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08/08/1994 - Minutes TIGARD WATER DISTRICT BOARD OF COMMISSIONERS MEETING MINUTES August 8, 1994 1. Call to Order Chair Froude brought the regular meeting of the Tigard Water District Board of Commissioners to order at 7:05 p.m. Commissioners Present: Chair Froude,Commissioners Morgan, Mortensen,and Pedersen Staff Present: Sherrie Burbank, Mike Miller, Randy Volk, and Ed Wegner Visitor: Jack Polans Presenter: Gilbert Meigs 2. Visitors Chair Froude welcomed the visitors and asked whether anyone had any comments at this time. Visitor Jack Polans stated that he realized it would cost TWD millions of dollars to improve the current water systems and wanted to know where TWD sits in terms of long term contracts. Chair Froude informed Mr. Polans that this topic would be discussed during this meeting. 3. Approve July 11, 1994 Regular Meeting Minutes Commissioner Morgan motioned to accept the meeting minutes as submitted and Commissioner Mortensen seconded the motion. A voice vote was taken and the motion was passed unanimously. 4. Draft Proposal Division of Assets • Gilbert Meigs, Economic and Engineering Services, Inc., furnished ten copies of the draft report and four sets of maps. This information should be distributed to TWD, City of Tigard, City of King City, and the City of Durham. • He began his presentation with the following disclaimer -- he is neither an attorney or public accountant so TWD may decide to refer the report to its attorney, the City's Finance Officer, or Coopers and Lybrand for additional review. TIGARD WATER DISTRICT BOARD MEETING — August 8, 1994 Page 1 • He then proceeded highlighting areas of particular interest or concern: - Table 4-2 (Asset Allocation Summary) There is supporting documentation in the appendix. In summary, of the total assets of $25,620,938, TWD's share is $5,594,537 or 21.84% of the total assets. Other numbers are shown for the other jurisdictions. They compared percentages of total asset allocations to proportionate interests as computed according to the Intergovernmental Agreement (see p. 17 of the draft) and found that the percentages are reasonably comparable. - Page 21 (Allocation of Liabilities) The allocation of liabilities must equal the assets. Proportioned the current liabilities according to proportion of jurisdiction interest. They then proportioned out deferred compensation according to Intergovernmental Agreement. Other jurisdictions however,can't have deferred compensation assets or liabilities on their books because all the employees have transferred to the City of Tigard. TWD might want to talk to the Tigard City Administration or the City's Finance Officer about this issue, which seems to be unintended outcome of the IGA. He further indicated that in order to make the books balance, "retained earnings" were used as an accounting device to make the books balance. Apparently, this requires showing negative retained earnings balance for some to make the liabilities-balance. This is not an unusual practice, but TWD might want to talk to the Finance Officer regarding this matter. - Assets and liabilities are allocated. Everything else is documented in the Appendix. This includes the Intergovernmental Agreement and the allocation of land values. The land values audit shows a total value which is a few thousand dollars less than the District shows. In order to make the allocation meet, the audit had to apply an adjustment of about $3,686. There is no accurate record of all reservoir (Appendix B) property. They don't- know how the audit value of $692,2559 figure was reached and unfortunately the records are not available to research. - Appendix C -- Left-hand column. The District's records showed less assets than does the audit . There was no value for pressure reducing stations, so they arbitrarily used $15,000 each. Since the records were not complete, additional shortages were called "miscellaneous" and distributed equally to -all jurisdictions. a TIGARD WATER DISTRICT BOARD MEETING -- August 8, 1994 Page 2 • He indicated it might be worth having staff and/or the auditors identify exactly what miscellaneous might be so they can revise the figures appropriately; However, he does not think it will make a big difference -- it is up to TWD. - The footage of pipe measured compared to within less than 1/2 percent of that the District compiled using a different method. • He recommends TWD take the time to review the Draft Report between now and the next meeting. He can then come back at that time (if TWD chooses) to answer any questions or a separate meeting can be scheduled to discuss just this topic — whatever the Board chooses. • Commissioner Morgan was concerned that staff had not had a chance to review the document to see whether it met the requirements of Intergovernmental Agreement of if there are any areas where there are any variances. Discussion regarding the next step. The three items identified by Mr. Meigs would be discussed internally first and that TWO Board would decide on the audience and that copies of the proposal would be requested in advance. Commissioner Morgan also pointed out that it was important to get consensus from all four jurisdictions and stated that each of the jurisdictions are in a position should they withdraw from the present contract that the computation for asset allocation effective 1/1/94 could be used as a baseline to either withdraw or modify the contract. The assumption of the contract is that all assets were frozen as of 1/1/94 and that if any of the parties want to move forward they can do that at some particular time in the future. This document would allow any party to initiate a new allocation study as of 1/1/95 using the same principles as applied in this study. • Mr. Meigs again reminded the Board that better records need to be kept. Commissioner Morgan motioned to refer the report to staff for review and comment with alternate comments/suggestions on how to proceed with other agencies. Commissioner Mortensen seconded the motion. A voice vote was taken and the motion passed unanimously. • There was clarification that Mr. Meigs had not talked to other jurisdictions. Ed Wegner stated they would get a copy of the report at the next IWB meeting so they can review it before the next joint meeting. Ed also informed the Board that they have the final authority to give the stamp of approval. The Board agreed they wanted comments from IWB before the final decision by TWO. TIGARD WATER DISTRICT BOARD MEETING — August 8, 1994 Page 3 • a • • Edindicated he is proposing a Joint meeting of the TWD and IWB boards for mid-September to discuss capital improvements and the allocation of assets proposal. • As a final note, Mr. Meigs reported he had received real good cooperation and response from the Water employees. 5. Vacation Easement -- 1S1-36DD, Tax Lot 600 Chair Froude reported this issue has been resolved. Mr. Wegner indicated that since the last meeting, staff had gone to look at the property and talked to everyone involved. Apparently the City of Tigard's paperwork had been lost in the shuffle. It has not been completed and approved by a voice consent via phone. However, this needs to be approved through the minutes. Commissioner Morgan motioned to ratify the vacation of the easement per the TWD Board meeting in July. Commissioner Pedersen seconded. A voice vote was taken and the motion passed unanimously. 6. Intergovernmental Water Board Update • Commissioner Morgan informed the Board that there had been no meeting since the July 11 TWD meeting. As a substitute it was suggested the IWB members attend a workshop. This workshop consisted of various displays sponsored by different consultants which showed the activities of consultants during the last year. Unfortunately, the workshop was not well attended — consultants outnumbered participants 2 to 1. One thing that became evident was that consultants were covering bases to show sensitivity toward public interest and work of specialists looking at environment and technological techniques in conducting studies. He gleaned from the workshop that apparently the technical people are getting way ahead of political people. • He informed the Board that the June 8 minutes served as an excellent resource for identifying alternative methods of water available. However, the minutes have not been approved so they are not available at this time. - Commissioner Morgan informed the Board that there were two items of interest -- Sources of water for long term supply; and the Murray report which identified criteria and sources. He assured the Board that the August 17th meeting will identify capital costs required to select combinations of those sources. He also stated that he doubts they will identify actual commodity itself but capital cost will be important. It is important to determine whether TWD wants to continue to be a customer through a water purchase contract, a partner of ownership of that water supply, or a member of what could become a water authority or a comprehensive TIGARD WATER DISTRICT BOARD MEETING — August 8, 1994 Page 4 regional agency. 1WD Board is also invited to the August 17th meeting at 5:30 at the Tigard Water Building. • Chair Froude was interested in how people were being fed information from public officials. Mr. Wegner assured the Board that he keeps Tigard City Council well informed on the issues, but doesn't know how involved other agencies get. 7. Director's Report • Discussion of expenditures and payment processing for $40,000 which has been allocated through the City of Tigard budget process. Suggested that routine expenditure that were budgeted and has to be paid, be processed by staff after reviewing for correctness -- anything under contract or regular budgets can automatically be paid for TWD. How would you like the rest of the bills handled? - A question and answer/discussion period followed. Mr. Wegner assured the Board that if staff has any questions they will hold the bill and seek Board approval prior to payment. - Commissioner Morgan motioned that staff manage the 1WD allocation and make those expenditures that are generally routine in nature and that the Board receive a monthly report indicating dollar expenditures for personal services, supplies, contracts, etc. Commissioner Mortensen seconded the motion. After another brief discussion to clarify the process and TWD obligations, a vote voice was taken and motion passed unanimously. - Tigard Water Service Area - Mr. Wegner showed the Board a copy of the Tigard Water Service area on a map dated 8/5/94. Explained the various color coding (blue-- proposed annexations for this FY; yellow--annexations in process; gray--TWD area) and assured the Board this map would be updated as progress continues. • Memo to Bill (Interim City Administrator) - The Capital Improvement Program. Staff is trying to develop a plan of action that incudes everybody and everything —TWD, City of Durham, City of ting City, and City of Tigard (incorporating the Tigard Water Service area). - The preliminary plan is to work with TWD, IWB, and the different cities with City of Tigard as the policy making authority in this process. The,plan is to operate the Water Division for the City of Tigard and set up 4:1_capital improvement program even though the final authority would be with the Tigard City Council. It must be recognized that some of the issues will have TIGARD WATER DISTRICT BOARD MEETING -- August 8, 1994 Page 5 • • • i • to be handled with input from the other jurisdictions. - With growth and absence of long term water supply plan, our water problems won't stop--we must get started now to develop a plan of action. All recommendations must be made with our future in mind. We hope other participants will put time and effort into developing and implementing this plan. Everyone will play an integral part of this plan and the final torch will be carried by Council. The purpose is to establish a consensus as to where we will buy water from over the long term. - Mr. Wegner reviewed the proposed calendar on the first page of the memo to Mr. Monahan. He recognizes that this is a tight timeline, but believes it is necessary to get things moving or we will have water difficulties by next summer. The issue of long term water supply is critical. - Concern was noted that with the upcoming change in City of Tigard leadership that this plan could possibly be postponed due to the elections. Mr. Wegner assured the Board that the Council was committed to move ahead no matter what— work was to continue on as usual. This might not result in exercising a contract right before an election but there would at least be direction to continue. The Council gave staff the responsibility to provide them with professional guidance instead of political guidance. • Other objectives: - Efficient use water; reliability; water quality; economic impact (revenue/expense); partnership versus surplus buyer; environmental impacts; growth; ease of implementation; and operational impact (manpower or money). • Conservation/Education: - Wise watering brochure (in all region nurseries); Cityscape articles which could be expanded through newsletters from the City of King City and/or City of Durham; and development of a mailing system for the unincorporated area). The City is also participating in NW Natural Gas' Conservation Program ($1.50 per registration for shower heads). - Randy Volk is working with the Conservation Coalition and the Parks Division is considering sprinkler demonstrations and planting seminars. • Water Supply Issues: - TWD needs to determine if they want to be a player or a surplus buyer -- do we want to control our destiny? - Revamping Portland Contract - Phase H study in progress TIGARD WATER DISTRICT BOARD MEETING — August 8, 1994 Page 6 - Regional concept — there is water; however, in reality is it is short - Need Lake Oswego contract by 12/31/94 or an extension based on new capital improvement plans • Short Term Supply/Demand Issues: - If we continue to increase our minimum daily water purchase from Portland, it will take 5 years to buy out. - Lake Oswego can't meet our current demands of 8.9 mgd -- their plant capacity is only 16 mgd. This leaves us short which means we have to take more from our storage system. Peak day of 14.6 mgd on 7/22.; 6 days when we used over 10 mgd. There has been a 23% increase in meter sales in last 4 years and no increase in supply during that same time period. If we keep growing at the same rate, by next summer we will have significant problems. • Tigard Water Service Area Plan: - Present to 3 Years -- Shows what is needed to exist today. - 1-5 Years -- The number one 1 supplier in the region will be Portland; however, we will still need to partner with Lake Oswego. The problem with buying surplus water is when they want to sell it, we don't need it. - Regional Plan -- We need to stay on top of the water supply issues and realize that the decisions we make in #1 and #2 will affect #3. • Current Areas of Water Study: - Inverted Block -- demand management tool during peak season usage -- you use it, you pay for it. - Menior Res -- Minimum of 2.5 mg to 35 mg. 94/95 budget -- site prep 95/94 -- construction - Well -- transfer water rights of #4 to new a well at Canterbury. However, the Watermaster says there is a 2 year backlog. Rebuild #2 in 94/95. - New pump at Lake Oswego could increase the additional mgd. There could be a new partnership -- we need to start looking at this possibility. • We are exploring all partnership options. • We have some immediate needs to survive and buy the water that we need. All plans must be intertwined with each other in order to make the right decisions. TIGARD WATER DISTRICT BOARD MEETING -- August 8, 1994 Page 7 • There was some discussion about whether Lake Oswego was open to this kind of partnership. Mr. Wegner informed the Board that the City has asked Lake Oswego to send us a signal of how their staff and Council feel. He knows that their study identifies that the most economical thing for them to do is join with COT, but they have not committed at this time --their Council is taking it under advisement. Their plan also indicates that they will have to take use their intake on the Willamette River. • Mr. Wegner indicated that the City is currently setting the following priorities: 1. Look at Lake Oswego as a primary source 2. Use Portland 3. Own our own well fields • Possible dates for joint TWD and IWB meeting: September 7th or one of the two boards' regular meeting dates. 8. Election of Officers Commissioner Morgan motioned that Commissioner Mortensen be appointed Secretary of TWD. Commissioner Pedersen seconded the motion. A voice vote was taken and motion passed unanimously. 9. Long Term Water Supply Strategies Commissioner Morgan stated that he doesn't like to receive a consultant report without prior staff review. He wants to make sure staff has an opportunity to review the analysis of the capital improvement program to assure any action complies with the contract and is accepted by other parties. Mr. Wegner indicated that the CIP report was done differently than Asset Liability report and that Randy Volk and he have had continual contact with Murray Smith to assure there are no surprises. He further indicated the report will coincide with staff thinking and won't hold any surprises. 10. Non-Agenda Items Commissioner Morgan asked if TWD was required to have an audit for FY 93/94 since they exist as a formal government agency with formal responsibilities. He recommended that staff find out and make the necessary arrangements if they are required to have an audit. Mr. Wegner with check with the Finance Officer. Commissioner Morgan also wondered who takes the responsibility for follow up issues addressed during meetings. He wanted to make sure staff understood that the Board is totally dependent upon staff to follow through with. the items approved. In addition, he wants staff to be sure to notify the Board if there are time restrictions that prevent immediate action. Mr. Wegner assured the Board TIGARD WATER DISTRICT BOARD MEETING — August 8, 1994 Page 8 that staff is keeping a list of those things which require action. He asked for cooperation in notifying staff if something has been forgotten. Commissioner Mortensen informed the Board that Lorry Christian sent out thank you letters to budget committee participants. 11. Future Meetings Meetings will be held the second Monday of each month. It was noted that Lorry Christiansen will not be able to attend these meetings and a new recorder will have to be engaged. 12. Next Meeting Agenda The next meeting might be changed due to the upcoming joint TWD and IWB meeting in September. It was agreed that the Board would decide whether to meet and when once the joint meeting has been scheduled. 13. Adjournment The meeting adjourned at 9:32 p.m. sb\twd8 TIGARD WATER DISTRICT BOARD MEETING -- August 8, 1994 Page 9