11374 TOTALS 25.81684 186.0187 0 0.143421 9.558463 0 46.82 23.98361 18.44199 310.783 612.37 310.563 0 0 AVES 0.832801 6.000603 #DIV/0! 0.004781 0.308338 #DIV/0! 1.510323 0.773665 0.614733 10.02526 19.75387 10.01816 #DIV/0! #DIV/0! Page 1 of 1 Greer Gaston - Additional Packet Material From: Greer Gaston To: Bill Scheiderich; Dick Winn; Gretchen Buehner; Julie Russell; Roland Signett Date: 8/3/2007 4:15 PM Subject: Additional Packet Material CC: Dennis Koellermeier The attached memo is related to item 5 of the August 8 IWB agenda, entitled "Discuss City of Durham Request for Clarification of the Tenancy in Common Agreements." Greer Gaston Executive Assistant City of Tigard Public Works greer t_gard-or.gov PHONE 503.639.4171 x2595 FAX 503.684.8840 Gam:-fD n o �i o�' e.mait JLx Cu. - L I�• w l ,rsa - 154 I file://C:\Documents and Settings\greer\Local Settings\Temp\GW}00002.HTM 8/3/2007 RAMIS CREW CORRIGAN, LLP Attorneys At Law MEMORANDUM 1727 NW Hoyt Street Portland,Oregon 97209 (503)222-4402 Fax: (503) 243-2944 TO: Dennis Koellermeier FROM: Tim Ramis DATE: August 3, 2007 RE: Questions from Bill Scheiderich Regarding Improvement Valuation of I" Properties Upon Sale to the City of Tigard Under the TIC Agreements and In Response to Durham City Council Request for Clarification This memorandum addresses your questions about the method of valuation of the Canterbury and Water Building improvements upon the sale to the City of Tigard, under the provisions of the Tenants In Common Agreements governing both properties. Questions Presented 1. Does the reference to the value of the improvements"as set forth in"the study mean that the improvements will be deemed to have zero value as of the end of each improvement's "life" per the depreciation schedule? 2. Or, does the reference to the value of the improvements "as set forth in"the study mean that the 1994 value is depreciated according to the schedule and then that value subtracted from the current replacement value? Summary The TIC agreements for both the Water Building and Canterbury improvements are consistent in using the straight-line depreciation approach to valuation of the improvements on both properties as set forth in the EES report, upon their sale to the City of Tigard. Accordingly, the answer is yes to Question 1., and no to Question 2. If the parties wish to use an alternative method of valuation for either or both properties' improvements upon sale of the properties to the City of Tigard,the respective TIC agreements would need to be amended. Memorandum re: Clarification of TIC Agreements August 3, 2007 Page 2 Discussion Regarding Question 1.,the current language of both TIC agreements with respect to valuation of the improvements to both the Canterbury and Water Building properties upon sale to the City of Tigard refers to the EES Report, in which a 1994 value was established according to straight-line depreciation of these improvements. Under this method the improvements would have no value at the end of each improvement's functional and economic life. The agreements contain no reference at all to an appraisal-valuation of the improvements upon sale to the City of Tigard, but instead point to straight-line depreciated valuation as set forth in the report. In both TIC agreements,only the values of the land, not the improvements, are subject to appraisal of market value upon sale to the City of Tigard. Regarding Question 2., using depreciated replacement-cost-new (RCN) for establishing valuation upon sale to the City of Tigard is not consistent with the EES Report's use of straight- line depreciation of the improvements, and is therefore inconsistent with the TICs' provisions for improvement valuation upon such sale. RCN of improvements is typically used for the purpose of developing depreciation tables generated through structure-mortality studies and sales of similar types of properties, and are used to estimate the loss in value from the property's new condition. These values are most often used to establish values of new construction in mass appraisal or to ascertain an insurance company's cost to replace a damaged or destroyed building, and are not related to straight-line depreciation valuation. All provisions under the current language of the study refer solely to straight-line depreciation, rather than to a depreciation schedule developed through studies that uses depreciated replacement-cost-new values. M a Le,,ct 8--3 -6 Intergovernmental WaterWig GCQ-�- Serving Tigard, King City, Durham and ti Li.01 I a)-'J'A . ��t'1 u AGENDA ' "i Z� r *t Wednesday, August 8, 2007 Cit} 5:30 p.m. 877 X3`1 q17 Tiga 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call 2. Approval of Minutes -July 11, 2007 Motion from the Board to approve the minutes 3. Public Comments Call for comments from the public 4. Consider a Water Building Lease with the City of Tigard—Dennis Koellermeier Motion to approve the water building lease with the City of Tigard 5. Discuss City of Durham Request for Clarification of the Tenancy in Common Agreements - Dennis Koellermeier 6. Consider Making a Recommendation to Owner Jurisdictions Regarding a PGE Easement on the Water Building Property- Dennis Koellermeier Motion recommending an easement be granted to PGE on the water building property. 7. Review the Working Draft of the Tualatin Project Title Transfer and Tualatin Basin Water Supply Project Principles of Agreement-Dennis Koellermeier 8. Water Supply Options - Dennis Koellermeier 9. Informational Items - Dennis Koellermeier 10. Non-Agenda Items Call for non-agenda items from Board. 11. Next Meeting- September 12, 2007, 5:30 p.m. City of Tigard Water Auditorium, 8777 SW Burnham Street, Tigard, Oregon 12. Adjournment 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. Questions? Contact the City of Tigard at 503.639.4171 City of Tigard 13125 SW Hall Blvd. Tigard, OR 97223 71 Phone: 503-6394171 TIGARD FAX TRANSMITTAL Date August 2, 2007 Number of pages including cover sheet 3 To: ff The City of King City(Fax No. 503-639-3771) 8"The City of Durham(Fax No.503-598-8595) From: Greer Gaston Co: City of Tigard Fax #: 503.684.8840 Ph #: 503.718.2592 SUBJECT: Iutetgoverimental Water Board Meeting Notice and Agenda MESSAGE: Please post the attached notice and agenda for the upcoming meeting of the Intergovernmental Water Board. Thank you. 1AENGIFAX.DOT Intergovernmental Water Board Serving Tigard, King City, Durham and Unincorporated Area MEETING NOTICE Wednesday, August 8, 2007 5:30 p.m. City of Tigard Water Auditorium 8777 SW Burnham Tigard, Oregon 97223 Questions? Contact the City of Tigard at 503.639.4171 Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and the Unincorporated Area AGENDA Wednesday, August 8, 2007 City of Tigard Water Auditorium 5:30 p.m. 8777 SW Burnham Street Tigard, Oregon 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call 2. Approval of Minutes —July 11, 2007 Motion from the Board to approve the minutes 3. Public Comments Call for comments from the public 4. Consider a Water Building Lease with the City of Tigard—Dennis Koellermeier Motion to approve the water building lease with the City of Tigard 5. Discuss City of Durham Request for Clarification of the Tenancy in Common Agreements - Dennis Koellermeier 6. Consider Making a Recommendation to Owner Jurisdictions Regarding a PGE Easement on the Water Building Property- Dennis Koellermeier Motion recommending an easement be granted to PGE on the water building property. 7. Review the Working Draft of the Tualatin Project Title Transfer and Tualatin Basin Water Supply Project Principles of Agreement- Dennis Koellermeier 8. Water Supply Options - Dennis Koellermeier 9. Informational Items -Dennis Koellermeier 10. Non-Agenda Items Call for non-agenda items from Board. 11. Next Meeting - September 12, 2007, 5:30 p.m. City of Tigard Water Auditorium, 8777 SW Burnham Street, Tigard, Oregon 12. Adjournment 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. Questions? Contact the City of Tigard at 503.639.4171 hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 812/2007 2: 42PM Last Transaction Date Time Ttipe Identification Duration Pages Result 08/02 02: 41p Fax Sent 5035988595 1 : 09 3 OK hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 8/2/2007 2 : 40PM Last Transaction Date Time Type Identification Duration Pages Result 08/02 02: 39p Fax Sent 5036393771 0 : 51 3 OK