06/11/2008 - Minutes Intergovernmental Water Board (IWB)
Meeting Minutes
June 11 , 2008
Tigard Public Works Building
8777 SW Burnham Street
Tigard, OR 57223
Members Present:
Gretchen Buehner Representing the City of Tigard
Patrick Carroll Representing the City of Durham
Julie Russell Representing the Tigard Water District
Bill Scheiderich Member At-Large
Dick Winn Representing the City of King City
Members Absent: None
Staff Present: Public Works Director Dennis Koellermeier
Water Quality & Supply Supervisor John Goodrich
IWB Recorder Greer Gaston
1. Call to Order, Roll Call and Introductions
Commissioner Carroll called the meeting to order at 5:36 p.m.
2. Public Comments: None
3. Update on the Lake Oswego/Tigard Intergovernmental Agreement (IGA)
Regarding Water System Facilities, Design, Construction, and Operation -
Dennis Koellermeier
Mr. Koellermeier summarized a Tigard/Lake Oswego water partnership calendar which
was distributed to the Board. The calendar is on file in the IWB record. He advised
negotiations on the intergovernmental agreement(IGA)were proceeding nicely, but the
timeline had been pushed back a month. Mr. Koellermeier noted the delay was due to
Tigard and IWB scheduling issues and did not represent any indecision on Lake
Oswego's part. Tigard's final approval has been moved to early August. IWB member
jurisdictions are now scheduled to consider the IWB's recommendation on the IGA as
follows:
King City July 16
Durham July 22
Tigard Water District July 28
The Board briefly discussed water rights as they pertain to a May 15, 2008 Tigard Times
article entitled, "Tigard tied to Lake Oswego water protests."The article is on file in the
IWB record.
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4. 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
Commissioner Scheiderich provided the Board with written comments on the Durham
IGA. These comments are on file in the IWB record.
The Board's discussion is summarized as follows:
Staff Member/ Comment
Commissioner
Carroll Suggested system assets and other assets (pipes, storage, buildings)
should all be considered water system assets. Should any of these
Section 4.A.(2) assets be sold, the proceeds should go back to the waters stem.
Scheiderich Advised the differentiation between system assets and other assets
was taken from state law related to withdrawal of territories from water
Section 4.A.(2) districts upon annexation of territory to a city. However, this is not
Section 4.B. exactly what occurred, because the whole area was not annexed, and
the Tigard Water District became a partner on the IWB.
Pointed out Section 4.13. contradicts Section 4.A.(2), where it says other
assets pledged to the use of the system. There is some logic to have
assets pledged to the member jurisdictions in which they reside. For
example, if a member jurisdiction leaves the partnership, that,
jurisdiction will probably want to retain transmission lines, etc.
Said if everything were a system asset, it would take action of each
member jurisdiction to dispose of it. If a member jurisdiction planned to
go off on its own as a water supplier, or wanted to use a facility for a
different purpose, then it would not be in their best interest to turn
everything into a system asset or pledge everything to the use of
Tigard.
Carroll Asserted if all the ratepayers have paid for an asset, then the asset
should benefit the waters stem.
Scheiderich Said, on the other hand,jurisdictions maximize their discretion by
calling it an other asset.
Koellermeier Added member jurisdictions would likely not want assets obtained by
donation to be considered system assets.
Buehner Said the majority of the cost of infrastructure improvements
(transmission lines, meters, etc.)was borne by developers and
builders.
Carroll Countered ratepayers subsidize the system to some degree.
Asked if the agreement could be written to:
• Consider everything a system asset provided all member
jurisdictions are participating. He suggested using the tenants in
common approach that was employed for the water building and
Canterbury property.
• Establish rules for how system assets are treated should a
member jurisdiction withdraw.
Koellermeier Said the existing IGAs spell out how assets should be treated if a
member jurisdiction withdraws.
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Winn Questioned why the Board wanted to change the existing IGAs, and
suggested the member jurisdictions may not be able to reach
agreement and working through the changes may be more trouble than
it's worth.
Buehner Stated real property (land) and personal property (transmission lines)
are treated differently under the law.
Koellermeier Said if everything were considered a system asset, the transmission
lines within the various member jurisdictions would be jointly owned via
a tenancy in common agreement by all the partners.
Advised assets were described in the 1994 Tigard Water District
System Assets and Liabilities Final Report.
Carroll Suggested adding language to the new agreement stating proceeds
from the sale of surplus property would be placed in the water capital
improvement fund.
Koellermeier Countered if a member jurisdiction wanted to privatize the operation
and maintenance of their water system, it would not be in their best
interest to place proceeds into the water capital improvement fund.
Suggested the Board proceed by hearing all the concerns of the
member jurisdictions. Those concerns could then be shared with legal
staff, who could draft language to address the concerns.
Russell Advised the Tigard Water District was reviewing the IGAs.
Carroll Brought up the duration of the agreement and suggested the
a reement be extended.
Russell Proposed the extension be tied to the upcoming Tigard/Lake Oswego
water partnership IGA. The assets resulting from that agreement also
need to be addressed, since member jurisdictions will not sign the
Tigard/Lake Oswego water partnership IGA.
Koellermeier Suggested member jurisdictions would be included in the Tigard/Lake
Oswego water partnership either:
• Through their recommendation of the IGA based on an
amendment to the capital improvement plan.
• Through their recommendation on a long-term water contract.
Winn Said the IWB was advisory to the City of Tigard.
Koellermeier Suggested the definition and role of"advisory board" be further clarified
in the new a reement.
Scheiderich Explained the existing voting requirements were the same whether the
Tigard/Lake Oswego water partnership IGA was considered as an
amendment to the capital improvement plan or as a long-term water
contract.
The Board entered into a discussion about who would own the assets and supply
contract associated with the Tigard/Lake Oswego water partnership IGA. Mr.
Koellermeier reported each member jurisdiction would be asked to consider a resolution
supporting the agreement. It was determined three of the four member jurisdictions
would need to approve the IGA. Commissioner Carroll said in this role, the IWB served
as more than an advisory board.
Commissioner Russell noted the existing IGAs say the capital improvements become
the property of the jurisdiction in which they are located. Commissioner Buehner
explained Tigard would have a tenants in common interest in the Lake Oswego facilities.
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With regard to the Tigard/Lake Oswego water partnership IGA, Mr. Koellermeier said
Tigard will be contractually obligated by the 1993 IGAs to provide water to all the
member jurisdictions equally. Since ratepayers from all member jurisdictions would fund
the improvements associated with this agreement, Commissioner Carroll asked why
each member jurisdiction wouldn't own a percentage of the assets. He also asked K a
member jurisdiction withdrew, why would they not be compensated for their share of the
cost of the improvements.
Mr. Koellermeier responded Lake Oswego had been clear that it only wanted to deal
with Tigard. Tigard cannot assign its liabilities. Should a member jurisdiction choose to
withdraw, the agreement recognizes they have ownership need use of the existing
systems. The parties would need to agree upon a way to co-use the system.
Commissioner Scheiderich added the agreement does not allocate percentages of
ownership.
Note: Commissioner Scheiderich left the meeting at 6:31 p.m.
Commissioner Buehner confirmed Commissioner Carroll was suggesting everything be
considered as a system asset; no city would own any percentage of any of the assets
individually. Commissioner Carroll added ownership would only be significant if a
member jurisdiction wanted to convert their ownership to some monetary value.
Commissioner Carroll reiterated everything in the water system today should remain in
the system in some form. If a member jurisdiction withdraws, there needs to be a
mechanism in place to assign value for the system assets the member jurisdiction paid
for.
Since assets created by virtue of the Tigard/Lake Oswego water partnership IGA are
outside the Tigard Water Service Area boundaries, Commissioner Buehner suggested
the assets could be addressed by an amendment to the existing IGAs. With regard to
these assets, she proposed the amendment discuss how ownership interest, less
depreciation, would be calculated in the event a member jurisdiction decided to
withdraw.
Commissioner Carroll commented on the existing 1993 IGAs:
Staff Member/ Comment
Commissioner
Carroll Requested the contradictory language in these two sections be
reconciled.
Section 4.A.(2)
b. &
Section 4.B.
Note: Later in the meeting, (See Item #9), the Board reopened this discussion and
talked about how to submit changes to the IGAs and extending the agreements
indefinitely.
Mr. Koellermeier pointed out a discussion of assets should also include a discussion of
liabilities. With regard to Commissioner Buehner's suggested amendment, he said
member jurisdictions would be responsible for the liability that Tigard incurs on their
behalf. If a member jurisdiction wanted to withdraw, they would be responsible for the
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liability. Commissioner Russell countered Tigard does not have taxing authority for any
of the other member jurisdictions.
As an example of the relationship between assets and liabilities, Mr. Koellermeier
provided the following theoretical scenario:
• A group buys an asset in another city.
• As a member of the group, partner A has a proportional interest in the asset.
• A $50 million revenue bond is sold to finance the asset.
• Five years later, partner A decides to withdraw from the group.
• There is another 15 to 20 years of debt service remaining on the revenue bonds
and partner A has terminated their revenue stream.
Commissioner Carroll inquired whether this meant there was a trade-off between having
ownership in an asset and avoiding liability.
Note: Later in the meeting, (See Item #9), the Board reopened this discussion.
Commissioner Winn said the City of Tigard delivers water to King City through a
contractual agreement(1993 IGA); Tigard is King City's water source. He advocated for
a "hands off" or"arms length" relationship with Tigard. Commissioners Russell and
Carroll advocated for a more active role with regard to the water supply.
The Board briefly discussed whether the 1993 IGAs represented a water contract or
some other type of agreement.
5. Water Supply Update
Mr. Goodrich reported:
• Consumption has returned to normal (6 million gallons per day)following a short
period of hot weather.
• Four million gallons per day of groundwater were used during the hot weather.
• Water quality is tested before any source is brought online.
6. Informational Items: None
7. Non-Agenda Items: None
8. Future Agenda Items
• Make a formal recommendation on the Lake Oswego/Tigard intergovernmental
agreement.
• Presentation by Washington County planning staff regarding Areas 63 and 64.
• Policy regarding extension of water services outside existing Tigard Water
Service Area boundaries.
• Review:
- Proposed revisions to the credit for leak policy.
- Proposed revisions to the Billing and Collection of Utility Charges section of the
Tigard Municipal Code.
- The billing insert policy.
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9. Next Meeting
• July 9, 2008, 5:30 p.m.
Tigard Public Works Building, 8777 SW Burnham Street, Tigard
In response to an inquiry, Mr. Koellermeier suggested the Commissioners and/or their
legal counsel send comments on the 1993 IGAs to Tigard staff who would combine the
comments into one document.
Commissioner Buehner asked if all the member jurisdictions were in favor of extending
the existing agreements indefinitely. Commissioner Russell said the Tigard Water
District had not considered this matter, so she couldn't comment. The other
Commissioners asked Commissioner Russell to obtain an answer from the Tigard Water
District. All other member jurisdictions committed to extending the agreement.
Commissioner Carroll requested legal counsel be consulted on the Lake Oswego asset
ownership versus liability issue. Commissioner Russell added changes or amendments
to the 1993 IGAs could also affect this matter.
10.Adjournment
At 6:47 p.m. Commissioner Carroll motioned to adjourn the meeting; Commissioner
Russell seconded the motion. The meeting was adjourned by unanimous vote, with
Commissioners Buehner, Carroll, Russell, and Winn voting yes.
,P ` J W•cccniX ( "I t`.orfs( 1 W
IWB Chair Greer A. Gaston, IWB Recorder
Date: 1 -9-0S'
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