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Tigard Water System Study - January 1992 111111 City of Tigard, Oregon Executive Summary Tigard Water System Study I January 1992 JCA James M.Montgomery r Serving the World's Telephone Environmental Needs (503)226-7377 (503)226-0023 Fax 220 N W Second Avenue Suite 1090 Portland Oregon 97209 No JNM James M. Montgomery err Consulting Engineers, Inc. January 14, 1992 City of Tigard City Hall 13125 S.W. Hall Blvd Tigard, Oregon 97223 MO Attention: John Acker, Associate Planner Subject: Tigard Water System Study Gentlemen: Enclosed for your distribution to City of Tigard staff and City Council members are ten copies of the final Executive Summary of the first phase of the Tigard Water System Study. The primary intent of the Executive Summary is to provide basic information for interested parties' review prior to the January 23, 1992 City Council workshop and as a basis for discussion at the workshop. rn Additional copies of the Executive Summary have been provided to : • Tigard Water District • City of Durham • City of King City • City of Lake Oswego • Portland Water Bureau • Tualatin Valley Water District If you need additional copies of the Executive Summary prior to the City Council workshop, please let me know. Sincerely, Qkk) %/),14() Robert G. Jossis Project Manager rrr cc: John Miller Roger Gano John Buol Jerry Baker Mike Rosenberger Gene Seibel err TABLE OF CONTENTS ro PAGE rir INTRODUCTION 1 SUMMARY 1 ire WATER SERVICE AREA 3 WATER DEMAND PROJECTIONS 3 PHYSICAL CONDITION OF EXISTING FACILITIES 4 Tigard Water District 4 Metzger Water District 4 WATER SYSTEM IMPROVEMENT REQUIREMENTS 4 Tigard Water District 4 Metzger Water District 5 EXISTING TIGARD WATER DISTRICT WATER SUPPLIES 6 Lake Oswego Supply 6 Portland Water Bureau Supply 6 Tigard Water District Wells 7 Other Water Supply Agreements 7 City of Beaverton 7 City of Tualatin 7 Lake Grove Water District 7 irr EXISTING METZGER WATER DISTRICT SUPPLIES 7 FUTURE WATER SUPPLY ALTERNATIVES 7 iis Tigard Water District Service Area 7 City of Lake Oswego 8 Portland Water Bureau 8 Willamette River 8 Tualatin River via the Joint Water Commission (JWC) 8 go Summary 8 Metzger Water District Service Area 10 TIGARD WATER DISTRICT FINANCIAL CONDITION 10 System Development Charges 11 Water Rates 11 CITY OF TIGARD WATER PURVEYOR ALTERNATIVES 12 usTigard Water District 12 Metzger Water District 12 Jw err I EXECUTIVE SUMMARY irr TIGARD WATER SYSTEM STUDY rr. INTRODUCTION The Tigard Water System Study is being completed for the City of Tigard by James M. Montgomery, Consulting Engineers, Inc. (JMM) as authorized by the City/JMM contract of August 14, 1991. The Water System Study is to serve as a "due diligence" evaluation of the City of Tigard assuming operation of the Tigard Water District (TWD) system and facilities and the portion of the Tualatin Valley Water District (TVWD) within the City limits. The level-of-effort of the study um is a reconnaissance level and subsequent detailed analysis will be conducted as necessary and as requested by the City. „o, The City of Tigard authorized the Tigard Water System Study and is considering becoming the Tigard area water purveyor for a number of reasons. Among the principal considerations which will be evaluated by the City in its decision-making process are potential advantages to Tigard area residents relative to: rw • Developing a more influential City identity and role in regional issue decision making. • More effectively carrying out City growth management responsibilities. The primary elements of the Water System Study include: • Review of available data and previously completed reports. • Meetings with all affected entities. • Water service area and water demand projections. • Review of existing TWD and TVWD facilities. • Determine major TWD and TVWD system improvement requirements. • Evaluate existing water supplies and future water supply alternatives. ... • Review existing financial conditions and rate structures. • Determine legal and institutional alternatives and constraints for the City of Tigard to become the Tigard area water purveyor. This Executive Summary provides a brief summary of the Water System Study findings to date. It was prepared to provide basic information for interested parties' review prior to the January 23, 1992 Tigard City Council workshop and as a basis for discussion at the workshop. As discussed earlier, the study is being completed with a reconnaissance level-of-effort and JMM's findings are based on this level of evaluation. It is hoped that review and discussion of the Executive Summary will bring forth from any party additional or clarifying information that will assist the ,Y,• City of Tigard in its decision-making process. SUMMARY Based on analysis and findings to date, JMM has found no major "red flags" or "fatal flaws" that should preclude further consideration of the City of Tigard assuming operation of the Tigard Water District and that portion of the Tualatin Valley Water District within City limits. rr To the contrary and relative to the TWD, the following conditions are found: • The existing water storage, pumping and distribution system is very sound and well maintained. Water service within the existing distribution area is very adequate and only minimal capital improvements to improve service are ma 1 1 am required. There appear to be no unmaintained or deteriorated facilities that would sr require replacement or major upgrading. • Most major water system improvements are those that will be required to serve new r development. • Unaccounted-for water within the system has been less than ten percent for the last rr ten years. This is a very acceptable percentage. • The TWD has a master plan for water system improvement requirements and has been judiciously implementing the plan. in • The TWD has recently adopted a system development charge (SDC) structure which meets Oregon Revised Statute requirements and provides funding for meter us installations, "buy-in" to existing capital improvements and for capacity increasing capital improvements required for new development. • The water rate structure provides general fairness and equity among rate payers "' and water rates are relatively low. • The TWD has only minimal current bonded indebtedness of $695,000 (principal in only) which will be retired in 1996. The same general statements can be made about the portion of the Tualatin Valley Water District N,,, within the Tigard city limits. In addition, there appears to be no insurmountable legal or institutional issues which might preclude implementation. There are, however, two obvious issues that must be addressed by the TWD or the City of Tigard °"' should the City assume operation of the District. These issues are water supply and water rates. The TWD typically purchases 96 percent of its water supply from the City of Lake Oswego and r. Portland Water Bureau on a "surplus water availability" basis only (92 percent from Lake Oswego and 4 percent for the PWB). The only TWD owned supply is from wells that only produce 1.0 mgd and which can not be expanded. It has been previously projected that the City of Lake r Oswego will not be able to meet TWD peak day water demands by 1997, if not sooner. Thus the development or procurement of a long-term dependable source of water supply for the Tigard area is critical. — Water rates have not been increased by the TWD since 1983. However, the TWD anticipates that water rates will be increased in FY 92/93 to provide increased operating revenues to meet current operating expenses and to maintain a responsible level of reserve funds. Water rates will also ,,,,l need to be raised significantly in the future as the wholesale cost of Lake Oswego water increases or as new sources of water are developed. Future dependable sources of water supply are projected to be up to two to three times the current wholesale cost($0.50/100 cubic feet)of Lake Oswego Water. NE The water supply and water rate issues and impending water rate increases may be unfavorable conditions relative to the City assuming operation of the TWD. Conversely, on the positive side are the benefits of achieving a more powerful voice in the current regional water supply studies ill and decision-making processes that will certainly impact Tigard area residents. In discussions with the Oregon Health Division, Portland Water Bureau, Tualatin Valley Water District and City of Lake Oswego, JMM has found that all of these entities would welcome more input and ,r,,, participation from the Tigard area in regional water supply issues. All four entities indicate a very high potential for cooperative relationships and see much to gain through cooperation with Tigard. All have a strong interest in mutually beneficial solutions to the region's future supply,w OW 2410 rr demand. And all are active participants in the regional water planning process and the importance of these positive regional relationships can hardly be exaggerated. Tigard will require cooperation from one or more of these entities to meet its future water needs. Development of an economical and dependable independent water supply system for the Tigard area is ri. virtually impossible. In addition to the opportunity to become a more active and credible participant in regional water supply planning issues, by becoming the water purveyor for the Tigard area, the City could also more effectively carry out its growth management responsibilities. This could be particularly beneficial in the area of responsibly providing water and other public services in cooperation with other entities to new development outside the current City limits but within Tigard's urban service area and impact area. Water service to such areas by the TWD is likely to be considered from one perspective(water supply),but service would be considered from a broader perspective by the City. WATER SERVICE AREA The water service areas of cities and water districts in the Portland metropolitan area are shown on the following figure. The Wolf Creek Highway Water District and Metzger Water District recently merged to form the Tualatin Valley Water District (TVWD). As shown on the figure, the TVWD serves the northern part of the City of Tigard. The Tigard Water District (TWD) serves the remainder of the City of Tigard, the Cities of Durham and King City, and unincorporated areas of Washington County. For clarity and for the purposes of this Executive Summary, the previous Metzger Water District portion of the current TVWD will be referred to simply as the Metzger Water District. Water service area alternatives for the City could include: • Only the area within City limits. • Only the current Tigard Water District area. • The current Tigard Water District area and the portion of the Metzger Water District within the Tigard city limits. There are also a number of other "sub-alternatives" associated with the above alternatives with respect to whether or not King City, Durham and unincorporated Washington County are included in the water service area. A key consideration of the City in becoming the water purveyor for the Tigard area is not to disrupt water service to any entities currently served by the Tigard Water District. Additionally, one of the City's policy considerations in assuming water system operation is the potential benefit to the City by becoming a more effective public service provider through consolidation of services. Based ++• on this perspective, the Water System Study was completed assuming the City of Tigard water service area would consist of the current TWD area plus the portion of the Metzger Water District within Tigard city limits. rr WATER DEMAND PROJECTIONS Current water demands for the TWD are approximately 4.8 million gallons per day (mgd) and 11.0 mgd for average and peak day demands, respectively. Two recently completed studies (1990 and 1991) of water demands for the TWD forecast that year 2010 demands will range from 6.8 mgd to 8.5 mgd for average demands and from 15.7 mgd to 19.3 mgd for peak day demands. Both studies anticipated a water consumption of approximately 145 gallons per capita per day (gpcd) with a peak day to average day demand ratio of approximately 2.30. The primary difference in the forecasted water demands was because of differences in population projections. One study estimated the year 2010 TWD service population to be 45,600 while the other much more conservative study estimated a year 2010 service population of 57,800. ir. 3 40 r __ _ ;''� CITY OF OREGON CITY-w---ea' ' ' °Fi .,'�1� { \� 't, ' _. / _ �.�I I .. 5 1 U V I C • ‘`.. ami-,..0-7,-.., ' •y,y - w.� , ,eL':. r , 1 IN J• 4 • r h s,#5` l�{ 'j �f-7'i U c 3,�• ". . ,, • -,:).;,-,.-..,.', • --.‘ -.:,---::,,i. 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"` METZGER . _ L i uk , ,�, irt: ..... • cwhu avow a :. • i PALATIFlE t i f: ':y.y�f fctrrrrirq 11 HILL VY:D - '\\ -1 'CIT_ OF .t Nj�.�:::SC�•t:�..Mtn a• rr;ar..rr.eu SKVVIEW ACRES W.CO. . 1. ; ,, . W.D. '' .Y�+ [ r • r i 4JItI1w\ IE t I G corns ro 0.c ... ^ • � `;a-? ' "' fl '•Te ,k a w GNR CORP. .o- ' t crV srf 4 , TlMMI :�. rr - 1 t:wer TIOAR Vi/:{) Igo: • �. ... tt:Y: .. • t CLIk�i 5 .•.. . . ... .... '" •�� .,:.0 �� , ; i , . ., . ,.V .. ii..\� i g .Kln:...• ro .' /I"' r.✓�' ,.. W• N)girs '. -,-* . il I ‘... \\\\\.'"---.' _.,, — -. :Cif } •y r.._r; A s 'r • .t. .r�# I' It : f� 'l _ .tt • ler �Ir,-_.t \, .-✓ / `,..� _ \4_. �Durllim '�1 - �. b ' J 11 pi ` iP (, 'GLENN'AtORIEY ` �'"�. R ' F -�- — - - NOT SUPPLIED BY CITY OF PORTLAND �"� ,,•fow. W.D . : rf.r...; 1 - )11_:... D J_ ' � •� DGrC •e V:S�OKS CITY OF •'� � �jf. f� � .11 TUALATIN Y l: RIDS LO�TO Th- if,„ r CITY OF PORTLAND �` ; cafnr d' - eI1/86 7/1/87 71 ' W.D, ! BUREAU OF WATER WORKS i•c•�c ` ONE 12/1/87 �— PARK P CE w D WATER DISTRICTS MAP I rt�wN L RIVEROIVEOSSY BR i PORTLAND-METRO AREA J.P.B 8/29/88 LA RovE Wp/� GLA(fih4O1FT:�M W D cadg `NECMED( 3/ 1/89 i CITY OF OREGON CIT L �..,v 1� e.rA� me yo / 7/1/89 L I � i '/ `� CHIEr ENGINEEII-AEG.a•Or EYGt. K0.•!f0 I-$-S 3 LI For purposes of this study, the TWD service population and water demands in year 2010 are estimated to be: Population -51,700 Average Water Demand (based on 145 gpcd which includes commercial and industrial demands) - 7.5 mgd Peak Day Demand (based on a peak to average day demand ration of 2.30) - 17.3 mgd '"" The portion of the Metzger Water District within the Tigard city limits represents approximately 3000 accounts and average and peak day water demands of approximately 1.6 mgd and 3.3 mgd, respectively. Thus the total City of Tigard water service area water demands for year 2010 are .• estimated to be: Average Demand Peak Day Demand .r (mil (med) Tigard Water District 7.5 17.3 City portion of Metzger Water District 1.S . Total City Demand 9.1 20.6 PHYSICAL CONDITION OF EXISTING FACILITIES Tigard Water District VIII JMM completed a visual inspection of all major TWD facilities (reservoirs, pumping stations, etc.) and all appear to be in good to excellent condition and are well maintained. Based on the �. regular maintenance of water storage reservoirs by the TWD, all reservoirs should be expected to last at least 50 years. Of the 21.0 million gallons (Mgal) in available storage, 14.6 Mgal in storage (four reservoirs) was constructed within the last 20 years. These reservoirs should have long remaining useful lives. The average age of the remaining eight reservoirs is 28 years so an equal useful life likely remains. The six pumping stations should be expected to provide satisfactory service for an additional 10 to 20 years. Metzger Water District A visual inspection of Metzger Water District facilities was not completed. Because the portion of .r. the Metzger Water District within Tigard city limits represents a relatively small portion of water system facilities under consideration, it was determined that a visual inspection was not necessary at this time. However, the TVWD reports that all major facilities are in good operating condition and that there are no particular "problem areas" (low flow, low pressure, etc.) in the system. Of the seven reservoirs in the system (total storage of 8.5 Mgal), three were constructed since 1975 and represent a storage capacity of 6.3 Mgal. The system has one pumping station which is used only during peak demand periods. WATER SYSTEM IMPROVEMENT REQUIREMENTS r Tigard Water District Based on previous water system studies for the TWD and JMM's visual inspection of facilities, the r.. TWD water pumping, storage and distribution system appears to be very sound. There appear to be no unmaintained nor deteriorated facilities that would require immediate replacement or major upgrading. Additionally, the TWD has systematically followed the recommendations and am .r 4 I orroorroor master plans provided by consultants for improving water service to existing customers and for construction of new facilities to meet water demands of new growth. A common "yardstick" for determination of water storage requirements is to assume that total storage should be equal to three days of average demand. Another method of determining storage requirements takes into account operational storage to meet peak hour demands; emergency storage during periods of supply curtailment, power outages, major repairs, etc.; and fire flow requirements. In either case, the total current storage requirements for the TWD would be or approximately 15.0 Mgal. Currently the TWD has 21.0 Mgal of storage and the location of the storage facilities throughout the water service area and within the various pressure zones also appears to be adequate. r Previous (1990) water system improvement master planning for the TWD identified a total of approximately $5.7 million in water pumping, transmission and storage facilities that need to be constructed to reinforce service within the current water system and to extend the backbone of the system to service new growth. As discussed previously, the existing water system and service is very sound so most of the improvement requirements are to serve new development. The sound condition of the existing TWD system is further exemplified by the fact that unaccounted-for water or within the system has been less than ten percent for the last ten years. Actual water loss is even less because part of the unaccounted-for water includes hydrant testing and other unmetered uses. Within the water utility industry, ten percent unaccounted-for water is considered to be an o r acceptable percentage. Phasing of the $5.7 million in water system improvements was anticipated to be as follow: Year Estimated Costs 1991 $214,000 1995 1,791,000 2000 and beyond 3,693.000 $5,698,000 In addition to the above improvements, the TWD has been implementing a program of paralleling existing 16 to 24-inch diameter transmission lines from its 10 Mgal reservoir at Bull Mountain Road and SW 125th Avenue to the Portland Water Bureau supply at Bradley Corners (Hall Boulevard and Greenburg and Oleson Roads) and to the City of Lake Oswego supply at Bonita Road and Interstate 5. The Lake Oswego transmission line paralleling has been completed. The costs for remaining PWB transmission line paralleling is estimated to be approximately $0.5 to $1.0 million. The TWD has been coordinating the installation of these waterline installations �•• prudently with on-going street construction projects. However, until a firm future water supply plan is adopted by the TWD, additional expenditures should be reviewed carefully. or Metzger Water District The primary water system improvement planned for the Metzger Water District is approximately 9600 feet of 16-inch diameter water transmission line to provide a "backbone" improvement in the southern end of the District. The line will run generally southeast from near Bradley's Corner to the proposed Dartmouth Street extension at Pacific Highway. It will improve water supply capabilities to both the Lincoln Center area at Highway 217 and Greenberg Road and to the Dartmouth Street and Pacific Highway area. Based on the "three times average day demand" criteria for adequate water storage volume, the Metzger Water District should have approximately 8.5 to 9.5 Mgal of current storage capacity. The Metzger Water District currently has 8.5 Mgal of storage. However, the water supply is a very r 5 410 is dependable supply. Consequently the current Metzger Water District water storage capacity is 's also very likely to be adequate. EXISTING TIGARD WATER DISTRICT WATER SUPPLIES ss The TWD currently has three separate sources of supply; the City of Lake Oswego, the Portland Water Bureau and two TWD wells. In typical recent years, the total water supply to the TWD would be comprised of: us City of Lake Oswego - 92 % Portland Water Bureau - 4 % u. TWD Wells - 4� 100 % Lake Oswego Supply +sw At present, the TWD/Lake Oswego water supply contract only requires Lake Oswego to wholesale "surplus" water to the TWD. 1990 studies determined that the water supply from Lake Oswego to the TWD was limited to approximately 4.0 mgd during peak demand periods and projected that rs surplus water during peak demand periods would be unavailable in 1997. The current TWD peak day demand is approximately 11.0 mgd. rr. The 1991 Lake Oswego wholesale water rate to the TWD was $0.40 per 100 cubic feet (cf) and this rate is less than Lake Oswego's costs of production (pumping, treatment and transmission). At the end of 1991, the Lake Oswego City Council authorized staff to start charging wholesale customers at ■s a rate of$0.50/100 cf. Currently, the TWD purchases approximately $1.0 million of"surplus" water from Lake Oswego annually. This represents approximately 45 percent of the water produced by Lake Oswego. The ✓ point of connection to the Lake Oswego supply is at a pumping station near Lake Oswego's Waluga Reservoir at S.W. Bonita Road and I-5. „s The water supply agreement between the TWD and Lake Oswego runs for the term of July 1, 1983 through June 30, 1993 and is automatically renewed for five year periods unless written notice is given. The TWD must purchase $75,000 of water each year, if available, but Lake Oswego has no .s obligation to provide water except if surplus water is available. Portland Water Bureau Supply ✓ By contract, the TWD must purchase approximately 4 percent of its water sales from the Portland Water Bureau (PWB). The TWD connection to the PWB system is at Bradley Corner, the intersection of Hall Boulevard and Greenburg and Oleson Roads. The current cost of the water is a relatively high $1.53/100 cf. The cost is high because the water is provided during periods of peak us demand. The agreement is for a term of 25 years (ending June, 2007) and requires the TWD to purchase a firm amount of water from the PWB on a "surplus" basis. The PWB has no obligation to deliver water to the TWD when water supply to City of Portland residents is deficient and ""' "surplus" water is unavailable. However, the PWB must make water available to the TWD when surplus water exists and, in turn, the TWD must purchase from the PWB a pre-determined percentage of its total water sales volume each year. This percentage is based on a 5-year moving u s average and for FY 199]/92,it is 3.89 percent. The TWD carefully manages its water purchases from the PWB to meet its obligation but to ensure us it purchases no more water than necessary. It should also be noted that in all of the PWB's 25-year wholesale water supply contracts, it is only selling "surplus" water and the water demands of the JMA um 6 0 r W City of Portland residents must be met first if water supply is not adequate. The "surplus" water supply provision is not exclusive to the TWD. Tigard Water District Wells The TWD has four wells in its system that can be considered operational, but only two of these are currently used for production. The other two have very low production rates with one producing water with high iron concentrations. Expansion of the current TWD well supplies (approximately 1.0 mgd) or development of new wells is very unlikely because the wells are in the Cooper Mountain/Bull Mountain Critical Ground Water Area designated by the Oregon Water Resources Department. rrr Other Water Supply Agreements ,,,,,, City of Beaverton. The TWD and Beaverton have an agreement to provide each other with emergency water. The agreement is for surplus water only, the agreement's period is from July 1, 1982 to June 30, 1992 and is renewable indefinitely. City of Tualatin. The TWD and Tualatin also have an agreement to provide each other with emergency water. Currently, the hydraulics of both systems only allows the TWD to provide Tualatin with water. For Tualatin to provide the TWD with water, a pumping station is required. The agreement is for surface water only, the agreement's period is from July 1, 1985 to June 30, 1990 and is renewable indefinitely. The agreement has not been renewed since 1990. Lake Grove Water District. TWD and Lake Grove also have an agreement to provide each other with emergency surplus water. The agreement's period is from July 1, 1985 to June 30, 1995 and is renewable indefinitely. 'r"' The emergency intertie agreements with the Cities of Beaverton and Tualatin have seldom been utilized. The TWD did, however, provide water supply to the City of Tualatin during a two week period in November, 1991. The intertie agreement with the Lake Grove Water District has never been exercised. EXISTING METZGER WATER DISTRICT WATER SUPPLIES The former Metzger Water District receives 100 percent of its water from the Portland Water Bureau. The primary connection is from a 48-inch diameter gravity pipeline,jointly owned by the Tualatin Valley Water District and the City of Tualatin, via the 60-inch Washington County Supply Pipeline. A secondary connection exists via the Burlingame pumped system. There is no emergency water supply intertie with the TWD. Similar to the TWD water supply contract with the PWB, the Metzger Water District supply from the PWB is on a "surplus" basis. The current wholesale cost of water purchased by the Metzger Water District (and TVWD as a whole)from the PWB is approximately $0.43/100 cubic feet. This is a relatively low rate because the water is provided by gravity (no pumping required) from the PWB. The TVWD has also paid for its share of capital costs for the gravity line to bring water from the PWB. FUTURE WATER SUPPLY ALTERNATIVES Tigard Water District Service Area By far, the most critical issue facing the Tigard Water District or the City of Tigard should it assume operation of the TWD is the development or procurement of a long-term dependable source of water supply. As previously discussed, approximately 96 percent of the TWD water supply is in the form of interruptible "surplus" water from the City of Lake Oswego and the Portland Water j 7 no Bureau. A number of water supply alternatives for the TWD have been studied in the recent past is and some are still under consideration today. These are summarized below. City of Lake Oswego. Based on previous studies, to meet growing Lake Oswego demands and all iiis of the TWD demands through 2012, Lake Oswego would have to expand its present Clackamas River water treatment plant capacity from 16.0 to 32.0 mgd, construct a new 5.0 mgd water intake and treatment plant on the Willamette River and add pumping and transmission capacity to the rowTWD. The TWD share of project costs were estimated to be. Period estimated Cost 1991-1994 $19,135,000 — 1997-2004 22964000 $21,432,000 Ns Portland Water Bureau. With the existing configuration of the PWB water supply system to the Washington County area and the TWD's existing connection at Bradley's Corner, a supply of 6.0 to 8.0 mgd is currently potentially available to the TWD. With the TWD's connection to the PWB system at I-5/Haines Road, an additional supply of 1.0 mgd is available and this will be increased is to 3.0 mgd in 1993. Thus without additional improvements to the PWB system, only 9.0 to 11.0 mgd of the TWD 17.3 mgd peak day demand in 2010 could be met by the PWB. To meet the 2010 demand, at least an additional $5.0 million in improvements would be required to the PWB system and up °_ to $1.0 million in improvements would be required to the TWD system. Part of the $5.0 million in PWB costs may be shared by other benefiting wholesale customers of the PWB, however. „w, It should be noted that other water purveyors(the City of Beaverton and the TVWD) also may claim a contracted "right" to the existing available PWB water supply capacity at Bradley's Corner. Thus the 6.0 to 8.0 mgd of available capacity at Bradley's Corner may not be a "given" for the TWD. us Willamette River. This alternative consists of a new water treatment plant on the Willamette River near Wilsonville and intake, pumping, transmission and storage facilities. The total cost m is estimated to be $26,950,000 with an additional $2,740,000 required in year 2000. Cost sharing of the pipeline costs (32 percent of total costs) may be possible with the Cities of Wilsonville, Tualatin and Sherwood since they could benefit from the project. It is also possible this project could be structured to include water supply to the TVWD as well. so Tualatin River via the Joint Water Commission (JWC). This alternative consists of the TWD joining the Joint Water Commission (Hillsboro, Forest Grove and Beaverton) and constructing "" new treatment (Tualatin River source), pumping, transmission, and storage facilities. The total initial cost was projected to be $35,760,000 with an additional $2,100,000 required in year 2000. Some of the costs of pipelines(44 percent of total costs) could possibly be shared with the TVWD and wr City of Beaverton since they could obtain water from the system along the pipeline route. Summary. Based on the 1990 study of the above water supply alternatives for the Tigard Water District, the estimated capital costs and commodity costs for the 20-year planning period for the ow water supply alternatives are provided below. The commodity costs are based on capital cost amortized over the 20-year planning period plus other annual operating costs "levelized" over the same 20-year planning period. Ili int JMA Nit 8 am Commodity Cost us (Per 100 cubic Alternative Capital Costs feet of supply) Portland Water Bureau $5,667,000 $1.10 * City of Lake Oswego $21,432,000 $1.16 Willamette River $29,690,000 $1.68 Joint Water Commission $37,860,000 $1.72 *Includes wholesale water purchase at$0.65/100 cubic feet It must be noted that the above costs are based on 1989 estimates and for year 2010 average and peak - day demands of 6.8 mgd and 15.7 mgd, respectively. As discussed previously, by assuming a higher population growth rate,year 2010 water demands for the TWD for the purposes of this study are 7.5 mgd and 17.3 mgd, respectively, for average and peak day demands. Presumably, the rir costs of developing water supplies to meet the higher demands will be higher as well. Another option that may receive more study in the near future is an expanded Willamette River supply. In previous studies, the Cities of Wilsonville, Sherwood and Tualatin were assumed to be partial partners of this option with the TWD. Since that time, the strong possibility has arisen that other water purveyors besides the TWD, Wilsonville, Sherwood and Tualatin would consider taking part in a Willamette River supply option. The other water purveyors include the TVWD *■ and the PWB. If this option is implemented, the TWD's costs for its required share of water may be considerably lower than those presented above because a larger facility, with many participants, could be less costly. A number of other issues must be addressed and considered with respect to water supply alternatives for the TWD. These include: • Although discussions have been held between the City of Lake Oswego and the TWD, no formal negotiations have been held relative to: err - the TWD's desire to become a part-owner (financing and management partner) in the Lake Oswego water system rather than simply being a wholesale customer. UM the potential for the City of Lake Oswego to further increase the wholesale water rate to the TWD. More detailed discussions and negotiations are currently being held between the TWD and Lake Oswego at this time, however. ii. • Although the City of Lake Oswego has 32.3 mgd of 1967 priority water rights on the Clackamas River near Gladstone, there appears to be a question as to the dependability of the entire right during low flow periods. irr • The TVWD is also having discussions with the PWB relative to obtaining an additional 6.0 to 8.0 mgd water supply at Bradley's Corner. ■r • Willamette River water rights are a particularly critical issue. Other Willamette River water right permit and application holders may preclude the City or TWD from gaining instream flow rights to the River. The alternative of purchase of stored water out of the Willamette Project is likely a very costly alternative to the development of instream flow rights. JPRA wr 9 iur Metzger Water District Service Area The former Metzger Water District receives 100 percent of its water from the Portland Water Bureau. It is expected that future supplies will continue to be provided from the existing 48-inch diameter pipeline via the 60-inch diameter Washington County Supply Pipeline although no serious water supply studies have been completed for this service area in quite some time. Since the Metzger Water District is now part of TVWD, it is expected that any future water supply considerations made by TVWD will be, in part, influenced by its increased service area due to the merger with the Metzger Water District. Currently, the PWB is conducting a source of supply study which is projecting future water demands for all metropolitan service areas. The demand projection for the TVWD is approximately 70 mgd and 36 mgd for peak and average day usage, respectively, in the year 2010. This includes approximately 7 mgd and 4 mgd for peak and average day usage, respectively, for Ile the Metzger portion of the TVWD. The PWB study is also identifying potential sources of water for future growth. These sources include the Columbia River, the Willamette River and expansions to the current Bull Run system. The TVWD will play a key role in this regional supply issue. The Metzger portion of TVWD will continue to receive water that is made available by TVWD from ■. wherever that water originates. TIGARD WATER DISTRICT FINANCIAL CONDITION At this time, the financial condition of the Tigard Water District can be considered sound. This is demonstrated by the following: • The TWD ended FY 90/91 with a reserve of approximately $2.0 million. • For FY 90/91, operating revenue was approximately $56,000 higher than operating expenses. This included depreciation expense of $520,000, and non-operating interest and miscellaneous income of$133,000 and $27,000, respectively. .r • The existing water system infrastructure is sound and capital improvement requirements are minimal except to meet demands of new development. • The TWD has only $695,000 (principal only) in outstanding general obligation bonds and these will be retired in 1996. However, there are a number of future conditions that can or will change the current financial picture for the TWD. These include: • The City of Lake Oswego will very likely increase the costs of water wholesaled to the TWD in the very near future. If Lake Oswego proposes to increase the costs of wholesale water too much, the TWD could purchase more water from the PWB. However, its costs will also be considerably higher than current Lake Oswego wholesale water costs($0.50/100 cubic feet). • To meet increasing water demands in the Bull Mountain area, the TWD must make a decision in the near future on the development or participation in the development of a long-term dependable water supply system. Recent(1990) studies have indicated costs of such water supply alternatives to be in the range of two to three times higher than the current cost of wholesale Lake Oswego water. • Costs of"moving" water (i.e., pumping, etc.) are increasing faster than increases in revenue from water sales. JPAN weem 10 1 rrr -` • To meet increasing water demands in the Bull Mountain area, the TWD anticipates constructing a new 2.5 million gallon reservoir in 1995 at a projected cost of $1.4 million. This project alone would utilize most of the $2.0 million reserve available at the beginning of FY 91/92. Interest earned on reserves will then also be reduced. b„ • The City of Lake Oswego anticipates it must spend up to $2.5 million for transmission line improvements in 1992 to be able to continue to meet current TWD peak day water demands. The TWD will likely be required to participate in some manner in these improvement costs. err Based on the above, it appears very likely a water rate increase will be required within FY 1991/92 or FY 1992/93 to meet operating expenses and to keep reserves at a reasonable level (i.e., ra $1,000,000). The current TWD rates have not been raised since 1983. System Development Charges The TWD has recently adopted a system development charge (SDC) plan which meets requirements of the Oregon Revised Statutes. The SDCs include the following costs components: """ • Cost of water meter installation (materials and labor). • Reimbursement fee which is the cost of new development to "buy into" existing water system capital improvements. • Improvement fee to pay for costs of capacity increasing capital improvements required for new development. to The actual SDCs were based on purchase of more water from the Portland Water Bureau. This is a less capital intensive option than other water supply alternatives. Depending on the water supply alternative ultimately implemented by the TWD, the capital costs could be higher and, as a result, the SDCs could likewise be higher. Water Rates Although a detailed analysis of the Tigard Water District and Metzger Water District water rate structure and water rates was not completed, the following general statements can be made: ro • Water rates are relatively low. • Water rate structures and water rates for the two districts are similar which would simplify the development of a unified rate structure and common water rates. As discussed above, it appears prudent and necessary that TWD rates be increased in the near future. This is further demonstrated by the fact that the TWD experienced operating losses of approximately$64,000 and$104,000 for FY89/90 and FY 90/91, respectively. Water rates simply do not generate enough revenue to meet operating expenses. Even though the TWD had an operating loss the last two fiscal years, it did generate a positive net income for the two years. This was primarily because of interest income on reserves(approximately$119,000 and $133,000 in FY 89/90 and FY 90/91, respectively). As discussed above, reserves and thus interest on reserves are ,ro projected to decline in the coming year. JMN 11 a rr CITY OF TIGARD WATER PURVEYOR ALTERNATIVES es A number of operational alternatives are available to the City of Tigard should it choose to become the water purveyor for the Tigard area. These include: • The City could operate the water system as a regular City department. irr • The entire water operation could be operated under contract by either a neighboring water utility or a private firm. • The City could contract out those aspects of water system management which it i.r chooses not to operate itself. • The City could join neighboring water utilities to form a Water Authority which would operate an independent utility. • The City could offer to sell the system to a private water utility company, to be operated as an investor-owned utility. The Oregon Revised Statutes provide for cities to withdraw territory within city limits from a water district, allocation of responsibility for the indebtedness of the water district, allocation of property between the city and the remainder of the district, dissolution of the remainder of the district, and appeals procedures. Should the City of Tigard decide to assume operation of the Tigard Water District and the portion of the Metzger Water District within City limits, the +rr following would be the most likely and expeditious scenarios with respect to each affected party. It should be noted that the TWD is currently providing water service to a portion of the Metzger Water District and this area has never been formally withdrawn from the Metzger Water District. iir The area (approximately 0.60 square miles) is generally bounded by the east TWD boundary on the west and Highway 217 and I-5 on the north and east,respectively. Tigard Water District Dissolution of the TWD outside City limits (Cities of Durham and King City and unincorporated .,. Washington County) with the City continuing to provide water service to that area is the most practical mechanism to continue water service to the entire TWD service area. The dissolution would require an election of the voters in the TWD outside City limits. To expedite the withdrawal, and prior to any action by either party, the City and the TWD should enter into an intergovernmental agreement greement spelling out the City's withdrawal intention; the TWD's dissolution intention; the agreement between the City and the TWD if withdrawal and dissolution occur; and their agreement if withdrawal occurs but dissolution does not. Metzger Water District For withdrawal of the portion of the Metzger Water District within Tigard city limits, the City and TVWD should also enter into an intergovernmental agreement (prior to withdrawal) defining allocation of assets and liabilities. From the standpoints of physical water supply and distribution, the most practical mechanism for water service to the withdrawn area would be for the City to contract with the TVWD for continued water service. However, there certainly are other issues to consider vis-a-vis continued water service by the TVWD to the portion of the Metzger Water District within City limits. These issues will need to be discussed and solutions negotiated between the City and the TVWD. For example, if the portion of the Metzger Water District within City limits was withdrawn from the TVWD, the TVWD will take the position that the contracted water supply from the PWB would revert to the TVWD and not pass to the City. r PAI irr 12 o