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02/26/2001 - Minutes BOOK COPY TIGARD WATER DISTRICT BOARD OF COMMISSIONERS WORKSHOP Monday, February 26, 2001 Members Present: Beverly Froude, David Strauss and George Rhine Staff Present: Mike Miller and Twila Willson Visitors Present: Paul Owen 1. Call to Order The regular meeting of the Tigard Water District Board of Commissioners was called to order by Commissioner David Strauss at 7:00 p.m. 2. Roll Call Commissioner Norm Penner was excused from the meeting because of illness in the family. Gretchen Buehner has not submitted a written resignation to date and, therefore, was included in the roll call, but was not present. 3. Approval of Workshop Minutes— January 9, 2001 Commissioner Beverly Froude motioned to accept the minutes of the workshop as 4.4•0" submitted. Commissioner George Rhine seconded the motion. The vote to accept the minutes as submitted was unanimous. 4. Visitor's Comments Mr. Paul Owen introduced himself and expressed his interest as a former water superintendent with interests in the proceedings, but stated he had no comments to bring before the Board. He was there merely as an observer. 5. Intergovernmental Water Board Update Mr. Mike Miller gave an update of the last two Intergovernmental Water Board Meetings in the absence of Commissioner Penner. The proposed rate increase was discussed at the February 14 meeting. Mr. Miller stated he would cover this topic in depth in his Utility Manager's report. Also in that report, he would talk about the Police Department's occupation of the Water Auditorium, lobby conference room and lunchroom beginning in April and running through June. An HVAC system remodeling project will be going on in the regular police facilities. The report on how the water supply negotiations were progressing was a topic discussed at the last two IWB meetings. TWD Workshop Minutes - 1 - February 26,2001 South Fork—The negotiations with South Fork had been proceeding very well until the City of West Linn received a complete change over in their council make-up. The new council is very anti-growth and therefore, bringing Tigard into the South Fork group would appear to be pro-growth. South Fork went to the Bond Council and were told that South Fork could not regroup or reform to allow other groups to buy into the project because the assets had not been paid for yet. South Fork might be willing to sell Tigard some of its water rights, but that would require Tigard to build our own plant or expand the existing plant. We could lease back or have South Fork operate the facility, but would not become part of the South Fork group. South Fork is very interested in us becoming a member at some time. They have 20 million plus excess water rights that are not perfected and they may lose those water rights. We would have to run pipelines from Oregon City to Tigard with no participation from West Linn and only possible participation from Lake Oswego. Joint Water Commission—We are making progress with the JWC. Tigard is part of the Integrated Water Manager's Group, which includes the managers of Haag Lake/Scoggins Dam, Lake Oswego Corp., Tualatin Valley Irrigation, USA, JWC and Bureau of Reclamation. The Scoggins Dam raise has been discussed. The Bureau of Reclamation has money set aside for a feasibility study to raise the dam. Actual construction of a dam raise is probably 8-10 years away and headway is being made with this option. A new intertie is being looked at on the west-end with Beaverton. The City of Beaverton is constructing their ASR Well #3. In the interim they may withdraw native ground water, which will give us access to their higher water pressure zone and would create a better pressure flow from them. The current agreement is for surplus, which now consists of fall, winter and some early spring months. Haag Lake is currently at approximately one-third its normal storage capacity and may not allow summer demands to be met from the stored water. Commissioner Rhine asked where the tie to Beaverton would be located. Mr. Miller indicated it would cost about$250,000 for 1000+feet of 16-inch line. The meter and pressure gauge would be located where Scholls Ferry and Barrows intersect on the remnant section to the west with piping to Tigard area at 161st Ave., Bull Mountain Meadows area. Commissioner Froude asked if there would be a problem with the native ground water. Mr. Miller explained that native ground water is the same as what we currently pump from the ground now. This would be an interim program to tap into the aquifer temporarily until Beaverton's ASR Well #3 is completely developed. Portland — Progress with Portland has been a very slow process. There has not been a contractual meeting with Portland since November. In the past they have repeatedly promised some form of proposal and they are currently stating there will be some form of contract by the end of April that can be negotiated. Nov TWD Workshop Minutes -2- February 26,2001 This places some of the other water systems in a difficult situation as their contracts will start to expire in 2003 and the existing contract with Portland requires a two-year notice •kk.• of their intent to either continue or discontinue their contract. Portland has said they will continue with the existing contracts, but none of the wholesalers want that contract because of the peaking clauses and some of the other penalties it contains. If Portland fails to deliver in April, the wholesalers, their boards and councils are ready to apply political pressure by sending letters to Mayor Katz and Commissioner Eric Sten. Commissioner Sten has been making very sharp statements to Powell Valley Road and Water District, Rockwood PUD and Clackamas River Water, because of the pipeline they propose to construct to link their lines. Commissioner Sten claims Portland knew nothing of this, although Portland's staff was informed. The City of Portland has announced there will be a rate increase, which averages about 9%. Tigard's increase however, because we did not take as large an increase as others in the service area last year, will be 12.9%. All the wholesalers did well last year with Portland on the peaking factor. 6. Utility Manager's Report Mr. Miller proposed several options for meeting facilities for the regular meetings of the Tigard Water District while the Police Department occupies the Water Auditorium. • Accounting Conference room - inside the Finance Department section of the Tigard Water Building. It is a small room. • Public Works Conference room— upstairs in the Public Works office area. It is a larger more comfortable room. AND w.• • Public Works Lunchroom —large area would be more comfortable for the budget meetings Commissioner Froude suggested looking into using the Fire Department Community room. Mr. Miller said he would look into using their facilities. Mr. Miller met with Ed Wegner and it has been suggested the Tigard Water District Board of Commissioners should not meet in March. There is not a lot expected to happen as far as water supply until perhaps late April or into May. That would allow Mr. Wegner enough time to have a new Utility Manager on board. Commissioner Strauss stated the TWD Board used to regularly meet every other month and stated this would be a good time to go back to that schedule unless an emergency or something surprising were to come up. Commissioner Froude brought up the matter of the Budget Committee meetings. She asked what needed to be done to handle those meetings. Mr. Miller said the Budget Committee members needed to be contacted. The Board of Commissioners should meet beforehand to discuss their budgetary needs. He suggested the Budget Committee meeting be scheduled to meet in April or May with final approval targeted before the end of June. Mr. Miller briefly explained what would be presented to the Tigard City Council on the following evening to request the 15% rate increase. Originally the rate increase of 42% was requested. The Intergovernmental Water Board agreed to staggering the increase TWD Workshop Minutes -3- February 26,2001 writer► at 10%, 12%, 12%, 8% and 8% over a five year period of time. The taxpayer's initiative proposed for the November election caused the IWB to raise the rates to only 3% last spring in case that ballot measure passed and roll backs or penalties were required. "'WO The ballot measure failed in November. The IWB also recognized at that time the need to develop three reserve funds of $500,000 each. • Rate Stabilization Fund • System Development Reserve Fund • Capital Improvement Plan Reserve Fund In order to raise the reserve funds on a yearly basis, rates would increase $.036 per hundred thousand. Therefore, it was determined that a full 10% rate increase was necessary, effective May 1, 2001. Volume charges would increase 15.5% and fixed charges increase to 10%. This decision was made before receiving word that Portland's rates were increasing 12.9%. The projection for the current fiscal year for the operation cost gain is $300,000. Even with the proposed rate increases, Tigard will still have the third lowest rates in the metropolitan area. The volume charges might be more than some others, but the fixed costs are less. Commissioner Rhine asked what was covered under the fixed costs. Mr. Miller explained that fixed costs included utility billing and meter reading. Volume charge includes operation and maintenance of the system, hydrants, and mains. 7. Non-Agenda Items Commissioner Strauss announced that another survey response was received. He vaie noted three observations— no Willamette River—no growth of the area —and no name listed. He felt that this one additional response did not change the overall outcome from the survey results. Commissioner Froude stated there was a need to get people on the Board and there was a need to fill the two seats that will be vacated. Commissioner Strauss stated write- in campaigns needed to take place. Commissioner Rhine asked Mr. Miller who pays for the use of hydrants. Mr. Miller indicated that in new subdivisions where tankers are filling for bulk use of water, they are required to pay$25.00 per month for the use of the hydrant, plus they are billed at the irrigation rate for the volume. Tigard receives approximately $10,000 in revenues from that source of use. Commissioner Rhine stated he assumed the system operated on the honor system. Mr. Miller said if no meter is available and the contractor has to count loads that it truly is an honor system. There is a $100 fine for illegal use of hydrant water and attempts are being made to increase that fine. Most contractors abide by the rule. The biggest offenders have been small hydro-seeding companies who come in needing only a few hundred gallons of water. They will hook up to a hydrant real quick to get the water. Sometimes Public Works will get phone calls from citizens to alert us when they think someone is drawing water inappropriately. The water loss, however, is a very low percentage averaging about 4 -6%. TWD Workshop Minutes -4- February 26,2001 Commissioner Rhine asked about loss due to fire use. Mr. Miller said that it has rarely been charged. The ability to do so is available however it generally does not amount to "°'r" much water. There have been two major fires within the last few months and no bill has been sent for either. Sometimes insurance companies will cover the cost however the Tigard Water Service System has not in recent years billed for the water. The members of the Board were pleased to hear that practice and advocated continuation of that policy. Commissioner Froude asked if drought conditions would affect hydrant use. Mr. Miller indicated that in 1992 there was a total lock up of water and no water was sold to any developer. Contractors had to have water brought in from outside the area. There was also a "water cop"who covered the water area at all hours of the day and night looking for violators to the lock up condition. Mr. Miller continued to explain that the Bull Run is rain dependent and not snow driven. The reservoirs are full, but May and June will give the telltale signs because that is when the rain is needed to saturate the ground. Mr. Miller said that the City of Lake Oswego has given us notice that they would not be able to supply water to us this summer at all. Commissioner Froude commented that information should be distributed about water conservation before we are in a drought condition. Mr. Miller said an article is in Cityscape every month about water. He announced that the new Water Conservation employee would be starting on Monday, March 12th. That individual's responsibilities include preparation of newsletters, publications, and public service announcements. Commissioner Strauss asked if Mr. Miller would issue a news release about needing candidates for the Tigard Water Board's open seats. Mr. Miller said he would put something in the Tigard Times. Commissioner Strauss asked if any Board member would be willing to serve as the budget officer this year. Commissioner Rhine volunteered to do that assignment. Mr. Miller will get the information needed on the budget committee participants to Commissioner Rhine. 8. Set next meeting date It was decided to skip the March meeting and meet on April 23rd. The plan is to have the budget committee meeting in May. Twila will notify Board Members as to the location of the upcoming meetings if Mr. Miller is unable to do so before he leaves. 9. Adjournment Commissioner Strauss, on behalf of the TWD Board Members, wished Mr. Miller every success and best wishes to he and his family. They are sorry to see him leave, but glad to see him receive an advancement. They thanked him for all his help and counsel. Commissioner Rhine motioned for adjournment of the meeting. The regular meeting of the Tigard Water District Board of Commissioners adjourned at 8:00 p.m. The next meeting of the Tigard Water Board will be on Monday, April 23, 2001. TWD Workshop Minutes -5- February 26,2001