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05/13/1996 - Minutes TIGARD WATER DISTRICT BOARD OF COMMISSIONERS MEETING MAY 13, 1996 MEMBERS PRESENT: Beverly Froude,John Volpe,Norman Penner, Lou Anne Mortensen,John Haunsperger STAFF PRESENT: Mike Miller,Wayne Lowry,Diane Kuhn 1. Call to order/Roll Call The meeting of the Tigard Water District was called to order at 7:04pm on May 13, 1996 by Commissioner Penner. All members present. 2. Visitors Comments: No visitors were present at the meeting 3. Approval of March 25,1996 Meeting Minutes Commissioner Haunsperger moved to accept the minutes of the March 25, 1996 meeting. Lou Anne Mortensen seconded the motion and it was passed unanimously. 4. Non-Agenda Items Wayne Lowry was present to speak on issues the board members had about the city taking over,and the merging of the water function. Wayne passed out a copy of the Tigard Water District Income Statement and Balance Sheet dated April 30,1996. The City has a Water Fund, the Water SDC Fund and Water CIP Fund. Beverly Froude asked Wayne what the CIP Fund stood for. He said Capitol Improvement Project. Wayne stated that this is the fund that the district, in 1992, began setting aside $200,000 per year to build half of the Menlor Reservoir. Mike stated that the money was designated to build a new reservoir. Wayne stated that the fund still exists, and money is still for its original purpose. Because of interest earnings, it has not had any more contributions added to it from the general fund, it continues to build interest on the balance, and now has a balance of$700,000. The Menlor Reservoir has been budgeted for in the past, and construction should happen this next fiscal year. John Haunsperger questioned the Capitol Tigard Water District Board Meeting-May 13,1996 Improvement Fund if it didn't also include the proposed reservoir on 141st? Mike stated that it was not. That fund was set up specifically for a reservoir construction fund. The Water SDC Fund, is where the majority of the connection fees go. Beverly Froude asked what SDC stands for. Wayne Stated that SDC stands for Systems Development Charge. These are fees charged for new meters,with$635.00 going into this fund for each meter sold, depending on the meter size. The connections that have been made since the city has become involved in water operations have accumulated in the SDS Fund. This fund is appropriated every year for capitol improvements only, meaning capacity increasing improvements to deal with growth. SDC Funds can be used for making water lines larger, or to build a new reservoir. These funds can not be used for repairing leaks, only new capacity enhancements to the system due to growth. State law is very specific on what SDC Funds can be used for. The current rate study by CH2M Hill recommends that we increase this charge. The IWB will be hearing that recommendation on Wednesday night. The Water Fund is the general fund. Basically it continues to operate as before as an enterprise fund. Today the balance is $5.7 million. The balance has continued to grow over the past couple of years. A benefit of merging with the city has been a decrease in overhead costs. Several positions that the Tigard Water District had as a whole entity are no longer needed because Bill Monahan, City Administrator, Ed Wegner, and Wayne Lowry are performing some of the tasks. The Water Fund continues to do very well, and be very strong. 100%of the water maintenance is charged to this fund. Meter installation, meter reading, meter repairs, billing operations, accounting time, some of Bill Monahans time, the City Attorneys time is charged to this fund. We have budgeted according to the functions of the city that are attributed to the water function. The overhead charge to this fund is less than in the past as a result of the merge. Mr. Lowry assured the Board that all the funds that they started with are still being used for water purposes. He stated that Mike Miller, Randy Volk, Ed Wegner, are involved in the water supply side, in dealing with contracts with water suppliers and capitol improvements. Mr. Lowry asked if they want to get into the City's Audited Financial Statement? Wayne stated that all funds are included in the financial statement,and the Auditors look at all the funds. John Haunsperger asked if Wayne had a copy of the Financial Statement? Wayne stated that he had extra copies if anyone is interested. Beverly Froude stated that it would be a good idea to have a copy available for the water district, so people could look at it, and will know where the resource is. Wayne stated that if they would like to get a copy each month, it could be included in their packet. A Tigard Water District page should already be included in their packet. Commissioner Penner asked Wayne about the the sewer and storm funds relating to the City of Tigard alone. Mr. Lowry answered yes. Beverly asked if the Water Budget is accurate? This was what staff proposed. Has it been changed? Wayne stated that there has been rather a significant change made by the Budget Committee in the water costs, under material and services. Water costs were reduced by about$340,000. The reason is Tigard Water District Board Meeting-May 13,1996 when the budget was put together,Ed Wegner, Mike Miller, and Randy Volk did not have any deals with anyone about what the rates may be, so they took the Tigard Water Service Area water needs, divided them by three and said they would buy a third of the water supply from Portland, Lake Oswego, and Tualatin Valley Water. This years rate with Portland was going to be $1.30 per one hundred cubic feet, which is expensive. Once we made a deal with Portland to purchase a million gallons of water a day, that will reduced the rate to $.85 per hundred. Commissioner Penner stated that the $340,000 will make it closer to the 1995-96 budget figure. Mike Miller stated that we guaranteed Portland, we would purchase a million gallons of water per day. Mr. Lowry stated that we like buying from Lake Oswego because it is less expensive, but in the summer they are not able to provide our needs. It is a situation that we need to have enough sources to meet the summer demand, and yet not try to buy from them all the time. Mr. Haunsperger stated that it is not a bad deal. Mike Miller stated that the problem with Portland has always been the summer peak usage. Because of the way we buy our water supply, we do not need Portland during the winter months, but do need them during the summer months. Our base is so low, 200 thousand gallons per day on the average, when we do purchase large volumes of 1-2 million gallons per day, it shoots the rate way up. To be honest,we can't afford to do that, so we had to make some sort of commitment to Portland. Lake Oswego,will never be able to supply a significant part of our needs during the summer months. Beverly stated that she feels we are in fair shape, and don't really need a water rate increase. Wayne stated that we are in great shape. He stated that you won't see the water rate increase. What we are recommending to the staff is doing away with the minimum and just have a billing charge of$3.85, and you pay for every hundred cubic feet used at a rate of$1.35. Pretty close to what we are paying now. It is revenue neutral to the system, cash flow will be different. Wayne Lowry stated that this will be the recommendation to the IWB at the meeting on Wednesday evening. Wayne stated that the plan has built into it an half million dollars per year,to build up a reserve fund for future water supply projects. Even with the current rates,we can cover operation costs plus a half million per year for reserve. We are in a very strong position, and with very competitive rates. Commissioner Mortensen stated that we do need to look for long term future water anyway which we have been discussing for years. Mr. Lowry stated that they have been working with Lake Oswego for a year or two trying to work something out, but just has not come about. Commissioner Froude asked if there were any other questions for Mr. Lowry? Commissioner Haunsperger stated that he would appreciate a copy of the information. Wayne stated to the Tigard Water District Board that if they ever have any questions,they can call him, or make a note of whatever they need for the meetings. Commissioner Haunsperger had another question for Mike Miller. Was there any discussion with the City of Portland or purchasing more than a million gallons per day, and what the rate might be? Mike Miller stated that they looked at purchasing 2 million gallons per day. It gives us a better base for summer which is our goal. But what it did in the winter months, because of wanting to run the wells year around to help reduce the water costs, it drives our purchases from Lake Oswego to negative numbers during the winter months. If we want some sort of relationship with Lake Oswego, which is beneficial; because of the Tigard Water District Board Meeting-May 13,1996 monitoring services they provide to us 24 hours a day, do control functions for us, transfer water to different reservoir, then we need to purchase water from them. Commissioner Haunsperger asked what our consumption is per day? Mike stated that it is around 4-4.2 million per day in January and February. We are back to 5-5.4 now. We get 1.1 million per day from the wells. Commissioner Haunsperger asked what the electric rate is for running the wells? Mike Miller stated that the electric rate is around$.04 per hundred. It is estimated that between maintenance on the wells, chlorine, depreciation, etc., total cost is about $.08 per hundred. Commissioner Mortensen asked if the agreement with Lake Oswego is still out there? Mike stated that there is no agreement. Commissioner Penner stated that because of it, they could just over night send us a bill at a higher rate. Mike stated that they are to be looking at their contracts and wholesale rates. 5. Intergovernmental Water Board Update Beverly Froude turned to Mike Miller to speak on CH2M Hill's water rate study. Mike Miller stated that CH2M Hill came to the Intergovernmental Water Board with a proposal on water rates. They looked at all the capitol improvements that we have planned to do for the next five years, which included two reservoirs, some major improvements in the system,but not including going out to an Willamette Plant. They looked at all the revenue sources, the expenditures,and basically came down to that the current rate that we already have; 1.32/CCF. We can recover enough revenue, so we don't have to increase rates. Looking at the rate structure, they suggested several different ways. One way is going to the true cost of service fixed rate, which was the initial thought of the IWB and City Council, and came up with two alternatives. A. (1) Do the same as we are currently doing, have a fixed charge which includes 800 cubic feet of water per two months. The base cost would increase to$14.77 which is almost the same as our current rate of$14.30. (2) Increasing the booster charge. People who live at the top of Bull Mountain,would pay an additional cost,due to additional electricity, additional pumping charges. (3) Different volume charges. They looked at the number of residential customers, verses the number of commercial customers, and number of multi-family customers. They took the total demand of the system, and started slicing it like a piece of pie,and residential had a larger component. They also peaked differently than industrial customers. Industrial is rather smooth all year around. Looking at that,is why you see some of these prices. Residential would be $1.35 per hundred, multi-family because of the peaking characteristics, they don't have the large yards, during the summer, their charge would be $1.33. Commercial would have more irrigation, etc. went to $1.56, industrial because of using the high volumes of water are at the cheapest rate at $1.30. Irrigation is $1.67 due to the peaking. The average per unit charge is $1.39. This actually works out to be revenue neutral. (B) The other way is to go with a flat base charge per billing cycle, charging $3.89 for the bi- monthly cycle. There would still be a booster charge which is $3.13. For every 100 cubic feet you would be charged $1.35 for residential. For people using 2CCF it would cost $2.70, people not on booster would pay $3.89. This is designed for people in King City, and Summerfield,not using the full 8 CCF per month,giving them a break,and also sends a message to others,that if you truly conserve,you will save money. IWB will recommend one of these ways of doing the charges. Commissioner Penner asked who will make the Tigard Water District Board Meeting-May 13.1996 decision? Mr. Miller stated the City Council. The staff recommendation is to go with the fixed charge for the service, as it includes reading the meters, the billing, all fixed costs, and then the unit charge. Commissioner Penner asked that the $3.89 base charge can actually pay for the cost of quantity of water used. Mr. Miller stated that our goal for next summer is to go to an inverted block to entice people to conserve. Commissioner Penner felt that it should make people in King City feel better, as it is a much lower amount compared to what they are paying now. Beverly Froude asked if the minimum now is $13.13? Mike stated that it is $14.30, based on the number of days in the billing cycle. Commissioner Froude stated that if the public relations is done well, the people need to know that, it was a significant decrease, rather than an increase. Mike stated that there is no tax base anymore, so people are getting the same service. Commissioner Froude,asked why the people on Bull Mt. have to pay a booster charge? Mike Miller stated that it is due to the additional pumping. Water is taken from the 410 zone which is the main operating level, pump to the 10 million gallon reservoir which is 470, there we pump it to the summit of Bull Mt.which is 713 ft. Then the water is back-fed to Aspen Ridge,but never comes back into 410. Beverly Froude asked if on the south side if it goes to King City? Mike Miller said no, there is no pumped water going to King City other than the 410 system. There is no water line at 133RD. There is a pipeline that goes through to provide services to some of the homes, but the pipeline doesn't go all the way to Beef Bend Rd. There is actual distinctions between pressure zones. Mike told the board that Little Bull Mt. actually does have a pumping charge, which includes Canterbury Woods Apartments, Calvary Presbyterian Church, etc. There is a pumping station there that is a booster, a pressure sustaining system. The system is designed with reserviors at the top, and we are pumping water to fill those reservoirs. Once the water gets up to the top, there isn't any more pressure. There are actually homes built higher than the reservoirs at Canterbury, and pressure is needed to get to those homes. Beverly Froude asked Mike if there is a charge on Little Bull Mt? Mike stated yes, for the booster. Commissioner Froude asked the board how they feel about these options, so it can be brought back to the IWB Meeting on Wednesday evening? The Board of Commissioners were in favor of the base flat charge. Commissioner Haunsperger stated that he felt information should go out with the water bill giving the rate information and how the rate was arrived at. Commissioner Froude stated that Mr. Polans has visited with people on this issue, and those people feel there is going to be a rate increase. Due to this fact, she feels that people should know that it is neutral. Commissioner Penner stated the flexibility,and that it is going to benefit certain water users. The ones with small homes and yards will be charged for what they use,where they used to pay a base fee. He feels that it is very positive. Mike Miller stated that the residents of King City, and Summerfield are not subsidizing the rest of the area with a base charge. Commissioner Penner stated that there is a cost of doing business that should be distributed evenly. Mike stated that all the rates in the area are going towards more of a service oriented type. Mike Miller stated that Tualatin Valley Waters public hearing is this month on rates, and changes that they have. They have several fixed costs in their rate. Actually their fixed costs are higher than what we are proposing, although their volume charge is $1.12 per unit. But their fixed costs are higher. Commissioner Mortensen asked if the 100 unit rate will stay the same? Mike said yes, basically it will stay the same. Commissioner Penner stated that we can better argue conservation, as people will see an impact on their bill. Mike Miller stated that the sewer bill is based on Tigard Water District Board Meeting-May 13,1996 actual usage, and King City was a big concern when they went to the consumption base sewer rates because they only used, on an average, 3 to 4 units per month. Commission Penner asked for the consensus of the board of the options. Commissioner Haunsperger moved to accept the A option. Commissioner Froude seconded the motion, everyone was in favor. Beverly Froude asked about the Sprint Mono Pole? There is a meeting notice on the front door of the Water Building. Commissioner Froude asked where the Mono Pole would be located? Mike Miller stated that the Mono Pole would be behind Tualatin Valley Fire & Rescue,on the property by the railroad tracks owned by the City of Tigard,which has been used as a storage area for rock, cold mix, pipe, fittings and supplies. The mono pole and building will take about 1500 sq. feet. There will be a small building for their equipment and a 100 ft. stainless mono pole like the one on Phaffel and Hall Blvd., used for cell communications. Commissioner Haunsperger asked if Mr. Monahan has drawn up a contract? Mike Miller stated he didn't know. Commissioner Haunsperger stated that one of the points he might caution them on in drawing up the contract is that to put wording in the contract to protect themselves of interference created by other users of the site to the city police, fire and other city departments. Radio interference is a real problem, and if there are interference problems caused by their installations that they should bear the cost of correcting them. One of the problems with starting this kind of a site is they usually build a building large enough to accommodate other users and then they lease out space in the tower for other antennas, and inter-mod products with the frequencies mixed together can cause interference to others. The city should not have to bear that cost. Commissioner Froude stated that she would give the final report on the facilities use. Bill Monahan was at the Intergovernmental Water Board meeting. He gave a report that King City wants to retain ownership, and negotiate for a monthly or yearly rental fee. The City of Durham is willing to allow usage of the building on a lease arrangement and to provide in kind services. The Tigard Water District has made a decision to retain ownership, although they may be willing to allow the right to usage for other purposes with advanced notice. Some of the other uses discussed with the Tigard Water District was use of the auditorium for court purposes. He stated that the city is not in eminent need to make changes to the facility since the cities position has changed with the Amber Foods facility and with the decision by the various entities to retain ownership. Chairperson Scheiderich questioned the concern for use of the Water Auditorium for free public space and stated that it would be appropriate to be agreed upon by all owners in advance. Mr. Monahan apologized for the use of the building for the homeless shelter and the Farmers Market without prior approval of the entity. This year the Farmers Market has only inquired about the use of the parking lot area and the only inside access would be for restrooms, beginning June 1 through October. The board discussed the farmers Market usage, and the fact that they are a non-profit organization.,1, under the Chamber of Commerce, they approved the use for this year. Commissioner Haunsperger asked Mike if there•was any other discussion by the city about using the meeting room for the court? Mike said he hadn't heard anything. Tigard Water District Board Meeting-May 13,1996 Beverly Froude read a letter to the Bull Mt. neighbors from a person in Mt. Gate. It was about becoming aware of water conditions in the area both from the Tigard Water Department, and through personal experience with a water treatment system. It was a sales pitch for a water system. Beverly Froude felt it to be negative, and where this person got it's information. Mike stated that because of the lead/copper,we are in compliance,we are over the action level on homes that were tested,that were built between 1982-85. It is not the water and the distribution system. It is dirt in the system that we cannot see, but in a years time can accumulate. Mike stated that our water meets the federal guidelines, and there is nothing wrong with our water, and it is probably scare tactics. Commissioner Haunsperger suggested to leave it alone. 6. Operation Manager's Report Mike Miller informed the Tigard Water District Board that two people have sent letters for the board vacancy, and that it had been advertised in the Tigard Times. He had received an application from a gentleman that works for Oregon DEQ in the storm, water program. Chairman Froude asked Mike if an application deadline should be set, and should we be interviewing at the June meeting? Commissioner Penner's asked how do they make a decision? John Volpe stated that one of the applicants was particularly good,the one with POE . Mike Miller suggested that they come to the June 24, 1996 meeting. The Board could individually speak with the candidates, and have them tell about their background, and tell why they are interested in serving on the board. Commissioner Froude asked Mike if Ed Wegner had not prepared a informational packet? She feels that the applicants need information on what the Tigard Water District is, what it does, what their job descriptions would consist of,and their term of office. Commissioner Froude asked Commissioner Volpe what information he would have liked to have had when he applied for the commissioner position? Commissioner Volpe stated that he would liked to have known more about the responsibilities. He feels that the scope and responsibilities are much narrower than what he had in mind when he applied. John feels that if the person who gets the position finds he has not more responsibilities than what they have now,that person may not be interested in the position. Commissioner Haunsperger made a motion we invite the persons who applied to the next meeting. Commissioner Froude seconded the motion,motion passed unanimously. Commissioner Penner asked how to prepare them? Does the city have any information already available that could be sent to the applicants? Mike Miller stated that he would check. Mr. Penner suggested that another possibility would be for a board member to call and talk with each individual prior to. Commissioner Volpe feels that an individual should not call and speak to the applicants. Commissioner Froude suggested drafting a letter on the expectations of a board member. Commissioner Volpe suggested a copy of the Intergovernmental agreement between the City of Tigard and the Tigard Water District be sent to the applicants. Also include a copy of the proposed budget and the Rules,Rates and Regulations Booklet,which used to go out in the packet to the new board members. Tigard Water District Board Meeting-May 13.1996 Commissioner Froude requested that The Rules, Rates and Regulations be revised. Mike Miller stated that he will arrange for the letter. The commissioners suggested it be sent by the staff. Lou Anne Mortensen asked if she should resign from her position now? The commissioners asked for Lou Anne to be present at the June 24, 1996 meeting, for the passing of the budget. 6. Non-Agenda Items There we no non-agenda items discussed. 7. Commissioner's Comments There were no commissioner's comments. 8. Set Next Meeting Agenda The next meeting will be held on June 24,1996,at 7pm. 9. Adjournment Commissioner Penner asked for a motion to adjourn the TWD meeting. John Volpe moved to adjourn the meeting,and Commissioner Haunsperger seconded the motion. The meeting was adjourned at 7:48pm. • Tigard Water District Board Meeting-May 13,1996