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03/11/2009 - Minutes Intergovernmental Water Board (IWB) Meeting Minutes March 11, 2009 Tigard Public Works Building 8777 SW Burnham Street Tigard, OR 97223 Members Present: Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham Ken Henschel Alternate Representing the Tigard Water District Bill Scheiderich Member At-Large (Arrived 5:40 p.m.) Dick Winn Representing the City of King City Members Absent: None Staff Present: Public Works Director Dennis Koellermeier Utility Division Manager John Goodrich Assistant Finance Director Debbie Smith-Wagar IWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions Commissioner Carroll called the meeting to order at 5:31 p.m. 2. Approval of Minutes —January 14, 2009 Ms. Gaston noted the agenda erroneously listed approval of February 11, 2009 minutes instead of the January 14, 2009 minutes. Commissioner Buehner motioned to approve the January 14, 2009 minutes; Commissioner Winn seconded the motion. The minutes were approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, and Winn voting yes. 3. Public Comments: None 4. Water Supply Update Mr. Goodrich reported: • Current demand is about 4 million gallons per day. Water demand typically drops during colder weather. ■ On aquifer storage and recovery (ASR) wells: - Tigard is injecting 1.8 million gallons per day. - 57 million gallons have been injected this cycle - 207 million gallons are already in storage, which represents a 95-day supply. - Inexpensive, interruptible water will be available for injection for another 45 days. Intergovernmental Water Board Minutes March 11,2009 1 - The City's ability to inject Portland interruptible water has been affected by turbidity issues this year. - Additional water for injection may be available from Lake Oswego. Lake Oswego water is more expensive than interruptible water from Portland, but less expensive than contract water from Portland. 5. Election of Chair and Vice-Chair Mr. Koellermeier informed the Commissioners that they were required to appoint a Chair and Vice-Chair at this time each year. Commissioner Henschel nominated Commissioner Carroll as Chair; Commissioner Winn seconded the nomination, suggesting the existing Chair (Commissioner Carroll) and Vice-Chair (Commissioner Winn) serve another term. Commissioner Carroll was appointed as Chair by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, and Winn voting yes. Commissioner Buehner seconded the nomination of Commissioner Winn as Vice-Chair. Commissioner Winn was appointed as Vice-Chair by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, and Winn voting yes. 6. Review the City of Tigard's Utility Services Delinquent Account Policy and the Residential Credit for Leak Adjustment Policy Mr. Koellermeier introduced Ms. Smith-Wagar from Tigard's Finance Department. This department is responsible for meter reading and utility billing. Mr. Koellermeier said the Finance and Public Works Department had worked together to update the policies. Mr. Koellermeier noted the Board was not being asked to take action at this meeting and confirmed the Board's role was to review the policies and ultimately advise the Tigard City Council. The Board discussed the Utility Services Delinquent Account Policy first: ■ In response to a question from Commissioner Buehner, Ms. Smith-Wagar pointed out that a charge would be assessed when a final notice (door hanger) is issued. ■ Commissioner Winn inquired about sending out notice "return receipt requested." He noted people sometimes said they did not receive the notice. Ms. Smith- Wagar said the City did not send notices this way because sending notices return receipt requested would be significantly more expensive. She noted Tigard did place a notice on the door as another means of notifying customers about delinquent accounts. ■ Tigard mails out about 80 to 100 urgent notices per month. ■ Commissioner Henschel inquired about adding a "check box" to allow water customers to donate additional money to assist fellow customers who are unable to pay their bills. Other utilities offer this service. ■ In response to a question from Commissioner Carroll, Mr. Koellermeier said Tigard is within its rights to terminate water service for non-payment. ■ Commissioner Buehner expressed concern over Tigard spending money for staff to deliver door hangers regarding delinquent accounts when many customers are Intergovernmental Water Board Minutes March 11,2009 2 repeat offenders. Other water customers are subsidizing customers who consistently fail to pay their bill on time. ■ Ms. Smith-Wagar confirmed that Tigard charges a $50 fee for shut off, but currently assesses no fee for delivering the door hanger. This $50 does not cover the cost to notice and collect on delinquent accounts. • Mr. Koellermeier said most water utilities are cost-of-service based; each customer is expected to pay for the actual cost of the service. This is how fees are established. • Commissioner Henschel suggested Tigard could assess a delinquent payment charge. • Commissioner Buehner explained a charge should be assessed when the final notice (door hanger) is issued. This will motivate customers who typically wait until shut off to pay their bill in a timelier manner. • Commissioner Winn advocated for "return receipt requested" mailing. Commissioner Buehner said, in her experience, people who do not pay their bills on time would not sign or accept such a mailing. ■ Commissioner Henschel advocated for a statement on each bill outlining the delinquent payment policy and the fees assessed at each step in the process. • Commissioner Carroll advocated for assessing fees as proposed in the draft policy. • Ms. Smith-Wagar explained Tigard would turn unpaid accounts over to collections. • Commissioner Carroll summarized Board's consensus: - Develop a cost-based fee structure. - Tie the shut-off fee to reactivation. Mr. Koellermeier confirmed the Board supported two fees, one for issuing the door hanger, and the other related to shutoff/turn on. - Investigate the feasibility of a late fee. Ms. Smith-Wagar said this may be easy to implement and she would investigate further. • Commissioner Henschel reiterated his request for a "check box." Commissioners Buehner and Winn were concerned about what would be required to administer such a program and they, along with Commissioner Carroll, were not receptive to the idea. Commissioner Carroll asked Ms. Smith-Wagar to explore the check box idea and look into how other utilities administer such programs. Mr. Koellermeier said staff would bring that information back to the Board. The Board discussed the Residential Credit for Leak Adjustment Policy. Mr. Koellermeier noted the draft policy contained minimum $10 and maximum $2000 credit amount. The policy still ensures Tigard recoups the wholesale cost of water. The Board discussion was as follows: ■ Mr. Koellermeier said there was an appeal process in the draft policy. Under the process, the Board was tasked with determining whether the credit calculation and policy was properly implemented by staff. The Board would not issue credits above a certain dollar level or outside the policy. ■ In the past, the Board considered all credits over $500. Commissioner Buehner confirmed under the proposed policy, credits of$500 or more would no longer come before the Board; they would be handled at the staff level. The Board could hear appeals on any amount of credit (between the minimum and Intergovernmental Water Board Minutes March 11,2009 3 maximum) whereby the customer did not believe the policy was properly implemented. • Mr. Koellermeier said the Board could decide not to hear appeals at all and these could be directed to the Tigard City Manager. ■ Commissioner Winn said he thought the limit requiring Board approval was going to be increased. Mr. Koellermeier said he was suggesting a different approach where all credits were handled at the staff level. ■ Commissioner Buehner asked if the new policy might result in more appeals coming before the Board. Mr. Koellermeier said that since customers could only appeal based on whether the policy was implemented properly, he doubted it would result in more appeals. ■ Commissioner Henschel said the fact that a credit could be appealed and reviewed by the Board would assure non-Tigard residents that their credits were handled fairly by Tigard. • Board consensus was to implement the proposed policy on a one-year trial basis and see if it resulted in more credit issues coming before the Board. Mr. Koellermeier said the next step would be to adjust City of Tigard ordinances related to the proposed policy. 7. Consider Making a Recommendation for the City of Tigard to Submit Letters Withdrawing from the Joint Water Commission (JWC) and Withdrawing Participation in the Tualatin Basin Water Supply Project Mr. Koellermeier referred to the draft letters in the Board's packet. The letters will initiate the process of withdrawing from the Joint Water Commission and Tualatin Basin Water Supply Project. If Tigard wanted to continue participation, it would need to make its $2.7-million payment by June 30, 2009. Commissioner Buehner and Winn said they did not want to make this payment. Mr. Koellermeier also asked that Tigard's name be removed from a stored water rights application. Tigard had been criticized by WaterWatch for pursuing several different water rights; this action will eliminate some of that criticism. Mr. Koellermeier summarized other details of the letters: ■ Tigard is co-owner in a piece of real estate. • Withdrawal requires a two-year notice. This is designed to give other partners time to arrange financing to buy-out the withdrawing partner. Since Tigard has limited ownership, the letter requests 18 months instead of 2 years. ■ If the withdrawal is accepted, Tigard's active participation in the JWC will likely cease. ■ Tigard's position with the JWC would change from an owner to a wholesale customer. Although this year, Tigard does not anticipate purchasing any water through the JWC this year. ■ The Board's recommendation will be forwarded to the Tigard City Council, and ultimately the letters will be reviewed and signed by Tigard's Mayor. Intergovernmental Water Board Minutes March 11,2009 4 Commissioner Scheiderich inquired on the status of the Lake Oswego water partnership. Mr. Koellermeier said a program manager would be selected in the next three months. He reported Tigard and Lake Oswego are working through the water rights appeal process. South Fork Water Board is expected to withdraw its protest against Tigard and Lake Oswego and may join forces with the two cities in their litigation against WaterWatch. Commissioner Henschel confirmed Tigard had no legal recourse to recoup money invested in the Tualatin Basin Water Supply Project. Commissioner Carroll motioned to recommend the City of Tigard submit letters withdrawing from the Joint Water Commission and withdrawing participation in the Tualatin Basin Water Supply Project; Commissioner Winn seconded the motion. The minutes were approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Scheiderich and Winn voting yes. 8. Discussion on Rewriting/Revising 1993 Intergovernmental Agreements (IGAs) between Durham and the City of Tigard, King City and the City of Tigard, and the Tigard Water District and the City of Tigard This item was continued from the Board's January 14, 2009 meeting. Page 9, Item 5.D.(4). Asset Ownership/Water Rates/Revenues--Capital Improvements • The Board noted a discussion on items similar to those in item (4) had already occurred and this section should be consistent with previous comments. • Commissioner Henschel said the Board had previously questioned the use of "depreciated value," and preferred the term "fair market value." ■ Mr. Koellermeier summarized his interpretation of this section. If a member jurisdiction with ownership in system assets withdraws from the IWB, either that member jurisdiction will be given access to those assets (if needed) or Tigard will buy their assets. • The Board also discussed a scenario in which water might be transmitted through a non-system asset (e.g. Durham's pipes). Under this scenario, Durham could assess a wheeling fee. Mr. Koellermeier suggested the challenge in this section arises when a member jurisdiction wants to withdraw, but still wants water. He proposed under this scenario, the withdrawing member is paid for their system assets and retains its right to contract as a wholesale customer. Commissioner Carroll concurred with this idea and added that there would have to be a compelling reason for Tigard to deny service to the withdrawing member jurisdiction. ■ Commissioner Carroll requested the language in this section be cleaned up and simplified. Page 9 Item 5.D.(5). Asset Ownership/Water Rates/Revenues --Capital Improvements ■ This section compliments the preceding section. No changes were recommended. Page 10 Item S.E. Asset Ownership/Water Rates/Revenues -- Capital Improvements ■ Commissioner Carroll said long-term water contracts (like City of Portland) are administered by Tigard for the benefit of the water system. He clarified Tigard would be the signing authority for all long-term water contracts for the equal benefit of all users. Intergovernmental Water Board Minutes March 11,2009 5 ■ Mr. Koellermeier suggested he would like to change the second sentence. He proposed Tigard approve/sign water contracts since Tigard is contractually obligated to provide water to the member jurisdictions. • Commissioner Buehner asked if the language was sufficient to deal with back-up water contracts. Commissioner Carroll suggested this could be resolved by striking "long-term," so the section would apply to any water contract. ■ Mr. Koellermeier questioned who should sign contracts. Commissioner Carroll said he liked to opportunity to vote on contracts. He continued that if three of the four member jurisdictions do not support a contract, then there is probably a good reason. Mr. Koellermeier said water suppliers might not want to enter into an agreement with all the member jurisdictions. Commissioner Carroll clarified that the member jurisdictions did not want to be included in a contract, or sign the contract, they wanted to approve the contract. Commissioner Winn countered the iWB was advisory to the Tigard City Council. Commissioners Buehner and Winn said the IWB should consider the contract, not the governing bodies of the member jurisdictions. Mr. Koellermeier summarized the discussion by saying the IWB will make a recommendation to the Tigard regarding water contracts. The Board concurred, with Commissioner Henschel saying Tigard could accept or decline the recommendation. Page 10, Item 5.1=. Asset Ownership/Water Rates/Revenues — Capital Improvements • Mr. Koellermeier said Tigard pays an annual revenue check to Durham, King City and the Tigard Water District (TWD). ■ Mr. Koellermeier noted the latter, bracketed part of this section applied to the 1994 take over. ■ Commissioner Henschel said the one-percent rebate the TWD receives is the TWD's sole source of revenue and amounted to about $15,000. The District's size is decreasing due to annexations, which means revenue is also decreasing. He proposed the District's rebate be increased. Commissioner Carroll suggested the District ought to be able to operate on $15,000. Commissioner Winn said the District had not spent its money wisely and King City ratepayers did not want to subsidize the TWD. ■ Commissioner Carroll said he would support the rebate going into a long-term reserve account. Commissioner Winn concurred. ■ Mr. Koellermeier said there was a mechanism within the agreement that allowed a member jurisdiction to determine or increase its rebate. Any increase would be passed on and paid by the member jurisdiction's constituents. ■ Commissioner Winn suggested the use of a franchise fee. Each member jurisdiction could set its own rate, or elect to charge no fee at all. Commissioner Henschel said he would prefer the fee did not show up on customer's bills. Commissioner Carroll said this would give the District the opportunity to justify their operating expenses to their ratepayers. Commissioner Henschel said the existing rebate system was working well, but the TWD needed a higher percentage rate. Commissioner Winn countered that the District should include any needed increase as a fee to their ratepayers. King City could charge a franchise fee and use this to generate much-needed income. The Board discussed the fact that the fee may not be able to be treated as a franchise fee. Commissioner Scheiderich suggested the issue was not getting resolved and the discussion should move forward. Commissioner Carroll summarized by saying this section should remain as is, with the exception that everything within the brackets be deleted. Intergovernmental water Board Minutes March 11,2009 6 Page 10, Item 5.G.(1) Asset Ownership/Water Rates/Revenues—Capital Improvements - Accounting ■ The Board consensus was that"Generally Accepted Accounting Principles," or GAAP will be used. ■ Commissioner Henschel recommended the last line be changed to, "The Intergovernmental Water Board shall review and approve such allocation and methodology." Approval of the allocation and methodology was important to the Board. Any change would be important to the Board. Commissioner Winn countered that the Board should not approve changes allocation and methodology. Commissioner Scheiderich proposed alternative wording on the current practice of having the Board approve the budget. Commissioner Carroll asked that such language replace the existing language. Commissioner Scheiderich proposed, "The IWB shall review and recommend approval . . ." Page 11 Item 5.G.(2) Asset Ownership/Water Rates/Revenues — Capital Improvements ■ No changes were recommended. Page 11 Item 5.H. Asset Ownership/Water Rates/Revenues — Capital Improvements ■ Commissioner Henschel noted if a single agreement were developed, the word "Party" should be changed to "Parties" or"All the Parties." Page 11, Item 5.1. Asset Ownership/Water Rates/Revenues — Capital Improvements ■ Commissioner Scheiderich suggested this section be deleted and Commissioner Carroll concurred. The Board tabled further review of the intergovernmental agreement to its next meeting. 9. Informational Items: ■ Mr. Koellermeier reported Tigard is working through the process of selling the Canterbury surplus and water building remnant parcels. Tigard was the sole bidder on each property and the sale is going into escrow. The Tigard Water District Chair and the Mayors of Durham and King City will need to have their signatures notarized on the sale deeds. 10. Non-Agenda Items: ■ Commissioner Henschel said he had requested information at an earlier meeting on who was using rebate services by member jurisdiction. Mr. Koellermeier said he would put this topic on an upcoming agenda. Commissioner Henschel said the Tigard Water District would do a mailing to their constituents to promote Tigard's High Efficiency Toilet Reimbursement program. He requested Tigard provide literature/brochures for their mailing. 11. Future Agenda Items Future agenda items were not discussed. Schedule Date Item April 8, 2009 Consider Making a Recommendation to the City of Tigard on the Utility Services Delinquent Account Policy and the Residential Credit for Leak Adjustment Policy. April 8, 2009 Consider Making a Recommendation on the City of Tigard's Proposed Water Division Budget. Intergovernmental Water Board Minutes March 11,2009 7 April 8, 2009 Consider Making a Recommendation on the City of Tigard's Proposed Water Capital Improvement Program. To Be Additional Tenancy in Common Agreements for Properties Announced within the Tigard Water Service Area. To Be Review the Billing Insert Policy. Announced 12. Next Meeting: April 8, 2009, 5:30 p.m. Tigard Public Works Building, 8777 SW Burnham Street, Tigard, Oregon 13. Adjournment The meeting adjourned at 6:55 p.m. IWB Chair Greer A. Gaston, IWB Recorder Date: A3a,,, /,3 J c Intergovernmental water Board Minutes March 11,2009 B