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04/08/2009 - Minutes Intergovernmental Water Board (IWB) Meeting Minutes April 8, 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 5:35 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 Note:Agenda items are recorded in the minutes in the order they were considered. 1. Call to Order, Roll Call and Introductions Commissioner Carroll called the meeting to order at 5:30 p.m. 2. Approval of Minutes --March 11, 2009 Commissioner Buehner motioned to approve the March 11, 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. Garrison Appeal of Leak Credit Ms. Smith-Wagar provided background information on this credit for leak appeal. She explained the customer's bili was $237. Based on the standard credit for leak formula, a $91.76 credit had been issued. Mr. Garrison had appealed, requesting an additional credit beyond the standard credit already issued. Commissioner Buehner confirmed the City of Tigard recovered its wholesale water costs and asked if the customer had been informed that they were being charged for Intergovernmental Water Board Minutes April 8,2009 1 these costs. Commissioner Henschel noted a credit beyond the $91.76 would mean other ratepayers were subsidizing Mr. Garrison's leak. The Board discussed City overhead costs, the cost of water, and markup on water. Commissioner Carroll questioned why Mr. Garrison should receive an additional credit when most customers accept the standard credit and do not pursue an appeal. Board consensus was not to issue a credit beyond the standard credit already issued. Commissioner Buehner requested Mr. Garrison be informed that no additional credit was issued because the City had to recover the costs associated with purchasing and supplying water. 6. Review the City of Tigard's Utility Services Delinquent Account Policy-- Continued Ms. Smith-Wagar summarized her memorandum and asked the Board for direction if they were interested in pursuing: ■ A donation check box to help people who need assistance to pay their water bill. ■ Mailing delinquent notices return receipt requested. ■ Assessing a delinquent payment fee. With regard to the donation check box, Commissioner Buehner said it may be possible to use a City of Tigard social service grant. As an alternative to the check box, Commissioner Scheiderich suggested a lifeline rate whereby the minimum amount of water to conduct household activity, like the first two units of water per person per household, is sold at a discounted rate that falls somewhere between wholesale and retail. A lifeline rate would typically be considered as part of a rate study. Mr. Koellermeier said the City of Tigard would be conducting a rate study next year. Ms. Smith-Wagar said approximately five to ten of the City's weekly shut-offs say they are unable to pay, but most do pay with a credit card. Mr. Koellermeier suggested two options: ■ Pursue the addition of a lifeline rate whereby a person would have to meet certain qualification requirements. ■ The Board could make a charitable contribution to some organization that would provide assistance to water customers who could not pay their bill. Commissioner Henschel said these options didn't give people the option of contributing. Ms. Smith-Wagar said according to Tualatin Valley Water District, few people make donations via its check box. Commissioner Scheiderich spoke in favor of the lifeline rate. Intergovernmental water Board Minutes April 8,2009 2 Mr. Koellermeier advised the City was required to move toward an incentive-based rate to encourage conservation. An incentive-based rate is also called an inclined or inverted block rate. Under this type of rate system, consumption is divided into units, with the price of water increasing with each successive unit. A lifeline rate could be incorporated into a new rate structure. Commissioner Buehner said this approach avoided some of the administrative pitfalls associated with the donation check box. Board consensus was to remove the donation check box from consideration. The Board discussed mailing delinquent payment notices via return receipt requested. Commissioner Winn noted he had suggested mailing notices via return receipt requested to reduce costs and ensure customers received the notice. Ms. Smith-Wagar said the majority of customers acknowledged they received the notice via the regular mail method, but waited until they got the door hanger notice before paying their bill. Commissioner Henschel suggested the customer be assessed a small fee on their next bill to recover the cost of return receipt mailing. Commissioner Carroll said the delinquent notice process needed to be self-sustaining; rate payers shouldn't subsidize the notification process for customers who are habitually late in paying their bills. Mr. Koellermeier advised actual fees must be based upon the actual cost of service. He confirmed the Board's direction that the delinquent notification process needs to pay for itself. Interim fees could be enacted until an evaluation of actual costs is conducted. Commissioner Buehner inquired about a first-time forgiveness clause. Board consensus was not to pursue mailing by return receipt requested; the door hanger fee will be implemented as an interim fee until an evaluation of the actual cost is conducted. Mr. Koellermeler said the Board would formally consider the final City of Tigard Utility Services Delinquent Account Policy at its next meeting. 5. Water Supply Update Mr. Goodrich reported: ■ The lowest average water usage on record occurred in March. Usage was 5.3 percent less than last March and 7.9 percent less than the 10-year average. The low usage was attributed to the economy; many houses are unoccupied. Commissioner Henschel noted there also appears to be a lot of vacant commercial property. ■ 253 million gallons are stored in aquifer storage and recovery (ASR) wells, a 117- day supply. Water in ASR wells is about 12-feet below ground level. Mr. Koellermeier reported the new reservoir has been operational since January. Planning for the grand opening of Price Park is underway. Intergovernmental water Board Minutes April 8,2009 3 7. Consider Making a Recommendation to the City of Tigard on the Residential Credit for Leak Adjustment Policy Mr. Koellermeier said this was the same policy the Board reviewed at its last meeting; the Board was asked to take formal action. Commissioner Buehner made a motion recommending the passage of the Residential Credit for Leak Adjustment Policy to the Tigard City Council; Commissioner Winn seconded the motion. The motion was approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Scheiderich and Winn voting yes. 8. Discussion of the City of Tigard's Intent to Apply for American Recovery and Reinvestment Act Funds Mr. Koellermeier informed the Board that the City of Tigard had applied for two low- interest loans through the American Recovery and Reinvestment Act of 2009. As part of the application process, a public meeting is required to review the projects for which funding is requested. The projects are: ■ 10-Million-Gallon Storage Tank Seismic Upgrade and Transfer Station Project ■ Aquifer Storage and Recovery (ASR3) Underground Water Injection and Recovery Project 9. 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 March 11, 2009 meeting. Page 11, Item 6.A. Indebtedness ■ Mr. Koellermeier said this section was related to the start-up of the IWB and was outdated. He recommended this section be deleted. Page 11, Item 6.B. Indebtedness ■ Mr. Koellermeier said this section was still applicable and should be retained. Page 11, Item 6.C. Indebtedness ■ Mr. Koellermeier said he had consulted a financial advisor regarding this section and confirmed that the language is outmoded. Mortgaging water system assets is no longer standard practice. He recommended only the first sentence be retained. New language should restrict the sale of assets used to generate revenue. ■ Commissioner Carroll summarized that Tigard would clean-up and update the Indebtedness section to reflect current financial practices. ■ Commissioner Carroll stated all the IWB members had agreed in principal that Tigard is the only entity that can assume debt in the name of the IWB. ■ Mr. Koellermeier said revised language should say Tigard can assume debt through revenue bonds as long as the debt is repaid by rates and charges to system. Other arrangements would require the approval of the member jurisdictions. ■ Commissioner Scheiderich said the section should also contain a statement that debt can only be issued in the name of the City of Tigard. Page 12, Item 7.A. Services Provided by Tigard Intergovernmental Water Board Minutes April 8,2009 4 ■ Commissioner Scheiderich and Commissioner Henschel questioned how the word "equally" was defined. • Mr. Koellermeier suggested the language was intended to convey that curtailments would be implemented identically, irrelevant of member jurisdiction. • Commissioner Buehner confirmed all shortages would be shared across the system equally. Page 12, Item 7.B. Services Provided by Tigard ■ Commissioner Henschel said the Tigard Water District (TWD) agreement states, "Tigard is under no obligation to provide such water services to areas annexed to the District subsequent to this agreement." This language is not found in the Durham and King City agreements. He asserted this was not equitable. • Mr. Koellermeier said he thought this statement was related to the fact that the potential for expansion differed among the member jurisdictions. He added the boundary of the Tigard Water Service Area was established when the agreements were created. ■ Commissioner Carroll said the Board had agreed in principal that expansion would be self-paid. ■ Commissioner Buehner countered the Tigard City Council was adamant that it retain veto power over any additions to the service area. ■ Commissioner Henschel asserted it was unfair to impose the restriction only on the TWD. • Commissioner Carroll and Commissioner Winn said the Board should be able to agree on an equitable statement that applies uniformly to all member jurisdictions. ■ Mr. Koellermeier said the boundaries of the service area were established in the original agreement. ■ Commissioner Buehner noted, in the past, King City had expanded beyond its original boundary. ■ Mr. Koellermeier clarified that a provision existed which automatically expanded the service area if land was annexed into a city, but the TWD service area was prohibited from expanding without the approval of the City of Tigard. This is an issue of who provides urban services. He advised Tigard would not be receptive to the TWD expanding its boundary, since the area is not within a city. ■ Commissioner Winn concurred with Mr. Koellermeier statements. • Commissioner Henschel suggested Tigard and the TWD could benefit from mediation or needed to find some middle ground. Otherwise Tigard or the TWD may not sign the agreement. The Board tabled further review of the intergovernmental agreement to its next meeting. Note: The meeting recessed at 6:30 p.m. for Board photographs. Note: The meeting reconvened at 6:53 p.m. 11. Non-Agenda Items: • Commissioner Buehner reported the Tigard/Lake Oswego water partnership Oversight Committee had its first meeting last week. Lake Oswego presented a $1-million budget for the upcoming fiscal year. The money will be spent on contracts with engineers and consultants, and legal fees. Only one legal issue Intergovernmental Water Board Minutes April 8,2009 5 has been settled with South Fork, other litigation will continue. Mr. Koellermeier said the suit will proceed into pre-settlement under adverse conditions. 10. Informational Items: ■ Mr. Koellermeier said Board members may wish to attend the Pacific Northwest Section American Water Works Association conference. The conference will be in Salem on May 6, 7, and 8 and there is a session specifically for elected officials. Mr. Koellermeier said he would provide the Board with further details as they are available. 12. Future Agenda Items Future agenda items were not discussed. 13. Next Meeting: ■ May 13, 2009, 5:30 p.m. Tigard Public Works Building, 8777 SW Burnham Street, Tigard, Oregon 14.Adjournment At 6:58 p.m. Commissioner Buehner motioned to adjourn the meeting; Commissioner Winn seconded the motion. The meeting was adjourned by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Sheiderich and Winn voting yes. IWB Chair Greer A. Gaston, 1WB Recorder Date: I) t-4 LJ 2 O()9 Intergovernmental Water Board Minutes April 8,2009 6