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02/13/2013 - Minutes Intergovernmental Water Board (I") Minutes SERVING TIGARD, KING CITY,DURHAM AND TIGARD WATER DISTRICT MEETING DATE: Wednesday, February 13, 2013, 5:30 p.m. MEETING LOCATION: Tigard Public Works Building 8777 SW Burnham Street Tigard, OR 97223 Members Present: Gretchen Buehner Representing the City of Tigard Ken Henschel Representing the Tigard Water District Keith Jehnke Representing the City of Durham Andrew Barrett Member-At-Large Dick Winn Representing the City of King City Members Absent: None City of Tigard Staff Present: Dennis Koellermeier Public Works Director John Goodrich Utility Division Manager Kristie Peerman IWB Recorder 1. Call to Order, Roll Call and Introductions Commissioner Winn called the meeting to order at 5:31 p.m. 2. Approval of Minutes — December 12, 2012 Commissioner Buehner moved to approve the December 12, 2012 minutes. Commissioner Henschel seconded the motion. The motion passed by unanimous vote of the commissioners present, with Commissioners Barrett, Buehner, Henschel,Jehnke and Winn voting yes. 3. Public Comments, There were no comments from the public. 4. Water Supply Update —John Goodrich Mr. Goodrich reported: ■ Average water use for the month of January was about 4 million gallons per day (mgd). This is comparable to usage during the same time period last year. ■ 170 million gallons (mg) were injected into aquifer storage and recovery (ASR) #2. Injection will continue until 200 mg are stored. Then, injection will shift to ASR #1. There is an 80-day supply stored in the ASR wells. ■ A water leak was discovered in front of Tigard Public Library. Two photos of a water line damaged by contractor were submitted to the board. The photos are on file in the IWB record. The contractor will be billed for damage. ■ He made a presentation to the Highlands Homeowners' Association today. He discussed water issues and backflow. Based on an inquiry from Commissioner Henschel, Mr. Goodrich and the board briefly discussed security at water facilities. 5. Update on the Draft Intergovernmental Agreement for Water Service Mr. Koellermeier introduced the draft Preliminary Discussion of the New Intergovernmental Agreement (IGA) regarding Water Service. The draft was sent by email to board members on Friday, February 8, 2013, and is on file in the IWB record. A memo from Clark Balfour, highlighting the major terms of the draft agreement, was distributed to the board. The memo is on file in the IWB record. Mr. Balfour described the agreement as a Tigard-centric view of how the water system should operate. The City of Tigard (COT) would assume complete responsibility of total system operations. This would include, but is not limited to, conveyance of assets, use of rights of way, the handling of annexations and delivering water to current and future customers. Mr. Balfour presented an overview of the articles in memo: ■ Article III — Current agreement will expire in five years. However, IWB member jurisdictions could enter into a new agreement now. ■ Article IV— COT would own all the water system assets. ■ Article V— COT would have sole responsibility to plan, construct, repair, replace, operate and maintain the water system. COT would be responsible for all current and future water source and water supply issues. Budget and rates would be prepared by the COT and reviewed by King City, Durham and Tigard Water District (TWD) prior to adoption by the COT City Council. Rates would be built on cost of service under AWWA standards. All customers would be treated equally, regardless of where they reside in the service district. ■ Article VI — COT would obtain the right to use the rights of way of King City and Durham. King City and Durham would be compensated for this use. Since TWD does not own any rights of way, there is no compensation in the agreement for the TWD. ■ Article VII- COT will provide water service to areas within the existing Tigard Water Service Area (TWSA) and to areas annexed into Tigard, King City, Durham and TWD. Service would only be provided to areas annexed into these cities, unless the health hazard annexation statutory process requires Tigard to provide water service to other properties. ➢ Commissioner Buehner voiced concerns about possible conflicts with the community plan. Mr. Balfour and the board had a brief discussion regarding this issue. Mr. Balfour will flag this section of the IGA. ➢ Mr. Koellermeier raised the question of the definition of the TWSA as it currently exists. Newly annexed areas into King City, Durham, and TWD since 1994 may not be included in the existing definition. This will require further research. ■ Article VIII — If an IWB member jurisdiction or member jurisdiction withdraws from the IGA it may only purchase those distribution system assets within its own boundaries. Master meters would be installed at the connection points of its system and the COT system. The IWB member jurisdiction or member jurisdiction could: o Become a wholesale customer; a wholesale water contract would need to be established with the COT. o Obtain its' own water source. ➢ Commissioner Buehner was concerned with the timing factors of the withdrawal. The board and Mr. Balfour discussed and agreed timing may need to be re-addressed. ➢ Commissioner Jenke questioned if an IWB member jurisdiction or member jurisdiction would withdraw, would they at minimum, acquire the pipes that are in ground at no cost. ➢ Mr. Koellermeier responded that the past board had concluded no monies needed to exchange hands for a base system. If the COT makes a substantial investment and acquires debt, the withdrawing IWB member jurisdiction or member jurisdiction would have to pay the COT or make satisfactory arrangements for their equal share of debt. ➢ Commissioner Henschel inquired about the possibility of the COT withdrawing from the agreement and requested confirmation that the COT would not have any opportunity to terminate the agreement. Mr. Balfour, Mr. Koellermeier and the board discussed the COT's commitment and responsibility to provide water serve. ■ Article Y - All water system construction, connections, permits and development requirements would be handled and governed by the COT. Mr. Balfour indicated he had not discussed in detail how the COT would develop its Capital Improvement Plan (CIP). He stated rates to cover the CIP would be based on cost of service principles under AWWA standards. The decision to be made is whether capital improvements roll up in rates when construction begins or when the improvement comes into service. The board discussed previous versions of the agreement. Mr. Koellermeier stated this agreement is time sensitive as the COT has made its first debt service payment. Mr. Koellermeier questioned if the agreement had been written with the intent that all I" member jurisdictions would sign on at one time. He expressed concerns with legal issues of one or two I" member jurisdictions entering the agreement, while others wait or don't execute at all. Mr. Balfour stated it would be difficult to resolve issues completely if all IWB member jurisdictions are not involved. The ability to do a partial agreement would be complicated. There could be a possible side agreement for operations, but IWB member jurisdictions would still be facing issues in 2018. Commissioner Henschel advocated for one joint agreement. Commissioner Winn requested separate agreements. Commissioner Buehner inquired, should a member jurisdiction decide on a disincorp oration, could it merge or consolidate with the COT? Mr. Balfour stated he did not address this in the new agreement. The board had a brief discussion on this inquiry. Based on the board's discussion, Mr. Balfour will redraft the agreement and flag issues for future discussion. Upon receipt of the revised agreement, Mr. Koellermeier will distribute to each member jurisdiction. Member jurisdictions should let the COT know when to place the item on the agenda. The board discussed the continuation of the IWB. Commissioner Buehner will be in Washington D.C. and will not attend the March 13 IWB meeting. 6. Election of Chair and Vice-Chair— Dennis Koellermeier Mr. Koellermeier informed the commissioners that they were required to appoint a Chair and Vice-Chair at their February meeting each year. Commissioner Henschel nominated Commissioner Buehner to serve as Chair. Commissioner Jehnke seconded the nomination. Commissioner Buehner was appointed to serve as the Chair by a majority vote of the commissioners present, with Commissioners Barrett, Henschel,Jehnke and Winn voting yes. Commissioner Buehner abstained. Commissioner Buehner nominated Commissioner Barrett for Vice-Chair. Commissioner Winn seconded the nomination. Commissioner Barrett was appointed to serve as the Vice-Chair by a majority vote of the commissioners present, with Commissioners Buehner, Henschel,Jehnke and Winn voting yes. Commissioner Barrett abstained. 7. Informational Items Commissioner Buehner reported: ■ West Linn City Council unanimously approved the conditional use land use application. Opponents of the application have stated they will be filing an appeal to the Land Use Board of Appeals (LUBA). With the city council vote being unanimous and the application having good findings, the chance of LUBA overturning the decision is small. Opponents are starting a campaign to approach Tigard residents and TWSA residents as a venue to further their opinion. ■ The mayor of Lake Oswego appointed himself and a new city councilor to the water partnership's oversight committee; both are opposed to the partnership. Commissioner Henschel congratulated Mr. Koellermeier and the COT staff for all their hard work and efforts regarding the West Linn City Council approval of the conditional use land use application. Mr. Koellermeier announced the partnership had its first competitive bid opening. The engineer's estimate to construct the river intake pump station was $12 million; the low bid came in at $10.5 million. 8. Non-Agenda Items The board did not discuss any non-agenda items. 9. Next Meeting: March 13, 2013, at 5:30 p.m. Public Works Auditorium, 8777 SW Burnham Street, Tigard, Oregon 10. Adjournment At 7:14 p.m. Commissioner Buehner moved to adjourn the meeting. Commissioner Henschel seconded the motion. The meeting adjourned by unanimous vote of the commissioners present, with Commissioners Barrett, Buehner, Henschel,Jehnke and Winn voting yes. lwylo Andrew Barrett, IWB Vice-Chair I istie Peerman, IWB Recorder Date: 13 Date: ��� 0 �1