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10/13/2010 - Minutes Intergovernmental Water Board (IWB) Meeting Minutes October 13, 2010 Tigard Public Works Building 8777 SW Burnham Street Tigard, OR 97223 Members Present. Gretchen Buehner Representing the City of Tigard 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: John Goodrich Utility Division Manager Greer Gaston Executive Assistant Visitors: None 1. Call to Order, Roll Call and Introductions Commissioner Winn called the meeting to order at 5:30 p.m. 2. Approval of Minutes —September 8, 2010 Commissioner Buehner motioned to approve the September 8, 2010 minutes. Commissioner Stone seconded the motion. The minutes were approved by unanimous vote of the Board, with Commissioners Buehner, Henschel, Jehnke, Stone, and Winn voting yes. 3. Public Comments: None 4. Water Supply Update Mr. Goodrich reported: • Water consumption was about 4.6 to 5 million gallons per day. ■ One reservoir continues to be offline for construction, which will be completed next spring. • Tigard is operating under its winter contract with the City of Portland. ■ There is about a 24-d2y supply in aquifer storage and recovery wells. Injection will start in November. Commissioner Henschel inquired about summer water usage and revenues. Mr. Goodrich said he would bring that information to the November meeting. Intergovernmental Water Board Minutes October 13,2010 1 Commissioner Henschel asked for an update on the pump station at 125th and Bull Mountain Road. Mr. Goodrich said the contractor was excavating, framing, and pouring concrete, and the project was on schedule. 5. Water Rate Study and Water SDC Update Mr. Goodrich distributed a memo from Redoak Consulting dated September 28, 2010. The memo is on file in the IWB record. He described the memo which summarizes the water financial plan, an outcome of Tigard's Water Rate Study and Water System Development Charge (SDC) Update. He reminded the Board of the previous discussions on this topic. Mr. Goodrich said a 34.5-percent rate increase is needed now to position the City of Tigard for future bonding. Bonding requirements and strategy were discussed. Mr. Goodrich gave examples of how rate increases would affect various residents or businesses. The average household would see an increase from $27.55 to $37.05, or about $10 per month. The City of Tigard will likely go to monthly billing in January. Commissioner Henschel inquired about changes in the City of Tigard's electronic routing address. This affected water customers' automatic transfers. Mr. Goodrich was not aware of any change and said he would look into the problem. Mr. Goodrich reported he had met with the Home Builders Association (HBA) recently. There were no comments regarding the SDC methodology. However, there were requests that SDCs be phased-in over time. Mr. Goodrich asked for the Board's: ■ Approval of the water financial plan and summary findings. • Support for the City of Tigard to proceed with water revenue increases to offset costs associated with the Lake Oswego-Tigard joint water supply project. Commissioner Winn asked for clarification on the bonding strategy. Mr. Goodrich explained that instead of one large bond, the City of Tigard would probably bond three times for smaller amounts: ■ In 2092 for about $30 million. ■ In 2014 for between $40 and $44 million. • In 2017 for the remaining funding. Bond anticipation notes may be used for bonding in earlier years. These notes would allow the City of Tigard to defer the principal and pay only the interest for the first few years of the note. Once the Lake Oswego-Tigard project is online in 2017, Tigard will not have to purchase water from the City of Portland. This will result in a $3.5 million cost savings. Of this amount, about $1 million will go toward operating and maintenance costs for the Lake Oswego water supply. The remaining $2 million will be combined with water rate revenues and will be used to pay the interest and principal of the bonds. Mr. Goodrich also noted that revenues from the bonds must be spent within three years, so this precludes the use of only one bond since Lake Oswego water supply projects span many years. Commissioner Buehner added Tigard's finance department expects bond rates to remain flat for the next five years. Commissioner Winn noted the rate structure was not included with the memorandum. Intergovernmental Water Board Minutes October 93,2010 2 Mr. Goodrich summarized the recommendations: • Move to monthly billing. • Establish fixed rate charges that increase with meter size. • Generate a larger portion of revenues through fixed rates. • Decrease volume rate to offset fixed charges. • Move to a tiered rate system. The monthly rate structure was subsequently distributed to the Board and is on file in the IWB record. Mr. Goodrich summarized the tables, which extend out to 2015. Commissioner Buehner suggested extending the rates to 2019 when rate increases end. The Board discussed how to best present rate increases to the public. Additional suggestions included focusing on the dollar amount of rate increases, as opposed to the percentage increase, and providing comparisons to other jurisdictions. At the request of Commissioner Henschel, a City of Tigard document entitled, "Fact Sheet: Water Revenue Bonds" was distributed to the Board. This is on file in the IWB record. Note: Discussion of this agenda item continued under item 7, Non-Agenda Items. 6. Informational Items a. Update from Commissioner Buehner on Lake Oswego/City of Tigard Oversight Committee Activities • Commissioner Buehner reported the cost allocation between Tigard and Lake Oswego had shifted slightly in Tigard's favor. Initially Tigard's share to develop the Lake Oswego-Tigard water partnership projects was estimated to be 57.5 percent. That percentage has decreased to approximately 52 percent, because the percentage of Lake Oswego's existing infrastructure that can be used in the new water system has declined. This excludes Tigard's share of the $17.5 million additional ozone treatment process. Overall Tigard's share of the project is on target. • The analysis of existing facilities is completed. • The water intake will be in the same general location along the Clackamas River. • A preliminary meeting with staff from the City of West Linn went well. Most issues with neighbors near the treatment plant have been resolved. • The size of the Waluga Reservoir has been increased. Another Lake Oswego reservoir on 101h Street is nearing the end of its useful life. The Waluga Reservoir will need to absorb the capacity of the 101h Street reservoir. • Permitting will be coordinated among federal, state and other agencies. Filing will occur late summer or early fall of 2011 and is expected to take a year to process. A preliminary ruling, in favor of Tigard and Lake Oswego, was issued. The appeal period will start after the final order is issued. An appeal is anticipated. • Land use permitting is in the preparation stage. Permitting will be required in Gladstone, West Linn, Lake Oswego, and Tigard. Final design needs to be 20 to 30 percent complete before entering the permitting phase. • Commissioner Buehner asked Ms. Gaston to furnish the Board with an updated memo dated October 2, 2010 from Joel Komarek to the Oversight Committee regarding "Program Costs --Sponsor Allocations." Intergovernmental Water Board Minutes October 13,2010 3 b. Update from Commissioner Winn on West Bull Mountain Technical Advisory Committee Activities • Commissioner Winn reported the water provider will not be determined until the financial and community plan is addressed in the next session. The concept plan will be ready to go to County Commissioners at the end of October. 7. Non-Agenda Items Commissioner Henschel inquired why the IWB intergovernmental agreement was not on the agenda as indicated in the September 8, 2010 minutes. Other Commissioners said the item was moved due to Mr. Koellermeier's absence. This item is expected to be on the agenda at the next IWB meeting. Note: Discussion of agenda item 5, Water Rate Study and Water SDC Update, continued under this agenda item. Mr. Goodrich.asked for the Board to make a recommendation to the Tigard City Council. Commissioner Winn confirmed that the recommendation was related to the Water Rate Study. Commissioner Buehner motioned that the Board recommend approval of the Water Rate Study to the Tigard City Council as presented at this meeting. Commissioner Henschel asked for Mr. Goodrich to confirm his proposed motion. Mr. Goodrich said he was seeping the IWB's approval of the water financial plan summary findings and support for the City of Tigard to move forward to increase water revenues to offset costs associated with the lake Oswego-Tigard joint water supply project. Commissioner Buehner amended her motion accordingly. Commissioner Stone seconded the motion. The motion passed by unanimous vote of the Commissioners present, with Commissioners Buehner, Henschel, Jehnke, Stone, and Winn voting yes. Commissioner Buehner said she was now meeting on the Lake Oswego partnership on a monthly rather than quarterly basis. She will be reporting to the Board about partnership activities more often. 8. Future Agenda Items • Future agenda items were not discussed. 9. Next Meeting: • November 10, 2010 at 5:30 p.m. Public Warks Building, 8777 SW Burnham St, Tigard, Oregon 10. Adjournment At 6:51 p.m., Commissioner Stone motioned to adjourn the meeting; Commissioner Henschel seconded the motion. The meeting was adjourned by unanimous vote of the Commissioners present, with Commissioners Buehner, Henschel, Jehnke, Stone, and Winn voting yes. Intergovernmental Water Board Minutes October 13,2010 4 Dick Winn, 1WB/Chair Oreer Gaston, iW ecorder Date: �/ !� �/� Date: //" /U Intergovernmental Water Board Minutes October 13,2010 5