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01/12/2011 - Minutes Intergovernmental Water Board (IWB) Meeting Minutes January 12, 2011 Tigard Public Works Building 8777 SW Burnham Street Tigard, 4R 97223 Members Present: Gretchen Buehner Representing the City of Tigard (Arrived 5:31 p.m.) Ken Henschel Alternate Representing the Tigard Water District Keith Jehnke Representing the City of Durham Dick Winn Representing the City of King City Mike Stone Member At-Large Members Absent: None Staff Present: Dennis Koellermeier Director of Public Works John Goodrich Utility Division Manager Renee' Ferguson IWB Recorder Debbie Smith-Wagar Assistant Finance Director Visitors: Bill Scheiderich, Durham City Attorney 1. Call to Order, Roll Call and Introductions Commissioner Winn called the meeting at 5:30 p.m. 2. Approval of Minutes -- November 10, 2010 Note: Commissioner Buehner arrived at 5:39 p.m. Commission Winn motioned to approve the November 10, 2010 minutes. Commissioner Buehner seconded the motion. The minutes were approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Henschel, Jehnke, Stone and Winn voting yes. 3. Public Comments: None 4. Water Supply Update Mr. Goodrich reported: • December average water demand was at 5.22 million gallons per day. • The month of January is currently at 4 million gallons per day. • Injection is ongoing into aquifer storage and recovery (ASR) wells one and two. One well is nearing capacity with 196 million gallons stored. Injection will continue in the other well for the next two months. Intergovernmental Water Board Minutes January 12, 2011 1 5. Pacific Realty Association Credit for Leak Request Debbie Smith-Wagar provided background information regarding this credit for leak request. Credits over$500 dollars must be approved by the Board. Commissioner Buehner motioned to approve the credit. Commissioner Jehnke seconded the motion. The motion passed by unanimous vote of the Commissioners present, with Commissioners Buehner, Henschel, Jehnke, Winn, and Stone voting yes. 6. Progress Report on Rate Implementation, the Transition to Monthly Billing, and the Financial Assistance Program Ms. Smith-Wagar reported: • The new monthly utility billing structure began on January 1, 2011. • All customers will be on a four-week billing cycle by the end of January 2011. • The switch to monthly billing was publicized in Cityscape, Know H2O, Tigard Times, The Oregonian, and in a bill stuffier. Note:Agenda item #6 was continued following the discussion of a non-agenda item. 11. Non-Agenda Items The Board briefly discussed a memorandum from Mr. Goodrich comparing Tualatin Valley Water District (TVWD) water rates to the new Tigard water rates. The memo is on file in the IWB. record. Note:Agenda item #S was continued. Ms. Smith-Wagar went on to report Tigard has collaborated with St. Vincent de Paul to administer a financial assistance program for water service. St. Vincent de Paul already administers similar programs for other utilities such as electricity and natural gas. Eligibility for water service assistance is determined by the same federal guidelines used for other utilities. Tigard provided $10,000 in initial funding for the financial assistance program. The assistance is available on a first-come, first-served basis. Commissioner Buehner asked Ms. Smith-Wagar to update the Board next month regarding any issues arising from the implementation of monthly billing. 7. Discussion of Durham's Comments on the Intergovernmental Agreement(IGA) with Durham City Attorney Bill Scheiderich -- Dennis Koellermeier Mr. Koellermeier introduced Durham City Attorney Bill Scheiderich. Mr. Scheiderich was appearing on behalf of the Durham City Council to review the Council's feedback on the sixth version of the ]GA. The feedback is summarized in a letter, which is on file in the IWB record. A summary of the IGA comments and the Board's corresponding discussions are as follows: • Durham asserts it should be treated as a co-owner as opposed to a wholesale water customer. • Item 1 -The parties cannot delegate condemnation authority to Tigard. A previous draft may contain alternate language that addresses this issue. intergovernmenta[Water Board Minutes ,January 12,2011 2 • Item 2 — Durham would like all parties to have a vote regarding water sales to non-parties. A majority vote of the four jurisdictions was proposed. The concern was that Tigard, as the managing entity, could make decisions to the detriment of the member jurisdictions. Commissioner Winn suggested this was a managerial issue and should be left up to Tigard. • Item 3— Durham questioned the use of the word "surcharge," and preferred the existing practice whereby the rebate is not listed separately on the utility bill. Mr. Koellermeier noted water revenue has recently increased. The intent of this language was to fix the member jurisdictions' rebate to about two percent of current revenue, as opposed to an ongoing calculation tied to revenue increases. He noted Tigard did not receive these funds; the funds were passed along to the member jurisdictions. The rebate was originally developed to generate revenue for Durham, King City and the Tigard Water District (TWD). The TWD has no other source of revenue. Commissioner Stone said if the member jurisdictions wanted to maintain the rebate, then the rebate should be transparent to customers and labeled accordingly. Commissioner Winn advised the Board had already reached consensus on a two-percent rebate, irrelevant of what terminology is used. Commissioners Henschel and Mr. Scheiderich said they did not want the fee to be delineated on the bill. The Board discussed possible terminology and Mr. Koellermeier said he would try to develop language that would be acceptable to the member jurisdictions. • Item 4—This item may be similar to item 1.E. in the seventh version of the IGA. Mr. Koellermeier said this was a carryover from the original agreement. He clarified Durham's comments were applicable irrespective of whether the revenue was generated for infrastructure inside or outside of existing Tigard Water Service Area (TWSA) boundaries. In terms of a member jurisdiction vote, Commissioner Winn commented the IWB does not have authority to dictate to the City of Tigard; the IWB is advisory. The Board discussed its role and authority as it relates to the Tigard City Council. • Item 5— Commissioners Henschel and Winn suggested a five-year notice of termination was appropriate. Commissioner Stone inquired about Tigard's budgeting process and the impact of a shorter termination notice. Mr. Koellermeier reported Tigard is obligated to purchase a certain amount of water from Portland, and this obligation was predicated upon Tigard's commitment to provide water to the member jurisdictions. He said Tigard would likely need a five-year notice of termination. Intergovernmental Water Board Minutes January12,2011 3 • Item 6— Durham wants to have a vote regarding the disposition of surplus assets. Commissioner Henschel concurred with Durham's position on the dispositions of surplus assets. Durham also requested use of the IWB meeting space once per year for each member jurisdiction. Mr. Koellermeier said he would prepare a response to this item. • Item 7— Mr. Scheiderich reported this item was not a principal concern for Durham. He noted other information under this item was commentary. • Item 8— Mr. Scheiderich said this was the same concern mentioned earlier, namely that Tigard had the authority to overextend the water system by constructing infrastructure to serve areas outside the existing TWSA boundaries. Durham would like to see an 1WI3 vote on such issues. • Item 9— Mr. Scheiderich said this was an oversight in all the earlier drafts. The IGA should have additional language to prohibit member jurisdictions from selling their share of the water system to another party. Several Commissioners said they supported this addition. • Item 10— Durham views itself as a co-owner of the system. Durham acknowledges its interest may be an equitable interest as opposed to a legal interest. Mr. Scheiderich reported Durham is adamant that if their ratepayers fund infrastructure, they should have an ownership interest in that infrastructure. Durham acknowledges this request is subject to bond covenants and the Lake Oswego-Tigard Water Partnership agreement. Commissioner Buehner and Winn concurred with Durham's request. Mr. Koellermeier said Tigard was exploring the issue of equitable interest. Commissioner Winn said that once the bonds for Lake Oswego-Tigard Water Partnership are paid, infrastructure associated with the project should become a system asset. Commissioner Winn acknowledged Tigard had assumed all the risk associated with bonding. Mr. Koellermeier said the issue of band risk still needed to be resolved. Commissioner Winn said when the bonds were paid, and Tigard no longer had any bonding risk, then King City ratepayers should have an ownership interest in the projects funded by the bonds. Mr. Koellermeier said the member jurisdictions, as partners, and Tigard, as the managing authority, have a unique relationship. He acknowledged the member jurisdictions were "owners," but said the level of ownership was not equal. He said that should a member jurisdiction leave the IWB, they would have an equitable interest in the water system. He added that, in addition to system assets, other asset classifications might be created. Commissioner Winn said he wanted only system assets. Intergovernmental Water Board Minutes January 12,2011 4 Mr. Koellermeier said he would try to develop a compromise that was acceptable to the Board. Commissioner Jehnke suggested the IGA could stipulate that a member jurisdiction could not leave the partnership until the bonds were paid. Commissioner Winn summarized his comments on the seventh draft of the IGA. His comments appear on a copy of the agreement, which is on file in the IWB record. Aside from minor edits, notations regarding changes to content are shown on pages 6 and 10. With regard to Commissioner Winn's comments on item 7.F., (page 6), Mr. Koellermeier confirmed that the IWB's approval would be advisory to the Tigard City Council. Mr. Koellermeier pledged that where possible, he would develop language that represents "middle ground" between Tigard's interests and Mr. Scheiderich's and Commissioner Winn's comments. if, from Tigard's perspective, there are issues where middle ground cannot be reached, Mr. Koellermeier said he would be direct about Tigard's position. Commissioner Buehner said some issues might require a consultation with Tigard's bond counsel. Mr. Koellermeier inquired about comments from TWD. Commissioner Henschel reported TWD Commissioners were asked to review and compare the various versions of the agreement. Commissioner Buehner asked if the TWD could submit their comments in advance of the IWB's next meeting. Commissioner Henschel said the TWD's timeline might not allow for this. Commissioner Henschel said he would not have any comments to share until the TWD had met and discussed the agreement. Commissioner Winn directed the TWD work from the seventh version of the IGA. Commissioner Stone inquired how the IGA addressed defending against claims and negligent operation of the water system. Mr. Koellermeier said he would work on this language. S. Progress Report on Water Policies and Procedures Update--John Goodrich Mr. Goodrich reported that on January 25, 2011, the Tigard City Council would consider new procedures for delinquent payments, credit for leaks, curtailment, and meter tampering. These procedures were requested by the IWB. Also at the request of the IWB, the Council will consider increasing the City Manager's signing authority to $2,000. If approved, only credit for leak requests over$2,000 will come before the 1WB. Mr. Goodrich also explained the process to amend Tigard's administrative rules related to these procedures. 9. Progress Report on Water System Development Charge Implementation —John Goodrich Mr. Goodrich distributed and summarizer[ a handout detailing new City of Tigard Water System Development Charges (SDCs). The fee schedule is on file in the iWB record. The Board briefly discussed SDCs. Mr. Goodrich reported the Tigard City Council adopted the SDC implementation recommended by the Home Builders Association. This represents a four-step, three-year phase-in of the charges. The new SDCs will take effect February 1, 2011. Intergovernmental Water Board Minutes January 12,2011 5 10. Informational Items - Update from Commissioner Buehner on Lake Oswego/City of Tigard Oversight Committee activities. Commissioner Buehner reported: • The Lake Oswego and Tigard City Councils approved the Supply Facilities Capital Improvement Program. • Neighbors surrounding the Waluga reservoir are upset about possible expansion of the site. • A value engineering review of water partnership project plans will be underway soon. Such a review is conducted to determine if any additional efficiencies or cost savings can be identified. The Oversight Committee will receive a report in February. In response to a request from Commissioner Winn, Mr. Koellermeier said he would provide the value engineering report and costs to the Board. He said performing a value analysis was typical for projects of this type. Mr. Koellermeier reported the contract for the treatment plant design would be awarded in March. This is the first of six design contracts. 11. Non-Agenda Items Note:A non-agenda item was discussed during agenda item #6. 12. Future Agenda Items • February 9, 2019 Election of Chair and Vice-Chair • To be Announced —Additional Tenancy in Common Agreements for Properties within the Tigard Water Service Area 13. Next Meeting • February 9, 2011 at 5:30 p.m. Public Works Auditorium, 8777 SW Burnham Street, Tigard, Oregon 14. Adjournment At 7:30 p.m., Commissioner Winn motioned to adjourn the meeting. Commissioner Henschel seconded the motion. The meeting adjourned by unanimous vote of the Commissioners present, with Commissioners Buehner, Henschel, Jehnke, Stone and Winn voting yes. Dick Winn, IWB Chair Renee Ferguson, IWB Recorder Date: `3 � I f Date: J` - � Intergovernmental Water Board Minutes January 12,2011 6