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City Council Packet - 02/22/2000
dR/G//Ufl L CITY OF TIGARD OREGON TIGARD CITY COUNCIL MEETING FEBRUARY 22, 2000 COUNCIL MEETING WILL NOT E TELEVISED 1:%aftNo%apW.dw 13126 SW Hall Blvd., Tigard, OR 97223 (503) 639-4171 TDD (503) 684-2772 Revised 2/17/00 IrIGpRD SINESS~'I` FETING ',FEBRUARY 2Z7iliut70 6.30 M CITY OF TICsAR® `~Tq~r~ItD'C[? , „t-BALL . ;f r ~]-3125 SIN{~I~LL~BLVD. ~i yTlGA~®g aItE~ON {97223 PUBLIC NOTICE: Anyone wishing to speak on an agenda item should sign on the appropriate sign-up sheet(s). If no sheet is available, ask to be recognized by the Mayor at the beginning of that agenda item. Visitor's Agenda items are asked to be two minutes or less. Longer matters can be set for a future Agenda by contacting either the Mayor or the City Manager. Times noted are estimated. it is recommended that persons interested in testifying be present by 7:15 p.m. to sign in on the testimony sign-in sheet. Business agenda items can be heard in any order after 7:30 mm. Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for Council meetings by noon on the Monday prior to the Council meeting. Please call 639-4171, Ext. 309 (voice) or 684-2772 (TDD - Telecommunications Devices for the Deaf). Upon request, the City will also endeavor to arrange for the following services: • Qualified sign language interpreters for persons with speech or hearing impairments; and 1 Qualified bilingual interpreters. J i Since these services must be scheduled with outside service providers, it is important to allow y as much lead time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting date at the same phone numbers as listed above: 639- 4171, x309 (voice) or 684-2772 (TDD - Telecommunications Devices for the Deaf). 3 a SEE ATTACHED AGENDA COUNCIL AGENDA - FEBRUARY 22, 2000 - PAGE 1 BONN= liiiiiiiiiiiiiii AGENDA TIGARD CITY COUNCIL BUSINESS MEETING FEBRUARY 22, 2000 6:30 PM • STUDY SESSION > EXECUTIVE SESSION: The Tigard City Council will go into Executive Session under the provisions of ORS 192.660 (1) (d), (e), (f) 8t (h) to discuss labor relations, real property transactions, exempt public records, and current and pending litigation issues. As you are aware, all discussions within this session are confidential; therefore nothing from this meeting may be disclosed by those present. Representatives of the news media are allowed to attend this session, but must not disclose any information discussed during this session. > Pilot Youth Program Activity 7:30 PM 1. BUSINESS MEETING 1.1 Call to Order - City Council 8t Local Contract Review Board 1.2 Roll Call 1.3 Pledge of Allegiance 1.4 Council Communications 1.5 Call to Council and Staff for Non-Agenda Items 7:35 PM 2. VISITOR'S AGENDA (Two Minutes or Less, Please) 7:40 PM 3. CONSENT AGENDA: These items are considered to be routine and may be enacted in one motion without separate discussion. Anyone may request that an item be removed by motion for discussion and separate action. Motion to: 3.1 Approve Council Minutes: December 7, 14, 1999 and January 11, 17, 2000 3.2 Receive and File: Photo Radar Proposal COUNCIL AGENDA -FEBRUARY 22, 2000 -PAGE 2 MEMO 3.3 Local Contract Review Board a. Award Contract to Oregon Excavation, Inc. for Construction of Lincoln Avenue Street and Storm Drainage Improvements b. Award Contract to CIDA, Inc. for Engineering Design and Right-of-way Acquisition Services for Burnham Street Improvements 3.4 Approve Council Goals • Consent Agenda - Items Removed for Separate Discussion: Any items requested to be removed from the Consent Agenda for separate discussion will be considered immediately after the Council has voted on those items which do not need discussion. 7:45 PM 4. CONSIDER INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND WASHINGTON COUNTY REGARDING THE MSTIP 3 PROJECT FOR WALNUT STREET AND THE GAARDE STREET IMPROVEMENTS Engineering Department Council Discussion Council Consideration: Motion to approve the Intergovernmental Agreement with Washington Countyauthorizing reimbursement to the City of Tigard for the Gaarde Street Extension Project from the MSTIP 3 Project funding for Walnut Street at the Gaarde Street Intersection. 7:50 PM 5. REVIEW COUNCIL LIAISON APPOINTMENTS Administration Department Council Discussion 8:05 PM 6. COUNCIL LIAISON REPORTS 8:15 PM 7. NON AGENDA ITEMS COUNCIL AGENDA - FEBRUARY 22, 2000 - PAGE 3 8:25 PM 8. EXECUTIVE SESSION: The Tigard City Council will go into Executive Session under the provisions of ORS 192.660 (1) (d), (e), (f) at (h) to discuss labor relations, real property transactions, exempt public records, and current and pending litigation issues. As you are aware, all discussions within this session are confidential; therefore nothing from this meeting may be disclosed by those present. Representatives of the news media are allowed to attend this session, but must not disclose any information discussed during this session. 8:40 PM 9. ADJOURNMENT \\TI G333\US R\D EPTS\AD M\CATHY\CCA\000222. D OC 1 i i i i i 3 COUNCIL AGENDA - FEBRUARY( 22, 2000 - PAGE 4 Agenda Item No.-qLi- Meeting of • I ~ 0 U TIGARD CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 • STUDY SESSION > Council President Brian Moore called meeting to order at 6:30 p.m. > Council Present: Councilors Paul Hunt, Council President Brian Moore, Joyce Patton, and Ken Scheckla. > Staff Present: City Manager Bill Monahan; Asst. to the City Manager Liz Newton; City Recorder Catherine Wheatley; City Attorney Tim Ramis; City Engineer Gus Duenas; Public Works Director Ed Wegner > EXECUTIVE SESSION The Tigard City Council went into Executive Session at 6:30 p.m. under the provisions of ORS 192.660 (1) (d), (3), & (h) to discuss labor relations, real property transactions, current and pending litigation issues. > Council President Moore recessed the Executive Session to study session at 6:36 p.m. > Pilot Youth Program Activity Liz Newton, Assistant to the City Manager, reported that they expected 200 middle school students and 50 high school students to attend the two city-sponsored events at the Senior Center on Friday. She reviewed the arrangements made for adult supervision, transportation, refreshments, music, and activities. She mentioned that the Interact high school kids from the Rotary have adopted the middle school event and intended to hold a raffle. She discussed the potential costs for the event, totaling $475 if they had to pay for a disc jockey and $225 if they did not. She asked if the Council would approve staff paying the costs for the events. Councilor Hunt asked how often they intended to hold these events. Ms. Newton explained that holding the events depended on obtaining sufficient adult supervision. She indicated that they intended to hold costs down to a minimum at future events. Bill Monahan, City Manager, mentioned the donations obtained by the people working this event, bringing it in at less than $2 per person. Ms. Newton noted that the kids themselves decided to charge $1 or a can of food for donation to a charity, despite staff telling them that it was a free event. Ms. Newton explained that they developed these events in response to the kids telling them that they wanted some place where they could listen to music and hang out with their friends in a supervised environment. She said that Chief Goodpaster told them how to handle the adult supervision so that the kids did not feel overly supervised. She confirmed to Councilor Scheckla that it was a non-smoking event. The Council agreed by consensus to direct staff to pay the event expenses out of the Administration budget. CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 1 Council President Moore commented that these events could give them an idea of what kind of support a youth recreational center run by Atfalati might receive from the kids. Councilor Scheckla indicated that he did not want this tied to Atfalati. > Intergovernmental Water Board meeting Ed Wegner, Public Works Director, reminded Council of the annual Intergovernmental Water Board meeting scheduled for Monday, February 28, 2000, at 7:00 p.m. at the Water Building. Mr. Wegner referenced the two reports scheduled for discussion at the IWB meeting, the Joint Water Commission status report and the Clackamas River South Fork options. He mentioned that staff would also present an update on the Willamette River option and Wilsonville's progress as well as the status of the Portland negotiations. Mr. Wegner said that the other major discussion topic would be the water rate study. He emphasized that the IWB annual meeting was an informational meeting with no action expected by the Board. Mr. Wegner confirmed that the South Fork Water Board intended to hold a special meeting to discuss endorsing an expanded partnership with its agency and begin the process of identifying interested jurisdictions and estimating costs involved. Discussion followed on details in pursuing a South Fork Water option, including media coverage and public information. In response to a question from Ms. Newton, the Council agreed that staff should issue information to the press after the IWB meeting on Monday, once all the partners were updated. At Council President Moore's request, Mr. Wegner reviewed the process if South Fork invited Tigard in as a participant. He indicated that each of the four jurisdictions comprising the IWB had to table the Willamette River option and allocate funds for investigation of the South Fork option. He explained that he and Mr. Monahan's authority to spend funds up to a certain limit in the water fund would allow them to keep the process going while they started the formal process. He confirmed to Council President Moore that staff would keep the Mayor informed. Mr. Wegner discussed the possibility of using the Joint Water Commission option as a back-up system instead of the Portland system. He mentioned that Beaverton might be interested in a joint project using the Menlor Reservoir as their backup source. At Councilor Scheckla's request, Mr. Wegner reviewed the Portland contract. He stated that the standard contract ran through 2007; Tigard is subject to penalties if water usage above or below a predetermined minimum and maximum amount as specified in the contract. He mentioned that Portland intended to tack on a 10% fee for capital costs (Tigard's rate would change from $1.32 to $.88); however, no capital improvements were scheduled in the Tigard area. Mr. Wegner explained that they could not switch over to South Fork automatically and void the Portland contract if they signed up with South Fork before 2007; it would take five years to make the transition. He indicated that Portland wanted all their wholesale customers to sign new contracts in 2003, regardless of when the original contract expired. CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 2 r low > Administrative Matters Mr. Monahan advised the Council that the Chamber of Commerce sent the City applications for their three annual citizen awards for volunteerism. He suggested nominating Tyler Ellenson from the Central Business District for his work in the downtown. He asked if the Council wanted to add its endorsement. The Council discussed the request. Councilor Scheckla spoke to the City remaining neutral, since there were many people worthy of recognition for their volunteer work. Council President Moore concurred that there were many worthy individuals but noted he thought it would be appropriate for the City to recognize Mr. Ellenson's work in the downtown. After brief discussion, Councilor Patton suggested taking some time to think of names for nomination. The Council agreed to revisit the matter at the March 14 meeting. Councilor Hunt mentioned he did not think the City should pay for Councilors and spouses to attend the First Niter Banquet. After discussion, the Council directed staff to continue paying for the Councilors but not Council members' spouses. > Meeting with County Chair Tom Brian Mr. Monahan reported on a meeting he and Council President Moore had with Tom Brian to discuss Park SDC issues, including City collection of Park SDCs in the urban services area. He indicated that Mr. Brian encouraged them to contact the Homebuilders Association on this issue. He mentioned that he had understood from previous discussions with Charlie Cameron that the County staff would take the Park SDCs directly to the Board of Commissioners once Tigard completed its annexations. Councilor Scheckla mentioned Kevin Wing's work as a lobbyist on behalf of the Homebuilders Association. Council President Moore reported that Mr. Brian told them that there was $500,000 in MSTIP funds for miscellaneous projects around the County. Mr. Monahan reported that the County thought it could secure $25 million in Federal funds for the commuter rail project and $25 million in State funds, leaving $25 million for the cities and the County to pick up. He mentioned the County providing $20 million and the cities providing the remaining $5 million from their TIF funds. He said that Tigard's share would be $1.5 million, $1 million for the Tigard downtown station and $500,000 as half of the Washington Square station (cost shared with Beaverton). Council President Moore said that the County wanted the cities to participate (not financially) in a countywide visioning process to describe what the County would look like in 2020. He mentioned that the County was close to securing the first State park in Washington County in the Banks/Buxton area. > Council President Moore adjourned the study session at 7:40 p.m. 1. BUSINESS MEETING 1.1 Call to Order - City Council & Local Contract Review Board Council President Moore called the meeting to order at 7:45 p.m. 1.2 Roll Call Councilors Hunt, Council President Moore, Patton and Scheckla were present. CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 3 1.3 Pledge of Allegiance A visiting Boy Scout Troop led the Council in the Pledge of Allegiance. Council President Moore presented the scouts with a City of Tigard pin. 1.4 Council Communications: None 1.5 Call to Council and Staff for Non-Agenda Items Mr. Monahan requested discussion on a training request during the non-agenda portion of the agenda. 2. VISITOR'S AGENDA: None 3. CONSENT AGENDA Motion by Councilor Hunt, seconded by Councilor Patton, to approve the Consent Agenda. Motion was approved by unanimous voice vote of Council present. (Council President Moore, Councilors Hunt, Patton and Scheckla voted "yes.") [4-0] 3.1 Approve Council Minutes of. December 7,14,1999, and January 11, 2000 3.2 Receive and File: Photo Radar Proposal 3.3 Local Contract Review Board a. Award Contract to Oregon Excavation, Inc., for Construction of Lincoln Avenue Street and Storm Drainage Improvements b. Award Contract to CIDA, Inc., for Engineering Design and Right-of-way Acquisition Services for Burnham Street Improvements 3.4 Approve Council Goals 4. CONSIDER INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND WASHINGTON COUNTY REGARDING THE MSTIP 3 PROJECT FOR WALNUT STREET AND THE GAARDE STREET IMPROVEMENTS STAFF REPORT Gus Duenas, City Engineer, presented the staff report. He explained that in 1997 the County Commissioners issued a revised MSTIP 3 project construction schedule because of the adverse impacts of Measure 50, delaying completion of the projects. He indicated that staff wanted to take the County up on its offer to allow the cities to advance the funds needed to complete the MSTIP 3 projects with reimbursement by the County in accordance with the revised MSTIP 3 schedule. He mentioned their intent to construct the last leg of the Gaarde Street extension north to Walnut this summer using advance TIF funding (completion of Phase 2). He explained that the intergovernmental agreement before the Council tonight was an agreement between the City and the County for the reimbursement of the $1.3 million allotted by the County for this project. Mr. Duenas reviewed the location of the project on the map, pointing out that it would extend Gaarde Street from Walnut Street to Hwy 99W. He noted the staff work in progress to design the project and acquire the necessary right-of-way. He indicated that Tigard would receive reimbursement from the MSTIP 3 funds for the design work in FY 2001/02 and for the right-of- way acquisition and construction in FY 2004/05. COUNCIL QUESTIONS CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 4 Mr. Duenas clarified for Council President Moore that the County would reimburse the City only for the actual funds expended on the project, not for the projected $1.35 million if it did not cost that much. He confirmed that the City had the TIF funding available to construct the project this summer. He clarified for Councilor Patton which portion of the larger City project the County would pay for. He confirmed that the Walnut/Tiedeman intersection would be completed before summer, the Walnut Street work between SW 12151 and SW 135 h completed this summer, and the Walnut/SW 12151 intersection work completed this summer also. Mr. Duenas explained to Councilor Hunt that they would use cut and fill to smooth out the big dip enough to meet the 35 mph design requirement for a major collector. Mr. Duenas confirmed to Councilor Scheckla that installing streetlights on major and minor collectors was a standard City policy, even if not specifically indicated on the plan before the Council tonight. Councilor Patton pointed out that the severability clause contained the old language. Tien Ramis, City Attorney, said that they would use the new language. COUNCIL CONSIDERATION Motion by Councilor Patton, seconded by Councilor Scheckla, to approve the intergovernmental agreement with the changes noted. Motion passed by unanimous voice vote of the Council present. (Council President Moore, Councilors Hunt, Patton and Scheckla voted "yes.") [4-0] 5. REVIEW COUNCIL LIAISON APPOINTMENTS Mr. Monahan mentioned the need for a Council representative on the Vision Task Force scheduled to meet in April and October. He suggested that a Councilor temporarily attend the Library Construction Committee meetings in lieu of the Mayor. He asked if the Councilors wanted to keep or change any of the assignments. After discussion, Council President Moore suggested that a Council representative fill in for the Mayor on his committees and keep the Mayor and Council updated. Councilor Patton noted that there were only a couple of committees that did not list a Councilor as an alternate to the Mayor and the alternates were already filling in as needed. Mr. Monahan commented that Mr. Duenas was the alternate for the Washington County Coordinating Committee and sat on its Technical Committee. Mr. Duenas indicated that there was nothing coming up requiring a policymaker's presence. Council President Moore and Councilor Patton agreed to fill in on the Advisory Committee. Mr. Monahan indicated that he has been sitting as the primary on the Cooperative Library Advisory Committee since Melinda Sisson left with Paula Walker as the alternate. He said that he intended to recommend the new Library Director as the primary and the City Manager as the secondary as soon as they hired a new Library Director. Council President Moore asked for a volunteer to fill in temporarily for the Mayor on the Library Construction Committee. Mr. Monahan reviewed the temporary make-up of the Committee (three appointed members and three staff members. Councilor Patton agreed to serve as the Council representative. Council President Moore agreed to serve as the Council representative on the Visioning Task Force. CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 5 6. COUNCIL LIAISON REPORTS Council President Moore mentioned the Transportation Bond Open House at the Tigard High School Commons, 6:30 p.m., Thursday. 7. NON AGENDA ITEMS > Training Request Mr. Monahan presented a request from the Police Department to send Officer Greg Pickering, Emergency Vehicle Operations Instructor, to California for training on pursuit intervention techniques or ways to stop a pursuit that did not involve a high-speed chase. He mentioned the use of specially equipped police cars. He explained that the funds staff would use to pay for both the training and the equipping of five police cars with the special equipment would come from a grant Tigard received from a federal law enforcement block grant program. Mr. Monahan indicated to Councilor Scheckla that staff could obtain information on how often in the past the police would have had to use this tool and how much it would cost. Councilor Scheckla said that he was not opposed to the training but he wanted more information. Council President Moore pointed out that the funds came from a grant. Motion by Councilor Patton, seconded by Councilor Hunt, to approve the training. Motion passed by unanimous voice vote of the Council present. (Council President Moore, Councilors Hunt, Patton and Scheckla voted "yes.") [4-0] 8. EXECUTIVE SESSION: Cancelled. 9. ADJOURNMENT: 8:25 p.m. c4A~_ nx w Attest: atherine Wheatley, City Recor r ' ayor, City of Tigard Date: a CITY COUNCIL MEETING MINUTES - FEBRUARY 22, 2000 - PAGE 6 c ~-r rn• AGENDA ITEM # FOR AGENDA OF 2-22-00 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE Pilot Youth Program Activity /~/J PREPARED BY: Liz Newton ?(i _ DEPT HEAD OK ['//'~_CITY MGR OK ISSUE BEFORE THE COUNCIL An update on the pilot youth program scheduled for February 25 at the Senior Center. STAFF RECOMMENDATION No action necessary - information only. INFORMATION SUMMARY As part of the follow up to the discussion on youth issues at the July 1999 CIT meeting, the City offered to make the Senior Center available for youth activities one day a week. A small committee was formed to plan and implement a pilot program. The Committee is comprised of representatives of the City, church community, and high school students. High school students who are part of the Interact Service Club have been working with middle school students to promote a kick-off event scheduled for February 25, 2000. The event scheduled for February 25 will be supervised by adult volunteers. A local radio station has donated the services of a disc jockey and local restaurants are donating food. The event will run from 4-6:30 p.m. for middle school students and from 7-10 p.m. for high school students. The School District is providing bus transportation from the middle school to the Senior Center for the event. Students will have to arrange for transportation home at 6:30 p.m. Permission slips for the bus and event were mailed out with the middle school students' report cards. The ongoing weekly program will not be implemented until the adult supervision can be assured. Wes Taylor is working with Tigard Christian Ministries to address those issues. OTHER ALTERNATIVES CONSIDERED Delay the event. VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY Schools and Education Goal #1: "Schools and City government will work together to provide a community-based recreation activity program for young people." Strategy (1) "Identify community resources for supporting/providing recreation activity programs for young people." FISCAL NOTES There may be some increased need for janitorial services for the Senior Center after the event. IADWCATHMOUNCIUPILOT YOUTH PROGRAMMOC 5L3sue;ni 2I2z1vU MEMORANDUM TO: Honorable Mayor and City Council FROM: Ed Wegner RE: Water Related Issue DATE: February 22, 2000 Just a friendly reminder about the Annual Intergovernmental Water Board Meeting to be held Monday, February 28, 2000, at 7:00 p.m. in-the Water Auditorium. I hope we will have good attendance from Tigard to show our support for looking at alternative water supply sources since the election in September. The agenda will include a discussion on long term water supply options including the Willamette, Portland, Joint Water Commission, and Clackamas River/South Fork. We will also hear a status report on the Water Rate Study. I have attached the two engineering reports we have received on the JWC and Clackamas River/South Fork option. ~ Draft-February 9, 2001 Economic and Engineering Services, Inc. 111 SW 5`h Avenue, Suite 1670 Portland, OR 97204-3620 (503) 223-3033 FAX (503) 274-6248 Memorandum To: Ed Wegner Date: February 9, 2000 From: Wade Hathhorn Project Number: 470070 Subject: JWC Water Service to City of Tigard cc: J. Thompson, R. Goff Please find below a narrative of the projects required in providing wholesale water to the City of Tigard from the Joint Water Commission (JWC) facilities. A summary of these projects are also outlined in the attached Table 1. The corresponding capital improvement plan (CIP) is based on a "wish list" of water demands put forth by the JWC partners and the City of Tigard (City). The City has requested service for 4, 6, 8 and 15 mgd by years 2000, 2003, 2005, and 2010, respectively. In reviewing this material, it is important to note that the projects and associated dollar amounts are still under revision. The numbers reflected herein represent draft information and are subject to change as the CIP evolves. Moreover, no definitive decision has been made as to the actual costs that will be associated with the City of Tigard's share for their service. The latter will require additional input from the JWC partners and further analysis from EES. Summary of Infrastructure Requirements Year 2000-2001: Service to City of Tigard will not be available due to hydraulic limits along the 42-inch pipeline that serves south Hillsboro via pressure reducing valves (PRV) nos. 1, 2, and 3-4. Must await completion of 72-inch north transmission line phase 2 project that is anticipated to be in-service by June 15, 2002. Year 2002: Provide City of Tigard with 5 mgd beginning early summer of this year. Service will require a 1250 hp pump station to be installed along the 42-inch south Hillsboro transmission line at a location on the downstream of side of PRV no. 3-4. Service to the City of Tigard would be accomplished via intertie with the City of Beaverton or comparable swap in water volumes among the two cities. Cost share between the City of Tigard and JWC for this facility is not yet determined. By this time, the JWC will also be either at or beyond their existing treatment plant peak capacity of 70mgd. The JWC plan will call for a 30 mgd upgrade at the Fern Hill treatment plant. The City of Tigard's share in this plant is yet to be determined. 1 Diaf[-FCbruaty 9, 2000 Year 2063: Provide the City of Tigard with 6 mgd beginning early summer of this year. Service will require the design and construction of a 40 MG reservoir atop Cooper Mountain. This project will include the construction of the reservoir, pipeline feeds to and from the JWC's south transmission line, and pipeline service line to the City of Tigard, with an anticipated completion date of May 15, 2003. The reservoir system will be driven by the pump station installed during the previous year. The City of Tigard's share would be about 10 MG in the Cooper Mountain reservoir. Year 2004: Expand service to City of Tigard to 7 mgd utilizing the infrastructure installed to date. Year 2005: Expand service to the City of Tigard to 8 mgd utilizing the infrastructure installed to date. By this time, the JWC will be short of raw water and will require an additional 24,500 ac-ft of storage in the upper system, presumably at Scoggins reservoir, and an associated raw water conveyance pipeline. The JWC will also require a second 30 mgd expansion of their treatment plant and the addition of a 40 MG reservoir atop Fern Hill. Cost sharing for these projects has yet to be determined. Year 2005-2010: Expand service to the City of Tigard from 8 to 15 mgd. Service will require the upgrading of the 42-inch transmission line along south Hillsboro. Cost sharing for this project will be proportional and has yet to be determined. Year 2010: Continue to provide 15 mgd to the City of Tigard. The JWC will require a 20 mgd expansion to their treatment plant. Cost sharing for these projects will be proportional and has yet to be determined. Year 2015: Expand service to City of Tigard to 17 mgd and upgrade pump station along 42- inch south transmission line an additional 1500 hp (total of 2750 hp). Year 2020: Expand service to 19 mgd to the City of Tigard. The JWC will require an additional 20 mgd expansion to their treatment plant. Cost sharing for these projects will be proportional and has yet to be determined. Year 2020-2040: Continue 18 mgd service to the City of Tigard. JWC facilities will require the upgrading of the 45-inch south transmission line or the addition of a 1500 hp pump station along this line. Cost sharing for these projects will be proportional and has yet to be determined. If you have any questions, please do not hesitate to call. 2 r a 1 ru r Draft-February 91 2000 ' Table 1 the J~VC City of Tigard lees from Remarks ants for Water Sere of Facilities Re ulrem SUmrrta Tigard cost Share by June 2001 late 72-inch 1yTI,2A an y+acilities ReQwred first comp service Must ansmission line Year(s) bevel - 42-inch south tr Tigard via PIS to be located water along to be d delivered down this line; • shared with 'WC; wanting 20 ws ong participating 0 $eavert°n be shared am 2000-01 Beaverton; expansion to 1250 by pump station Proportionate share treatment plant 5 TOO pume15 and service line to Tigard; 2002 taut expansion feed lines, and will own 10 mG. 30 mgd treatment P Include reserv Shed with 3VC; Tit Proportionate share reservoir to be Canonire with existing infrastructure. in Scoggins MG Cooper Mtn. Reservoir and 2003 6 mgd 40 associated p ipalines NIA a expansion to occur cl pipeline; ante w Warr quu°e a ssociate d convey G None Assume sd ansion; and add 40 MG I mgd artial o awntionate share °r reservoir an ant plant exp 2004 water storage and raw Prop ership complete second treatin p 24,500 3c-"" pipeline FeTngillreservoir• g mgd water 2005 lant expansion 30 mgd treatment p fete upgrade in sequential stages Hill Reservoir Come 40 MG Fern ortionate share Upgrade of 42-inch south transmission Prop 8-15 mgd tine 2005.10 draft-Febn~an " Table A (ConQd) the dWC City of Tt orW Remarks ater Services from uirements for Summa °i Facilities Re Tigard Cost Share of the treatment plant, shared e uired lete third expansion Facilities R 9 Comp JWC participants. total of service Propoovate share or amon PIS g will have r" ershivo year(s) 1 evet 20 mgd treatment plant expansion partial own among 1WC parfla ants; or shared Plant' shed 2010 15 00 Proportionate S nase ? 2`i50hp• of wate1 treatment ton along south partial ownership aus PUMP station d onate share or ~ ng tJWC 'Participants 17 mgd U ~nsmission line; add 1500 UP 2015 ProPo. ersW. uential stages anion partial own upgrade in d treatment plant exp Complete . 19 se4 mgd 20 mg ortiottate share 2020 line prop ch south transmission d upgrade 45500 h um station 18 mg or add 2020-40 NOW South Fork Water Board • City of Oregon City * City of West Linn North Clackamas County Water Commission ® Oak Lodge Water District . Mt. Scott Water District ® Damascus Water District City of Gladstone ❖ City of Tigard . Cities of Tigard, King City and Durham o Adjacent Unincorporated Areas of Washington County CONCEPT OVERVIEW AND DECISION GUIDANCE DOCUMENT FOR WATER SUPPLY OPTIONS February 17, 2000 FINAL DRAFT i Mwrq Smith & Associates, Inc. En~neelsJPlanners 12111 AM Sole 1020 Noe 269010 - - - - M* Orep 9M 1u M9022 Introduction Background The South Fork Water Board (SFWB) has recently been considering expanding beyond its traditional service area of Oregon City and West Linn to provide water supply to others. The City of Tigard recently expressed interest in exploring the potential of obtaining a long-term water supply from the SFWB. This expression of interest by Tigard prompted the initiation of this study, which is being sponsored by an interested group of participants as identified below: 0 South Fork Water Board (SFWB), the jointly owned water supply agency for the Cities of Oregon City and West Linn • North Clackamas County Water Commission (NCCWC), the jointly water supply agency for the Oak Lodge Water District (OLWD), the Mt. Scott Water District (MSWD), and the Damascus Water District (DWD) City of Gladstone • City of Tigard including the Cities of King City and Durham and adjacent unincorporated areas of Washington County A vicinity map showing the water service areas of the participants is attached as Figure I at the end of this report. Purpose The purpose of this study is to review and assess current conditions relative to a potential SFWB expansion, to establish potential feasibility and to recommend "next steps" in possibly moving such a proposition forward. The key objectives of this study are highlighted as follows: • Confirm "Drivers" - Confirm and summarize the various individual and collective motivations or "drivers" that promote the considerations of a potential SFWB expansion. O Determine Feasibility - Establish and summarize the various known technical and regulatory challenges that must be overcome for a broadened regional scenario to materialize. Identify any immediately apparent or potential "fatal flaws". o Assess Willingness - Presuming that various "drivers" support the consideration of broader regional options and presuming feasibility can be confirmed, establish the willingness of the various entities to cooperatively work toward expanded regional solutions. Identify and summarize key principles of agreement necessary for each agency to consider, relative to a broadened regional entity. • Identify "Next Steps" - Establish and summarize the key next steps necessary to move decision making to the next level. This initial effort involves only the parties to this study. It is the intent of these parties to include others as the intents and interests of the various parties are further refined. 00-0447.101 Page 1 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard nn~~a~o~nnm Existing Systems General This section provides a brief summary description of the existing water supply facilities of each of the study participants including existing facilities and capacities, current utilization of capacity, current status of planning work, and other information relevant to this study. Participants South Fork Water Board - The South Fork Water Board (SFWB) is a water supply agency formed by intergovernmental agreement between the Cities of Oregon City and West Linn. The system provides wholesale water to both cities as well as Clackamas River Water-South (formerly the Clairmont Water District). The Board's major facilities include an intake and raw water pump station on the south bank of the Clackamas River directly east of I-205, a conventional water treatment plant located on Hunter Avenue in Oregon City, a pump station located on Division Street in Oregon City, a raw water pipeline between the intake and the plant and finished water pipelines connecting the plant to the pump station and the pump station to a 10 million gallon (mg) finished water storage reservoir in Oregon City. The Board completed a master plan in September 1997. The existing system has a peak production capacity of approximately 20 mgd. Recent historical peak day demands have been approximately 18.3 mgd. The river intake has expansion capacity up to approximately 53 mgd based upon the installed fish screen size and current fish screen regulations. Expansion of the water treatment plant to this capacity or greater could likely be accommodated on the existing plant site. North Clackamas County Water Commission - The North Clackamas County Water Commission (NCCWC) is a water supply system formed by intergovernmental agreement between the Oak Lodge Water District (OLWD), the Mt. Scott Water District (MSWD) and the Damascus Water District (DWD). The Commission's major facilities include an intake and raw water pump station on the south bank of the Clackamas River approximately one mile upstream of the SFWB intake, a slow sand type water treatment plant located adjacent to the intake, a finished water pump station at the plant site, and a transmission main which crosses the Clackamas River and provides finished water supply to the OLWD. The current nominal capacity of the plant is 10 mgd with a planned ultimate expanded capacity of 20 mgd. City of Gladstone - The City of Gladstone owns and operates a water system that supplies its water service area. The City obtains most its water supply from Clackamas River Water under a n wholesale water supply agreement. Water is transmitted from the CRW plant to the City through a City-owned transmission main. Approximately 5-10% of the City's supply is obtained from the Oak Lodge Water District through a wholesale water supply agreement. City of Tigard - The City of Tigard operates a water system that serves Tigard service area, which includes the City of Tigard as well as the Cities of Durham and King City, and the adjacent surrounding unincorporated areas of Washington County that are within the Tigard 00-0447.101 Page 2 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard Water District. The City has three wells that supply a small portion of the system's water requirements. The bulk of the water supply for the City is purchased under wholesale water purchase agreements from three adjacent water providers - the City of Lake Oswego, the City of Portland and the Tualatin Valley Water District. The City has a water supply plan that was completed in 1994 and has been periodically updated. The City is currently preparing a distribution system master plan. Tigard desires to obtain a long-term water supply and is currently considering four options - the Willamette River, the Joint Water Commission (Cities of Hillsboro, Forest Grove and Beaverton and the Tualatin Valley Water District), the City of Portland, and the South Fork Water Board. Tigard has water rights on the Willamette River in the amount of 26 tngd. These rights have been assigned to the City through agreement with the Willamette Water Supply Agency (WWSA). Other Systems City of Lake Oswego - The City of Lake Oswego owns and operates a water supply system that supplies its water service. Its water service area includes the City and several adjacent small water districts and systems. Lake Oswego provides surplus water as well to the City of Tigard system. The City's major facilities include an intake and raw water pump station located on the north bank of the Clackamas River in the City of Gladstone, a modified conventional water treatment plant located in the Robinwood area of the City of West Linn, a finished water pump station located at the plant, finished water storage reservoirs, a raw water pipeline between the intake and the plant and a finished water pipeline connecting the plant to the finished water storage reservoirs. The existing system including the intake, the plant and the raw and finished water transmission system has a peak production capacity of approximately 16 mgd. Recent historical peak day demands have been approximately 13 mgd. The City is currently in the process of completing a new water system master plan. That plan is considering alternatives for increasing water supply to the City. Those alternatives include obtaining increased water supply in a cooperative arrangement with the South Fork Water Board. Water Demands Existing peak day water demands and peak day water demand forecasts for each of the study participants as well as other providers are summarized below. The demand information provided + extends to the year 2050. It is intended to provide a reasonable forecast of the total peak day water demands on the Clackamas River. These demands will later be contrasted with the At, existing municipal water rights on the river. Table 1 summarizes the water demand information + AMU' and the sources of that information. + j _ 00-0447.101 Page 3 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, -.0y (lntinnC City of Tigard am loll III IRMO Table 1 Peak Day Water Demand Summary Study Participants and Other Providers Water Provider Peak Day Demands, mgd Data Source Stud Participants 2000 2020 2050 SFWB City of Oregon City 8.7 13.4 20.3 SFWB Master Plan City of West Linn 7.8 11.2 12.7 City Master Plan NCCWC Oak Lode W.D. 9.3 9.7 11.3 RWSP, Ph. 2 Mt. Scott W.D. 6.2 18.5 20.4 Mt. Scott W.D. Damascus W.D. 2.4 17.1 18.8 Damascus W.D. City of Gladstone 2.6 2.6 2.6 CRW Master Plan City of Tigard 13.8 18.0 19.4 City Water Supply Plan Subtotal - Participants 50.8 90.5 105.5 Other Providers City of Lake Oswego 16.0 20.0 24.0 City Master Plan Clackamas River Water 16.0 25.4 31.9 CRW Master Plan Subtotal - Other Providers 32.0 45.4 55.9 Total - All Providers 82.8 135.9 161.4 Water Rights and Water Availability General 10 In this section, the existing municipal surface water rights of the participants and others on the Clackamas River and its tributaries are summarized and quantified. The relationship of these rights (senior or junior) to an existing instream water right held by the Oregon Water Resources Department is identified. The results of a previous study regarding the availability of water in the river to satisfy these demands are discussed. A general discussion is included on the administrative procedures to transfer existing rights to new or alternate or secondary points of diversion and other administrative procedures needed to effect water right transfers. The potential of acquisition of new rights is discussed as well as the potential for legislative, regulatory and legal impacts upon the ability to utilize these rights fully. Valuation of water rights is discussed. Existing Municipal Water Rights - Clackamas River Table A in Appendix A is a spreadsheet summarizing all of the municipal water rights held on the Clackamas River and its tributaries along with relevant information regarding each right. The table is organized in order from the most senior right to most junior. The table indicates the 00-0447.101 Page 4 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard permitted withdrawal as well as the estimated maximum withdrawal rate considering certain water supply limitations that may apply to specific rights. This situation applies to two rights held by the SFWB. These rights cannot be utilized to their full extent due to the lack of available water at their originally permitted diversion point (South Fork of the Clackamas River). The table also indicates a major instream right on the Clackamas River held by the Oregon Water Resources Department. Ten rights are held which are senior to the instream water right. Five of these senior rights are held by the SFWB. Clackamas River Water holds two of these rights. The Cities of Gladstone, Estacada, and City of Lake Oswego hold one right each. Five rights are held by municipal agencies that are junior to the instream right. The City of Gladstone holds two rights. dMA Clackamas River Water, the Oak Lodge Water District, and the City of Lake Oswego hold one right each. The estimated maximum potential withdrawals from the Clackamas River under these existing rights excluding the City of Estacada are as follows: • Maximum withdrawals - rights senior to instream right 112.4 mgd • Maximum withdrawals -rights junior to instream right 56.4 mad • Total maximum withdrawals - all rights 168.8 mgd The current withdrawals under the senior rights are estimated to be approximately 60 mgd with approximately 10 mgd being currently withdrawn under junior rights. Existing Municipal Water Rights - Willamette River The City of Gladstone holds a water right on the Willamette River at Gladstone in the amount of 12.4 cfs or 8.0 mgd and the City of Tigard holds a water right on the Willamette River at Wilsonville in the amount of 40 cfs or 25.9 mgd. The Willamette Water Supply Agency (WWSA) has assigned these rights to Gladstone and Tigard under a right assigned to WWSA from the Tualatin Valley Water District. The right has a priority date of June 19, 1973. Tigard's right could potentially be transferred downstream from the Wilsonville area. The total rights of the participants on the Willamette River are 52.4 cfs or 33.9 mgd. Present and Future Withdrawals Under Existing Rights Estimates have been made of the present and future withdrawals (peak day water demands) anticipated under the existing rights by the study participants and other providers. Table 2 contrasts current and forecasted withdrawals to the available water rights for all of the providers currently utilizing the Clackamas River. This table therefore excludes the City of Tigard's demands. Table 3 contrasts current and forecasted withdrawals to the available water rights for all of the providers currently utilizing the Clackamas River plus considering the demands of the City of Tigard but without a Willamette River water right. Table 4 contrasts current and forecasted withdrawals to the available water rights for all of the providers currently utilizing the Clackamas River plus considering the demands of the City of Tigard and including Tigard's and Gladstone's Willamette River water rights. 00-0447.101 Page 5 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard Table 2 Water Rights and Peak Day Water Demand Summary Current Clackamas River Water Rights Folders (Tigard Excluded) 2000 2020 2050 Total existing Clackamas River water rights, 168.8 168.8 168.8 m d Total estimated peak day water demands, m d 69.0 117.9 142.0 Remaining ri hts, m &d 99.8 50.9 26.8 Table 3 Water Rights and Peak Day Water Demand Summary Current Clackamas River Water Rights Holders Plus Tigard And Without Willamette River Water Rights 2000 2020 2050 Total existing Clackamas River water rights, 168.8 168.8 168.8 m d Total estimated peak day water demands, m d 82.8 135.9 161.4 Remaining rights, m d 86.0 32.9 7.4 Table 4 Water Rights and Peak Day Water Demand Summary Current Clackamas River Water Rights Folders Plus Tigard And With Willamette River Water Rights 2000 2020 2050 Total existing Clackamas River water rights, 168.8 168.8 168.8 m d Existing Gladstone and Tigard Willamette 33.9 33.9 33.9 River water rights, m d Total existing water rights, m d 202.7 202.7 202.7 Total estimated peak day water demands, m d 82.8 135.9 161.4 Remaining rights, m d 119.9 66.8 41.3 Water Availability The Regional Water Supply Plan, Phase 2, (RWSP) undertaken and completed in October 1996 by 27 water providers, included an analysis of the availability of supply on the Clackamas River. River gage records were analyzed over an extended period. The analysis concluded that: Water is currently available 100% of the time for all existing Lower Clackamas municipal diversions at current withdrawal amounts 00-0447.101 Page 6 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard • Water will be available 100% of the time for all existing senior Lower Clackamas municipal diversions at their fully authorized withdrawal rates • The instream flow requirement will be satisfied 98% of the time when the senior rights are fully utilized • The rights junior to the instream right will be satisfied 97% of the time when the senior rights are fully utilized and the instream right is satisfied • The critical period of flow in the Clackamas River with respect to satisfaction of water rights was determined to be September, October and November. Pending Water Rights Applications Current information indicates that there are three pending municipal water right applications on the Lower Clackamas River before the OWRD. These are as follows: • Mt. Scott Water District - 10 cfs/6.5 mgd - priority date of 5/23/94 • Clackamas River Water- 77.4 cfs150 mgd -priority date of 6/19/95 • Clackamas River Water - 71.5 cfs/46.2 mgd - priority date of 6/23/95 Potential to Obtain Additional Rights on the Clackamas River As discussed above, the analysis of the availability of water to satisfy existing water rights indicates a reliability of supply of 97% when all rights are fully utilized. The RWSP concluded that water available for new rights after meeting instream and existing rights will be insufficient to provide reasonably reliable water supply during peak demand periods. Regulatory Impacts Oregon Water Resources Department - A recent Attorney General's working draft memorandum has indicated that the Oregon Water Resources Department has the ability to cancel municipal water use permits if the Department considers the rights unusable. Water use permits could be considered unusable if, for example, the authorized amount of the permit exceeds the forecasted water demands of the permit holder. The obvious question that arises is how far in the future does the Department evaluate this question. Proponents of the Department's position consider a period of 20 years as an adequate period to address this issue. The water utility industry considers 50 years as a minimum period and would argue for a longer period to plan for future water supplies that would need to be supported by municipal water use a permits. The water utility industry is currently developing a position on this issue. It is understood that the industry will probably take its case to the Oregon Legislature in 2001 in order to seek legislative action in support of its position. The prospect for an acceptable resolution of this issue cannot be predicted. The Willamette Water Supply Agency has undertaken a procedure to pool water rights and allocate them to agency members in a process that allocates water rights in proportion to forecasted demands. This process was demanded by the OWRD to achieve a rational basis for maintaining water rights on the Willamette River based on establishment of reasonable demand 00-0447.101 Page 7 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard forecasts. The OWRD could possibly demand such a process on the Clackamas River and the participants of this study could consider pooling of water rights if the OWRD so demands. Endangered Species Act - On March 24 and 25, 1999, the National Marine Fisheries Service (NMFS) announced the listing of an additional nine species of salmon and steelhead as ffm threatened under the Endangered Species Act (ESA). These listings were in addition to a previous listing of the coastal Coho salmon, which is not relevant to the Willamette River basin. Of the nine species in the March, 1999 listings, five are in Oregon. These listings in Oregon include the Lower Columbia River chum, the Lower Columbia River chinook, the Upper Willamette River steelhead, the Upper Willamette River chinook, and the Mid-Columbia River steelhead. The Lower Columbia River steelhead had been previously listed on March 19,1998. The listings on the Lower Columbia also include the Willamette River Basin. Listings of the Upper Willamette River species begin above Willamette Falls with the exception that the Upper Willamette River chinook also includes the spring run chinook on the Clackamas River. The Lower Columbia River steelhead listing includes steelhead on the Clackamas River. In a case where critical habitat is designated, any federal agency must consult with NMFS before it makes any commitment of resources within an area established as critical habitat. NMFS has declared that two of the species on the Clackamas River have critical habitat, the Upper Willamette River chinook and the Lower Columbia steelhead. A federal agency connection such as a Corps of Engineers 404 permitting process can trigger a consultation process. NMFS then issues a biological opinion as to whether the proposed federal action would jeopardize or adversely modify the listed species. NMFS is required to develop protective regulations that are entitled 4(d) regulations. These regulations may incorporate prohibitions or limitations of activities including curtailment or reallocation of water rights in order to increase instream flows. On December 30, 1999, NMFS issued its section 4(d) rules to protect further diminishment of listed steelhead species under the ESA. These listed species include the Lower Columbia Rive steelhead on the Clackamas River. On January 3, 2000, NMFS issued proposed 4(d) rules for endangered salmonoid species to include the Upper Willamette chinook, which includes a spring run on the Clackamas River. These 4(d) roles are presently undergoing a public review and comment process. The Secretary of the Interior is required to prepare recovery plans for threatened or endangered species unless NMFS finds that such a plan will not promote the conservation of the species. Recovery plans are binding only upon federal agencies but may impact on activities of others if there is the necessity to obtain a federal license or permit approval or if there is federal funding or federal assistance. The ESA includes specific acts that are prohibited with respect to any endangered species. NMFS has the authority to extend these protections to species listed as threatened. The practical effect of the ESA is to permit the Federal government to create "de facto" regulatory water rights. Under the ESA, protective regulations, recovery plans and taking restrictions independently create a federal right which may restrict or prohibit release from federal impoundments and create the right to impound or appropriate water from navigable waterways. The result is that any surface water appropriation, whether existing or proposed, could be subject to ESA restrictions. It should also be noted that as of July 1, 2001, the OWRD 00-0447.101 Page 8 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard will review water permit extension requests taking into consideration the habitat needs of sensitive, threatened or endangered species. ow In summary, projects that require a Corps of Engineers 404 permitting process or other federal permitting will undoubtedly require consultations with NMFS and the issuance of biological opinions when projects are proposed to be constructed in areas declared as critical habitat. The outcome of consultations with NMFS cannot presently be predicted. It is important to note, also, that regarding potential harm to listed species, it is irrelevant whether the harm will arise from a proposed new facility or a facility that exists. It should be further noted that if harm to a listed species can be demonstrated, then the harm must be addressed no matter what the cost to otherwise lawful activities. Appendix B includes a memorandum from Attorney Jack Hammond concerning a situation in. the City of Oakland, Oregon regarding the impact of the ESA on the City's plans to upgrade a water system intake on Calapooya Creek under an existing and senior water right. NMFS is demanding that the City convert 40% of its senior water right on the creek to an instream right. Water Rights Administrative Procedures Oregon statutes and the related administrative rules provide for certain procedures with respect to the administration of water rights. These laws and rules provide for procedures such as transfers, establishment of alternate or secondary points of diversion, modifications of place of use and type of use, partial or full certification of rights, and extension of time for perfecting permits. These administrative procedures give municipal providers opportunities to make changes to existing water rights. Valuation of Water Rights Two legal opinions on the subject of valuation of water rights are included in Appendix C. These opinions, prepared by SFWB's attorney, Mr. Tom Rastetter, and by Mr. Jack Hammond, then attorney for the former Clairmont Water District, resulted from discussions between Clairmont and the Board in 1991. The opinions differ on the subject of assigning value to water rights. Participant Interests General i i The intent of this section is to summarize the current understanding of the interests of each of the a participants in the study. In addition, potential water supply interests of the City of Lake Oswego are summarized. South Fork Water Board The South Fork Water Board's water supply facilities are nearing capacity as peak demands are approaching the capacity of the system. The Board will need to expand its supply facilities soon, 00-0447.101 Page 9 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard at substantial cost, to meet increased demands. The Board is interested in seeking partners in its system. It desires to achieve economies of scale in expansion of its system in order to moderate or lower wholesale water rates to Oregon City and West Linn. The Board has expressed willingness to enter into agreements with others that provide for equity ownership of existing and future facilities and joint governance and management of the jointly owned facilities. The Board is also interested in interconnecting with other systems to improve the reliability of its supply system. The Board's master plan reviewed potential markets for water from the SFWB system. Those markets included other providers within the Clackamas Basin as well as providers outside the basin including the cities of Tigard, Sherwood and Wilsonville. North Clackamas County Water Commission The Commission's existing slow sand filtration plant is not capable of reliably treating Clackamas River water during high turbidity periods that occur in the winter. The Commission is thus seeking to obtain as soon as possible a winter water supply from others. A winter supply would supplement or replace the plant's production during winter periods. The Commission is further interested in cooperative arrangements with others that will optimize the utilization of its existing water supply facilities and improve reliability of supply through interconnections with others. City of Gladstone The City of Gladstone is seeking a long-term water supply in which it can acquire an equity interest commensurate with its investment and which has an equitable governance and financial structure. The City is seeking a long-term water supply with the lowest wholesale cost. The City's current water supply contract will expire in about 3 years and thus the City needs to consider its options and make a decision soon. The City desires to avoid the risk of having to make future capital expenditures due to the need to change water supply sources or of having to relinquish governance and control as part of a wholesale water agreement. City of Tigard The City of Tigard presently purchases the bulk of its water supply from others under wholesale water agreements. The only water supplies that it owns are wells with limited capacity. The City is seeking a long-term water supply in which it can acquire an equity interest commensurate with its investment and which has an equitable governance and financial structure. The City has been pursuing a long-term supply for over five years. It led an effort to develop a sub-regional supply on the Willamette River at Wilsonville along with four other partners. A charter amendment by opponents to the Willamette River source has led the City to consider other alternatives while still considering the Willamette. The other alternatives are the Joint Water Commission (Cities of Hillsboro, Forest Grove and Beaverton and the Tualatin Valley Water District), the City of Portland and the South Fork Water Board. The City's current water supply contract with the City of Portland will expire in 2007. The City's current water supply contract with the Tualatin Valley Water District will expire in 2005. The City needs to consider its options and make a decision soon on which source option to proceed with. The City has a water 00-0447.101 Page 10 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard right for 25 mgd on the Willamette River at Wilsonville that has been assigned to it through the Willamette Water Supply Agency. City of Lake Oswego The City of Lake Oswego is currently undertaking a water system master plan and is considering several alternatives for future water supply. It is understood that the current planning is indicating that the City has strong interest in continuing to obtain its entire supply from the Clackamas River. Preliminarily, the City has indicated that it is interested in developing joint water supply projects with others that are consistent with its needs and which can realize economies. The City is concerned about reliability of supply and is interested in implementing another crossing of the Willamette River to improve supply system reliability if the Clackamas River is selected as the next increment of supply. Institutional and Governance Considerations Preferred System Organization While there are many alternative organizational types that could be implemented under Oregon statutes, the participants is this study have expressed a strong preference for utilizing an interlocal agency created through intergovernmental agreement under Oregon Revised Statutes (ORS) 190. This type of organization is familiar to the participants in that both the South Fork Water Board and the North Clackamas County Water Commission are ORS 190 organizations. Likely the dominant factor in this preference is the desire for participating agencies to retain decision-making control. ORS 190 agencies can provide this control through a representative governing board with board members appointed by each participating agency. ORS 190 organizations provide other benefits including the flexibility to provide for central capital financing or financing directly by participants, the ability to tailor agreements to meet specific needs and provide specific powers and structure desired by the participants, ability to hire staff and operate facilities directly, and the ability to expand the organization to include new participants in the future and provide them a voice in decision making. Other possible organizational types could include water supply district, water improvement district, people's utility district, and joint water authority. Appendix D includes excerpts from another water supply preliminary engineering report which addresses in detail alternative organizational types for a similar joint project. Intergovernmental Agreement Elements Within the context of the ORS 190 institutional structure, it is suggested that a number of key elements be addressed in potential agreements. These elements, which are not necessarily complete in every detail, establish the basic principles upon which the parties deal with each other with the goal of creating a fair and equitable agreement for participants. The following key elements should be considered in developing an agreement: ® Capability For Central Financing - The agreement should provide for centrally issued debt even though initially capital improvements may be funded directly by participants 00-0447.101 Page I I South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard I. i Cost Allocation Principles - Capital costs of new facilities should be allocated in proportion to capacity. Cost allocation in accordance with incremental capacity increases should not be considered. • Purchase Of Existing Facilities - Purchase of existing facilities should be on an equitable basis that recognizes the owning agency's investment and value and is also fair to the purchasing agency 9 Operation and Maintenance Costs - The agreement should provide for equitable recovery of system O&M costs. The system should be operated on an "at cost" basis and no participant should be advantaged or be allowed to profit from participation in the system. Authority to Impose Rates - The agency should have the authority to impose rates and charges in order to recover its costs. The costs to be recovered include capital costs, O&NI costs, administrative costs, debt service, and "must lease" capacity payments. 9 Definition of Ownership and Capacity Interests - The ownership rights to participant agencies should be sufficiently robust to facilitate local debt issuance in support of proposed projects. Participant agencies should be provided explicit capacity rights that define a supply resource that they may rely on for their own water system planning. S Provisions for Latecomers - A mechanism should be provided for adding new participants in the future. These provisions could include buy-in provisions to existing facilities as well as additional charges to reflect the expenditures of the original participants as well as the risks taken by the original participants in the system. • Participation in System Expansions - A process should be provided for expanding the system. The process would identify rational expansion projects and the procedures for subscribing to the projects by the participants. • "Must Lease" Provisions - With the understanding that the participants in the joint agency would want to promote efficient use of available capacity, the agreement should include provisions that the joint agency would act as the broker for unused capacity in the system under a defined pricing structure. Participants with excess capacity must make it available and the participant requiring capacity must lease that capacity through the joint agency. • Sale of Wholesale Water or of System Capacity - The joint agency should have the ability to sell capacity or water unused by the participants. a Wholesale SDC's - Where central financing is utilized, a wholesale SDC should be established for the joint agency. With local funding, each participant can impose their own SDC under their own methodology. Decision-Making - A decision-making structure must be established which provides for equitable representation and efficient execution of the joint agency's duties. Many models can be considered that provide a balance between proportional representation and the interests of each participant, regardless of size. Alternatives that could be considered include one agency/one vote, voting or representation weighted by capacity, voting or representation weighted by financial commitment, and a dual majority system. Appendix D includes excerpts from another water supply preliminary engineering report that addresses in detail key financial issues for a similar joint project. 00-0447.101 Page 12 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard Joint Water Supply Options The opportunities for joint water supply options between the study participants and others are great. Many have already been identified in previous studies and investigations and discussions. These opportunities could include but are certainly not limited to the following: a NCCWC Winter Water - Installation of a connection between the SFWB and the NCCWC for winter water supply to NCCWC and emergency backup to SFWB from NCCWC 0 Gladstone Supply - Supply to the City of Gladstone from the NCCWC, the SFWB or CRW a Lake Oswego and Tigard Supply - Supply to the west side of the Willamette River from the SFWB for the City of Lake Oswego and/or the City of Tigard a Supply to Others - Supply to others from the SFWB and/or the NCCWC a Other Joint Projects - Development of other joint water supply projects such as emergency interties, storage reservoirs, aquifer storage and recovery (ASR) sources, water source projects in the Clackamas River Basin, water source projects on the Willamette River, etc. a Joint Planning - Joint investigations and planning efforts a Joint Programs - Other mutually beneficial water supply programs Regulatory Impacts The potential impacts of the ESA and the OWRD on the water rights of the Clackamas River have been discussed. There may be other regulatory impacts upon projects but these can be anticipated to generally be project specific. The major regulatory impact on projects is usually the U.S. Anmy Corps of Engineers/Oregon Division of State Lands Joint Permit process for work in navigable waterways and wetlands. There may be other regulatory impacts but the ESA and OWRD impacts are anticipated to be the most serious at this time. Costs The identification and scoping for specific projects, the development of costs and the allocation of costs to participants are not within the scope of this study. The principle of economy of scale applies in any capital-intensive industry such as water supply. Generally, significant economies can be anticipated to accrue to the participants in joint water supply projects. These economies can be achieved by maximizing the utilization of existing facilities, by constructing larger facilities resulting in lower costs per unit of capacity, reduced operation and maintenance costs per unit of production and other factors. While further analysis is needed to confirm that economies can be achieved with any specific project, the participants can proceed with confidence that significant economies can usually be achieved in jointly water supply development. 00-0447.101 Page 13 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard _ tea Conclusions The foilov:,ing conclusions have been reached resulting from this study: 1. The peak day water demands of the participants in this study are forecasted to increase from 50.8 mgd today to 105.5 mgd in the year 2050. The peak day water demands of the participants of this study plus the City of Lake Oswego and Clackamas River Water are projected to increase from 82.8 mgd today to 161.4 mgd in the year 2050. 2. Municipal water rights on the Clackamas River total 168.8 mgd. An instream right exists on the river to provide flows for fish. Municipal rights senior to the instream right total 112.4 mgd. Municipal rights junior to the instream right total 56.4 mgd. (City of Estacada excluded in all cases.) 3. Considering the forecasted peak play water demands of the current Clackamas River municipal water right holders, there are sufficient water rights to meet year 2050 demands. 4. Considering the forecasted peak day water demands of the current Clackamas River municipal water right holders plus Tigard without any participants' water rights on the Willamette River, there are sufficient water rights to meet year 2050 demands. 5. Considering the forecasted peak day water demands of the current Clackamas River municipal water right holders plus Tigard and including Gladstone's and Tigard's water rights on the Willamette River, there are sufficient water rights to meet year 2050 demands. 6. A water availability analysis performed as part of the Regional Water Supply Plan, Phase 2, concluded that, when all municipal water rights are fully utilized on the Clackamas River, water is available 100% of the time for the senior rights, 98% of the time for the instream right, and 97% of the time for junior rights. 7. The Regional Water Supply Plan, Phase 2, concluded that water available for new rights after meeting instream and existing rights is insufficient to provide reasonably reliable water supply during peak demand periods. 8. The National Marine Fisheries Service under the Endangered Species Act (ESA) lists two threatened and endangered fish species in the Clackamas River. 9. The ESA permits the Federal government to create "de facto" regulatory water rights. NMFS could potentially impose restrictions on water withdrawals from the Clackamas River in order to protect listed fish species. 10. NMFS could become involved in water rights and impose restrictions through a Federal nexus such as Federal permitting (for example, through the Corps of Engineers), Federal grant and loan programs, or other Federal agency involvement. Ant 11. OWRD permit extension rules may have an adverse impact upon the ability to fully utilize existing water rights on the Clackamas River. 12. All of the participants in the study have driving interests that could be satisfied by a joint approach to water supply development. 13. An interlocal partnership in the form of an ORS 190 organization is the preferred form of organization. 14. Institutional, governance and financial principles have been outlined in this study that could serve as the basis for intergovernmental agreements between the participants and others. 00-0447.101 Page 14 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard 15. There are significant regulatory hurdles that may impact the ability of the participants to proceed with some joint water supply options. The water use permit extension rules of the Oregon Water Resources Department and the Endangered Species Act are the two most significant regulatory challenges. 16. Joint water supply options appear to be technically feasible and there are no apparent technical "fatal flaws" in pursuing joint projects. 17. It can be anticipated by the participants that significant economies can be achieved by development of joint water supply projects. 18. Collective action by study participants and others could achieve many benefits including improved economy of water supply, improved reliability of systems, and joint response to regulatory challenges. Recommendations Based upon the results and conclusions of this study, it is recommended that: 1. Participant Actions - The participants consider this study as the basis for future discussions regarding regional decisions. 2. SFWB Action - The South Fork Water Board consider this study and take action to adopt a policy of its intent with respect to expansion of the Board to include other water providers. This policy should address the institutional, governance, financial and other fundamental principles of agreement as outlined in this study. 3. Next Steps - After determining that there are not "fatal flaws," a joint planning effort by the participants and others should be accomplished to define water supply options that could be undertaken by the parties and develop the concepts, costs, and agency allocations. This work would be an integrated engineering plan that would include engineering, regulatory, institutional, financial and project strategy elements. 4. Further Evaluate Potential Regulatory Constraints - Based upon an affirmative policy of intent by the South Fork Water Board, a joint regulatory review effort should be undertaken by the participants focusing on the potential impacts of the Oregon Water Resources Department permit extension rules and the Endangered Species Act on the water rights of the participants and others. This effort may include preliminary consultations with both agencies and result in an assessment of the ability of the participants and others to fully utilize their water rights on the Clackamas River. This effort would identify any "fatal flaws" to proceeding with joint water supply options as a result of potential water rights restrictions. This effort could lead to development of interagency memorandums of understanding (MOU's) regarding these regulatory issues. 00-0447.101 Page 15 South Fork Water Board, Final Draft Concept Overview and Decision North Clackamas County Water February 17, 2000 Guidance Document for Commission, City of Gladstone, Water Supply Options City of Tigard NORTH CLACKAMAS COUNTY - VYA`i'ER,CQ~MISION WATER TREATAA NT PLANT yc CITY OF LAKE OSWEfxO WATER TREATMENT` PLANT 1 TI®ARD i WATSii / I . sA~ua LAKE oawCOM l . - ~ .c ;ice-~~' V~ , / iPROPOSED FINISHED \ . WAVER TRANSMISSION 'MAIN \ WEET LINK 1.4 a em" OITY ' SOUTH FOR ATER 030ARD 6000 0 6000 12000 WATER TR ENT PLANT r```• SCALE ~N FEET • ~ FIGURE 1 FEBRUARY 2000 VICINITY MAP PARTICIPANTS 81 OTHER PROVIDERS , /FINAL DRAFT ce g 00-0447.101 .t 1 1 4 ~{T~T T TT~r~T mom APPENDICES Appendix A - Table A, Municipal and Instream Water Rights Summary, Clackamas River and Tributaries Appendix B - Memorandums dated January 27, 2000 and February 2, 2040 by Attorney Jack Hammond regarding the activities of the NMFS concerning the City of Oakland, Oregon, water and waste water treatment plant projects and specifically water rights and permitting issues Appendix C - Attorney Torn Rastetter and Attorney Jack Hammond correspondence regarding valuation of water rights Appendix D - Chapter 5 and Appendix H, Willamette River Water Supply System, Preliminary Engineering Report, December, 1998 i s Im .Mamma low 6 , ,,ti~►N1111111~ 'now TABLE A MUNICIPAL AND INSTREAM WATER RIGHTS SUMMARY CLACKAMAS RIVER AND TRIBUTARIES South or Water C1067 South Fo Board (T6162) 7flll4 M C Clackamas River 1.7 6.0 3.88 6.0 188 Note 3 ou or Water South Fork, Board P3778 1/16118 M P Clackamas River 0.6 20.0 12,93 4.00 2.59 Notes 4,9 Sou Fork Water South Fork Board P9982 8/11/26 M P Clackamas River 0.6 20.0 12.93 0.0 0.00 Note 5 South Fo Water Memaloose Board P9982 1/16/3, M P Creek 0.3 10.0 6.46 10.00 6.46 Notes 6,9 City of P20145 Clackamas Gladstone (T5791) 3/15/51 M C River 3.2 4,0 2.58 4.0 2.58 Note? South Fork Water Clackamas Board P22581 8/3/53 M P River 1.7 60.0 38.78 60.0 38.78 Note 3,11,12 City of Clackamas Estacada C26471 5110155 M C River 24.9 2.0 1.29 2.0 1.29 Clackamas C37794 Clackamas River Water (P27925) 4/25/62 M C River 3.2 15,0 9.70 15.0 9.70 City of Clackamas Lake Oswego P32410 3/14/67 M P River 0.8 50 32.32 50 3232 Clackamas C64979 Clackamas River Water (P33586) 5/20/68 M C River 3.2 25,0 16.16 25.0 16.16 Subtotals • Before Instream lt 212.0 137.0 176.0 113.7 _ eF s2 „ s Clackamas Clackamas River Water P34426 5/23/69 M P River 3.2 6.5 4.20 6.5 4.20 Oak Lodge Clackamas Water District P35297 7/IAO M P River 3.2 62.0 40.07 62.0 40.07 Note8 Cityof Clackamas Lake Oswego P37839 715175 M P River 0.8 9,0 5.82 9.0 5.82 City of Clackamas Gladstone P43170 3/28f78 M P River 0.4 1.73 1.12 1.73 1.12 Note 10 City of Clackamas Gladstone P46120 4121/81 M P River 0.4 8.0 5.17 8.0 5.17 Note 10 Subtotals • After Instream Right 87.2 56.4 87.2 56.4 [Total • Municipal WalerRf hts 2942 193.0 2632 170.1 Notes: I. M = Municipal, I = lnstream, P = Permit, C = Certificate. 2. Flows in cubic feet per second (cfs) and million gallons per day (mgd). 3. The original right C1067 is on the South Fork of the Clackamas River. T6162 provides for an alternate point of diversion at the South Fork Water board intake which is presently conducted. Withdrawals at intake are first appropriated front C1067/T6162 then from P22581, 4. Minimum natural streamflow will support only a portion of this water use permit during peak summer demand period and coincident low streamflow. The estimated maximum potential diversion during peak demand period is approximately 4 cfs (2.58 mgd), An application to the OWRD for an altemate point of diversion at the South Fork Water Board intake is currently in process. 5. Natural streamflow cannot support any withdrawal under this water use pemtit during peak demand periods. 6. Minimum natural streamflow will support only a portion of this water use permit during peak summer demand period and coincident low streamflow. The estimated maximum potential diversion during peak demand period is approximately 10 cfs (6.46 mgd). An application to the OWRD for an alternate point of diversion at the South Fork Water Board intake is currently in process. 7. Diversion is at Clackamas River Water intake. 8. Point of withdrawal is at Clackamas River Water intake. Secondary point of withdrawal is at NCCWC intake in the amount of up to 155 cfs (10.0 mgd), 9. Minimum natural streamflows will only support a portion of these diversions. There is potential for downstream transfer of a portion of these rights. The estimated potential total transfer is 14 cfs (9.05 mgd). 10. Right for abandoned Ranney collector. Transferred to Clackamas River Water intake. if. Partial certification of this right is currently in process. 12. Present withdrawal includes wholesale water supply to Clackamas River Water • South of approximately 10.0 cfs or 6.5 mgd. 02/14rM Cticksms Rights r'.iPm}aAtWP01d1.10111pJdM~YamualdN'C'mM e r 0 t e - = APPENDIX B 1 01/27/00 09:57 FAX 503 656 1092 I HUTCHISON HAMMOND &WALSH 0001/017 HUTCHISON, HAMMOND & WALSH ! j A Profcssionsl Corporation 1 ' 2 7 ATTORNEYS AT LAW JMAITHMA.BRII?=' 21790WILI.AM=DR= ~ TEUMHONE JOHId M BUSruxrt. Iowa P.O. BOX 648 t ioarr a JlvHAIMAOND. soN~ WV-M LINN, OREGON 97068 SPIIITH & ASSOCIATES, W AM D. WAi Stt Email: maiMutthinonetal.com FA= ZCH J (ice 8C31~3 -Also admftW in CA and WA Facsimile Transmittal NOTICE: This communication consists of attorney privileged and confidential information intended only for the use of the individual or entity named below. If the reader of this message in not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of thin communication is strictly prohibited. If you have received thin communication in error, please immediately notify us by telephone, (603) 656.1694. Thank you. Please deliver the following to: NAME Dirk Borges, Canby Utility Board Phil Smith, Murray, Smith & Associates 225.9022 John Thomas, Mt. Scott David LaLiberte, Liberte Environment Associates Inc. 528-0569 DATE January 27, 2000 NUMBER OF PAGES (including cover sheet): 17 If you do not receive all of the described material, please contact our office immediately. Sender: Doris Layton for John H. Hammond, Jr. Telephone: (503) 656-1694 FAX (503) 656-1092 ATTACHED: Contact Report OHD Drinking Water Program from Michael W. Grimm i i i 3 t 01/27/00 09:57 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH Q002/017 . SPH 26 '00 1i:10AM OR HEALTH,DIV CEHS S P.1/16 is • eta, ~S t~w1- ' Contact Report ~K • OHD DDrinldng Water Program .44"A-Sp . DAM- U k.- PWS ID 41 81 Water System Name:Cily of Oakiand County: Dougl Contact & Phone: M=r Tammy. C! ty► Attv.. et.al. Date: T_ annia 06_ 2000 Who Responded: MichaeI W Wmm A.g.@- C n•~,.« SUMMARY: DWSRP - EmLm1310ental Review wi h NIM & RD ' Reason AlerUEnforcement/SNC(WQ Issue Type [ ] Alerts - SNCs - MCL.s Y (21)'.. [ ] Coliform [ JMCL [ J NM [xj Formal Fnforcemeat* (2V) [ J Chem MCL [ ] N03 [ ] IOC [ J VOC [ ]SOC [ ] Rad [ ] Emergency Assistance (2E) [ ] Chem MIR [ ] N03 C ] IOC [ ] VOC [ ]SOC Rid [ ] Cross Connection (2 [ D TTEm E) MCL [ D M/R [ D Water Quality 3ssues* (n [ I Lead Copper [ ] MCL. [ ] M/R [ ] General Assistance (2T) [x] SWTR [x]"MCL' [ ] MIR [ ] Plan Review (2G) [ ] Operations [ ] Other (20) [ j Plan Review, Marts Alert /Enforcement1SNCMQ Issue Type Details: The City and it's representatives along with representatives of Mural Development, mainly Mona Ellison, Joseph Sahlfeld, and Wesley Lannen (plus RU's attorney), Pete Dalke of the DEQ EPOC program, and. Mark L.iverman from National Marine Fisheries Service. The City of Oakland staff was present by phone from Roseburg along with other NMPS staff. At issue was the set of terms and conditions placed on the City by NMFS as part of the Biological Opinion for the Calapooya Creek (receiving stream for the proposed VJIM and the intake for the WTP). The City set-forth with tiro agenda to separate the issues in the BO specific to the WWTP from those specific to the WTP since the WWTP is ready to proceed as soon as the S$$ are made available. The Environmental Review for the WWI? is to be done by Mona at RD since the construction com will be funded entirely through RD funds. The hot topic was T&C #10 (to be renumbered as.#S) which was: "AD shall ensure, through grant and/Dr loan contracts or other documentation, that the City officially conveys (through WRD) a mUftrzm of 0.1 cfs of its water rightr to. instream flaw right as mitigation for the ekmination of WW effluent... RD shall•submit documentation to NMFS and to ODFW dernonstrating the conveyance..." RD had sixorig.objections to being.named as the enforcer of issues they have no authority to enforce. The City rejected the forced forfeiture of it's senior water right (instream W.R for Calapooya Creek are dated 1958, and the City owns THE senior water right of 2.0 cfs dated 1903). As a compromise,-the City offered the irrigation water right (useless to the City since it cannot be transferred to municipal use) that came with the property the City recently purchased (9 acres of agricultural land which will now be used as sewage lagoons for the W'VVTP when Calapooya Creek is below critical streamtlow) for instrearn flow right NUFS agreed, though leery of the date and volume of the "donated" water right. Therefore, it appears as though the WWTP will move forward now. What the City explicitly did NOT wish to discuss at all was T&C #11 which reads: Rim 01/27/00 09:57 FAX 503 656 1092 MCHISON HAMMOND &WALSH IM 003/017 . JAN 26 'oo 11: iew OR HEALTH D;Y,CEHS P.2/16 "R,D shall ensure, through grant and/or loan contraets or other documentation, that the City of, f iciaUy conveys (through WRD) a minimum of 0.7 refs of Its municipal water right to instream flow right as mitdgation for current and potential increased PTV system diversions... RD shall submit documentation to the NMFS and ODFW demonstrating the, conveyance-." For this project, NMFS will likely try to change "RD" to "O1W* ardlor "OECD" since this project is to be funded by DWSRF money. One was given the impression that the "gag order" was in effect by the City attorney in the anticipation of a serious legal challenge to the BO T&C. Legal counsel for RD stated flatly it was not his nor anyone else he consulted's opinion that the federal ESA could be so broadly interpreted as to permit this kind of seizux6 action by N1M. Ms'assessment is that NNM is testing this level of enforcement for the court system to set a legal precedence.' If the NMFS is succes3ful, this We of environmental widgaticin might be sufficient to grind tha loan process of auy-program to a halt if utilities determine water rights could be at sudw for them (especially 4075 of the senior r water rights hike Oakland). More meetings over this issue are coming, and my guess is the courtroom is the forum, so I will stay involved with this potentially show-stopping situation. The water industry should be extremely wary of NMFS's broad power. Liverxnaa's own -coimunents ware: ` Our new prime directive is to secure water rights for instream use any way'we can get them no matter what. Fish need to swim. Period." k hacl W- rimm, TkF1 1~` 01/27/00 09:58 FAX 503 655 1092 HUTCHISON HAMMOND &WALSH @ 004/017 a+n esuRr~ ucvCS.un fCn i ~w 41 04 i~io ~ 1~M JRN ? : ~Q_ 1 ~QAIM_OR HEAL PLV. ~pit~r , ~'}~}iV~ aap~ PP FAX TRANSMjT'r^L 1110 a T,0>. . V. gels afROM Aftids afPlopWW Ads 1bm p~Sal dots l ems a~ibo s~ l W s~►stboa bt UR oc m alyngm ,=d0C *xRoad stodtM b twa.oc qakonlmm ' to ~ poadbls d~cs is~r str 1 juvm~als: ~ oe ' odaltV& rem -P bams odd'ymo haWislsyAm~crysqfpm=csrm=lv,'l d ftago gafkwam taIoanePftmdoa. 41, ofoaofkab r.md*o ia lm of Ueda = b*== h2otw arc. &ftvsodo n icftft stm W =d b=b could aLw auq bkm a s t b amok= ftft, ft offlawm at* ww w wd r C~OO~►sespa~alclaod~~smmnncrsmdas~►fsd1. 3ttt~®t i'8~ stss o~dm fts bialodw c = = cmww szott=s wlM . , ; ~aQa6boaaoTbe3eo~fiom~r ~~.w b~m~s ofa aas3tbsa ~ bkocomhm:dw Al a% T& 4#A oftern wVinm thu&m wds ft deal mad ft *0 cad PWs bano&pn"sfw%& od ofdc Wed zdakwid spy. It 3f hlwa r ft Om rM 'mod bws zvAy of ft sw rftWmmonts peal el asftVwpoW k-t=ra wo* ymposabj the a q, aad tie pow affs~tQ ate also ascaod b clc w Le e 1'~ pta a arigLosi b P to bosimmu of-60 graded af3atmvm bsblt~, ssaa o bedeocls asa~rvs>sl~. ~aSd else, ~eooaify tba . luuoduad= cd'sbr:st c tc:os~ ed'aad fie. oftwdo aWMhow such as mm cossads ash yssmc6 IfA&weIn*:®Iada aofl waswas in so a &C I or*vwqu *r vdthmslc ' a iSl t i9 ~O . 1~ . p " DEC 18 .99 1 1 t iS Pfd&5:. eve MEN n ~~:5 ~ ~8 y SSA: ~ ~s o to Ir CL-T FE 14 kit g 01/27/00 09:59 FAX 503 656 1092 HiTd'CHISON FIA OND &WALSH f~006/017 JPN 26 '00 11:S1AM oR HEALTH•DIV CEHSm wri'-A' •u ~ZAN•34 •EP,5i-i'1gPM Fmuy. do opal oo afhe M t>WWAIM am reafts ft uee of Sarel, lta> duM c=.. welsh, if apil M hW CeispM& tom, ooW4 bjwe or kM egnada crgvdanM MkC la of it* attubw rn (god Nicely, am v*sequsat COE" pwmwbqo nphu dates City talcs can end spicaift n maau to p v wx sqf pettduaw putt. the mk a. or other delasterlow axcsursals !Yarn eetalAg tM wsmer. Astntaiaa dot" City meths llaTa oottditiasa, it 13 tmlilcely that a substan%W qM world oooisr. Ifs is and is tlm cam-ftectkM offt-pipeltae tawm ooa&gation. or tiah pump ow sat &a edmiag dived= darn. T&C 1 a m4 that *43 muodal, vbich eats ba aaata)y toaia tmdw two eatsdltioas. be propa dy. a:utWaoaat db ad belhss coming intro cov = wah fawLig varster. On Bra-posidVa awe, the upbgtusat abbe PW kMkaaa (*VMh"Mt M0e t xW5 acrd ODPW Mea ft at ndaxds) is Maly to t+eduetr mom ft tti mid Ay due m SMWIZ and iaspim Alsoh aldtongb tba degm of nay dkeg cffeet on izividual lLth is Maalt m getaoaa:~r, m tkss etgent at:at9he c~l~Taatge of efllnmt iii t~ r.~tlalfag WN aai4al] ~ ~verlae$r affect wat..,omdlt duct die dry pe%W (dm to l=used DIM nand t%MpeM+tta. deatsmscd DO, ea:~~, 4lae ptapoaaesl ecsaass. v+ill eliutlas►ta: thin atdvecse effoat. Piaally. tbo ~ ~ tlassa rim NWE end COOM review tsmd tsgpaeoved mtod ifieaAow to tine dWesia dam dumld amurc than the design vdH gready n* = or el;,-; o atq► &rect Wadto to fib Ong to pLw tba dam. Z The Clay's eel near asucimd with &d VW and 9V MbMA IMM~ mould thusly have few laagdtem edveaae meta on floe twbimt cn vbkh LiL w~road took OC =hu mdrsaw 'srod OC aw l~Ilfe_g~ !S~ ~1~ tSINI ~RiJ fAelfw>1~ ~_t~ ni~e..1a i.. waw.w~~.1~, Ittg~bLa: ''.$ta e~tlatg ~ ba~00tt.119~iC ~ piigs~l oiat~ Ilat'aw of mad i WuCn2cs; (ind teir proactin tom) vatld Ma* hmvo no 61scumhte effete on ft M*8bft of iwbltaQ dMAML , to *uim no stag t of" madt of Catapoaya C,r nk is waAma" an 4s aenaII of a fasw mahm trines daft the V1 pipewA ar PW fnlatta coessuucd a s attar bmve mW saber eft on aloarbng ar.ttes: rmePtratmrat of ]qo woody a>padaealal. 9l~ :natal smaaaiat of tipt~s that isay vas to ®~ar thae catcc banks :loans: pipdiaa and/or (ttl&cpig u= ft dwuld trotbove n 1 effm on e1ta:er instteaw arsipaic b&t u Ia rate ahoxc cams, hotefe~ter, the ptapa>sed actions wools 1' have asr3vat~ ~ .~a~, Scaaly, • tlw consUmclian ofauff=dum * *s shisabod =din ore a'ad dma vat wwu 10mly kuv& o seditrum. CaLvoa" Cm L ton addisfan. npMM &SMOAL S ~5 ' to degrade ct enK qst wvaft tom=~ ~ d saediaa®vs havt the i ass mffwt prbmy rend wwnduy pnxhwdft CSpaaxo ea' aL 1996), wA to tealrtee cover ft JuyaWk nh aaadds (Bjorl~ toad Reiser 1991). A.0 Whh atnbi&W tsaed cantimmizonn. however, do City wial W togWnd m roue sedimen 3ation Aw 0 disttrr6araa:a oftipxriaa mum, and to oubigam unavoidable impasis, for e%swple. by pauatfstg and nMj0MWq& tent OURS. . 7 aEC is $ is %I-.L7. PAGE. atria 01/27/00 09:59 FAA 503 656 1092 HUTCHISON HAM3IOND &WALSH Z007/017 ' 'tea' 1 i ISM OR sF1q era l rs Whole it sdg~ats tl~ cust~r up~ttreatn peasa,Pa at tlyo P'W di`reraioa dame by adult aslmonide aad doh ~ paSSaQe by lsotl< adult and~uvmills ~tY be poasabk at ' . modem to blo llowr &I cower slow %vah da dm to be et caul s pe dd b slope m kW rad sell fad In M& was. Tilbas ahs mq*cmft is * M 10 TCAUND yau,rc=lupmc==ddvwasttwemmpasae~fwba%adultcadjnveoilos fo=ddswmM thm be a bma&W a of tba Fr,-F sad "539. toe isiaa, ttae dlmhssdan of dttem c saharge m terra C mlc dutlm do dry sesaea sbgnld bMawn wmsr 9Uty' is *o egWlc (=mdvjb y di whm d o*&= ease . wbldt w 1=46 ealea3aaida eagd tl*pt+ry "UL At sbovo, CatapmyfiC=k bas b= demised by ODMto l* wad' qu$VW4hdWd$or 3 . 'Ihe daq~ad+alau of meter q~etitl► !s m ~ I~ ~e Da the ao~ictiots in Sara • wM& occur is the rAmm ad malt' fhil, *lsiols = Mmly m be baeaaUm mgmada U& wm i£ a*" wdw qmlitgr pauMm ere adds. Tbs p *qMd at i = VM 8 b► l3saskm W= gWUy lbr elimlaeoW ilss,tli 4 rgp of WW taftos pba doom iWo *0 mak, bat Vial pot~lly dee~o ~goaiblrlsYred~` lava im~aa+eelt,.tl~eby s$ mo d~t~ of pollwsati. The pmpvm a mcdam would &=n=w&brcjmnft is Wqmy&Cmk ba* by eti~ tlLe ~ of ~ iato't5o eruslc by pao'aidia~ ~o eaeaQa& to vrit14sW,-==a=d ofPW. Low ow0 have dw peal to affiea =utumus mimoai s in SWA= l was. At' a= mcly low flow 1gmv14 WdWS&Ws .msg be+mme s8ass &d In SmInad aSss ~`h-Y- `-a""i be mm vdnarablc to psudatm f r ba& k4W fah and by del and avim predatats). a dv weer duality {cqcdagy high water tempemm and low &udved am'sm aa), mid am d== d m ldar+ea wluta 1w -Aw mina raids ha ft mm m lea pools or pool sad titles rea*m at tow flow kve34 >t ti c of paedadm sand of m ads vAeft quality c=dldom is M* to be slevau4 ad flae ability of b&vMuete to > to to t sui>abla mess Cm'b=xy stoma, fos c=*19) b olb= coed by shallaw rHav dom. in addWan m dhimt effam on individut! fish. salmaWd ptey sp rl= such as aquatic iaveaubmes aimmend. viabMW 'Voile the on of a~ low fio eats nay U only a few hmn or dga6 wow or mast of %e adverse affe= a moda cd vA* low waaflow are "y w be aa>amly S~m~itL ~ ot~x . e~sa vvbea iadividml ualmaoid= a~ able t~ mar+dve tlac =Www amMm s rr=tgd by 10,E su mfloaoti Wr asp ofgio%6 and caodieiv® Lamy be af'msmd, wtdah cauld lave tn*llcsd s ft wism s ovivd ad =p m ttcdvo MVPM e. j, sehs vie R a mdW; 1 •teai_ „ (r t mss- Tba U.S. GmlcmjL~ Sz-.%7 foa• *c&z wd case ibavi e ~ ~giag samosa on GYmBc. Baenot an au ~ IYS N~atiel (ec ~ raf le daai~e a~ mica'; p~loid ®f ee~~l 19~t9f~ tkw USA ealeu~ lost ~ tl~ raeaaa mtffiual fl®wr at 3>wr sae is ZDS Cataula~ enelti arsaual ~o~d ea t'hA rmavm a DEC to as toato ~aee.®es 01127100 10:00 FAX 501 611 1092. HUTCHISON HAMMOND &WALSH IM008/017 ,~~J" ~rr~1t•,ts~L'~ OR nGF~ -WI'I~J* i JCJ.7 Y1IJ.1pp~ t.6y jM t tam. QV*a SAN 04 (dlC7ri• 19Ph{ . 'P= , dminsge gm 210 rdW, pmW of==W 19SS-1473 Emd 191 ) It 478 W. EW" the bawaalTd owl trod oft= = ONA twi= t w as Inma dim at ffio sr,, al>ataatlaly mom flown 4win Idy, Augaasf, aaald Seepta;aa ba ate ab~ tvmle& u large ale 1bx daiL Og spy is Fay on ttas 9bd five dws of Sepumbw 1987, ==daft' NcqpM 1 = Am $A to Ll cfs, vAdk How* at the Oal&md Up rapd 055 cfa to 1.1 ch. Mw di om bdcwn the w=rAr amt ez jr W aum gat tbetwo situ is bUly dw ptincipAy tai irdgaign.aad alunUp d Walw willftwaja a6ar tisane inbsudbse tow at mw adw nannal pkcnmam% bamus USCIS xcme i = now &d Raw acttte 04had Is cqud to ar ex c r PP d wt of dw blunparid gars daarlag the sum=. For MOple, from MY 11 thioalih 1s. 1998, flow It Cl 31 ue t fmtld pp rmVed fta 33 to 44 tbm & 2% 198$ maw at the Maitland l1e 9 99 5 to 12 cg's. wbUe a t Naanpa W Rom nnipd from 1 t to 13 ch. 7ba City baslds d a ne=w watw !hilt an Calaapoay& QWX tbait 42 eftblteb and in 3R9. We= rigtb fa i vk=m flow we hold by tti State of Oa+eM but 11um an rclsAVcly j=iQc. having bow est9lisbad in 1958 and 1974. Tb a vob in o of file 1958 0mion vn=.d& Is 12 cfs (mmvaad at the Vw%A), whila lira; 1974 iris Raw rkW vary fcom to to'804 c0'e aepa9adlq on to W= atad non a. V am riglum wAla to aaada 195812 c& bsbam ftw arc aublisbcd as Cokpooya Oak q*mm d9ta CiWs as rwt~pala,lt cf dlvt=~=°.. ud 7.6 cr% ~Qaa t~J ~'8 C"$'I.~*~:.'~! ~ (L.4Ta..a w.wi '~.°.w5 ~ ~ • Mm bdwbm ttba Caklog pp ad alas mtuft Of Caqwp ag* w11 0 U Rives west aboat 1.011 Cs for a gad sated C=Wuft *a Cry's 2 ah) of 19.496 Ct>l. I°llic taaW In divided bccwem SS SqsatC !lilts; s ffimilst auatba af Cftoop O wk water sighm whm asses joaavr to ' Omgo®'s I9S6 i~eaaaa mtgbt8 ~ asist. . Theca cai~, wW by jwlcr water a h 0W= am auSpaadad vA= w4d= wa a ugbm ' cazsaot be unsc Ana a plas~wl ~ aranrx slgltti tvfkaa do rant v~da$wt1~ told vola~a+ that: is 1egglly t~;ta atsa; aodfor slay ~ make divesaivna . !<s is only avllsas seadar wares d0ft hold= cam0t whh tw dm vaiamm scaly =nded is tbeirpaicaity °callcd." At ruin. poasat line Rw's larall wamum . juda u=% to suaw sutfficiat eAr to ' Tt~l ela®pol~n2 of divacstaltt ~tbs ro>maiy sa:rllor eat Aa laaavita6Ua y of slams dram . is that the will rot la~lata juo>ivr utafe~ ®t1•fkaw is lased at tffi user°a ' point of divrssicn; Uk =1 kstriam son M=m The obvisfs mods cuoQary-is . !bat ! ~ ~ l~ tits poser of Ic adaidaa to snails! b7'selale~ a tight . bold, dw W= am as the Oakland gaga to ummis in caupoop ; *A asmy also lam direst mcaumm oaffiammftwMa 11w + ed depth lu tbal ca of ms's 1958 1 right iia at dw mouth of Ilan ca tcm* ndW 01 but vAtb the Wl tam afft d$" of amiam to the 1958 nlumaaal Clow AOL no water Ymuld mah the ta+oatla undl flown above dw and swats DEC 16 089-11116 Pa3tiE.685 01/27/00 10:01 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH IM009/017 . ~ wow . .v.n.' r. .......u...o r.. JAN 26 '20 11'•12AM OR HEALTH DIV'C'g.EH9`u wire. ~+r. ~JpM 84 ,'oP•easj9pm 4, appoub iQS' u t 2a cfm. may, btftm ftw vob= as ft Oai lwAl pp would teed to ba ebm>tC a efe bo$d1+m Cdvpwya Cmelt watw weld !etch ibs Umpqua River duowh =raw ftw. '!Tale is assumin dug UUM7 b k4aim ee0m flaw, Grad li~W plus d® D~2 brute ~b al v®lt.t~ vxitb4a tho'eeabl:o Ac law(low levels in the eoawtcn4 Ce V06yas Crock In'buW= ass q*AAy reds to i olMd, pabia CUM William. WM, IMI /Og; pets. etazam) dad so do eat emt tbote alttfteaa flow to flee etcclt. Tbo City of5umarlin aumdy talsom t golf saw ae veldt im WW U=awg pleat efflunk VAac th City PwPom to isf4w Apse vft des WIW nvammmplselt dounm No csdmvn of Ivio wa r+ 1 1 flow or spew valer cam-budoo is a vdW% bzt *s pnZM and hay$" vA&h a* do pw4elm bw4daiies of C.alepooya C n* briptW divetsions do am gwerally • beeesSt ova-~a8teialf, . As noead above, Jammer, isdiwi&aat vira®oe as~S>mldos eta that vpketly► di rest ft fall t of tbeit tight emdi»ly. As a sale: oftmab,it9a Ii me y tbuoWy abotd Hof ewt*W valums of aazariS0 Sm bftw€d dmwa st spy p41cWv ti8o~ dasivg the wgetm sawn 6)m VAIllams, VIRD, gam. comm.). A;Vbiee$ *a appe=h=d0e1, dm the 12 ch 1933 instremm Saw r101 on Cebwaya Creak Ib Ilkdr m be exec v &wb arge ist the oakl$t A gags d aboud 16 cfs (dw 0,9 nee &-Aw t = S go of pWor water deft 6tw= OzVwd gage tell bash of sic plus 12 aft lu a ,1a1 fimu • PA dWduqm below abma 16 cS . at t* Aaldi aad gaga 8om as Rho month of C m& would likc1 r be neda and lei' balder !a efle. maeause 4 e3e bglowtha gage ~e seaioc to me 1958 a421f3L Y w DW=tr oar fiW XCinrkd0= (arc els=Wek ri de 2.4,. ?be adb ve anumaiNfilearzic-d -s fmm tribubmim ere, bclaw *o ©aWmA gage, vAiLch in Mmeily a resonabl= Bw mt low Sow iaveiL ff this maq: fth + ic6ced, ih=== wrier cmay be available for leb+eam flpws arm isr pum (daps onto disamp).. F igeas 1 lllusaates eun=1 Chlapooys Creole iastctrim $owa'at fm iafl w volume, based anvi v at desoae6md above. As the CabMya Creek d Wngp dmmw bJov 4 ch (afi muzttand 14 tine OW41md • gaga), ad®tivrlgr ~ ti~a leelders w+owld begonb ba regolano~. 73Ae aaaeler . wow tight and= creck Oft *c CWx mumps! dg* i9 Anbdgsft cf G2 eft wAla dhcrsam paimR at about esoele mile 2.1. Su. in 9=W, tM pmem ef'tlds aamioe baipum ahoWd awe a iaitftd =aunt afanfice Bow b wM t12.1 nflaaffin momb of tbo aeeh, as Im as three arm a fm tenths of s cfa ftw as me wook=*w the magi`s veak (W w 2 cfb) at+e satldiied. ~.s a peaJattral asa~e, howsve:; . 9btn the ®v, yeiratiem ~ozet ripatiasl - vt~tlsn, s+md wl~rfsoe ate may b &aad tbo eaeaic 1 to ebn 1w g' 12.4 mils, so** valtatrle of w=that is nom9myto ran am aws diversion point (4mbs ode of lour =ck flow) and RM gock n& 2.1 is ==raft and vmiable, burls Iilerl~► to ba s tbaa the L+aoeds of site irrigarar. is DEC 16 199 11918 tasiaE.887 01/27/00 10:01 FAX 503 858 1011 HUTCHISON HAMMOND &WALSH 0010/017 f ,0Q „ .1 ,.l~M OR W-Pi_T D }~5at tarvaarw aa~ JRM 04 • ~..~419PM b. ~ed'tiitis wowd It =m ffia vcftw oaf t# a v tm m CW vz bo "tp v4 f a • ~ would taast bs 1~eb ~ ' a the att:tsar~ ®$v . tb~ e~lc. aad 1 ~ ~ vas t3~t~ tpe~ daft tt~ otQi so ebom Allot tits WWvmWd elunadtta~ ~l'a tic tlfi . Wbgo d* vuoeaBd rise ~ eat ~ ~ leas . &min * &y saw), it waidd auc tttdtassa wztmvckmfuthm=vsL dwptto and mdom waaW air ift CUy too bct m@mwmw 08* i to mad mar webs ftbo and w ad= Its of a lain tlt$ - c=kWowits atn Ott aff~ a va~d~ t~ tht: og . of Bowrs is the cm* (ps km w ask ndI&Z1) dating lave i pedQ& wcWd be reducaL ►.t aft ~ tlaa ~S~ dry ~astmiS alaotas 7,00® • 3Ad, wrbilzga3+lc iv~ttl~ ~ ~ ~ l~Y ~ 9 3SO,OC~! mod, '1°bi~ ! tit ~a3 t~ of ties ~on Calapmya Ctee3c #1®w v®9tt~ Itd rhea ~ the and 9a oba ~'ig iD00 , wbi 9s alb O A3 a& Usimg rise mean dally damcd ft tt =awh cf MCM sP4 mm= bvicd am= nd ka a64 on Calapaoya Cga: flow wouldb® albwu 10 400 bpd. or absaL0:31 cfs. The papasad acdaaw wcuM n*xA a 4, by abma 74JXG , Md vmuld Lmeam paak vie dmwd capod► w about 72A OOO Sp4 se thc vcdm wanld•diowtw 0' w dhmat a m ° vch-im dmWS 6c smmer w d sob IhU ofup to 794J0 pd. W*A is abaat 1M c& Btu autmt tier aaffea efdo aapa ratloa sf ta *V and CW uvmm is• a &Ivttdoaa 2031 ch. Oise wt eglaat ofthc p%xmd taotZotta is a nwd a is the subjwt r~ of Calspooym Cmk of f mm • 0.b 15 efs 0c voles eftbia VV a Mua* up m abmc 092 ds (41to vohmw aftbe fib' dffmm PLO the i sd ea edly► of dw CW gdm)L DaU pulsMW W ft USt33 fm the 1937 9!20901902 a1baw to t$tg =am mbdm= daily VowatThe Cakbnd 3p ww a► obcaa 19 eft Wd vu Im mam• 1 cts for Eva • of s3; se3e ltrbbe 1. Ian dim d s96te Oakland paw= lets tta 16 eft (aboett tiro val>as>aa wary t®pat~v3tic the fii! 1!33 f~tzrmm fiewxW w a ftmd at9W days dtuaag this pec1~ ( 1), whtth is 4asu caa~lPoft6atatal ol'dairs 1~ Jtme i• . through Cctob= 311a6a Ww*n days ioWavesidw). 1bs sae dam ghowto mm di=A wp artbe 3apvm llss fim 16 is An l 3VP ofdw dipin Aupa and Septmber of &m Y~+ 2!232 5g}tt@ is if the y vantty'ems ottg~ ~ 195'1 ~ o~ diacbas;~s ~ ttu 8~ ~a !2222 ttsaa 4 efb eat tb~e +ralmooe . to aw 12Ow = *a0 of DyucwQ rA ot+oW of 3310 ftv a'~m 1937 tbaetagle 1996 Tab3e 1} T~ is olt~a dairy lm ~ &ep . dorm tkis p=Ivd, sod 33% cf the dsys ismAd if 2993 and 1997 area vQduded. An cJbi d above,19AN C& of ~ tf o~ soya ! ease ~ rim 1938 Aria sniftthakotuhnswu flow s1~3L to fate "Miar i mipeom md d do dzbm as wzU as o teas tree ofe1~ oi'9t is°m rS a 17 DEC is .3i I r e es PAtitti r~®~ 01%27/00 e10~:02 FAX 5c033 656 109922 HUT'CHISON HAMMOND &WALSH 0011/017 HEAL I M D Y C it rai i iM~ .~u.i -eto.uru 599PM J {~~26 ' 110 1 f!tgM OR JAN B4 ~•1~.i. • , T" I. D&y zean at ft UM "Oal od fte" (1432OM 4 _ 11Viaer Yame Ud a 0 ) 4 cfk~ briow 6 db 8989 C91dIS7) 90 1988 Q.OS ~/8f89? 24 95 1989 29 017189) 11 193 1990 Z.6 (+1r151~90) 10 93 1991 1.S 1) . 38 77 1993 0.49 (w4m) 33 Ill ism ss (10/i2w 0 2s 1994 0 (Vl7JK 81I W94) 49 1993 3.0 (W4i95) 5 nm. 0.0 m9m) 119 , 63 1997 3r6 (8/14197) 2 s0 1999 33 (9/8l98j 2 53 Amm-! 1°s 19.3 17.7 24 exjav$tba mcm ==oaf CalqmyaC bytU C * { 031 st), ho e 3t is?ilteiytba~ a~oat9.93g ~ imilo+v to t~ meek ®a tb~ ~ioa ' luftm to CAlqmM% Cmc fmatba sbom 9.953 cos eat ftndn sme of the sadr aia w bt. 0 vvOMft &=%Ica of E by "MY• Tal"s 2 3.4. and 5 dlawd o. on s wiarvsm as wumftvlt @ooa' Acutse afled oesk of Calspocya Cmsk as tba cW qumuwks ww dm=7d=bgdw dry s aad hmom im?w in mw4ows ai 6c OakbW pp vadtP i g 9o vWkbMb by 60 MY and dmmtslng Vd& tw wbS= ed fbw to &W Vcb= In cdmpooya Omdc iauqmvd" of usSm bySe Cllyo and tie ' afi W at. 7lw offt for o a snbgwdmvdww=d the nkvwdt&u and fp= idmvad fi m d s mp ae svanne tbasY ~ > ae~oDt po 1~ ®TLL'SCC~ Gov saw to ~~a i ~ scu ftoa>,s. abas ~vitba dbe ==k daaaael Is DEC 16 1 9a ],]ail PAGE.aIa Igo m r e~ o ~ a A• illy 3• a Ise o its ' ICU • n 16• . Ila(q1~ All ~ 11a. .9 lid to A all t0 V A la - . . ~ o yTyT.T.~' X 77r ax.)! .MEMO 01/27/00 10:03 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH 40O1J/017 r te' 0 ' if: NAM OR FEAO'DTCF ~ - - cur i .~w •.i-.. i.,~~, ~ ~.~..w JAN 04 '0E• ~?!1A9PM . ,A.~re+ ...e s. je Amm et t_ L n 1; OA eke addit~a~d w sv d teaatlta ft 324 dep (1"6 tt OJ 46 $ddWmd ~ "d reanlta in233 d ra (,~1.?S~, anr~ umblu23.8 dep ba9>ae). dllt Wgh about 02 wvWB be Pie wi& flo propaUd dam of the =wPW 9s10=. the d 'w *e wt+W as *M• vaoeald>~ ss~nlsood M gsavWdtd CWs ad8'dQW vdduftvwWsvcWd bd wts of *v G'f% and w v'A,oulda~rtz i&o~ . . ''ndlogo~► ~aab~l.1 Glow aft o :,,,r'°-°s &am t ~p3tuofdhw&A( isddmat atek Ias~1~,9). T 0 paeposod "imam *fee ova pow of 8& on bwam so" ludw wftwmsch tamer. flowvW=q in d& gemb at Vvw d 1dWw vqk mee t t e of the IW td W ayuema. Pis= 7. Awvw thcia' 1&tw es a pabd lA: ttttder~vtasl t~► Ie~taataap~EDciadowvoi~e. As t~ b®aamf~t~ta~lti - ' aim Bass, 9awvaSam®itmthat 1.1 ~ maid lay ' by'uw rapdad cbim p fn the pabd of'd3vaubas, eqmddly a to lowm Am lev" only uv*z the ofd 1 z mdefiftaaa! ?w bar * Chy of==e d wu slam 0.55 c*hvwavay wuu 6 nw& ibe ouv=t affil peoosod ~ d3vat ~ is8oeed os iaolaeof This bi 6c tam wbich thvCbjr wu Wd wUhdmw the la Waftbe Calagoeya Gnek tow vt9b tLe point of dLvadcd In Sm vxreW locealoa. o$ is tatda~d ffiat as i~ flee Iotvest > of Galapooym Ceork ~d ala+madY this have bem =&=A to is®lakd pools wdcr Wows muchhilt Haan *m cmd&mdin ==Ado, Swo lnwp tv 12.4 miles (14.S ssnhm 2.1) of s m `V*M sasssm igtbe. Chy 1maD to vvit Amw AU of dw avek's day to sad* ks t at the c=mpolat of diverslm h the City vYCE.1b to mow its pokst of Pw divntslm in Cry ]Ih-b ".4 das edditiwl n=h wiabodtt imvuw= Dow would ba mp to dwS 13J aa11aA ialmCk as Lq%J==m* 4. Sammm gt= M ~►hiEm t~ D~aY of a v oa a . • &~1tad L1Tl; coAtlm>st tt~. @C aed mo w®11 amT tts~e3~ ~ of . tits l Wdmlogk dbcb oft$e m embe eslatdaoed.it le d!ffistalc~ p tlm MOW eta asf the prop~ad tt ties of Calapmya Ctsaak bte of t~ • *E00 spw= Acd the leek of spslfee dam. tffim to 60 Owa v/ aytaem,AndoMe low saws in Cdqums c dteto hawsm ad Sqpwaa& W is alm 1iEaely to be ad ,zAw DO sw MWY be lowma ding theme &wo torus- 86, wwle the dbsbwm of ww diumal llm as ve drat - tffm an 24m votttaoa dttt Aogm =A h v d am ]mars taws smom . anal am is ~ $ep~b~. detest, ~ . 25 MEC Is 695 11 :x6 PAGE a17 1 sy7Y i 491 fj 0 w all VMS 313 a ad,~ H ~ g s r0l./27 10:04 FAX~} 503 656 110y9~2~ e~~ ~HUTCHISON HAMMOND &WALSH 1@015/017 "I0 11= r4A M OR Fit~A.Ili DLV [x1'•°" JAI 04 '0~ ~.4~~.ht =Amw des Jo ofvw tad PW = 71m&cd why= of ~ ~ie~it~od eod s ~ b~ a mba~ra. . . . Ia ad~t®n ~ airy . it t~ep► ha ta~+fad tt~t r td ot'tit~ ~ ovum the Y aftalks a t~~BDtfa9l '=NWT beNeves. .the pedal-l its of i d aid dmk im &gCiYaaa iw d vusald d~ t~ read o~~i~o Ise . dadopmed into = dyzl4 do pgpmd G o&" wammatmuk im m tea wa aYd aw oaoae. . otaww C. cannutt"FAW& era is SO t as ~ Staff ox ` , . . s~ia►l~,„ ~ ~1 1 ~erd~, ~ ~ sgsta~~oi oc~ altT$se ' area of~o ~osleeal a e~l~ctso " 'flea attda~ ~ ~ ' C~crs1~. I~Se pa~i ~ ats bcWg Car bm mvjewedbWjAwwy=Wo Ana 7 anoUbdMPOCCUL IM 940016 m ul pcj=.g ad= tots taa36 action 10 aftfeaMvnll be evabdM is ucfi RL 7 a mm mdom mm*m tlti a at* =I to tm peed a do . I b sae RwW a of ur a now. or io wda*, Buse avAprime aadvid" vita rho sotaa~ aeeaa eat tvptetd s~ a to t~ r a~a°s. o ~ulvsta seal Stara alma tv11 ai~aor' eos is NMMa===thfftZw P6dGE - H~~ DEC 161,38 111:38 01127100 10:04 FAX 503 616 1092 HUTCHISON HAMMOND &WALSH Q016/017 JAN 26 1®0 11:15AM OR HEALTH DIV CEEB JAN ®d (D &N]=)N COAMNIOAUGNS ON E:t BOOV16/99) nuva5lavigm mv.wpom 0a -tb OWlo e- Lf. P-J;v- im &c a o~ ~ ► 2, IM i kg Of too hm Wt fti AMY wA$fpsm'bj%looks= aukhabi4seinto - oftbepmdww. thep 4meA "m is umdmm w& to a=z and o . , 3• vtt _ Anwim=e 3 epecm=uy dedx 1 obl"maaa 818 &wdy SppEis" loft ate. 4. An vladcwrdvn no Gcd" fiewiv Chumd On- ~i ®ccvr 6 Tn~ ] r/c. 3~01~8 iba~.~ a ehaas~ by m~ ~ a or . ~h-p~,~ a ShOU by m9DWna St SU fiRK& T ~a sips :site ~D pct /c. 6. S•ra~r,.r ~.ac 0 YCAVL A3W ;4Waar ►w ch wvodbyohs Chy crib 0 sZadtaf w sfdawwafil?W17 da be %mgle -rre- p rv®QS70%ra'pvWi army _ Cr1nn.~. aua~wE t}as Panl;wz Pam Gram Cbbi~-W pbMw dub=" =mm 69 t ' ~t be satB.s~~tbt ~ ~r . l s~atl~tl ~ P°fi6~ a ®87 Mac 16 1,88 11231 01/27/00 10:05 FAQ[ 503 656 1092 HUTCHISON HAMMOND &WALSH IM017/017 'JA~fV~6"0 i "TOAM OR 1 EOWD "EH~neni yiN.~aae JAN 04 'eCn&; •at 0. Ri?e11 "and desigm ostmb f w-tP st*opw s~ ~am ® s3sE 8tau1diho o. prt 1958 ? L~..IG t+r ease: n - tlatthaCW • aim s~Il ba st ~ ,~.,~p ~ ~ d~2® fzw zl&vAfhin 30 days afft folt t? KILN 11. Zz~ ahSll Sys lla~Io~ o~ r tas MY lbh= =f wA&= fwc' wd ]?w Im "shit dw to s0 FS ®d ODFW tbc + ~ ~'1i ~'mod ~c W~ iv° ~ fu -.a~3 ~ ~ : ~`..°..'~~9 , ~ ~ ~ ~ • t city. 12. RD !b0 caa0. th= giM and/or IV= Cot*mds cw odW thattlho CRY &vel6ps=diLmjd= s K ~ by ~ w z'P "am- =mmm Fume iy. 7[1a ghs tics 12 Mood* oftl=&A-0 aftMUb WKWA 30 &P ofitl 13. RD shalt a sooe]!ec llama a' tht de cky demos Am agonddidiwor djve Cd%wW6C=k bsyWd*e 12 Cb 6=9 is pwjecosdwomtzCW& fwftMo#=y whhcasr S$onml AV=CV. er oth= mlov" Padua 14. ID"a=r, p=wW(V kmM MMM Of 09m a, tbu84b$ City to mbidds ~ RD. ft U.& AUV , or o nlevant F 1 dmM do N WS ftanbsev msaes ofFt need for m=mmrlnfftrt= f 9aCabpoop Cw* cr®ff~ onk fto 2 ' TErm P_2? DAC•Ia Igo 11:aa PAGE.Q~B =PL P.14 02/03/00 09:10 FAX 503 656 1092 I HUTCHISON HAMMOND &WPLSH 0 002 UTCHISON, HAMMOND & WALSH A Pm&ssional Corporation ATTORNEXS AT LAw HEATUR A. BRINION 21790 VAII AJdETTE DRIVE TEUMBONS JOHN M SU3T13tMM, MAO P.O. BOX 648 SHENF m XA33ERGOFF" (503)65&1694 JOHNIL RAri MM. JR WEST LYNN, OREGON 97068 JOHN C. HUTCHMN , Email: mail@butc6isonetal,com KC9AE.D. WALSH PAX (503) 656.1092 • Alm cdm[tted is CA gad WA "Alan tdmitmd in WA Facsimile Tran'smittAl NOTICE: This communication consists of a rney privileged and oonfidential information intended only for the uee of the individual or entity named below. If the reader of this eesage is not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby tified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this Comm 'cation in error, please immediately notify us by telephone, (503) 656.1694. Then& you. NUMBER OF PAGES: _ 4 MIM0RAND UM TO Dirk Borges, G neral Manager, Canby Utility Board Denny 19ingbile, General Manager, Damascus Water District Ron Partch, Ci Administrator, City of Gladstone John Thomas, eneral Manager, Mt. Scott Water District Dan Bradley, I terim General Manager, Oak Lodge Water District Scott Lazenby, ity Manager, City of Sandy FROM: John H. Hamm nd, Jr. RE Status of Draft iological Opinion Concerning the City of Oakland Waste Water a A Water Treatment Plant Projects DATE: February 2, 2000 Attached is a draft co y of a Biological Opinion concerning the City of Oakland Waste and Water reatment Plant Projects, as well as comments by the State Health Division. ThisIis potentially a very significant case as the National Marine Fisheries Service S). is attempting•to impose conditions that would require the City of Oakland o convert .8cfs of its 2.00s water rights on Calapooya Creek to instream flow. The City of Oakland i • a small city in the vicinity of. Roseburg with a• population of approximately 850 people. Its Waste Water Plant is presently in violation of its NPDES per it. Currently, there is a mean daily discharge of ICE C®py 02/03/00 09:10 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH IM 003 MEMORANDUM TO: Dirk Borges, General Manager, Canby Utility Board ' Denny Elingbile, General Manager, Damascus Water District Ron Partch, City Administrator, City of Gladstone John ThomaG, Caneral Manager, Mt. Scott Water District Dan Bradley, Interim General Manager, Oak Lodge Water District Scott Lazenby, City Manager, City of Sandy RE: Status of Biological Opinion Concerning the City of Oakland Waste Water and Water Treatment Plant Projects February 2, 2000 Page 2 effluent into the creek during the August and September dry period of 74,000gpd. The proposed modifications to the Waste Water Plant will reduce those effluent discharges to zero. This will be accomplished through a series of sewage lagoons. The Water Treatment Plant improvements include construction of an intake at a new location. The present intake does not have adequate fish screening. The new intake will increase the production of the Water Treatment Plant from a level of 276,000 gallons per day to 720,000 per day. Calapooya Creek is a tributary of the Umpqua River, It contains listed cuttlk-r-n-at trout, .......1 s.....Lon aad steelneaa, as well as associated critical habitat. The City of Oakland has the most senior water rights on the river with a priority date •of 1903. The first instream rights on the river total 12 cfs and an appropriated date of 1958. The key emphasis of the draft Biological Opinion are low flows on Calapooya Creek during July, August and September. The principal concern expressed by NMFS was the level of flows five miles down stream at the Oakland gage. NNNS concluded that the instream flow is reduced to below 4 cfs, an average of 19.2 days per year, and that because of the elimination of the present effluent discharge from :the Waste Water Plant, this would increase to 19.8 days. In regard to increased withdrawal at the water intake, this would increase the days where there was less than 4 cfs of instream flow to 20.4 days a year. The draft Opinion basically concluded that there was a zeroing-out effect from the Waste Water Plant improvements because, although, the effluent discharge reduced the available flow within the stream, the negative impacts of the , effluent discharges were eliminated. The Opinion noted however that the decreased flow, because of the Water Treatment Plant construction, could have an impact on listed species. q 02/03/00 09:10 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH IM 004 MEMORANDUM . TO: Dirk Borges, General Manager, Canby Utility Board Denny IKlingbile, General Manager, Damascus Watei District Ron Partch, City Administrator, City of Gladstone John Thomas, General Manager, Mt. Scott Water District Dan Bradley, Interim General Manager, Oak Lodge Water District Scott Lazenby, City Manager, City of Sandy ® RE: Status of Biological Opinion Concerning the City of Oakland Waste Water and Water Treatment Plant Projects February 2, 2000 Page 3 The draft Opinion also considered the affect on listed species of construction within the stream bed as a result of the use of excavation buckets, construction and removal of cofferdams, increased turbidity, operation of heavy equipment, and the use of fuel and lubricants. It noted that these activities could have the potential to injure listed species. However, the Opinion fails to quantify those impacts. It also noted on the positive side that the new water intake would significantly reduce mortality to salmonids that now exists at the present intake, which does not meet NUTS and ODFW screening standards. The proposed waste water improvements total $2.5 it on with an equivalent cost for the water system improvements. Federal Rural Development has proposed a grant of $2 million for the waste water system improvement with the remainder of the waste water and water treatment plant systems funded by other federal and state grants and loans. The attached incidental take conditions recommended by NMFS would require before Rural Development transfers the-funds to the City, that the transfer of water rights to instream flow be accomplished, at least as a matter of contract between Rural Development, the City, and the Oregon Water Resources Department. Rural Development, the State Health Division, and DEQ are very critical of NMFS' effforts to coerce the City to give up 40% of its senior water rights in order to receive federal and state monids which will be used, to eliminate current violations, which if corrected, would materially benefit water quality in the stream and reduce the likelihood of injury to listed species because of the removal of effluent-from the stream and the construction of NMFS and ODF&W approved screening on the new intake. A very important point is that NMFS, in its consultation role, does not make a Section 7 conclusion that the activities funded by federal sources would be likely to jeopardize a listed species or to destroy or adversely modify critical habitat. It 02/03/00 09:11 FAX 503 656 1092 HUTCHISON HAMMOND &WALSH 0 005 MEMORANDUM TO: Dirk Borges, General Manager, Canby Utility Board Denny'Klingbile, General Manager, Damascus Water District Ron Partch, City-Administrator, City of Gladstone John Thomas, General Manager, Mt. Scott Water District Dan Bradley, Interim General Manager, Oak Lodge Water District Scott Lazenby, City Manager, City of Sandy RE: Status of Biological Opinion Concerning the City of Oakland Waste Water and Water Treatment Plant Projects February 2, 2000 Page 4 appears that without a finding of jeopardy, NMFS would lack authority to compel the imposition of conditions requiring transfer of senior water rights to instream flow. The key issue is whether Rural Development will ignore these proposed conditions and remit the money to the City without them. The way the system should operate, if such conditions are imposed, is that NMFS must conclude that federally funded or* approved activities will jeopardize an ESU. The duty to avoid jeopardy is set out in Section 7(a)(2) of the ESA. It states [each Federal agency] "shall... insure that any action authorized, funded or carried out by such agency... s not likely to jeopardize the continued existence of an endangered species or threatened species or result in the destruction or adverse modification of "the species" designated critical habitat." In response they must develop means of avoiding jeopardy. A possible alternative means if jeopardy was found, could be a transfer of existing water rights to instream flow. There have been a number of judicial holdings doing this on the. Sacramento River and its tributories. However, without the jeopardy standing, there is a disconnect in the process. It is passible that by making a draft Biological Opinion, NMFS is implicitly suggesting that if its conditions are not met the draft Biological Opinion could be replaced with a formal Biological Opinion, finding jeopardy and imposing a transfer to instream rights as a condition to remove jeopardy. If NMFS did conclude that jeopardy existed in a Biological Opinion, any judicial review of the jeopardy finding would be given substantially judicial deference by the courts unless there was a finding that the jeopardy conclusion was arbitrary and capricious: It would be instructive to inquire as to whether NMFS has used similar strategy in other situations. Another alternate for NMFS would be to proceed under Section 9 "take" prohibitions and impose monetary penalties. This case is s very important one and should be closely monitored. Respect y submi ed, John H. Hammon , r. JHH:dl C:\'?dyFi1ee\J1Eff\Endan=erod Spedeo\StatusoIDreft F1100pinion.wpd t e e t m e 0 t r s _ APPENDIXC HUTCHISON. HAMMOND, WALSH, HERNDON & DARLING A PROFESSIONAL CORPORATION ATTORNEYS AT LAW JOHN C. HUTCHISON 21790 WILLAMETTE DRIVE TELEPHONE JOHN H. HAMMOND, JR. P. 0. BOX 646 (503) 656-1694 MICHAEL D. WALSH WEST LINN. OREGON 07068 ROBERT D. HERNDON FAX DEANNE L. DARLING (503) 656-1092 January 4, 1991 Mr. Gary S. Saleba Economic and Engineering Services, Inc. P.O. Box 1989 Bellevue, WA 98009 RE: Value of South Fork Water Rights Dear Gary: As I indicated to you at the time of your preliminary presentation of the strategy report on long term organizational and financial options for the South Fork Water Board, I have a problem concerning your recommendations concerning whether there was a value associated with the South Fork Water rights independent of the cost of the physical facilities associated with the permit. It has always been the position of the Clairmont Water District that there is no independent value associated with water rights, whether they be perfected or in permit form. The purpose of this letter is to set forth my thoughts on this important issue. It appears that this issue is specifically addressed by Oregon state statutes. The key statute is ORS 537.390. In short, that statute explicitly states that no value is to be associated with water rights which exceed the cost of perfecting the right itself. More specifically that statute reads as follows: 11537.390 Valuation of Water Rights. In any valuation for rate making purposes or in any proceeding for the acquisition of rights to the use of water and the property used in connection therewith, under any license or statute of the United States or under the laws of the State of Oregon, no value shall be recognized or allowed for such rights in excess of the actual cost to the owner of perfecting them in accordance to the provision of the Water Rights Act." (Emphasis Added). Thus, both for rate making purposes and for purposes of determining the value associated with the acquisition of water Gary Saleba January 4, 1991 Page 2 rights, no independent value may be associated with the water rights themselves. 1!t Several other states in the west have adopted similar statutes limiting the value of water rights associated with issued permits or certificates. (Cal. Water Code 1392 and 1629; Ariz. Rev. Stat. Ann. § 45-159). Those states are even more restrictive than Oregon, by limiting the value associated with the rights to the amount the holder had paid to the state to receive the right. These statutes and their meaning are discussed as follows: "Acceptance of a permit or license to appropriate water in California carries an express statutory condition that no value thereof, fln excess of the actual amount paid to the state, shall ever be claimed with respect to, among other things, public regulation of services to be rendered by the appropriator. The Arizona and Oregon water rights statutes contain provisions to the same effect." I, Water Rights Laws in the 19 Western States, Hutchins, 1971. The statutory pronouncement of ORS 537.390 of the limited value of water rights arises from the statutory declaration in Oregon that all sources of water in the state are the property of the public. Thus ORS 537.110 states as follows: "All water within the state from all sources of water supply belongs to the public." Also see Rencken v. Young, 300 Oregon 352, 363 (1985) and Coast Laundry, Inc. v. Lincoln City, 9 Or App 521, 526 (1972). That latter case stands for the further proposition that water from natural streams does not become the personal property of the appropriator until it has actually been appropriated and diverted from the stream into the distribution system of the water purveyor. Obviously, it is impossible to attach a value to something in which one has no property interest. In that your study proposes that the Clairmont Water District pay the depreciated replacement value of all of the existent facilities of the South Fork Water Board, it appears clear that ORS 537.390 would prohibit recognition of any additional value of the water rights. Clearly, the value of the South Fork facilities would at least be equivalent to the value associated with the perfection of the South Fork water rights. Gary Saleba January 4, 1991 Page 3 ' I would be more than happy to discuss this matter with you further at your convenience. Sincerely, /2/ JOHN H. J2. John H. Hammond, Jr. Board Attorney JHH/cb CC: Alan Fletcher, Superintendent Clairmont Water District John Buol, Manager South Fork Water Board Thomas J. Rastetter, Attorney at Law Ed Sullivan, Attorney at Law Bill Monahan, Attorney at Law a i i i 3 a THOMAS J. RASTETTER ATTORNEY AT LAW 294 WARNER N111-1TE ROAD OREGON CITY. OREGON 97045 TRidl`HON& 4503) 657-0777 P'Ax. 4503) 650.0367 January 22, 1991 ry Saleba Ec omic and Engineering Services, Inc. Pas Office Box 1989 Belle e, Washington 98009 Re: Value of South Fork's water rights Dear Gary: I have been asked for an opinion on the issues raised in Jack Hammond's letter of January 4, 1991. In that letter, it was Jack's opinion that ORS 537.390 would preclude us from recognizing any value for South Fork's water rights beyond what it may have cost us to perfect the rights. He also cited some case law and a statute which state that the waters of this state belong to the public and cannot become the personal property of the appropriator until diverted and put into the distribution system of the water purveyor. From this latter concept, the conclusion is made that we cannot attach value to the rights since we have no property interest in them. I disagree with both conclusions reached in that letter. For purposes of clarity, I will deal with ORS 537.390 and the "public water" issues separately. Effect of ORS 537.390: ORS 537.390 reads as follows: "Valuation of Water Rights. In any valuation for rate- making purposes, or in any proceeding for the acquisition of rights to the use of water and the property used in connection therewith, under any license or statute of the United States or under the Gary Saleba January 22, 1991 Page 2 laws of Oregon, no value shall be recognized or allowed for such rights in excess of the actual cost to the owner of perfecting them in accordance with the provisions of the Water Rights Act." Clearly, this is not a "valuation for rate-making purposes", so the relevant inquiry is whether our situation falls into the category mentioned in the second clause. That is, is our s tua-'Cion a "proceeding" under any license or statute for the acquisition of rights and the property used in connection with the rights? My opinion is that it is not. The use of the language "proceeding" under a "license or statute", in which the water rights and "the property used in connection therewith" are acquired suggest that the statute is meant to apply to governmental actions such as condemnations. That interpretation seems far more likely than an interpretation which would apply it to our situation. It would be difficult to describe our adding Clairmont to our entity as a "proceeding for the acquisition of rights" as meant in the statute. Clairmont would simply be made a part of our entity, and our water rights would remain vested in that entity. Additionally, for the statute to apply, this would have to be some sort of statutory proceeding to acquire the rights. Finally, the property used in connection with those rights are the cities of West Linn and Oregon City, which are certainly not being "acquired" in connection with the rights. It would take an extremely expansive and strained reading of the statute to make our situation apply, and it seems far more likely that its application is limited to ratemaking and condemnation cases. The history of the statute suggests that my interpretation of the statute is correct. In Water Laws in the Nineteen Western States, the purposes of the statute is discussed as follows: "Field studies of irrigation enterprises published in 1930 and 1953 revealed instances in which valuations of water rights were included in rate bases of companies in which ownership of water rights was vested, but none in those of enterprises the water rights of which were held by the water users. It was found that on the whole, State commissions were averse to placing substantial values on water rights beyond the actual cost of their acquisition even if, as a matter of law, they belonged to the companies." Gary Saleba January 22, 1991 Page 3 "Acceptance of a permit or license to appropriate water in California carries an express statutory condition that no value therefor, in excess of the actual amount paid to the State, shall ever be claimed with respect to, among other things, public regulation of services to be rendered by the appropriator. The Arizona and Oregon water rights statutes contain provisions to the same effect." Water Laws in the Nineteen Western States, Hutchins, 1971, Vol 1., pp. 556-7. [footnotes omitted]. Unfortunately, there is no case law which has interpreted or even mentioned this statute. Equally unfortunate is the lack of any helpful legislative history. The applicable part of the statute was enacted in 1927, about the time mentioned in the quote above, when regulatory bodies became aware of the problem of having utilities include the value of water rights in their rate bases. ORS 537.390 was initially codified as ORS 537.280, and the language in question was added to the statute as part of House Bill 125. There was apparently a committee report on the bill from the Irrigation and Drainage Committee, but the State Archives has informed me that they don't have any documents that old. There is a discussion of the statute in "Condemnation of Water Rights", 46 Texas Law Review 1054, (1968), however. In that work, it is noted that under the law of most states, the full market value of water rights must be paid in a condemnation. However, exceptions to that rule are described as follows: `A California statute, first enacted in 1913, incorporates in appropriation permits and licenses a condition restricting condemnation awards for acquisition of such rights by most condemnors to "the actual amount paid to the state therefor...." A similar Oregon statute is limited to instances in which the °property used in connectionf0 with the water rights 7 is also acquired and is evidently of primary importance in public acquisition of hydroelectric plants. Conditions inserted in some hydroelectric licenses by the Federal Power Commission similarly withhold compensation for the full value of water power.' 46 Texas Law Review 1054, 1094 (1968). Emphasis added. i 1 Gary Saleba January 22, 1991 Page 4 That discussion further supports an interpretation of the statute as being limited to ratemaking and condemnation proceedings. In sum, there is very little discussion of the statute which would aid in its interpretation. However, given the plain wording of the statute and-the discussions given the statute in water treatises, it would take a very liberal and expansive reading to have it apply in our situation. My opinion is therefore that the statute is limited to ratemaking, condemnation, and similar proceedings. Property Interest in npublic Water" The second basis of Clairmont's opinion can be stated as follows: a) All water within the state belongs to the public. ORS 537.110; Rencken v. Young, 300 Or 352, 363 (1985). b) Water can only become personal property if it is appropriated and put into the distribution system of a water purveyor. Coast Laundry Inc. v. Lincoln City, 9 Or App 521, 526 (1972) c) Therefore, it is impossible to attach a value to something in which one has no property interest. The first two assumptions are correct, but reliance on those concepts is misplaced. In our situation we are not concerned with water itself; rather, we are concerned with a property interest granted by the state in the form of water rights. In other words, it is not the liquid we are claiming a property interest in. It is the right to use that public water that gives us a property interest. This concept was explained by the Oregon Supreme Court as follows: "According to the modern accepted doctrine, it is the use of water, and not the water itself, in which one acquires property in general." =grred v. _City of Baker, 63 Or 28, 39 (1912). Gary Saleba January 22, 1991 Page 5 Thus, under Oregon law a property right is clearly recognized in water rights, and there is no prohibition against assigning value to those rights. Please-,t me know if you-have any questions about these matters. Very truly yours, THOMILS- R TETTER TJR:slb Vcc: John Buol Jack Hammond Bill Monahan Ed Sullivan Aft .19 t t r t r e e e A APPENDIX D 1 SECTION 5 SYSTEM OPERATIONS, ORGANIZATION AND GOVERNANCE General This section includes a detailed discussion of an anticipated water supply system operations structure and organization as well as potential Supply System governance options. The participating water providers considered a wide range of potential governance structures as part of the preliminary engineering efforts. The descriptions and discussions of the governance options presented in this section were used to formulate a preferred system operations and governance structure. Section 3 described in detail the features and capacities of each of the facilities which will make up the Willamette River Water Supply System. The facility capacities are developed based on water demand estimates and cost effective oversizing to provide maximum value as facilities are considered for potential ultimate expansion. Section 4 presented a detailed discussion of project cost estimates in addition to the allocation of these costs among the participating water providers. This section also addresses the institutional issues necessary to implement the supply project. It reflects a review of numerous issues and options by the project participants, and focuses on the conclusions of that process. Water Supply System Operation The creation of a new water supply system will require that a management structure be established with the responsibility to operate and maintain supply system facilities. System management responsibilities also would include maintaining water quality records and meeting regulatory reporting requirements in addition to other responsibilities. It is anticipated that regardless of its ultimate service provider status, as public or private, the anticipated management structure will include a general manager, plant operators and clerical/administrative staff. Figure 5-1 presents a schematic representation of this potential structure. The staffing levels suggested in Figure 5-1 anticipate minimum staffing levels for a treatment plant facility operated 24 hours a day, with at least one operator on site at all times, and two operators working the day shift. The structure described above and illustrated in Figure 5-1 represents the anticipated minimum level of operations staff needed to safely and efficiently operate and maintain the water supply system including the raw water intake, treatment plant, high service pump station and finished water transmission system. It is anticipated that at this staffing level routine system operations will be completed as part of daily work load assignments. 98-0375.118 Page 5-1 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 Organization and Governance It is anticipated that specialty maintenance tasks such as the cleaning of the intake wetwell, treatment: plant site maintenance task and other tasks will be completed by specialty vendors or suppliers. Figure 5-1 Willamette River Water Supply System Staffing Schematic Summary Supply System General Manager Clerical/Administrative Water Treatment Plant Chief Operator I Water Treatment Plant Operations and Technical Staff (eight full time positions) System Operations Options It is anticipated that the operational structure described above represents the minimum level of resources required to operate and maintain the supply system. The services provided by this structure can be procured by two methods, through a public entity or a private enterprise. A brief discussion of these options is presented below. Public Operator All of the water treatment plants and water supply systems in the Portland metropolitan area are owned and operated by public water providers. This service provider option requires that the agency or agencies that own and are responsible for the water supply system, employ, staff and manage the labor and material resources necessary for system operations. It is anticipated that while certain specialty tasks will be contracted out, the primary functions of the water supply system operations can be completed by public employees. Operational system control, system water quality reporting and the responsibility to meet all drinking water quality requirements are completed under the direction of the agency, agencies, or governing bodies and carried out by public employees. 98-0375.118 Page 5-2 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 Organization and Governance Private Operator Under this option the governing agency, or agencies, would enter into a contract with a private organization to operate the water treatment plant and possibly the entire water supply system. It is common practice for private operators to reduce staffing and rely on automation to reduce operating costs. The proposed treatment plan and supply system will be fully automated so that the opportunity for such savings may not be available under the anticipated Willamette River Water Supply System operational structure. Furthermore, it is assumed that 24 hour staffing of the water treatment plant would be a minimum requirement under either the public or private operator option. Some labor cost savings may be achieved by a private organization through reduced labor and labor overhead costs. Cost savings may also be realized through the use of private materials and chemical procurement processes which may avoid public contracting requirements. The responsibility to comply with and meet all drinking water quality regulations is also directed onto the private operator. Water Supply System Organization The selection of an appropriate institutional structure is based on numerous criteria or considerations. In the course of the development of this document, numerous issues and criteria were considered. Through the course of this preliminary engineering effort, the following issues proved central to establishing a preferred governance and financial structure: • Statutory Authority - Does the statutory authority exist to allow a governance option and provide necessary powers? If so, what process is necessary to implement that option? • Financing Capability - Does the governance option provide the capability to finance necessary capital improvements? If so, does it offer the option of central or local financing of project costs? Ownership and Control - Do participants retain control of the new agency, and ownership or ownership rights in the facilities? System Expansion - Do the governance and financial structures provide a reasonable mechanism for future expansion? Can and should agencies be required to participate in future expansions, and under what terms or provisions? e Timeliness of Implementation - Does each option provide for timely execution consistent with the intended project schedule? S Decision-Making Structure - Can. a decision-making structure be imposed that provides equitable representation to all participants? 98-0375.118 Page 5-3 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report ! System Operations, December 1998 Organization and Governance • Cost Recovery Options - Do local agencies retain flexibility in how to recover their shares of costs, including the use of System Development Charges (SDC's) and other local non-rate resources? • Cost Sharing Principles and Equity - How are capital costs allocated to participants? How should Operating and Maintenance (O&M) costs be recovered? • Impacts on Ratepayers - Do the governance options differ in their potential impacts on participants' ratepayers? Put differently, does a given option offer cost savings or other features that translate to lower rates? • Ability to Address Future Needs - Can future expansion and improvement needs be addressed reasonably and equitably? • Risk Sharing - Are financial risks commensurate with project benefits, and are risk-takers adequately compensated? The governance review process examined numerous institutional structures and within those, policy or structural issues related to the questions presented above. The information developed during this review and discussion process is documented in a series of issue papers that examine these questions in greater detail and which are presented in Appendix H. The remainder of this section summarizes the work efforts and documents the resulting direction generated through the committee review process. The participating water provider staff members reviewed numerous institutional structures currently available under Oregon statute, including: • Interlocal partnership • Domestic water supply district • Water improvement district • People's utility district • Joint water authority Detailed information on each of these potential structures is presented in Appendix H. Preferred System Organization As an outcome of the committee review, evaluation and discussion process involving project participants, a strong preference was expressed for an interlocal agency created through intergovernmental agreement under Oregon Revised Statutes (ORS) 190. A dominant factor in this preference was the desire for participant agencies to retain decision-making control related to the supply system. ORS 190 agencies can provide this control through a representative board with participants appointed by each participating agency. In addition, the ORS 190 organization provides further benefits including: 98-0375.118 Page 5-4 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Deport System Operations, December 1998 organization and Governance o The flexibility to provide central capital financing or allow local financing - of project costs. This flexibility was deemed important because the schedule for the initial phase of development may not allow time for developing new central financing capacity, indicating that local financing is preferable. However, central financing may be desired in the future for capital replacement needs or further expansion of capacity. a Potential agreements may be tailored to meet the specific needs and provide the specific powers and structure desired by the participants. Y The ownership interest of participants through the joint agency will allow for local financing and a tangible interest in the project. m A joint agency may hire staff and operate facilities directly. • A joint agency may be expanded to include new participants in the future, and provide them a voice in decision-making. Examples of Portland metropolitan area water service agencies created under ORS 190 include the South Fork Water Board and the Hillsboro-Forest Grove-Beaverton-Tualatin Valley Water District Joint Water Commission. Within the context of this institutional structure, the participants identified a number of elements to be addressed in potential agreements. In some cases there are specific recommendations, while in others the deliberations did not lead to definitive guidance. The following sections may be considered as elements to be included or addressed in the ORS 190 agreement which may ultimately be created to form the new joint agency. Capability for Central Financing The agreement should recognize that each agency will fund its own share of the initial capital improvements, however, it should provide the ability for centrally issued debt in the future. The intent would be to provide a central mechanism to fund upgrades or replacements related to the existing facilities and this could also conceivably extend to central funding of future expansion phases or system extensions. Capital Cost Allocation Principles The capital costs of the supply system will be allocated to participants based upon two principles, which are: a Costs of central facilities, such as the river intake, treatment plant or transmission components of common benefit, would be allocated in proportion to shares of capacity. 98-0375.118 Page 5-5 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 Organization and Governance M, • Costs of transmission facilities will also be allocated according to shares of capacity of each segment of the transmission system. Operation and Maintenance Cost Allocation Principles The operating and maintenance (O&M) costs of the supply system would be initially recovered through a common volume charge. In the future, cost recovery might be expanded or modified to include segregation of supply and transmission elements, and potentially the use of fixed costs imposed in proportion to capacity shares in addition to volume charges. Definition of Ownership and Capacity Interests The ownership rights provided to participant agencies should be sufficiently robust to facilitate local debt issuance in support of the proposed project. Further, participant agencies should be provided explicit capacity rights which define a supply resource that they may rely on for their own water system planning. Authority to Impose Rates As implied above, a proposed joint agency should have the authority to impose rates and charges in order to recover its costs. The rates and charges would be imposed on the agencies, companies or individuals holding capacity or using water from the system. They would not be directly imposed on the retail customers of participant agencies. The type of costs to be recovered include: • Capital Costs o O&M Costs • Administrative Costs • Debt Service Repayment ® "Must Lease" Capacity Payments Provisions for Latecomers The joint agency should provide a mechanism for adding new participants in the future. Adding new participants would require approval of the joint agency governing board. The agreement should also provide for establishing latecomer charges, which are imposed as a condition of membership. The latecomer charges would not apply to project participants participating in the initial project or in facility oversizing arrangements. For other members in the formative Willamette Water Supply Agency (WWSA) but not participating in the initial construction of the proposed project, the buy-in charge would be based on capital cost shares for all applicable system components. For those not participating in the initial project, 98-0375.118 Page 5-6 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 organization and Governance the buy-in charge would also include a share of formative pre-project costs, and would include in that an above-market rate-of-return to reflect the investment risk taken by current project participants and WWSA members. When capacity exists that can serve a latecomer, the capital cost share would be paid through the payment of "must lease" payments as discussed and defined below. Further, latecomers would be required, without option, to participate fully ;-n the next facility expansion. This participation would include any shares of the project declined by existing participants. The intent of these provisions is to provide adequate compensation to existing participants for the use of available capacity, and to protect existing participants from anticipated and potentially adverse consequences of an accelerated expansion schedule. When capacity does not exist to serve a latecomer, the latecomer would be required to participate directly in an expansion to develop necessary capacity. In this scenario, a "must lease" provision may still apply for some system components, and an additional buy-in charge to common facilities of benefit may also be appropriate. A brief discussion of and expansion on these concepts is presented below. 1M Participation in System Expansions When elements of the system require future expansion, a process has been outlined which defines the role of participants in that expansion. This process includes: • Identify one or more "rational" expansion projects. Allocate expansion capacity to participants according to the following priority: 1. Assign mandatory capacity shares ("must lease" or latecomers). 2. Forecast capacity and demand for each participant and the joint agency as a whole. 3. Allocate remaining capacity according to the net requirements of each participant at the time the new capacity would be fully utilized. • With the exception of mandatory shares, participants are free to subscribe to a lesser amount of capacity than allocated. In such case, remaining capacity would be offered to all participants. If not fully subscribed, the scale of expansion would be reconsidered. To the extent that participants decline allocatt:U acity shares and their corresponding costs, they would pay a premium if they eventually need the allocated capacity. "Must lease" i 98-0375.118 Page 5-7 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 Organization and Governance man, MINEWIN 1; 11MININ1111al provisions would include a higher rate of return in such circumstances. This structure is intended to allow flexibility for participants while discouraging arbitrary under-subscription. "Must Lease" Provisions It is the intent of the participants that this joint agency promote efficient use of available capacity. Pursuant to this goal, the joint agency would act as a broker for unused capacity under a defined pricing structure. In this manner, no participant would be required or allowed to expand system capacity until expansion is required due to total system demands, nor could a participant withhold or arbitrarily price unused capacity needed by another participant. This structure is effectively a "must lease" arrangement, under which a participant with capacity must make it available and a participant requiring capacity "must lease" available capacity under defined terms: The normal pricing structure for the "must lease" arrangement would include the following elements charged to the lessor: • A return on capital determined by multiplying the estimated replacement cost of the assets, net of depreciation, by a rate of return. The rate of return would be the average investment earnings of the joint agency, plus a premium. This premium should be large enough to create an incentive to anticipate capacity requirements at the outset, without being punitive. A premium of 200 basis points (2.0%) might be appropriate. • A depreciation charge determined by dividing the estimated replacement cost of the assets by the estimated useful life of the assets. • A charge for O&M and other costs based on the joint agency's normal water rates and charges. The capital and depreciation elements of this charge would then be credited or paid to any participant with surplus capacity available, in proportion to their share of total surplus capacity available. The O&M element would remain with the joint agency as a part of its O&M cost recovery. As noted above, a participant may decline to participate in a system expansion. If a participant does so, and subsequently requires capacity beyond its allocation, the above "must lease" provisions would apply, with an additional premium. For example, the additional premium could be set at 200 basis points (total of 400 basis points, or 4%). 98-0375.118 Page 5-8 Willamette River Water Supply System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report System Operations, December 1998 Organization and Governance h Sale of Wholesale Water or of System Capacity The joint agency will have the ability to sell capacity or water unused by participants. This is necessary to protect the common interests of all participants and effect the "must lease" provisions presented above. Wholesale SDC's With local funding of initial project costs, each participant will be free to implement its own SDC under their own methodology. In the future, it may be desirable for a wholesale SDC to be available as a tool. Depreciation/Replacement Funding 46 As a part of the O&M costs and rates, the potential for replacement funding should be provided for. Initially, a strategy has been identified for funding a replacement program which includes the following elements: • A target replacement reserve set as a function of total capital balance is identified. C An initial (small) level of funding is identified. • An annual increment to that funding level is identified. ® In any year in which the reserve balance is below the target, the annual funding is increased by the increment. In any year it exceeds the target, the annual funding is decreased by the increment. The replacement reserve would be available for replacement or capital rehabilitation of system assets. In the future, this funding strategy may be modified to increase or decrease cash funding toward replacement costs to account for accelerated repair and replacement needs as the plant capital ages. Decision Making A decision-making structure must be established which provides for equitable representation and efficient execution of the joint agency's duties. An issue paper identifying some potential approaches, and relevant issues and concerns, is attached in Appendix H. No single approach to the governing body has been selected at this time. However, the various models under consideration share the common thread of attempting to provide a balance between proportional representation and the interests of each participant, regardless of size. s i 98-0375.128 Page 5-9 Willamette River Water Supply System Section S Participants' Discussion and Review Document Preliminary Engineering Report 1 System Operations, December 1998 40 organization and Governance Conclusion The system governance and institutional options available to the participating water providers, and documented in this section were developed, reviewed, discussed and evaluated as part of the preliminary engineering effort. A wide variety of options were considered and a strong consensus developed in favor of the use of an ORS 190 organizational framework. The system operation options presented at the beginning of this section present two alternatives for the ultimate operation of the proposed supply system. These alternatives can be considered in combination with the project procurement options presented in Section 6. 98-0375.118 Page 5-10 Willamette River Water Supply. System Section 5 Participants' Discussion and Review Document Preliminary Engineering Report system operations, December 1998 Organization and Governance APPENDIX H ISSUE PAPERS Appendix H contains three issue papers prepared by Financial Consulting Solutions Group, Inc., and a summary of the meeting notes from the September 14, 1998 project meeting related to supply system governance issues. The first issue paper, Potential Governance Options and Collateral Issues, provides a general and broad review of issues associated with five forms of potential organization models. The second issue paper, Central vs. Local Capital Financing, outlines the relative merits of a central versus a local capital financing system for the proposed Willamette River Water Supply System. The third issue paper, Joint Agency Decision-Making, provides a review of representation and decision-making options. Aft 6 98-0375.118 Page H-1 Willamette River Water Supply System Appendix H Participants' Discussion and Review Document Preliminary Engineering Report i Issue Papers December 1998 September 11, 1998 Issue Paper Willamette River Water Supply System Potential Governance Options and Collateral Issues Purpose: Governance Options A The purpose of this issue paper is to provide the potential component or participating agencies of the Willamette River Water Supply System (System) with a set of potential System governance options provided for under current Oregon Revised Statutes (ORS), to consider in tandem with associated planning, engineering and related technical analyses. The set of governance options discussed herein is not intended to be thorough nor all encompassing. However these options do reflect legal forms of governance that might be considered in the near-term and long-term context for designing, financing, constructing and owning the System. As of this writing, five forms of governance are reviewed herein, although some options may be eliminated from and/or others added to this list before expanding the analysis for the final options: 1. Interlocal Partnership/Joint Operating Agreement 2. Domestic Water Supply District 3. Water Improvement District 4. People's Utility District 5. Water Authority fin For each option, the following categorical information was researched and is summarized in the attached matrix: • Statutory Authority Voting a • Ownership • Operations and Maintenance • System Expansion ® Latecomers • Capital Financing i 98-0375.118. Page 1 Willamette River Water Supply System Governance Issue Paper 09/11/98 September 11, 1998 • Financial Risk Sharing ' • Resource Planning System Management and Reliability At this time, the potential System component agencies include the City of Tigard, OR; the Tualatin Valley Water District, OR; the City of Wilsonville, OR; the City of Tualatin, OR; and the City of Sherwood, OR. All but the city of Wilsonville are members of the Willamette Water Supply Agency (WWSA). A significant reason, among others, for the WWSA being formed was to better coordinate the processing of pending applications for new water rights, pool the applications, and adopt an appropriate and effective strategy for implementing the Regional Water Supply Plan (RWSP). However, the WWSA's charter does not currently include financing, constructing and owning a regional Willamette River water supply source. A simple, single owner approach to developing the System, coupled with interlocal agreements for capacity purchases or wholesale water agreements, may be the most reasonable approach to governance in the short-run or for the first phase of System development. Such an interim approach could get the ball rolling to avoid expensive delays. However, in the long run, the agencies ~ that intend to be served by the System might benefit as a whole and/or individually by implementing a different governance option. Any such benefits will be determined through subsequent analyses. Collateral Issues Potential component or participating agencies should be aware of a number of additional financial issues or topics germane to potential governance structures. When preparing interlocal agreements or choosing a governance approach to owning and operating the water supply System, participating agencies should consider: • Basic Cost Sharing Principles • Wholesale System Development Charges (SDCs) • Future Capacity Expansions • Capacity Allocations • Facility Financing • Outside Funding Sources • New Agency Buy-ins • Operations and Maintenance (O&M) Costs 98-0375.118 Page 2 Willamette River Water Supply System Governance Issue Paper 09/11/98 September 11, 1998 Alft This paper includes a brief discussion of each topic above as a "shopping list" that can lead to a more focused effort on key financial issues pertaining to the System. Governance Options Prelude Before reading the discussion below concerning the governance options, please review the attached matrix, Table 1, which presents a cursory, summary of relevant research findings. The following discussion does not attempt to repeat all of the information provided in the matrix, nor is it intended to be an exhaustive study on the merits and drawbacks of the various alternatives. The purpose here is to highlight some apparent strengths and/or weaknesses of each option as they might apply to governing the financing and ownership of the water supply System. Discussion 1. Interlocal Partnership/joint Operating Agreement This option may be the simplest to implement of the six options addressed in this issue paper. Essentially a new organization is formed, but no separate legislation is required at the State level. This is the organizational model utilized by the Hillsboro, Beaverton, Forest Grove and Tualatin Valley Water District Joint Water Commission. Through interlocal agreements, this option has the flexibility needed to address virtually all of the concerns of the participating agencies. The partnered jurisdictions or joint agency can own assets, issue revenue bonds, hire staff, contract with private companies to operate and maintain its system, and can be expanded to include new partners as appropriate. Joint agencies may not levy taxes nor issue General Obligation bonds, which means that these sources of low cost capital would not be available to the partnership or agency, except by way of individual partner funding mechanisms. This option is compatible with the varied nature of the System partners' needs. In the near term, for example, those agencies not needing water may not want any particular operating role with the System. However, a particular agency, such as the City of Tigard, can be assigned administrative responsibility to run the System. Discussion 2. Domestic Water Supply District (DWSD) Clearly this option, when carefully and thoughtfully implemented, can serve the needs of a regional water supply system. Control is placed in the hands of five separately elected commissioners, and the district would own and control the use of all assets. One benefit of a regional DWSD owning and managing 98-0375.118 Page 3 Willamette River Water Supply System 1 Governance Issue Paper 09/11/98 S-eptember 11, 1998 A the supply and treatment capacity might be the added flexibility to sell water when needed. Another advantage might be a more focused governing body, with full responsibility for financing, owning and operating the System. A possible disadvantage might be that, with governance of the District in the hands of an independent Board of Commissioners, individual member cities' and districts' would experience a relative loss of control over water resource" planning, pricing and capacity management. However, since the cities and county control land use planning, zoning and enforcement, collateral issues of control probably could be addressed with wholesale water purchase agreements with the District. Another disadvantage of this option might be the added layer of government in the process. Again, formation of a DWSD does not preclude contracting with private companies for operation and maintenance of the system. One unresolved issue is the scope of water service that a DWSD may provide under the ORS 264. That is, it is unclear whether an entity organized under ORS 264 would be permitted to act as a wholesale supplier other than on an excess basis. In its incorporation clause, ORS 264.210 allows a DWSD to supply its "inhabitants with water for domestic purposes" and may "sell ...any surplus water over and above the domestic needs of its inhabitants to any persons, corporations or associations ...or to other communities, water districts and municipalities." The questions are, is the intent of this option to provide supply and then own and operate the associated retail delivery system? Can this form of agency be used to be a supply side only option, which wholesales its water to agencies such as the City of Tigard and Wilsonville? The language of ORS 264.210 suggests that a DWSD may be formed only to serve domestic (retail) customers, with wholesale supply as a strictly surplus management function. Given the different authority afforded to Water Improvement Districts, it is assumed that this institutional form may not have the authority to provide flood control services, and could provide irrigation services only MIN with its surplus water supply. That difference probably would be irrelevant to governance of the Willamette System. Discussion 3. Water Improvement District (WID) a Organized under ORS 552, this option appears to mirror the structural nuances of a Domestic Water Supply District option. One major difference is that this option makes no provision that the District be organized with the primary purpose of providing domestic water supply. In other words, the "surplus" clause found in ORS 264.210 does not appear in ORS 552. This , , or to enter option allows a WID to provide strictly wholesale water supph" into other water-related services if needed, such as irrigation and water quality planning. The ORS 552 statute also provides for additional elected board membership, five, seven or nine, as opposed to just five to run a WID System. 98-0375.118 Page 4 Willamette River Water Supply System Governance Issue Paper 09/11/93 September 11, 1998 This arrangement may be desirable to achieve better representation of the participating agencies' ratepayers. If any of the agencies have irrigation needs, perhaps this option might provide some added flexibility to provide such service where needed within the boundaries of participating agencies. Discussion 4. People's Utility District (PUD) This approach to governance is essentially a form of homeowner or mutual cooperative wherein the customers own the water system. Control, and the form of governance, is set by the customers, not by elected officials. PUDs have many of the same powers that the Domestic Water Supply and Water Improvement District's have, including the power to issue revenue and 40 general obligation bonds. This option does not appear to fit the form of governance needed for a water supply and treatment system project contemplated for the Willamette River. Discussion 5. Joint Water Authority (JWA) This governance option contemplates consolidation of a number of existing municipal water utilities and/or. water districts into a single JWA. The structure and language of the resolution forming the JWA determines the new Authority's exact range of powers and purposes. Pre-existing participating agencies may or may not dissolve following the formation of the JWA, depending on the incorporation resolution. The JWA would be governed by a five- or seven-member elected Board and would constitute a fully-independent organization. The JWA's enabling legislation, ORS 450, allows a JWA to serve as a purely retail, purely wholesale, or mixed retail and wholesale water lift provider. The JWA appears to offer a number of advantages as a governance model for the Willamette System. The incorporation resolution allows considerable flexibility in the Authority's range of powers and scope of purpose. If formed as a strictly wholesale water provider, a JWA would enjoy at once a singularity of purpose and the flexibility to sell water when and where needed. The JWA's broad-based, independent taxing authority would potentially give it access to more favorable financing terms than individual agencies. Its consolidated and directly-elected governing body would likely be more. focused than a simple inter-local agreement, as well. This app;cn is not without apparent disadvantages. As a fully independent entity, a J VA is effectively an added layer of government. Additionally, the constituent jurisdictions (and future customers) of the JWA may be wary of ceding control of the regional system-to say nothing of their existing assets-to a new set of elected officials. While some protections and/or contingencies may be anticipated in the incorporation resolution, such limitations may be I i 98-0375.118 Page 5 Willamette River Water Supply System T-M Governance Issue Paper 09/11/98 :r " September 11, 1998 difficult to impose on the new )WA and, would be made at the cost of the Authority's governance flexibility. Collateral Issues Discussion Basic Cost Sharing Principles How should project costs be allocated among members? Treatment costs in proportion to a purchased capacity share can make sense, subject to how this interfaces with SDC decisions for connecting to the System. If the System owner were a wholesaler, then there would be no capacity purchase, nor a regional SDC to aid in financing. Rather, the cost allocation method would likely include a capital recovery factor which would be embedded in the rate of return (return on investment) and depreciation (return of investment) components of the wholesale rate. If component agencies each finance and purchase their own capacity in the System, then each agency could adopt an appropriate SDC as a source of funds from new development. Transmission costs can be dealt with by facility location and service or in aggregate by capacity share of the System. Will geographic location be a significant equity issue in the allocation of transmission costs? One risk with the geographic approach to cost recovery is that the "best" location in terms of overall cost designation can create winners and losers among participants or component agencies and become a deal breaker in reaching an agreement on cost sharing. A common "postage stamp" allocation approach (with costs shared by proportionate capacity without regard to location) often helps to neutralize the impact and evens cost recovery, but may not reflect all valid cost and equity distinctions. Wholesale SDCs Should a "Wholesale SDC," in the form of a hookup fee charged to new customers in the System apply to help recover the growth-related regional System costs? If so, should the Wholesale SDC be collected and held by a central agency, or by individual member utilities? How should initial agency investment in the first phase of facilities be recognized?_ As noted above, this - issue is related to the institutional form of governance and the character of the' funding mechanism for the new System. Clearly, if each participating agency provides its own funding for its capacity purchase commitment, then each agency can retain local control over SDC calculation and adoption issues. However, if a single or central regional agency owns and finances the system, perhaps a Wholesale SDC could be adopted which could be collected by each component or participating agency as growth occurs. Depending on the actual financing arrangement, and interlocal agreements, the source and 98-0375.118 Page 6 Willamette River Water Supply System Governance Issue Paper 09/11/98 MIN11111111M 11114 11 September 11, 1998 application of SDC generated cash flows can be structured to enhance credit rating and debt service coverage considerations. Another concern related to SDCs is whether they should differ by phase of construction, and capacity commitment. It is possible that one or more jurisdictions buying into future capacity shares of subsequent phases would be subject to SDC rates different from those charged to the initial group of participating agencies, depending on the relative cost of each phase of expansion and the relative contribution toward past phases. Future Capacity Expansions This issue is the most common obstacle to an effective regional capital program. Anticipation of how future expansions are to be handled could provide a more complete regional picture for the supply system. At least three key questions to address include: ® To what extent will future expansions be allowed to be initiated by local agencies or a new regional agency? e To what extent can an agency be "dragged into" participation in the cost of an expansion? AM ~ What standards should be used to determine the need for expansion: local use vs. capacity share or aggregate use vs. total capacity? Capacity Allocations Should agencies be allocated explicit shares of capacity, or given a common right to use (i.e.,. first come, first serve)? If the latter alternative is more appealing, the Wholesale SDC can provide adequate compensation to system participants, since new customers would pay an equitable share of capacity costs through the SDC regardless of jurisdictional location. This issue is critical to the flexibility of the regional System in its efforts to manage capacity and serve growth areas as needed. If explicit shares are assigned and purchased by participating agencies up-front, the regional entity may consider mandatory or voluntary provisions for "rental" and/or sale of capacity prior to expansions. A common example is one agency's use of another's idle capacity in lieu of a unilateral System expansion. At the outset of a major regional program such as the Willamette System, decisions are often made about capacity sharing and payment based on the best available information and planning. When each agency's rate of growth and use of purchased capacity is relatively i comparable, then the trigger points for planning, designing and constructing new capacity can be expected to follow a joint course of action. However, capacity management and flexibility can be stressed when one or more of the participating agencies realize an accelerated use of purchased or assigned 98-0375.118 Page 7 Willamette River Water Supply System Governance Issue Paper 09/11/98 September 11, 1998 capacity. Suddenly, such an agency or agencies are faced with a premature need for new capacity before one or more of the other participating agencies have a need or interest in expanding the regional system's capacity. Without an up-front agreement on capacity leasing or sales (including how to price the. transaction) and how unused capacity will be managed, future expansions will be problematic. It is likely that the agencies with available capacity will attempt to preserve their capacity for respective growth and may resist participating in the next phase of capacity expansion. Facility Financing Is the intent to finance the System centrally with capital costs to be recovered through rates and/or capacity payments, or should individual agencies separately finance their respective project shares? Will the initial financing structure apply to future expansions as well? How do Wholesale SDCs fit into this picture, if at all? Typically, central financing, properly constructed, can reduce borrowing costs and related security conditions (e.g., coverage) due to the high relative position on the payment ladder. Central financing can be accomplished through a central agency or sponsor agency, with potential implications for ownership and control. A, licensed Financial Advisor and/or underwriter can best address this issue. Regardless, the cost of capital financing, including interest, bond reserves, minimum debt service coverage, can differ between agencies. Considerations such as the impact of rated bonds, bond insurance, and historical credit performance can differ depending on how the governance matter is agreed upon and implemented. Sometimes a participating agency would benefit by a regional agency financing and owning the project. Outside Funding Sources If outside funding, for example lottery economic development funding is pursued, should it be done on behalf of the regional project with benefits shared, or pursued separately by participants for their own shares? This could affect eligibility and cost allocation issues. New Agency Buy-ins What terms or provisions are there for allowing new agencies to join after construction? How does a buy-in or compensation mechanism work? Whose capacity is allocated to the newcomer? Are buy-in transactions handled through a regional forum or through one-on-one negotiated transfers? Does this consideration essentially mean that not all capacity should be assigned and purchased, and that a portion should be left in a pool and paid for from all parties with the idea that latecomers will buy-in if there is any capacity left for purchase? 98-0375.118 Page 8 Willamette River Water Supply System Governance Issue Paper 09/11/98 September 11, 1998 Operations and Maintenance Costs !-low will O&M costs be shared? Since many operating costs are relatively fixed and some participants are in reserve positions (do not need the capacity today), should there be fixed O&M costs by capacity share included in some form of standby fee or an interest charge, in addition to variable charges? Should there be distinct charges for treatment and transmission, reflective of relative participation levels? Should there be minimum payment ("take-or- pay") provisions to assure adequate regional funding for O&M? Will there be an audittreconciliation mechanism to assure appropriate payment levels, and at what level of detail? 1 98-0375.118 Page 9 Willamette River Water Supply System Governance Issue Paper 09/11/98 Table 1 Willamette River Water Supply System Potential Governance Options - MATRIX 1 of 2 SItow!Authorit - ORS 190 (Intergovernmental ORS 164 (Domestic Water ORS 552 (Water ORS 261 (People's Utility ORS 450 Uoint Water and Sanitary Unit Cooperation), Local Supply Districts). Improvement Districts). District). Individual property Authorities). Two or more existing governments may enter into a Communities may be Communities may form WIDs owners may choose to form cities or districts consolidate into a written Agreement to perform incorporated into special to supply water and to customer-owned, cooperative single, independent Water any or all functions that a party districts to supply water. provide a number of other utilities. Authority. to the Agreement has authority water-related services (e.g., to perform. flood control, irrigation). Voting Details of governance structure Policy set by an elected five- Policy set by an elected five-, Policy set by a five-member Policy set by a five- or seven- are determined by Agreement member Board of seven- or nine-member Board Board of Directors, elected by member Board of Directors, ORS between jurisdictions; officials Commissioners, ORS 264.410 of Directors, ORS 552.208 apportioned geographic 450.600-6S5. Directors maybe may not be directly elected. 0). M. subdivision, ORS 261.405- elected at-large or by apportioned 460. geographic subdivision. Ownership In general a joint agency is the District would own all regional District would own all District would own all regional Newly forced JWA may acquire legal owner of any assets, with assets. regional assets. assets. all existing water supply assets individual partners owning (including receivables), depending shares in the common agency. on the incorporation resolution. However, ownership of specific The IWA would own all regional assets may be assigned to assets. Preexisting debt may be ` specific jurisdictions by distributed among constituent Agreement. agencies by agreement. Operations & Maintenance May hire staff and operate plant May hire administrative and May hire administrative and May hire administrative and May hire administra!ive and owned by the joint agency or operational staff and operate operational staff and operate operational staff and operate operational staff and operate plant any of its constituent plant owned by the district, plant owned by the district, plant owned by the district, owned by the district, ORS jurisdictions, ORS 190.010 (2- ORS 264.210. May also ORS 552.320 (1). May also ORS 261.305 (4). May also 450.075. May also contract with 3). May also contract with contract with private contract with private contract with private private companies for O&M. = private companies for O&M. companies for O&M. companies for O&M. companies for O&M. System Expansion Determined by agreement. joint District Commissioners control District Board of Directors District Board of Directors District Board of Directors controls agency determines how and planning and timing of system controls planning and timing controls planning and timing planning and timing of system when to expand. expansion. of system expansion. of system expansion. expansion, including potential annexation/inclusion of additional municipal or district water systems. Latecomers joint agency Agreement may be District may supply water Following a petition for The district may annex a parcel The JWA may annex-a parcel or expanded to include new outside the district. Expansion inclusion of territory, the or municipality, or consolidate municipality, or consolidate with partner jurisdictions. Precise of the district is not provided County Boundary Review with one or more other one or more additional districts or procedures for expansion and/or for in ORS 264, but proceeds Board may put the districts, following approval of municipalities, following approval dissolution of the joint agency according to the procedures in annexation question before voters in both the district and of all elected bodies and the are specified in the initial ORS 198, and may require voters for approval and/or the area to be annexed, ORS Boundary Commission, or Agreement. Boundary Review and/or rejection, ORS 552.810. 261.105 (1-3). approval of voters in all affected electoral approval. areas (ORS 450.680). F:\PROJECT'"9\0375.117\REPORTS\Table 1 Matrix 91198.doc Prepared by FCS Group, Inc. X9/11 /98 ,avow .Mum of 2 list to im vernance Options Potential System Go ~ ette fciver Water SupP1y , • , ~ . • ' Vdiliam May levy taxes on property and g bonds, impose various other fees bonds enue May issue G• May issue rev hearing + i Public nd charges- May levy taxes andior fees following a with approval of the 9oarfollowing • issue independent hnancral review, voters, + and charges- may approval C the board pirecrors and the May issue May issue revenue district Also with the a public hearing- of bonds G.o. bonds in an amount ors and voters. May with approval Capital Financin roved by May issue revenue when approved issue G•o' 2 5°k of the value of taxable of direct revenue bonds ublic the Board, following a P annership commission. 5°b of issue G.o. bonds in an pursuant to the amount 5 • dY in property in the district fission 52.5% of the property p rids in an amount Ag{Qement if, alter a public able Proms approval of the Comm in bodies of bo the value of tax voters. Also may ec" hearing. hearing, the govern B with approval of the and district value in the district with artnered the district May issue G.o. issue' imptovementBoeeds' appro lea val of voters in pst each of the p roves the commission. 2 5% of election at which at out* jurisdictionr ~ aount 5 when cost of wotk ecific of registered voters turn bons i with voter assessed againstsP issuance of r iternafively, oneor d n property an am May levy taxes when to revcover bond taxable ropenylpropeniesbonefited revenues are Consensus)- urisdfctfons maY approva I . to additionQO25~ of by project. payments more member j lay the VWA ted. borne by ordinary to districts maY exhaus Risk ui issue fe to lodged om other by taxable property, es of up cllizeen revenue p may not levy speCial taxes match the distri ct and and {t cdfzsistin a liabilities omt agency Risk borne by specific pie existing ' .111c partners. I 'Is o. bonds, principal and interest due. its citizen0andowners. assigned to spec to Risk borne by the district and could be levy taxes or sue G. andowners. district and its citizensll surviving jurisdictions according Risk borne by the oration tesotution. Financial Risk Sharimembers. ndowners the incotp 130 R{sk shared among ownership its citizens~a• held IW II so risk followagreement nplanning authority enjoys m Generally, osi of assets. However, authority heldby of D{tectors. IWA owers- may snake specific risk planning tanning P authority held by issiontre relevant P assignments. planning district Comm including eminent domain-shoes held by issioners. District ensoys most relevant and land use cod including of full zoning ngauthority district comet planning Powers- Reururce Pl annin authorized Planni missfoners. District enloYs most relevant district enforcement. maY corn owers=Including full domain- and and odes and r A joint agency o s most relevant planning P eminen e use c all resource District enl y including zoning ! to conduct any ed by Its planning rights- eminent domain-short of enforcement. full planning Conduct zoning a nd land use ad dividual pattners tincluI us eminent domain-sho rt of s t, land use. zoning and land use codes and enforcer D a also in f system zoning enforcemen . require implement 10 to prepare riding on the details 0 implement a watershed IWA Is responsible for etc.), depe ent. fan. d reliability. ip Agreem improvement P man the parrpersfi agement an District is resPe ieand onsible for stem managem pistritt is resp sy iiabilit system management and reliability. District is, ponsible for Re System Mana ement ment. The system management and reliability. Determined by a ree g D~ef `n assign reliability. agreement may articular . toles 10 administt live fictions, or create member 1 oint agency an independent j Inc. struCtut ith responsibility for FCS Group, Prepared by 09111198 system mono enrent. TS\Table 1 Matrix 9119a•doc S\98\0375.117~EPOR Sam f ~P '01E~ Meeting Notes Willamette River Water Supply System September 14,1998; 10:00 a.m. The purpose of this meeting was to review the preliminary issue paper on governance and financial options. From that, direction on viable and non-viable concepts or options was solicited, with the intent to focus intensive analysis and investigation on plausible institutional or financial approaches. The content of that issue paper formed the basis for the discussion at this meeting and is referenced as a source document for background on these issues. Institutional Options A primary issue in the institutional review was control. The participants identified individual provider control as a critical element. This means that those options requiring separate elected bodies were not considered desirable. Of the governance options considered, only an IGA agency under ORS 190 offered agency control. A question was raised whether a water authority, under ORS 450, could be constructed without separately elected officials. While the statute does not appear to provide this option, FCS Group will investigate this question further and document a response. Within the 190 structure, the next major issue dealt with centralized versus local financing. Both options are available, as evidenced by the South Fork Water Board (SFWB) and the Joint Water Commission QWC). In general, the expectation seemed to be that each provider would finance their own project share. However, there were potential advantages to centralized financing which warrant further documentation and elaboration. FCS Group will prepare a white paper, by October 16`h, detailing the mechanism and the pros and cons of central and localized financing. Until then, FCS Group will analyze the financial impacts for both alternative financing scenarios. Another issue discussed dealt with potential outside funding assistance. While it was recognized that the options are limited, the options of collective or individual action were discussed. The consensus was that, in general, each agency could pursue funding support independently for their own use and benefit. This might qualify shares of the project for funding assistance which the regional project could not qualify for. It was also recognized that, if an opportunity arose, the group could pursue a common funding source. Finally, the issue of a system development charge (SDC) imposed by a central agency was reviewed. An example would be the SFWB water SDC. It was recognized that this hinges on the financing approach. If a central financing mechanism is used, a central SDC would F:\PROJEGTS\98\0375.1170AEMOS\MTGNOTES91498.doc 10/7198 FCS Group, Inc. (425) 867-1802 be appropriate. if locally funded, then each agency would reflect their share of costs in their own SDC basis. Financial Issues Cost Allocation - The allocation of project costs is being done in two ways: • Treatment and related central facilities are allocated by capacity share • Transmission is allocated by capacity share of specific facilities. A question was raised regarding Tigard's 10 Million Gallon (MG) storage facility which could be used as a terminal storage facility for the supply system. This reservoir could provide service continuity to all project participants as currently planned, and may be needed as a part of the supply system. Murray, Smith & Associates, Inc. (MSA) will examine options for the use of this facility and resultant cost-sharing approaches. Plant Capacity Utilization - The discussion of plant capacity focused on the issue of separate versus community use of the facilities and their capacity. When an agency requires more capacity, it was generally agreed that this should not provoke an expansion, unless the facility, in aggregate, requires more capacity. Instead, options for voluntary or mandatory capacity-sharing were explored. When plant capacity is available, it was agreed that "deficient" member agencies could - make use of that capacity, regardless of ownership. This was referred to as a "must lease" provision. A price mechanism would be established by contract for reimbursement to "surplus" or capacity owning members. The mechanism discussed might charge a lease rate based on current replacement costs and a rate of return in excess of market rates. This lease payment would be allocated to members in proportion to their share of aggregate surplus capacity. As a consequence of being in a deficit position, the lessee is obligated to purchase replacement capacity in the next expansion. This assures surplus agencies that their future requirements continue to be based on their capacity investments to date. Plant Expansion Participation - When a plant expansion is required, the next issue discussed was who would participate. There was discussion of both a purely voluntary and purely mandatory subscription process. The voluntary process was likely to cause several problems, including inefficient expansion increments, selection of preferred expansions due to unit costs or other factors, and potential - inconsistencies between ownership shares and needs. The mandatory process was considered onerous in that an agency might be forced to participate in an unanticipated expansion. A "middle ground" was explored and gained acceptance in which an allocation of a expansion capacity based on a forecast of needs would be determined. This allocation would be based on rational expansions of the facilities. First, deficit agencies must acquire capacity to replace leased capacity. Second, the projected facility use when the ) expanded capacity is consumed would be used to allocate member shares. At that time, F:\PROJECTS198W375.117\MEMOSVNTGNOTES91498.doc 10/7/98 FCS Group, Inc. (425) 867-1802 members could opt in or out for their shares. If they opt out, electing not to acquire capacity projected to be needed, then they would be at risk to lease capacity at a premium rate if they incur a future deficit. The issue of emergency requirements was discussed. 1± was agreed that the lease provisions should not apply to emergency or mutual aid situations. In such cases, no penalties would be applied. In general, emergencies relate to equipment failure or possibly supply failure (drought), but would not apply to demand variations or shortages caused by agency action or inaction. It was agreed that examples of these mechanisms would be needed for the participants to review. This will be developed by FCS Group as alternate scenarios or sensitivity cases in the financial analysis. Expansion Cost Allocation - Since providers are initially participating in different project components to different extents, it was recognized that future expansions may require compensation beyond immediate capital costs. The shares of specific facilities or components will need to be tracked, and rules for acquiring capacity in existing oversized facilities will be needed. These should be based on a method which adequately compensates members currently investing in oversizing. To assure this, a replacement cost approach, or original cost plus a return, might be appropriate. Absent this, it would not be appropriate to provide for compulsory transfers of capacity interests. New Members - The potential for future new members was discussed. In general, four classes of agencies were identified: 1) Capacity participants; Tigard, Wilsonville and Sherwood 2) Project participants, no capacity; e.g. Tualatin Valley Water District (TVWD), and Tualatin 3) Willamette Water Supply Agency (WWSA) members, no project participation; e.g. Canby Utility Board 4) Non-participants; e.g. Newberg it was agreed that basic rules for capacity acquisition and cost-sharing, as described above, would apply for categories 1) and 2). Category 3) would be subject to buy-in provisions for all aspects of plant capacity. Category 4) would also be subject to buy-in to "R&D" costs, such as the initial pre-planning costs currently underway. These costs should be escalated at an above-market rate to reflect the investment risk taken on by. current project participants and WWSA members. A further provision was considered which would also require new members (e.g. categories 3) and 4)) to fully subscribe in the next expansion, including any shares declined by existing members. This would protect existing members from accelerated expansions and related costs due to accommodating a new member. In such a case, later lease provisions would be at market rates, without a premium. FCS Group will add further detail as this approach is modeled and analyzed. I F.TR0)ECTS198W375.1171MEMOS\MTGNOTES91498.doc 1017/98 FCS Group, Inc. (425) 867-1802 O&M Costs - The recovery of O&M costs was discussed with respect to the structure and basis for cost recovery. The two basic options are through usage (volume) charges or fixed (capacity) charges. The question was asked as to the most common approach. The volume charge was considered most common. However, the basic equity issues of current users maintaining and operating a larger system than necessary were explored, especially when current usage is not at least roughly proportional to capacity shares. Options such as a fixed and variable O&M cost split seemed too heavily weighted toward fixed, capacity related costs. An alternative to be developed would be for maintenance costs to be charged by capacity share, while operating costs are charged by volume used. While an arbitrary basis (e.g. 50/50) was discussed, a strong preference for a cost-based rationale was expressed. MSA will develop cost estimates with this issue in mind, and FCS Group will analyze cost recovery options. Depreciation/Replacement Funding - It was agreed that the combined burden of facility financing and full depreciation or replacement funding would be onerous. Further, there would be political difficulties associated with a rapidly accumulating capital account. However, it was also recognized that a replacement cost recovery mechanism was appropriate to some extent. Several options were discussed. Two seemed worthy of further analysis. These were: • Partial depreciation funding based on the depreciation of equipment only, not including structures. This has the rationale that all equipment y could be replaced through this mechanism in order to last as long as the facility. Partial depreciation funding at some level, with a maximum accumulated replacement fund. For example, funding could be set at $200,000 per year, with an accumulation target of $2 million. In any year that the - balance is below this target, the next year's funding is increased 10%. In any year it meets or exceeds the target, the next year's funding is reduced 10%. FCS Group will analyze these options. The meeting concluded shortly after 12:00 p.m. Upcoming meetings were identified, including: 1017, 2pm - TAC review of facility plan and cost allocations • 10/21, 10am (tentative) - govern ancelfi nan ce follow-up and preliminary analysis results • 11/4, 2pm (tentative) - TAC meeting, potential gov/fin follow-up F.%PRO)ECT5\9VO375.117\MEMOSWTGNOTES91496.doc 10/7/98 FCS Group, Inc. (425) 867-1802 Issue Paper Willamette River Water Supply System Central vs. Local Capital Financing Purpose: Central vs. Local Financing The purpose of this issue paper is to outline the relative merits of a central versus a local capital financing mechanism for the Willamette River Water Supply System (System). The discussion herein is general and conceptual in nature; assertions regarding the appeal of either financing structure to the Willamette System specifically are not based on any thorough quantitative analyses. Further, this Issue Paper does not offer specific recommendations for action, nor does it claim to predict with any accuracy the financial performance of the System under either financing strategy. However, this Issue Paper does describe the features of each capital financing structure, as well as the most relevant general advantages and disadvantages of each according to selected administrative and financial criteria. Thus, the paper aims to facilitate discussion and consideration of a specific financing approach. Market conditions will determine the relative advantages and disadvantages of each financing approach. Pursuant to the 14 September meeting of the five potential System member agencies (Participants), this paper assumes that the members will form a joint agency (Central Agency) through an Intergovernmental Agreement under ORS 190. At the time of this writing, the five potential Participants were the City of Tigard, the Tualatin Valley Water District, the City of Wilsonville, the City of Tualatin, and the City of Sherwood. Either central or local capital financing structures are available under a ORS 190 Intergovernmental Agreement.' 9ft Each alternative is described briefly below; the main text includes a discussion 8 of additional particular aspects of each structure, as well. ' One example of an ORS 190 joint operating agency for a water supply project using central financing is the South Fork Water Board (formed by Oregon City and West Linn). An example of a similar agency using local financing is the Hillsboro-Forest Grove-Beaverton joint Water Commission. 98-0375.118 Page 1 Willamette River Water Supply System Governance Issue Paper 10/16/98 F. PRO)ECT5\9B\0375.11TREPORTS\Central vs local Finance.doc Central Financing Under a central financing plan, the Central Agency would issue debt for capital construction and would be directly responsible for the service on that . debt. Alternatively, a single Participant could act as the central financier for the project, issuing all debt and paying all debt service associated with the System. Individual Participants would not issue any debt for their shares of the System; rather, Participants would contribute their allocated shares of capital costs through wholesale rates andlor regional System Development Charges (SDCs) paid to the Central Agency or single Part i ci pant-fi nanci er, depending on the structure of the agreement. Local Financing A locally-financed System would pay for capital projects with lump-sum "buy- in" contributions from Participants. Once assigned cost according to their respective project shares, Participants would be responsible for securing their own money to be paid to the Central Agency for construction. Individual Participants would be free to pursue any financing means at their disposal, including cash payment, revenue bonds, state- or federally-subsidized loans, or general obligation (G.O.) bonds. Participants would pay for only routine operating and maintenance costs (O&M) and possibly depreciation costs through wholesale rates to the Central Agency. A Regional SDC probably would be inappropriate under a local financing scheme: each Participant would build its share of System costs into its own local SDCs. Evaluative Criteria The evaluative criteria relevant to a discussion of central versus local financing may be grouped into two broad categories: administrative and financial. The administrative criteria discussed in this Issue,Paper are: • Risk, Control and Accountability • Regional SDCs Likewise, the following financial criteria are addressed in this discussion: • Cost of Financial Capital (Interest Rates) • Coverage Requirements 98-0375.118 Page 2 Willamette River Water Supply System Governance Issue Paper 10/16/98 Fn1PROJECTS198\0375.117TREPORTS\Central vs local Finance,doc • Debt Issuance Costs • Outside Funding Support • Rate Impacts This list is by no means exhaustive; a number of other important evaluative criteria may be relevant to the discussion of capital finance structures. However, these criteria provide a sound basis for consideration of central and local financing for the System. Administrative Issues Risk, Control and Agencies entering into an Intergovernmental Agreement involving financing Accountability necessarily face some degree of financial risk, as well as issues of control over and accountability for the Central Agency's financial capital. Decisions regarding capital finance for an intergovernmental System are inexorably linked to the governance of the System. Discussion Central Financing. A central financing structure can simultaneously protect Participants from and expose Participants to various financial risks. Central financing spreads credit risk across several Participants, which individually provide credit security to the collective System. This credit security is one factor that could lead to the more favorable lending conditions that a centrally-financed System could realize (discussed further in the "Financial Issues" section, below). Inasmuch as individual Participants are bound to pay debt service through rates paid to the Central Agency, they protect one another under this arrangement. However, in order to gain advantageous interest and coverage terms, a central financing scheme would require "step-up" and "cross-security" provisions that essentially expose all Participants to a financial failure of one or more Participant(s). That is, in the event that one or more System Participants failed to make payments to the Central Agency or Participant- financier necessary for service on the System's capital debt, the other { Participants would be obligated to "step up" and fulfill the System's debt service and coverage requirements. Cross-security provisions operate similarly: Participant agencies must pledge security toward the entire debt issue, not merely their own individual portions. In this sense, all Participants are exposed to financial risks over which they may have limited control: namely, risks posed by other Participants' financial 98-0375.118 Page 3 Willamette River Water Supply System Governance Issue Paper 10/16/98 AIM F:\PRO)EC7519M375.117\REPORTS\Cenlral vs Local Finance.doc practices. Additionally, individual Participants would have little or no control of the debt service schedule or conditions of a centrally-financed capital program, except through whatever political influence they have on the initial financing plan policies and procedures. Put another way, whether or not an individual Participant favors a particular type of debt instrument, that Participant is obligated to meet its payments in the form of rates and/or SDCs to the Central Agency or P.:rticipant-financier. The ORS 190 Intergovernmental Agreement establishing the Central Agency may include structures and provisions to mitigate these potential risks to some extent. For example, Participants could be required to put obligations to the System in "senior position" and/or to pledge their own assets as security against the Central Agency's debt. Of course, this type of requirement can be difficult to establish if Participants have pre-existing bond covenants demanding seniority. Poorly-rated Participants might be required to contribute to a debt service reserve over and above their allocated share of required reserves in order to mitigate against their inferior credit. The Central Agency charter agreement should establish procedures for arbitrating and/or managing Participant defaults, too. In short, Participants should be given every possible protection against the.. default of a single other member without diminishing the scale economies that make central financing appealing. Nevertheless, no mitigating provisions can protect Participants entirely from the financial risks presented by step-up provisions; without such step-up provisions, central financing might not achieve many financial advantages over local financing (discussed further, below). A potential indirect administrative advantage of central financing is that it could facilitate smooth transactions of capacity shares between Participants in the future. Under a central financing structure, each Participant would be subject to the same capital payment terms in the form of wholesale rates and SDCs-differences would be based solely on Participants' respective plant capacity shares. Thus, if one Participant wished to sell a share of capacity to another ten years after the project is operational, the transaction could be relatively simple: the buying Participant would take over the payments to the Central Agency for the capital cost of the purchased capacity share. The selling Participant would no longer pay for that share of capacity and would receive a negotiated premium from the buying 98-0375.118 Page 4 Willamette River Water Supply System Governance Issue Paper 10/16/98 F:\PRO)ECTS\98\0375.117\REPORTS\Central vs Local Finance.doc Participant for the rights to that capacity. Special arrangements for payment of either Participant's debt service might not be necessary, since all System debt would be paid for by the Central Agency or Participant-financier. However, it is possible that as a condition of the bond covenant, the Participant selling capacity would remain responsible for paying for its initial capacity-based share of wholesale rates and/or SDCs. In that case, the Participant buying capacity would pay negotiated rates and/or SDCs to the selling Participant, which would, in turn, pay the Central Agency, thus satisfying the conditions of the bond covenant. This arrangement could continue for the life of the debt, after which a more direct sale of capacity could take place. Local Financing. Since each Participant is responsible for contributing its own share of capital costs at the outset of a locally-financed project, each Participant would bear independently all risks and have all control and accountability associated with its own debt instruments. Although Participants would be responsible for fulfilling the obligations of their respective wholesale purchase contracts, each would develop its own financing strategy. That is, Participants could choose to use long- or short- term debt instruments, revenue or G.O. bonds, cash-fund part of their up- front capital share, or whatever other means are at their disposal. With no step-up or cross-security provisions in place, Participants would bear little or no direct risk due to other Participants' financial failures. That is not to say that Participants bear no risk due to the other Participants. Depending on the structure of the agreement governing the System, Participants may be required to help fund future System expansions before exhausting their own capacity. Further, inasmuch as the System relies on a steady stream of wholesale charges and/or standby fees for its day-today operations, the System is vulnerable to a financial failure of one or more Participant(s). However, with capital financing secured up-front, this risk is diminished: if a single Participant defaults on its debt service obligations, only that member's credit rating is likely to suffer and only that Participant i bears any direct liability for failure. { I Regional System System Development Charges (SDCs) are fees charged for new units Development connecting to a utility. By providing a mechanism by which future customers pay for system over-sizing costs, SDCs enhance economic Charges equality between present and future customers. Additionally, SDC income can help cushion somewhat the rate impact of new capital projects. Depending on the construction timing and/or financing structure adopted 98-0375.118 Page 5 Willamette River Water Supply System Governance Issue Paper 10/16198 F.%PRO)ECTM98W375.117NREPORTS\Central vs Local Finance.doc .l for the System, a "Regional SDC" to help pay for the capital costs of the System may or may not be economically desirable. In the case of a regional System, the Regional SDC may or may not take the form of a charge paid directly by new units hooking up to a Participant's system. For example, a Regional SDC may simply be a new unit growth . capacity component of the wholesale rates charged to Participant agencies. Put another way, the Regional SDC could be a charge based on new hookups paid by each Participant agency to the Central Agency: depending on how the System Interagency Agreement is structured, Participants could charge Regional SDCs on behalf of the Central Agency directly to individual units hooking up, or build the Regional SDC cost into their overall rate bases to be recovered in any way they see fit. For example, South Fork Water Board uses the former method: its participant agencies collect a separate SDC on behalf of the regional authority. The Cascade Water Alliance (CWA) uses the latter method: its participant agencies are responsible for paying a charge to the central agency based on new hookups, but are not necessarily required to collect revenue in the form of an SDC. The point here is that Regional SDCs may be seen as a revenue source for the System that Participants may be able to apply with a great degree of flexibility. Discussion Central Financing. For the reasons outlined above, a Regional SDC may be appropriate to help pay for the growth portion of the project if Participants opt for a central financing structure. The Regional SDC could be billed and collected directly by the Central Agency or by the individual Participant. Another potential advantage of a Regional SDC paid to the Central Agency-either directly or through the Participants-is equality among communities. While some variation might occur from Participant to Participant due to allocations of transmission and/or other System costs, the SDC would be derived from a single set of assumptions and calculations. That is, customers in every Participant jurisdiction would pay a SDC based on a common methodology for the regional System, varying only to the extent that their respective System costs differed, thus enhancing equality for all customers. The use of SDCs as a means of meeting debt service obligations bears some risks, too. If it relies upon SDC collections to meet debt service commitments, a Central Agency or Participant-financier risks failure to meet bond requirements and/or default if new growth-and therefore SDC 9M375.118 Page 6 Willamette River Water Supply System Governance Issue Paper 10/16/98 i F.XPROJECTS\99W375.117\REPORTS\Central vs local Finance.cac collections-fail to meet expectations. This "growth risk" could be reflected in higher interest rates on debt and/or other financing terms if SDCs are relied upon for a major component of debt service. Thus, when considering the use of SDCs for enhancing equity and cushioning rate impacts, Participants should balance these goals against the "growth risk" that may lead to less favorable lending conditions. One potential indirect disadvantage to Regional SDCs is that they may complicate capacity allocations as actual growth rates inevitably vary from their projected courses over time. For example, if one Participant experiences growth at a rate higher than expected, its Regional SDC contribution will be higher, too. After some time, the fast-growing Participant may find that its Regional SDC contribution represents a higher proportion of total SDC revenues than its share of System capacity. Unless applied as a whole or partial offset to each agency's wholesale rate obligations, extraordinary fast-growing Participants may wind up effectively paying for the same future capacity twice: once in the form of a Regional SDC, and again in the form of wholesale water rates. Local Financing. Regional SDCs probably are inappropriate under a local financing structure. Local financing would effectively make each Participant's share of the System's capital costs a part of the Participants' overall capital program, as would any local project. These capital costs would simply be built into the individual Participants' local SDC cost bases. The chief advantage of the local financing approach without a Regional SDC is control: each Participant can choose the methods it deems most appropriate. Further, local financing offers significantly greater flexibility in customers' payment terms, an advantage that might prove useful in promoting economic development or other ends. financial Issues Cost of Financial The cost of financial capital, most simply expressed as an interest rate on a Capital (Interest principal capital amount, is a central concern for any capital project that Rates) may be or must be debt-funded. With larger projects like the Willamette regional water treatment facility, small differences in interest rates on capital can have significant impacts in the long-term capital cost of a project. The decision to proceed with a central or local financing structure can produce pronounced interest rate impacts. While it is impossible to anticipate accurately the interest rate that a Central 98-0375.118 Page 7 Willamette River Water Supply System Governance Issue Paper 10/16/98 F. PRO)ECT5\9M375.117\REPORTS\Cenlral vs Local Finance.doc -IM Agency would pay on revenue bond debt, it may be useful to consider the probable range of rate that the System might encounter. A Central Agency composed of financially-secure Participants and armed with the strict step-up and cross-security provisions described above might achieve a rating of Aaa with low corresponding coupon rates. As a new entity, the Central Agency would have no credit history; the Central Agency's rating would be based on the individual credit histories and financial strength of the System Participants. Just as important would be the System's financing structure. One or more of the larger Participants might qualify for such a favorable rating individually, too. However, Participants with less financial security and/or less favorable credit history might garner only B-range ratings or no ratings, with higher corollary coupon rates. Samples from a Western U.S. municipal debt market index, shown below, are reasonable approximations of the coupon rates that the System might encounter in the market. It is important to note that this scale-especially the non-rated column-is based on relatively strong land-secured bonds. Liquidity and other factors may cause actual rates on unrated bonds to deviate more than 50 basis points from this illustrative scale.' Coupon Year Insured Aaa/AAA Not Rated 1999 3.20 3.75 2000 3.40 3.90 2005 3.80 4.40 2010 4.30 4.90 2018 4.90 5.45 2028 5.00 5.55 The critical point here is that a 50 to 100 basis point spread can reasonably be expected between municipal issues with the best ratings and issues with poor or no rating. Discussion Central Financing. From a lender's perspective, financial risk normally is inversely related to the size of the borrower for most public works projects, when all other factors are held equal. A Central Agency or single Participant-financier could use a central financing mechanism to combine Z Source: Stone & Youngberg Weekly California Municipal Market Report, 25 September 1998. 98-0375.118 Page 8 Willamette River Water Supply System Governance Issue Paper 10116/98 F:\PROJECTS\98\0375.1171REPORTS\Centrat vs Local Finance.doc Mon the financial strength and spread the credit risk of the member agencies. If structured properly, a centrally-financed capital project may be able to secure more advantageous interest rates than would the individual Participants, taken individually or in aggregate. The critical factors in determining what credit advantage-if any-a central financing approach might achieve are the source(s) and timing of the revenue stream the Central Agency or Participant-financier would collect. Generally, the more guaranteed and secure the revenue stream to the Central Agency, the more favorable the lending terms are likely to be. The advantage could be especially important for the smaller or financially weaker Participants, as these agencies would have the most credit advantage to gain through scale. However, this logic assumes that all Participants hold similar credit ratings: it is possible that a centrally-financed System could encounter a higher overall cost of capital than a locally-financed one if there is a significant disparity among the credit of the various Participants. That is, one or more especially poorly rated Participant could potentially damage the Central Agency's credit to the extent that any economies of scale achieved through central financing are effectively negated. The Central Agency or single Participant-financier probably would require firm contractual wholesale relationships and/or senior position on debt service commitments with the individual in order to take advantage of the System's scale for interest rate purposes. This consideration would be very important under a Central Financing plan and would be a central consideration in developing a wholesale rate structure. Without firm contracts in place, central financing may offer little interest rate advantage. Moreover, the degree to which the Central Agency would enjoy aggregate interest rate savings over a locally financed system depends to a great degree on the structure of the bond covenant agreed to by the Participants. If the bond covenant includes strong "step-up" and "cross-security" provisions that obligate all Participants to pay the debt of the System regardless of individual Participants' financial performance, then the Central Agency may gain significant interest rate savings overall. Without such provisions, the Central Agency's interest rate could hinge to a great extent on the "weakest link" among the System's Participants. Put simply, the interest rate advantage gained through central financing depends upon the structure of the Central Agency and its bond covenants. 98-0375.118 Page 9 Willamette River Water Supply System Governance Issue Paper 10/16/98 F.WROIECTM9810375.1171REPORTS1Central vs Local Finance.doc Local Financing. Under a local financing structure, individual Participants would secure financial capital at a market-determined cost, each according to its respective financial health and/or credit rating. Without the cross- security possible through central financing, the aggregate cost of capital (i.e., the effective interest rate paid. by all Participants combined) using local financing could be higher than it would be using central financing. However, if some Participants choose to use cash assets or a subsidized financing source to pay for their share of System's capital costs, the effective cost of capital paid by those Participants individually may be lower under a local financing structure. Further, if one or more Participants' credit position is especially poor (see above), more credit-worthy Participants may prefer local financing to take advantage of their superior financial positions and avoid "subsidizing" less financially-secure Participants. Issuance Costs A number of transaction costs normally accompany any capital financing strategy. These costs include underwriters' fees, brokerage fees, attorney's fees, bond ratings fees (when ratings are sought), insurance assessments and/or premiums, and any other miscellaneous costs associated with bringing a debt issue to the bond market. Many of these costs are set according to the size of the debt issue; others are more or less common to a debt issue of any type and of any significant amount. Discussion Central Financing. A centrally financed project probably would incur lower overall issuance costs than the Participants' individual issuance costs taken in aggregate. The reason for this advantage is simple: a project financed by either the Central Agency or by a Participant-financier would pay common issuance costs only once; the five locally-financing Participants would have to pay those costs individually for each of the five applicable debt issues. Even without the "step-up" and "cross-security" provisions that provide potential interest rate and coverage advantages, central financing can offer some savings by consolidating underwriting, financial advising, engineering and legal costs. These scale-related savings may be offset to some degree by the fact that the Central Agency would be issuing debt for the very first time, and therefore might incur somewhat higher issuance costs than it might in later issues. Those issuance costs tied to the total debt principal amount are more or less equal under either structure, although even these costs might be lower with central financing, since a larger single debt issue will attract more competitive bids from transactions firms. 98-0375.118 Page 10 Willamette River water supply System Governance Issue Paper 10/16198 F:tPROJECTSX98W375.1171REPORTSICentral vs Local Finance.doc Additionally, central financing offers the potential advantage of "market familiarity" for the future. That is, if the Central Agency should wish to issue debt again in the future to finance a capital expansion, the market would already be aware of the Central Agency and its credit record. This recognition can make future bond sates easier and more favorable, assuming that the Central Agency performs well financially. Local (Financing. Total issuance costs could be higher under a local financing scheme because each of the five Participant would incur issuance costs associated with their respective debt issues (assuming all choose to use debt financing). Moreover, the smaller or financially weaker Participants may find ratings service fees very expensive-perhaps prohibitively expensive-if seeking ratings independently. One possible alternative for gaining some economies of scale with issuance costs while still maintaining a local financing structure is for some or all of the Participants to retain the same bond counsel, underwriter, consulting engineer, and/or financial advisor. This common pool of professionals would manage separate debt issues for the various Participants. Participants could gain some savings by using common professionals who are familiar with the System, its governance and its financing. Moreover, since professional issuance fees are negotiated, firms may be motivated to make more attractive bids to secure the total System financing package than they would to handle individual Participants' portions of the financing. Of course, this option might conflict with some Participants' existing underwriter, financial advisor, and/or bond counsel arrangements. Coverage Debt service coverage requirements are provisions within bond covenants Requirements that require the borrower to raise revenue each year greater than or equal to the amount actually owed in the given year. Virtually all revenue bonds require at least a 1.0 coverage factor (i.e., the borrower usually must raise at least 1.0 times the amount of peak annual debt service); at the time of this writing typical coverage requirements on revenue bonds for a reasonably strong utility fall in the 1.10 to 1.30 range. Normally set as conditions of bonded debt or loans, annual debt service coverage requirements may be of particular concern if bond debt instruments are used to finance the System's capital costs. When they apply, coverage requirements beyond 1.0 constitute a significant corollary cost of financial capital, since they represent revenue that the borrower(s) must raise annually from rates and other stipulated qualifying sources of income. 98-0375.118 Page 11 Willamette River Water Supply System Governance Issue Paper 10/16/98 FAPROJECTM98\0375.11 T.°EPORTMentral vs Local Finance.doc In addition to the coverage requirements, typically there is a requirement for ~ a reserve account, which serves as further security for bondholders. A bond reserve may be funded in a number of ways: some borrowers choose to fund the reserve fully using the principal proceeds of the bond sale itself, others "ramp up" to full the full reserve requirement by funding the reserve from . rate revenue over five years. in today's market, advance funding of the reserve from the bond proceeds is the most common approach. Discussion Central Financing. Like interest rates, debt coverage requirements are functions of the perceived financial strength of the borrower. Thus, a central financing arrangement-led by either a Participant-financier or a Central Agency-is likely to qualify for more lenient coverage requirements (e.g., 1.10 to 1.25 times annual debt service) on bonded debt than would an individual Participant. If wholesale contracts with the Central Agency are structured carefully to provide guaranteed purchases for the life of the debt and the Participant agencies are reasonably financially-secure, a very relatively low coverage requirement may be possible through a central financing structure. Again, the degree to which central financing can achieve lower debt service..... coverage requirements will depend a great deal upon the structure of the' Central Agency, its wholesale rates and contracts, its related bond covenants, and the creditworthiness of its Participant-customers. One additional advantage possible through central financing is the greater flexibility that a new Central Agency could enjoy in establishing bond covenants related to coverage. For example, a Central Agency could apply Regional SDC revenues toward meeting coverage; individual Participants' existing bond covenants might make such arrangements difficult. Another common way to avoid higher debt service coverage costs is through the use of G.O. bonds instead of revenue bonds or other debt instruments. G.O. debt typically has no additional coverage requirement or any other reserve requirement, but requires voter approval for issuance, since the collateral on G.O. debt is a commitment of tax revenue. However, G.O. debt is not an alternative available to an intergovernmental agency formed under ORS 190, although individual Participant agencies could issue G.O. debt within their legal capacity to do so. Further, although an individual Participant-financier would be legally permitted to issue G.O. debt for the System on behalf of all the System's Participants, such a step may be 98-0375.118 Page 12 Willamette River Water Supply System > Governance Issue Paper 10/16/98 F:\PROJECT5\98W375.1171REPORTS\Central vs Local Finance.doc MEN problematic. Officials and voters in individual communities may be reluctant to approve G.O. debt for which citizens in other Participant jurisdictions will not be responsible. In other words, a regional System's allocation of benefits maybe inconsistent with the disaggregated financial risk borne by the taxpayers of a single Participant-financier. Local Financing. A local financing structure could result in higher overall debt service coverage requirements than would a central financing structure, just as individual and/or aggregate interest rates could be higher with local financing than with central financing. Lacking the security that can come with scale, individual Participants raising local capital probably would be held to a currently prevailing coverage convention, such as 1.25, for revenue bond debt, and could face coverage requirements of 1.30 to 1.40 or higher if their credit records or general financial health is suspect. Of course, as with interest rates, the precise coverage requirements imposed by underwriters would vary according to each individual Participant's financial strength and stability as judged by a rating agency and/or underwriter. However, unlike the ORS 190 Central Agency contemplated, each of the potential Participants currently has the statutory authority to issue G.O. debt, pending voter approval, within their G.U. capacity. For those Participants who have sufficient unused G.O. debt capacity and the political backing needed, G.O. debt may prove to be an attractive alternative for avoiding debt service coverage costs. Outside Funding While the opportunities for securing subsidized funding from the state or Support federal government are limited, there are a number of funding programs for which the System might qualify in part or as a whole. Many of these outside funding programs offer significant capital financing savings through lower interest rates, favorable coverage requirements, no need to set aside funds in a bond reserve, and/or inexpensive issuance costs. In some cases, the decision to finance the system centrally or locally may be a factor in determining the eligibility of the project for outside funding support. This discussion does not include a listing or evaluation of potential funding outside sources; such a list and evaluation could be developed as a follow- up to this Issue Paper or simply left to Participants to explore individually. Discussion Central Financing. The large scale that offers interest rate, coverage and issuance cost advantages to a centrally-financed System may actually disqualify such a system for some of the state and federal funding programs available for water system development. Most subsidized funding programs 98-0375.118 Page 13 Willamette River Water Supply System Governance Issue Paper 10/16/98 F:IPROJECTS198W375.117\REPORTS\Central vs Local Finance.doc i ti are intended to serve smaller communities that lack sufficient scale or resources to gain the advantages that naturally accrue IM larger utilities. Thus it is possible that some Participant-particuiarly the smaller Participants- -might be better able to win outside funding support than would a larger. Central Agency. But central financing does not necessarily preclude availability of outside funding support. Indeed, many larger utilities are successful in winning outside funding support because their large scale often affords them both greater financial savvy and political sway with state and federal governments. As a relatively large, regional player, a Central Agency might be able to draw favorable attention from Washington DC and/or Salem more effectively than any of the Participants might individually. a %~I>;errla[IVeIy, if one of the S~i~aiicr PartisripaitS (e.g., .She:~:~oo ^r Wilsonville) were to act as a the central capital financier for the System (rather than using the Central Agency for financing purposes), the regional 49 project might qualify for the subsidized funding programs offered to smaller communities.. For example, recent changes in state policy would now allow a smaller Participant to finance all or part of the capital costs of the system through a loan from the Oregon Water Resources Department Water... Development Loan Fund (WDLF), even if the small Participant-financier would only use a small portion of the capital facilities built. Intended to encourage regional solutions, these rule changes for the WDLF could offer significant savings, especially in issuance costs. Local Financing. Under a local financing structure, each Participant could choose to seek its own outside funding sources. Some Participants-- especially smaller ones-may qualify for several state and federal programs aimed at small communities for which a Central Agency would be ineligible. Programs like the WDLF could be available to qualifying individual Participants, although a local financing structure would require that each Participant separately apply for funding. On the other hand, some individual Participants may lack the grant/loan packaging expertise and/or political clout needed to win outside funding support. In any case, a local financing structure could provide greater flexibility and opportunities to Participants seeking outside funding support. Rate Impacts Paying for the Willamette System will require substantial financial 98-0375.118 Page 14 Willamette River Water Supply System Governance Issue Paper 10/16/98 F. PRO)ECIS198W375.1171REPOP.TS\Central vs Local Finance.doc Else 1.67 contributions from all of the System's Participants, contributions that will necessarily have impacts on local retail water rates. The System's financing structure will influence the timing of these impacts and the degree to which they affect retail customers. Discussion Central Financing. Under a central financing structure, the Central Agency, following the direction of its governing board, would determine the structure and timing of the debt instruments used to finance the System, as well as the wholesale rates and/or Regional SDCs that Participants would pay toward service on that debt. These wholesale rates and/or SDCs would become part of the Participants' respective retail rate bases and passed on to retail customers accordingly. Individual Participants would control these impacts only to the extent that they could work with others through the Central Agency's governing board and accommodate wholesale and regional System costs within their rate structures. Local Financing. With local financing, individual Participants would control the structure and timing of their own financing instruments to suit their own customers' needs. Debt issues could be timed and structured to moderate retail rate impacts. For example, in order to mitigate a large up-front retail rate increase as the result of regional System obligations, a Participant might choose to use a debt mechanism with deferred principal payments, paying only interest over the first few years of debt service. Such a structure would allow the Participant to "ramp up" its rates and avoid one-time, extraordinarily large rate increases. Another Participant with large cash reserves might choose to cash-fund a large portion of its System capital costs and recover future revenue through a local SDC to minimize debt service. The point is that, while Participants would bear significant financial responsibilities to the Central Agency in the form of capital costs and wholesale rates, local financing would give individual Participants significantly greater control over the timing and severity of corollary retail rate impacts. Participants would not need to compromise or negotiate with other Participants to determine the structure and timing of debt issues under a local financing structure, so long as each fulfills its financing commitments to the Central Agency. 98-0375.118 Page 15 Willamette River Water Supply System Governance Issue Paper 10/16/98 F.XPROJECTS198W375.1171REPORTS\Centrat vs local Finance.doc SOME 111MMEMM111 loin lminilliginill'il"mim MIMI Table 1 Willamette River Water Supply System: Central vs. Local Financing SUMMARY MATRIX - pg. 1 of 2 I • ~ .e e ® .e f MORRIS? Criteria Cost of Capital + Interest rates reflect the - Lower overall interest rates + Interest rates more - Potentially higher overa` I (Interest Rate) System's ability to pay may actually be higher for accurately reflect individual interest rate for entire service on debt. some well-rated Participants' abilities to pay system. + Potential for significant Participants: de-facto service on debt (no de-facto - Possibility of significanVy overall interest rate savings "subsidizing" of poorly- interagency interest rate higher interest rates for if agreement & bond rated Participants. subsidy). poorly-rated Participants. covenant are structured to + Financially-strong ensure maximum security. Participants may achieve + May result in better interest better interest rates. rates for smaller or poorly- rated System Participants. Coverage + Coverage requirements - Zero-added coverage + Coverage requirements - Potentially higher overall Requirement reflect the System's ability alternative (General reflect individual added coverage to pay service on debt. Obligation (G.O.) bond Participants' abilities to pay requirement for entire + Possibility for lower debt debt) is not available to service on debt (no de-facto system. service coverage Central Agency organized coverage cost subsidy). - Significantly higher requirements. under ORS 190. + Financially-strong, well-rated coverage requirement for + May result in more lenient - May result in de-facto Participants may achieve poorly-rated Participan s. coverage requirements for "subsidizing" of poorly- more lenient coverage poorly-rated System rated members. requirements. Participants. Issuance Costs + Potential for markedly lower - Complex institutional + Simpler institutional - Potentially higher overall overall issuance costs, since arrangement may result in arrangement may result in issuance costs as each only one bond issue is higher underwriting and lower underwriting and Participant pursues its own brought to market. legal fees, but probably still legal fees, but probably still capital funding source5r Future capital debt issues less expensive than local more expensive than central depending on sizes of aided through "market alternative. alternative. issue(s) and complexity of familiarity" with Central - New agency likely to + Could achieve some scale transactions. Agency performance. encounter high up-front economies by "pooling costs for first debt issue. "professional service costs. 17 Table 1 Willamette River Water Supply System: Central vs. Local Financing SUMMARY MATRIX - pg. 2 of 2 a ~ - e ® .e e Outside Funding + Regional organization may- Large scale may disqualify + Individual members may be - Would lack "regional" Support have political clout and the System for some state able to compete for take political appeal to state appeal to state granting and/or federal funding advantage of state and/or agencies in some cases. and/or subsidizing agencies. programs for which federal funding programs + Funding through a single individual Participants may for which a larger, centrally- Participant-Financier may be eligible. funded System may not allow all Participants to take qualify or would be subject advantage of funding to "ceilings" that reduce the programs for which only overall potential benefit. one or more qualify. Administrative Criteria Risk, Control & + Cross-security and step-up - Cross-security and/or step- + Each Participant responsible - Participants complete ,y "on Accountability provisions provide can up provisions may expose only for its own debt their own;" other blanket of group security to all System Participants to service; individual Participants not obligated to individual Participants. individual Participants' Participants' exposure to aid in the event of a + Unified capital finance plan financial failures and/or other Participants' financial financial crisis. may help facilitate smooth, debt defaults. failures is limited. - Disparate capital financing efficient transactions of - Individual Participants have + Participants given greatest structures may complicate capacity shares between no control over structure possible choice over capital future transactions of Participant in the future. and/or schedule of debt funding instrument, and capacity shares between service, except as provided timing, structure and terms Participants. for in the Central Agency's of debt service. governance agreement. Regional System + Regional SDCs may provide - SDCs may be an unstable + No Regional SDC-local - No Regional SDC-could Development added source of revenue to source of revenue-could agencies free to build result in an inequitable Charges (SDCs) enhance equity and cause financial problems if System capital costs into distribution of system costs financial stability. used improperly. their own SDCs bases. between present and future + Availability of Regional SDC - Regional SDCs may customers, depending on mechanism offers added encounter strong political how local SDCs are financial flexibility to resistance. structured. Central Agency. F:\PROJECTS\98\0375.117\REPORTS\Central vs Local FCS Group, Inc. Finance.doc (425) 857-1802 f Issue Paper Willamette River Water Supply System Decision-Makin 1. Representation and Decision-flaking Options Issue: The proposed 190 organization governing the Willamette River Water Supply System will require a legislative body. Based on committee direction, this body will be comprised of representatives of each agency. A further decision is required as to the voting mechanism. Typically, decision-making is by vote with voting rights accruing to each participant. The basis for determining decisions can include one or more of the following options: 1. One Agency/One Vote 2. Voting or Representation Weighted by Capacity 3. Voting or Representation Weighted by Financial Commitment A related issue related to meetings and decision-making is defining a specific decision-making process, including requirements for meeting notification, minimum participation (quorums), and the level of agreement needed to ratify an action. Discussion: Each option noted above has both advantages and disadvantages. Some criteria to be considered when evaluating these or other options might include: ® Adequacy of representation for all participants - Do all members have meaningful representation in decision- making? o Proportionality of representation to project participation - Do members bearing greater financial or project risks have proportionately greater voice? ® Willingness of members to participate at prescribed levels - Does the representation structure create a burden on 98-0375.118 Page 1 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 smaller agencies to participate, or an obstacle to securing a quorum? • Protection of individual members against group actions or decisions - Can the regional agency take actions which adversely affect minority members in abusive ways? • Ability to do business and make decisions - Is the group manageable in size and able to reach decisions in timely fashion? Representation in regional organizations is varied. Some examples include: 0 North Clackamas County Water Commission - One agency with three representatives, and two agencies with one representative, with the number of representatives roughly proportional to capacity interest. Three representatives constitute a quorum. Three affirmative votes (constituting a majority of representatives, not just those present) is needed to act. • Hillsboro-Forest Grove-Beaverton Joint Water Commission - Three representatives from each member for a total of nine. Five members constitute a quorum and an affirmative action requires a majority of the quorum and at least one affirmative vote from each agency. • South Fork Water Board - Three representatives from each of the two members. Four members constitute a quorum. An affirmative action requires a majority of the quorum and at least one affirmative vote from each agency. • Cowlitz Sewer Operating Board (Cowlitz County, WA) - One representative from each of four member agencies. Unanimous approval required for action. • LOTT (Thurston County, WA) - One representative from each of four member agencies. Unanimous approval required for action. • Cascade Water Alliance (King County, WA) - One representative from each of approximately 30 members. "Dual majority" approval by membership (not just those present) required based on both: a) one vote per agency and b) weighted vote based on agency water demand. This effectively establishes a quorum of at least 50%Q of k 98-0375.118 Page 2 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 all Pill' members and 50% of capacity interests. With this project, an additional question is how to define proportionality. Agencies are participating to varying degrees in each project element (river, intake, treatment, transmission). One potential approach is the amount of capital cost incurred by each agency. This mechanism could be adaptable over time through the use of an indexing system. Alternatively, current' numbers of representatives could be proportional to initial cost, with recognition and agreement that the representation may change as future investments after the balance, but no direction on how that should be accomplished. Finally, a composite "capacity" could be determined based on weightings of different project elements, perhaps related to the cost of ultimate development levels. This is likely to prove comparable to the cost approach. The cost approach appears the most reasonable and available for defining proportionate voting. This could be applied through representation levels, or voting weight. As a practical matter, differential voting weights would allow each agency to assign one or two representatives, with alternates, and promote both efficient execution of business and ongoing participation by members. In defining the new Willamette decision-making body, the level of participation appears a critical element of the process due to the disproportionately large investments being made by several of the participants. However, this could result in a de facto majority for one agency, the City of Tigard. In effect, such direct proportionality could negate the votes of other agencies. Therefore, a secondary mechanism which introduces elements of general concurrence would also appear appropriate. Several of the above examples offer this in different manners, including at least partial approval by all agencies or approval by a majority of agencies, as well as proportional interests. The partial approval requires a larger body, with the opportunity to split an agency's vote. The "dual vote" can accomplish the same purpose with a smaller representation, such as one representative per agency. A third approach would be to allow proportional decision-making, but set the standard for approval at some level above the voting share of the largest member (e.g. their share plus 1/3 of remaining shares). It is important to note that the multiple standards for approval can act comparable to "super-majority" requirements as effective obstacles to action. It is this ability to obstruct that affords protection to all members, but it can also work to prevent efficient execution of uusines:. 98-0375.118 Page 3 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 I rN Nonetheless, it provides a valuable element of representation and protection for all participants, and as such may be a "necessary evil". Variations on the dual vote also exist. One includes the use of simple majority unless superseded by a call for a weighted vote. Typically this must be called before the vote, although in some cases can occur after. This approach differs from the dual vote in that it defines one method as the decisive vote, rather than dual approval. Another alternative uses simple majorities except that weighted majorities are required for votes on any financial matters. In practice, this can work fine with a cooperative board, but, since most decisions can have some financial ramification, it can also create conflict in interpreting which decisions have financial import merit°.ng a weighted vote. The idea of proportional voting, but with approval requirements exceeding the share of any one member by some margin, may also provide effective protection of all interests, especially when one agency may have a majority interest. However, it seems potentially prone to polarizing the membership to a greater extent than the other methods, since a minority bloc could prevent action. While the dual majority also effectively allows this, it appears to do so less overtly, while also protecting (at least conceptually) the rights of the majority to act. Recommendation The dual majority voting approach appears to provide the necessary proportionality while protecting the interests of smaller participants. This approach wou!d require both a simple and weighted majority on each decision. [Only one vote would occur, but the votes are tabulated in two manners.] Due to the varying degrees of participation in different project components, there is no obvious single capacity measure to use for the weighted vote. A composite "equivalent capacity interest" could be constructed for this purpose. The simplest such measure would be total project capital investment (in dollars). In order to normalize investments made over time, they would be indexed to current construction costs. This can be practically accomplished through a running total of capital investment by agency. Each year, the total for each agency would be escala~ed according to the annual change in the ENR construction index, i in addition to any new capital investments. O&M costs would not be included in this total, although payments to the regional utility for capital replacement or replacement reserves could be. 98-0375.118 Page 4 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 The use of the dual majority approach allows for a decision making body composed of one voting representative from each member. Through the use of primary and alternate delegates, this should help provide a high ongoing level of participation. It also simplifies the voting by having a single voice for each agency on regional water decisions. 98-0375.118 Page 5 Willamette River Water Supply System Decision Mlaking Issue Paper 11/17/98 i 1 Issue Paper Willamette River Water Supply System Decision-Making 1. Representation and Decision-Making Options Issue: The proposed 190 organization governing the Willamette River Water Supply System will require a legislative body. Based on committee direction, this body will be comprised of representatives of each agency. A further decision is required as to the voting mechanism. Typically, decision-making is by vote with voting rights accruing to each participant. The basis for determining decisions can include one or more of the following options: 1. One Agency/One Vote 2. Voting or Representation Weighted by Capacity 3. Voting or Representation Weighted by Financial Commitment A related issue related to meetings and decision-making is defining a specific decision-making process, including requirements for meeting notification, minimum participation (quorums), and the level of agreement needed to ratify an action. Discussion: Each option noted above has both advantages and disadvantages. Some criteria to be considered when evaluating these or other options might include: 0 Adequacy of representation for all participants - Do all members have meaningful representation in decision- making? 0 Proportionality of representation to project participation - Do members bearing greater financial or project risks have proportionately greater voice? 0 Willingness of members to participate at prescribed levels - Does the representation structure create a burden on 98-0375.118 Page 1 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 smaller agencies to participate, or an obstacle to securing a quorum? • Protection of individual members against group actions or decisions - Can the regional agency take actions which adversely affect minority members in abusive ways? • Ability to do business and make decisions - Is the group manageable in size and able to reach decisions in timely fashion? Representation in regional organizations is varied. Some examples include: • North Clackamas County Water Commission - One agency with three representatives, and two agencies with one representative, with the number of representatives roughly proportional to capacity interest. Three representatives constitute a quorum. Three affirmative votes (constituting a majority of representatives, not just those present) is needed to act. • Hillsboro-Forest Grove-Beaverton Joint Water Commission - Three representatives from each member for a total of nine. Five members constitute a quorum and an affirmative action requires a majority of the quorum and at least one affirmative vote from each agency. • South Fork Water Board - Three representatives from each of the two members. Four members constitute a quorum. An affirmative action requires a majority of the quorum and at least one affirmative vote from each agency. • Cowlitz Sewer Operating Board (Cowlitz County, WA) - One representative from each of four member agencies. Unanimous approval required for action. • LOTT (Thurston County, WA) - One representative from each of four member agencies. Unanimous approval required for action. • Cascade Water Alliance (King County, WA) - One representative from each of approximately 30 members. "Dual majority" approval by membership (not just those present) required based on both: a) one vote per agency and b) weighted vote based on agency water demand. This effectively establishes a quorum of at least 50% of 98-0375.118 Page 2 Willamette River Water Supply System Decision Making issue Paper 11/17/98 members and 50% of capacity interests. With this project, an additional question is how to define proportionality. Agencies are participating to varying degrees in each project element (river, intake, treatment, transmission). One potential approach is the amount of capital cost incurred by each agency. This mechanism could be adaptable over time through the use of an indexing system. Alternatively, current numbers of representatives could be proportional to initial cost, with recognition and agreement that the representation may change as future investments alter the balance, but no direction on how that should be accomplished. Finally, a composite "capacity" could be determined based on weightings of different project elements, perhaps related to the cost of ultimate development levels. This is likely to prove comparable to the cost approach. The cost approach appears the most reasonable and available for defining proportionate voting. This could be applied through representation levels, or voting weight. As a practical matter, differential voting weights would allow each agency to assign one or two representatives, with alternates, and promote both efficient execution of business and ongoing participation by members. In defining the new Willamette decision-making body, the level of participation appears a critical element of the process due to the disproportionately large investments being made by several of the participants. However, this could result in a de facto majority for one agency, the City'of Tigard. In effect, such direct proportionality could negate the votes of other agencies. Therefore, a secondary mechanism which introduces elements of general concurrence would also appear appropriate. Several of the above examples offer this in different manners, including at least partial approval by all agencies or approval by a majority of agencies, as well as proportional interests. The partial approval requires a larger body, with the opportunity to split an agency's vote. The "dual vote" can accomplish the same purpose with a smaller representation, such as one representative per agency. A third approach would be to allow proportional decision-making, but set the standard for approval at some level above the voting share of the largest member (e.g. their share plus 1/3 of remaining shares). It is important to note that the multiple standards for approval can act comparable to "super-majority" requirements as effective obstacles to action. It is this ability to obstruct that affords protection to all members, but it can also work to prevent efficient execution of business. 98-0375.118 Page 3 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 Nonetheless, it provides a valuable element of representation and protection for all participants, and as such may be a "necessary evil". Variations on the dual vote also exist. One includes the use of simple majority unless superseded by a call for a weighted vote. Typically this must be called before the vote, although in some cases can occur after. This approach differs from the dual vote in that it defines one method as the decisive vote, rather than dual approval. Another alternative uses simple majorities except that weighted majorities are required for votes on any financial matters. In practice, this can work fine with a cooperative board, but, since most decisions can have some financial ramification, it can also create conflict in interpreting which decisions have financial import meriting a weighted vote. The idea of proportional voting, but with approval requirements exceeding the share of any one member by some margin, may also provide effective protection of all interests, especially when one agency may have a majority interest. However, it seems potentially prone to polarizing the membership to a greater extent than the other methods, since a minority bloc could prevent action. While the dual majority also effectively allows this, it appears to do so less overtly, while also protecting (at least conceptually) the rights of the majority to act. Recommendation The dual majority voting approach appears to provide the necessary proportionality while protecting the interests of smaller participants. This approach would require both a simple and weighted majority on each decision. [Only one vote would occur, but the votes are tabulated in two manners.] Due to the varying degrees of participation in different project components, there is no obvious single capacity measure to use for the weighted vote. A composite "equivalent capacity interest" could be constructed for this purpose. The simplest such measure would be total project capital investment (in dollars). In order to normalize investments made over time, they would be indexed to current construction costs. This can be practically accomplished through a running total of capital investment by agency. Each year, the total for each agency would be escalated according to the annual change in the ENR construction index, in addition to any new capital investments. O&M costs would not be included in this total, although payments to the regional utility for capital replacement or replacement reserves could be. 98-0375.118 Page 4 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 The use of the dual majority approach allows for a decision-making body composed of one voting representative from each member. Through the use of primary and alternate delegates, this should help provide a high ongoing level of participation. It also simplifies the voting by having a single voice for each agency on regional water decisions. 98-0375.118 Page 5 Willamette River Water Supply System Decision Making Issue Paper 11/17/98 AGENDA ITEM NO.- 2 -VISITOR'S AGENDA DATE : February 22, 2000 (Limited to 2 minutes or less, please) Please sign on the appropriate sheet for listed agenda items. The Council %vishes to hear from you on other issues not on the agenda, but asks that you first try to resolve your concerns through staff. Please contact the City Manager prior to the start of the meeting. Thank you. STAFF CONTACTED NAME, ADDRESS & PHONE TOPIC Agenda Item No. 3 r.';eeting of .2. D-2 OD MEMORANDUM TO: Honorable Mayor and City Council FROM: Ronald D. Goodpaster Chief of Police DATE: February 14, 2000 SUBJECT: Photo Radar The purpose of this memorandum is to give you an update regarding the Police Department's preparation and planning for the possible implementation of photo radar, with Council approval later this year. The Department is in the process of finalizing our request for proposal and a contract that will be presented to the Council after the budget process. There are two major issues we are working on at this point. The first is inclusion in the budget of monies for remodeling to make room for additional personnel in the municipal clerk area. The second is a request from the Municipal Court and the Police Department for one and a half additional personnel that would be required to not only operate and issue photo radar citations, but also to process those citations through the Municipal Court system. Both of those positions and the money needed for remodeling has been included in budget requests, and once the Budget Committee has had a chance to review those requests and decide on them, we will be prepared to come to the Council for a formal recommendation for the approval of the implementation of photo radar in Tigard and a proposed contract. We are continuing to communicate with the other cities that have been using photo radar and are implementing photo radar to ensure that we are up to date on all the information regarding this technology. Some of you may have read the article in the Oregonian stating that Clark County was going to scrap photo radar, saying it was not cost effective. The Clark County Sheriff stated photo radar was a good idea but said it was hard to justify when it operated at a loss to the County and the vendor. They stated that the particulars of the Washington State law are what prompted their decision to terminate the use of photo radar. Honorable Mayor and City Council February 14, 2000 Page 2 Clark County and the vendor for photo radar mutually agreed to suspend the program due to some extra steps involved in the processing of citations issued as a result of photo radar imposed upon them by the Washington Attorney General. This makes their program extremely labor intensive, more so than what Oregon's is required to be and, therefore, increased their cost to a point where it was found to be cost prohibitive. There is state legislation being introduced this session in Washington that addresses the processing issue; and Clark County has expressed their interest in restarting their program once this legislative issue is resolved. The big issue is that currently cities in Washington who use photo radar need to access two different databases from the Washington Department of Licensing to issue a citation. They look at both the registered owner and the driver's license and compare the pictures for a match. Only law enforcement has access to these records in Washington; and as a result, this increases their workload tremendously in processing photo radar citations and significantly increases their cost. The legislation, which is being introduced this session, will take the extra work out by allowing cities to send the citation to the registered owner of the vehicle similar to what has been occurring in Oregon for the last several years. If you have any questions concerning our continued efforts towards implementing photo radar, please feel free to contact me at your convenience. AGENDA ITEM # ' CL FOR AGENDA OF February 22. 2000 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE Award of Contract for the Construction of Lincoln Avenue - Street and Storm Drainage Improvements n_z PREPARED BY: Vannie Nov DEPT HEAD OK: Gus uenas CITY MGR OK: Bill YootnVaabbann ISSUE BEFORE THE COUNCIL Shall the Local Contract Review Board approve the contract award for the construction of Lincoln Avenue - Street and Storm Drainage Improvements? STAFF RECOMMENDATION The staff recommends that the Local Contract Review Board, by motion, approve the contract award to Oregon Excavation, Inc. in the amount of $182,824.00. INFORMATION SUMMARY Lincoln Avenue between Commercial Street and Greenburg Road has been approved for CDBG funding effective July 1, 1999. The existing roadway is narrow and does not meet minimum width standards. The existing pavement is in need of major maintenance in most areas. In addition, the existing drainage system is an inadequate series of ditches, culverts and home-made catch basins. Many of the ditches have been filled in over the years creating serious drainage problems. The scope of this project is to construct half-street improvements, which include construction of sidewalks, curbs and new storm drainage system. The City has applied for CDBG funding to improve the other half of the street. Right-of-ways at the corner of Commercial Street and Lincoln Avenue have been obtained to construct ADA wheel chair ramps for the new street. Completion of full street improvements would provide two - 11-foot travel lanes and 8-foot parking between Greenburg and 9151 Avenue and two - 13-foot travel lanes between 915` Avenue and Commercial Street. The bid opening was conducted on February 1, 1999. The bid results are: Oregon Excavation Clackamas, OR $182,824.00 Oregon Siteworks Aloha, OR $213,759.25 Excel Excavations Tualatin, OR $223,865.35 Crestview Construction Hillsboro, OR $229,519.00 Banzer Construction Salem, OR $245,266.00 Sunquest Construction West Linn, OR $245,991.05 H&R Utilities Hillsboro, OR $246,100.00 Benge Construction Tualatin, OR $249,949.50 Canby Excavation Canby, OR $251,780.00 LZN Excavation Clackamas, OR $261,144.00 Parker Northwest Paving Oregon City, OR $262,066.00 Andersen Pacific Ridgeview, WA $267,568.00 Northwest Construction Battleground, WA $268,883.25 D&D Concrete & Utilities Tualatin, OR $270,044.00 Three Dimensional Beaverton, OR $271,563.00 Wayne Jeskey Clackamas, OR $278,025.00 Rychart Excavation Hillsboro, OR $282,514.73 Portland Excavating Fairview, OR $284,384.75 Eagle Elsner Tigard, OR $286,354.75 Dirt & Aggregate Interchange Fairview, OR $287,444.40 Miller & Sons Sherwood, OR $297,715.20 Skyline Equipments Clackamas, OR $303,062.50 C&M Construction Sherwood, OR $310,291.15 Emery & Sons Stayton, OR $316,891.50 Engineer's Estimate $299,600 OTHER ALTERNATIVES CONSIDERED N/A VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY This project meets the Tigard Beyond Tomorrow Transportation and Traffic Goals of "Improve traffic safety". FISCAL NOTES The street improvement portion of this project was funded in the amount of $190,000 in the FY 1999- 2000 CIP with $166,800 in CDBG funding and $23,200 in City funding. The storm drainage improvement was funded in the amount of $60,000 in the FY 1999-2000 CIP Storm Drainage System Program. $4,000 has been spent on right-of-way acquisition leaving $246,000 in this fiscal year's project fund. This amount is sufficient to award the contract of $182,824. tkdtywide%sumtagenda summary for lincoln projecl.doc MENNEN" CITY OF TIG ARD OREGON LINCOLN AVENUE STREET & DRAINAGE IMPROVEMENTS FROM CORCI4L STREET TO QREENWRQ ROAD y N H BEGIN CONSTRUCTION 95TH AVE c a STA 10+00 91ST AVE a 22ND A i ~ y 90TH AVE a~' O END CONSTRUCTION ry~~ STA 25+64 I 14 BLVD ew NO SCALE AGENDA ITEM # ? k' FOR AGENDA OF February 22, 2000 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE: Enp-ineering Design and Right-of-Way Acquisition Services for Burnham Street Improvements PREPARED BY: Vannie Ngay n DEPT HEAD OK : Gus uenas CITY MGR OK: Bill tonaha~n ISSUE BEFORE THE COUNCIL Shall the Local Contract Review Board approve the contract award for the engineering design and right- of-way acquisition services for the Burnham Street Improvements project? STAFF RECOMMENDATION The staff recommends the Local Contract Review Board, by motion, approve the contract award to CIDA, Inc. in the amount of $125,228.00. INFORMATION SUMMARY The existing Burnham Street is a Major Collector that runs in a southeasterly direction and provides connection between Main Street and Hall Boulevard. The street currently exhibits substandard width and the pavement surface is incapable of adequately serving the existing traffic and future transportation needs. No sidewalks exist along various portions of the street and certain areas offer narrow shoulders forcing pedestrians to walk along the edge of the travel lanes. The current public rights-of-way that vary between 40' and 60' will need to be expanded to accommodate the widening. Currently, surface water runoff is collected and conveyed southwesterly through a combination of systems of open ditches and pipes that are difficult to maintain. The drainage pipe materials consist of failing concrete and corrugated metals with pipe diameters varying from 8 inches to 15 inches. Even though sanitary sewer exists through most of the project corridor, a- portion of the sewer does not have 4 maintenance access. The existing 8-inch cast iron water lines will need to be replaced with 12-inch ductile iron to provide an efficient and durable piping network. This project proposes to upgrade the existing utilities and to reconstruct Burnham Street to enhance the safety of both motorists and pedestrians. H A Request for Proposal was advertised on Decenber 21, 1999. Out of 12 consultant firms submitting proposals, three consultants, Compass Engineering, Harper Houf Righellis, and Cida were shortlisted for interviews. CIDA, Inc. is believed to be the best candidate for the project based on the firm's a capabilities, qualifications and resources to perform the requested services. Right-of-Way Associates, the sub-consultant of CIDA, Inc. would provide assistance with easement and right-of-way negotiation and acquisition. The scope of services consists of project orientation, preliminary design, final design, right-of-way acquisition, and preparation of contract and bid documents that would be used in the bidding process of the project. The design phase is anticipated to begin immediately following the award of the contract and would be completed in August 2000. The right-of-way acquisition phase is anticipated to be completed by December 2000. Attached is the location map of the project. OTHER ALTERNATIVES CONSIDERED None VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY This project meets the Tigard Beyond Tomorrow Transportation and Traffic Goals of "Improve Traffic Safety". FISCAL NOTES This project is handed in the FY 1999-2000 CIP using Traffic Impact Fee funding in the amount of $300,000 for design and right-of-way acquisition. This amount is sufficient to award the contract of $125,228 to CIDA, Inc. 1Ac1tyMde\sumlagenda summary for bumham street rfp.doe p mom W. I~o~~cl OA YA71011 tYtTIY Location MaP ~ sT ti I1 ~,o~ qcJ~ project Location 1 i i /~aq0 ~O.qO 11 I 1 1 1 I 1 I N 1 300 500 Pots 0 100 200 '9S iti ase W O Ciry of Ti y p ~ u„,~,De„tl+n• tst2sswt~sB'Yd Grp, OR 9722s J (SOJ)p3y+117t ~gplNµ,K.dlSpyl'O,pt•us M P Plot date: Dec 15.1999; C aod c ~ GIC03.APR t rteuainompnt AGENDA ITEM # 3'q FOR AGENDA OF 2-22-00 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE Approve Council Goals for 2000 PREPARED BY: W.A. Monahan DEPT HEAD OK _ ITY MGR OK ISSUE BEFORE THE COUNCIL Approve the Council Goals for 2000. STAFF RECOMMENDATION Approve the Council Goals for 2000. INFORMATION SUMMARY Council met on January 17, 2000, in a special meeting and reviewed the progress made by the City in attaining completion of the goals set for 1999. Council gave direction on the goals and tasks to be undertaken for the year 2000. On February 15, 2000, Council reviewed the draft goals; no additions or changes were made. The Goals for 2000 are attached and are submitted for Council's formal approval. Staff will update the Council on progress toward attaining these goals in April 2000. OTHER ALTERNATIVES CONSIDERED N/A VISION TASK :'ORCE GOAL AND ACTION COMMITTEE STRATEGY N/A FISCAL NOTES N/A I:\ADM\CATHY\COUNCIL\AGENDA ITEM SUMMARY SHEET - COUNCIL GOALS 2000.130C a- Council Gals for 2000 The Tigard City Council met on Monday, January 17, 2000 to review progress made on 1999 goals and to set goals for 2000. The Council agreed to continue the 1999 goals to conclusion and discussed various tasks required to complete the goals in 2000. The format of this presentation of goals is: a) A restatement of the 1999 goals b) Tasks to he accomplished in 2000 c) The goal for 2000 1. a) Complete the City's transportation improvement program development. b) Tasks Continue development of the program elements now under way, as planned. That is, complete the Transportation System Plan and continue to develop a bond measure to place before the voters in November, 2000. c) No change to the goal. 2. a) Participate in a study of a recreation district, and upon completion of the study, determine the City's level of support b) Tasks Staff must present information to Council regarding what the other participating jurisdictions plan to do, that is, do they favor asking Washington County to place a measure creating the district before the voters in November, 2000? Schedule a presentation of the Atfalati Feasibility Study report before Council-during the workshop meeting in March with action by the Council scheduled for the following Council business meeting. - Information needed by Council to make a decision whether to support the district includes: Council Goals 2000 Page I of 4 Which programs/facilities will be affected by the proposed Rem district? What arrangement is planned for operations of the Tigard Tualatin School District facilities? What commitment has the School District made in terms of utilizing operating funds that will be freed up if Atfalati assumes responsibility for operation (i.e. costs of operating the swim center)? What is the boundary of the district that will be forwarded to the County for consideration; who are the partners to the district? - What is the proposed cost that the citizens will be asked to support. c) Review the results of the Atfalati Recreation District Feasibility Study and determine if the City should support formation of the district by endorsing forwarding the results of the study to the Washington County Board of Commissioners asking that a measure be placed on the November 2000 ballot to form the District. 3. a) Assist the Tigard Central Business District Association to develop a plan for the downtown. b) Tasks Continue to support the efforts of the Tigard Central Business District Association. Participate in the Oregon Downtown Development Association resource team data-gathering event in February. Budget funds for Fiscal Year 2000-2001 to support the plan for the downtown to be developed by the Tigard Central Business District Association. c) No change to the goal. 4. a) Complete the City Master Plan for. Parks. b) Tasks Review the City's request to Washington County that a parks systems development charge be created and collected within the Washington County urban services area administered by Tigard. Have Public Works and the Atfalati Recreation District update Council on the plans for development of Cook Park. What projects are planned and when will they be completed? Will the City or Atfalati be responsible for completing elements of the plan? Complete the Summerlake Park plan after the Council makes a decision on how the lake will be utilized or altered. c) No change to the goal. Council Goals 2000 Page 2 of 4 S. a) Determine the City's long-term water supply. b) Tasks Continue to evaluate the options available to the City and select a plan of action. c) No change to the goal. 6. a) Establish an annexation policy for the City. b) Tasks Take final action on the island annexations in February. Revisit the City's policy on annexation to determine if the City should be encouraging annexation of properties. c) No change to the goal 7, a) Encourage and support private sector programs to rehabilitate housing which will be offered for rent at affordable rents, resulting in a safer environment for the tenants (public safety, fire, life, sanitary). b) Tasks Continue to enforce the Property Maintenance Code (Housing Code). Target support of private financing of affordable housing within the community. Encourage Community Partners for Affordable Housing to take on additional projects such as the successful Villa La Paz acquisition and rehabilitation program. c) No change to the goal. 8. a) Determine the level of City support for a program of community events. This goal has been completed and now becomes a task. The City will continue to support the events that we presently have. The City will not independently attempt to create more events. Information will be made available to the public and performing groups that the Bishop-Scheckla Multi-Purpose Facility is available for performances at no charge as long as the events are open to the public at no charge. Council Goals 2000 Page 3 of 4 11NIN INS 9. a) Promote intra-city Tri Met bus routes. b) Tasks Survey City infra-city route rider needs and develop a proposal to place before TO Met for consideration during 2000. Through code enforcement, encourage TO Met to improve the level of cleanliness, litter pickups, and garbage pickup at all Tri Met bus shelters. c) The goal changes to: Develop a demonstration bus program for Tigard intra-city services to be submitted to Tri Met for consideration in 2000. Task Update The 1999 Goal Setting also resulted in creation of tasks to be completed in 1999. The status of these tasks is as follows: 1. Support development of the Washington Square Regional Center Plan - a task force devPlooed a plan that is now before Council for action in February. Furt. work on the need to coordinate the improvement of infrastructure at the time of development will be completed. 2. Continue to improve communication within the Council. This is an ongoing commitment of Council. It is not necessary to continue it as a task for 2000. 3. Expand the use of the City's web page - the City made significant strides in 1999 and will place even greater emphasis on using the web page as a communication tool in 2000. In addition, the Council created a new task, related to the web page.... 4. (New) Strive for implementing a paperless Council meeting in 2000. Staff will investigate the steps involved to convert to Council use of notebook computers, receiving Council packet information via the internet, rather than the present Council packet materials. I:W DM\B ILUGOALS2000.DOC Council Goals 2000 Page 4 of4 AGENDA ITEM # FOR AGENDA OF February 22, 2000 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE Intergovernmental Agreement Between the Ci of Tigard and Washington County Re ardin the M TIP 3 Project for Walnut Street and the Gaarde Street Improvements PREPARED BY: A.P. Duenas DEPT HEAD OK CITY MGR OK ISSUE BEFORE THE COUNCIL Shall the City Council approve, by motion, the attached Intergovernmental Agreement (IGA) with Washington County authorizing reimbursement to the City of Tigard for the Gaarde Street Extension Project from the MSTIP 3 Project funding for Walnut Street at the Gaarde Street Intersection? STAFF RECOMMENDATION Staff recommends that City Council, by motion, approve the attached IGA and transmit the approved IGA to the Washington County Board of Commissioners for their action. INFORMATION SUMMARY On May 16, 1995, the voters approved a Major Streets Transportation Improvement Program-Six Year Serial Levy for Roads (MSTIP 3). Improvements to Walnut Street from its intersection with 12151 Avenue to its intersection with 1351h Avenue is included within the list of projects approved by the voters. In May 1997, the voters approved Measure 50, which had adverse fiscal impacts on the original schedule for construction. On June 23, 1998, the Board of County Commissioners adopted a revised and extended schedule for construction of the MSTIP 3 projects. The original project was subdivided into three phases with Phase 2 being the intersection of Walnut Street with the extension of Gaarde Street from Quail Hollow-West to Walnut. Because of the revised schedule for construction, Washington County offered the opportunity for each of the cities within the County to accelerate projects in advance of the adopted MSTIP 3 revised schedule, pay for the projects out of other funds, then receive reimbursement from the County in accordance with the adopted schedule. The City of Tigard is in the process of performing the design of the larger project extending Gaarde Street from Quail Hollow-West to Walnut Street. This larger project includes design, rights-of-way acquisition, and construction of the Walnut Street/Gaarde Street intersection and approaches, and extension of Gaarde Street from that intersection south to connect with the segment of Gaarde Street constructed as part of the Quail Hollow Subdivision project. The City intends to construct the project using Traffic Impact Fee (TIF) funding in advance of the adopted MSTIP 3 schedule. The attached IGA would authorize reimbursement to the City for that portion of the MSTIP 3 project that lies within the larger City project. The IGA sets forth the County and City obligations under the agreement to ensure that the project approved for MSTIP 3 funding is constructed and that all funding out of MSTIP 3 accounts is fully reported and accounted for in this process. ~ NINON all 1111111 OTHER ALTERNATIVES CONSIDERED Construct the intersection of Walnut Street and Gaarde Street in accordance with the revised MSTIP 3 schedule and complete the extension to Quail Hollow after the MSTIP 3 project is completed. VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY The improvements proposed for Gaarde Street and Walnut Street meet the Tigard Beyond Tomorrow goals of Improve Traffic Safety and Improve Traffic Flow. FISCAL NOTES The design and partial rights-of way acquisition for the Gaarde Street Extension from Quail Hollow-West to Walnut Street is funded from TIF funds in the FY 1999-00 Capital Improvement Program. The total funding of $650,000 authorizes design and rights-of-way acquisition for Gaarde Street from Highway 99W to Walnut Street. The segment from Quail Hollow-West to Walnut Street is identified as Gaarde Street Improvements Phase 1. The City's intention is to set aside TIF funds for construction of the project in mid-2000. I:\Citywide\Sum\Agenda Item for MSTIP 3 IGA RIMINI nQ I G~O s~ z--~Jj , N TERGOVERNMENTAL. AGREEMENT .MAJOR STREETS TRANSPORTATION IMPROVEMENT PROGRAM FOR ROADWAY IMPROVEMENTS TO: WALNUT STREET A-1 GAARDE STREET CITY OF TIGARD THIS AGREEMENT is made and entered into by and between WASHINGTON COUNTY, acting by and through its Elected Officials, hereinafter referred to as "COUNTY"; and the CITY OF TIGARD, acting by and through its City Council, hereinafter referred to as "CITY." WITNESSETH ARTICLE I - RECITALS WHEREAS, on May 16, 1995, the voters approved a Major Streets Transportation Improvement Program - Six Year Serial Levy for Roads (MSTIP 3); and WHEREAS, improvements to Walnut Street at,the intersection with Gaarde Street (PROJECT) is included within the list of projects approved by the voters; and WHEREAS, in May 1997, the voters approved Measure 50, which converted the MSTIP3 levy to a part of the COUNTY permanent rate; and WHEREAS, on June 23, 1998, the Board of County Commissioners (BCC) adopted a revised schedule for construction of the MSTIP 3 projects and indicated its intent to proceed with the MSTIP3 projects on a revised schedule in light of the fiscal impact of Measure 50; and WHEREAS, by the authority granted by said MSTIP 3, the COUNTY may enter into cooperative agreements with various cities within Washington County for the performance of work on improvement projects with the allocations of costs and terms and conditions mutually agreed to by the parties; and WHEREAS, ORS 190.010 authorizes agencies to enter into intergovernmental agreements for the performance of any or all functions and activities that a party to the agreement has the authority to perform; and WHEREAS, CITY desires -to have the PROJECT constructed in conjunction with construction of a new section of Gaarde Street extending approximately 680 feet south of -1- the PROJECT (CITY PROJECT) scheduled for 2000 and has Countywide Traffic Impact Fees (T IF) available to fund the PROJECT in advance of the BCC adopted schedule; and WHEREAS, CITY and COUNTY propose that the CITY manage the design and construction of the PROJECT, that the CITY pay for all PROJECT costs, and that the COUNTY reimburse the CITY with MSTIP3 funds as they become available in accordance with the aforementioned BCC adopted schedule; and WHEREAS, under such authority, it is the mutual desire of the COUNTY and CITY to enter into such an agreement for construction of the PROJECT, with the allocation of responsibilities as detailed below; NOW, THEREFORE, the premise being in general as stated in the foregoing recitals, and in consideration of the terms, conditions and covenants as set forth below, the parties hereto agree as follows: ARTICLE II - COUNTY OBLIGATIONS 1. COUNTY shall enter into and execute this Agreement during a duly authorized session of its Board of County Commissioners. 2. COUNTY shall,-upon execution of this Agreement, assign a liaison person to be responsible for coordination of PROJECT with CITY. 3. COUNTY shall keep records of COUNTY costs for its internal work that is part of the PROJECT, as provided in Article IV below. 4. COUNTY shall perform actions regarding compensation as set forth in ARTICLE IV - COMPENSATION. ARTICLE III- CITY OBLIGATIONS 1. CITY shall enter into and execute this Agreement after it has been approved by the Tigard City Council. 2. CITY shall, upon execution of this Agreement, assign a liaison person to be responsible for coordination of PROJECT with COUNTY. 3.. CITY shall perform actions regarding compensation as set forth in Article IV - Compensation. City shall take reasonable steps to identify and separate PROJECT costs from costs incurred for the CITY PROJECT. In recognition of j the difficulty of separating project management and engineering costs for the f PROJECT from the costs for the larger CITY PROJECT, 80% of the costs for the CITY PROJECT may be allocated to the PROJECT. Costs for this work allocated to the PROJECT shall not exceed $112,911. -2- IBM 111111111 4. CITY shall perform, or cause to be performed, all actions necessary for design and construction of the PROJECT in accordance with CITY standards and the approved PROJECT prospectus. Responsibilities shall include project management, design and construction engineering, right-of-way acquisition, acquisition of all required permits and approvals, contract administration, and construction management. CITY shall advertise for, award, and administer the construction contract. CITY shall be responsible for acceptance of contractor's work. 5. CITY shall provide COUNTY with the opportunity for design review of final plans prior to bidding. 6. CITY shall provide COUNTY with the opportunity for review of the contract bid proposal prior to contract award. 7. CITY shall provide a final cost accounting for the PROJECT, including all internal and external costs, to the COUNTY within 90 days of final acceptance and payment to the contractor. /ARTICLE IV - COMPENSATION 1. CITY, upon completion of PROJECT work performed, or caused to be performed, by CITY, shall on a semi-annual basis prepare and submit an invoice or invoices to COUNTY for the cost of the work, which consists of CITY project management, engineering, design and other services, consulting engineering services, and construction costs including construction management. Estimated costs are: Design $112,911 Right-of-Way $322,102 Construction $922,204 TOTAL $1,357,217 2. Notwithstanding the estimate of costs above, the COUNTY shall reimburse the CITY for the actual amount of its cost incurred for PROJECT work, up to $1,357,217, or as authorized by the BCC. CITY administrative costs shall be reimbursed in accordance with an adopted cost allocation plan. If upon completion of the design phase it appears that the total PROJECT cost will exceed $1,357,217, the CITY and COUNTY shall meet to review the design and estimate and determine whether to modify the design, project scope, seek additional funds or take other action. 3. COUNTY shall, at the time shown on the schedule for expenditure of funds for the MSTIP3 Walnut Street Phase 11 project, as adopted by the BCC in June, 1998, or -3- f as subsequently amended, reimburse CITY for the cost of the PROJECT that is initially paid for by the CITY. The approved schedule for expenditure of funds provides for design in 2002, Right-of-Way acquisition in 2003, and construction in 2004. The COUNTY's obligations under this Article shall not be a general obligation of County, but shall be payable solely from available funds allocated to the MSTIP3 program by the BCC. 4. The COUNTY will pay interest on costs paid by the CITY for PROJECT work at the Local Government Investment Pool (LGIP) rate in effect on the date this Agreement is executed. 5. The COUNTY may charge, the PROJECT for necessary work such as plan review, administration, financial and managerial services. ARTICLE V - PROJECT DEFINITION AND SCOPE 1. DEFINITION: The PROJECT shall be generally defined as the improvement of the Walnut Street and Gaarde Street intersection and is phase two (2) of a three-phase project to make improvements to the section of Walnut Street from 121x` Avenue to 1351' Avenue. All construction shall meet CITY standards. 2. SCOPE: The scope of improvements associated with the PROJECT shall include, but not be limited to: A) Reconstruction and widening of Walnut Street to accommodate three lanes of traffic with curbs and sidewalks along both sides to a distance of 350 feet in both directions from the centerline of the intersection; and B) Construction of Gaarde Street to accommodate three lanes of traffic with curbs and sidewalks along both sides to the end of the curb radius; and f C) Widening as appropriate at the intersection approaches to accommodate turn lanes; and D) Construction of a Traffic control signal; and E) All required storm drainage improvements including water quality facilities, grading, landscaping, illumination, signing, striping and other associated work. -4- l ARTICLE VI - GENERAL PROVISIONS 1. LAWS OF OREGON The parties agree to abide by all applicable laws and regulations regarding the handling and expenditure of public funds. This Agreement shall be governed by the laws of the State of Oregon. All provisions required by ORS Chapter 279 to be included in public contracts are hereby incorporated by reference and made a part of this Agreement as if fully set forth herein. 2. DEFAULT Either party shall be deemed to be in default if it fails to comply with any provision of this Agreement. CITY and COUNTY agree time is of the essence in the performance of any of the obligations within this Agreement. Complaining party shall provide the other party with written notice of default and allow thirty (30) days within which to cure the defect. COUNTY shall pay the CITY for costs incurred for satisfactorily completed and authorized work up to the time of default. CITY or COUNTY shall be liable for all costs and damages arising from their default. 3. INDEMNIFICATION This Agreement is for the benefit of the parties only. Each party agrees to indemnify and hold the other harmless, to include their respective officers, employees, agents and representatives, from and against all claims, demands and causes of actions and suits of any kind or nature for personal injury, death or damage to property on account of or rising out of services performed, the omission of services or in any way resulting from the acts or omissions of the parties so indemnifying and/or its officers, employees, agents or representatives. Indemnification is subject to and shall not exceed the limits of liability of the Oregon Tort Claims Act (ORS 3b.260 through 30.003). In addition, each party shall be solely responsible for any contract claims, delay damages or similar items arising from or caused by the action or inaction of the party. 4. DOCUMENTS ARE PUBLIC PROPERTY All records, reports, data, documents, systems, and concepts, whether in the form of writings, figures, graphs, or models which are prepared or developed in connection with the PROJECT, shall become public property. 5. MODIFICATION OF AGREEMENT No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing and signed by both parties. Such waiver, consent, modification or change, if made, shall be effective only in specific instances and for the specific purpose given. 5m - r 6. DISPUTE RESOLUTION The parties agree to use their best efforts to resolve any dispute arising out of this Agreement by mediation. If mediation is not successful within 30 days, the parties are free to utilize any legal remedy they may have. 7. SEVERABILITY The parties agree that if any term of provision of this agreement is declared by a court to be illegal or in conflict with any law, the validity of the remaining terms and provisions shall not be affected, so long as this agreement continues to reflect the intent of the parties. In the event the intent of the parties is not carried out by the severed agreement, the parties shall negotiate an equitable adjustment of this agreement so that the purposes of this agreement are given effect. 8. NONDISCRIMINATION No person shall be denied or subjected to discrimination in receipt of the benefits of any services or activities made possible by or resulting from this Agreement on the grounds of race, color, religion, gc-nder, sexual orientation, national origin, disability, age or marital status. Any violation of this provision shall be considered a material defect and shall be grounds for cancellation, termination or suspension in whole or in part by the COUNTY. 9. INTEGRATION This Agreement includes the entire agreement of the parties and supersedes any prior discussions or agreements regarding the same subject. There are no understandings, agreements, or representations, oral or written, not specified herein regarding this contract. ' ARTICLE VI - TERM OF AGREEMENT 1. The term of this Agreement shall be from the date of execution for four (4) years. 2. This Agreement may be amended or extended for periods of up to one year by consent of the parties, subject to provisions of this Agreement. Except for breach, it may be canceled or terminated for any reason beyond the control of the parties. 1 IN WITNESS WHEREOF, the parties hereto have set their hands as of the day and year hereinafter written. -6- NINE Al DONE AND DATED this day of , 2000. CITY OF TIGARD WASHINGTON COUNTY, OREGON gm Y'-t M&yer Counc President Chair Date: 21_ yf> ,Co _ Date: ATTEST: i ~Jl,t City Recorder Recording Secretary APPROVED AS TO FORM: Loretta S. Skurdahl Senior Assistant County Counsel I:\Eng\Gus\MSTIP 3 Reimbursement\MSTIP 3 Reimbursement IGA -7- AGENDA ITEM # FOR AGENDA OF 2-22-00 CITY OF TIGARD, OREGON COUNCIL AGENDA ITEM SUMMARY ISSUE/AGENDA TITLE Review Council Liaison Appointments PREPARED BY: Cathy Wheatley DEPT HEAD OK - CITY MGR OK T- ISSUE BEFORE THE COUNCIL Review the Council Liaison Appoint Matrix and make changes, if needed. STAFF RECOMMENDATION Review and discuss to determine if changes should be made to the attached matrix. INFORMATION SUMMARY Council serves on City and regional committees, task forces and associations representing the City Council and the City of Tigard. The attached matrix is provided for Council review for discussion at the February 22, 2000, to determine if new appointments are needed or if Council members would like to trade assignments. Staff calls Council attention to the Vision Task Force, which needs to have a Council liaison. It is anticipated that the Vision Task Force will be meeting this year at the end of March and through April to review status of goal achievement and provide input for development of a community survey. In October, the Task Force will be looking at changing focus or direction of the visioning program as a result of the feedback received from the community survey. Bob Rohlf was the Council liaison on the Task Force when it was originally formed. OTHER ALTERNATIVES CONSIDERED 1. Make some changes and schedule for review again (designate a target date). VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY Not directly linked to a Vision Task Force Goal but complements the goal in the Community Character and Quality of Life that calls for "...establishing and maintaining a program of effective communication." FISCAL NOTES N/A it1AADM\CATHY\000NCIL\C0UNCIL LIASON SUM SHEET.DOC NMI an a mljm~wj 1' h ~,l l' Y ~ 1 ~t1Y nts 0o f Liaiso~► ~p~o►n~me ~heckla Update 1! 131 ~ounCi! & 5~ of or Staff Potion Alter¢►ate Council or Re resentatlve Moore heckla Primary Hunt irtee Name Staff) Patton Comm 14ico1+ Moore Committee Patton. Prosser, Bud et Hunt Budget Subcom ' Monahan Social Sovices Nicol, Budget Subcom. Roberts Events Schecklo ity pevelop. Commun Grant Moore Block Board Adviso Hendryx Monahon Central Business t Assn, (peimar'~~ tyistric Smith Coop• Lib Bo rd Adviso Moore Growth M9mt. formerly Nicoll Caucus * Cd De unt _ c Boar July - a use H -LG Board ckla bask June 00 heckl IA ~►ater Sche San Code Task s work - Housing Farce Dec Patton July"~ force concluded) Jan-June 01 _ Hunt Moores AVO Moore Newton Com. ycheckla Moore _ to be Adviso Staff Rep. t&ACC Nicol, public works deft Park and Recreation staff member `Cask force pis{rict Nicoll ~Atfalati~ We nee (staff) Water Hunt Regional e 1 Consartium ~atr►x " fag 'nment ncillStnff ~°u1SCn Appc► Cou r Update 1f 13100 Alternate ar Staff Re resentative Primary (Council or Committee Name staff) Wheatley - (staff; Senior Center ex officio) Tigord Chamber of Commerce Board Tigord Chamber - Business advocacy Committee Moore & Patton Transportation - Bond Measure Rohlf - Budget Task Porte Vacant ¢¢/Citizen Vision Alternate - Commits Monahan Pe washington County consolidated puenas Communications Com Nicoli washington County Coordinating Monahan staff Committee rlicoli Wegn¢r - western gYPass g1coli Re resentotive Steeri Com' I.lunt gob 6tohlf . Willamete Water ~hec 0 ex-officio Su l A e tlicoli Washington syuar¢ Taslt 'Force R¢ Tonal e 2 on AgOntment katrix - Pag Council/staff L~ajs Update 1/13/00 Council or Staff Representatives of Meetings Committee Name Council and/or Alternate or Staff Staff Representative Festival of Balloons Nicoli, Moore, Monahan, Goodpaster, Wegner, Wheatley FOCUS Mayor Nicoli's Nicoli Meeting of City and County Elected Officials (Informal) Metro - Various Meetings as we are notified Westside Alliance Moore Council/Staff Liaison Appointment Matrix - Page 3 Update 1/13/00 Council Liaison Appointments Elected Official Nicoli Hunt Moore Patton Scheckla Name of • Budget • Budget . Budget • Budget • Budget Board/Committee or Committee Committee Committee Committee Committee Task Force • I-5/217 • IGA Water • Growth Mgmt. • Budget Sub- • CDBG Advisory Steering Board Caucus Committee - 8d. Committee • Mayors Appt. • Transportation Social Services • Housing Coda • Mayor's Appt. • Regional Water Bond Measure • Transportation Task Force • Wash. Co. Consortium • Mayor's Appt. Bond Measure • Mayor's Appt. Coordinating • Willamette • Mayor's Appt. • MACC ' Com. Water Supply • Western Bypass Agency Steering Com. • Washington Square Regional Task Force I:\ADMICATHYI000NCILIAPPTMATR. DOC Council/Staff Liaison Appointment Matrix - Page 4 ova. -7 MEMORANDUM 7/2.2®00 TO: Honorable Mayor and City Council FROM: Ronald D. Goodpaster Chief of Police DATE: February 18, 2000 SUBJECT: Training Request Recommendation would be approve request. Attached is a copy of a training flier that we want one of our officers to attend to become a Pursuit Intervention Technique (PIT) trainer in the Department. The officer we would be sending is currently an emergency vehicle operation instructor, and this would complement nicely the instruction we already do with emergency vehicle operations. The training is only available in San Bernardino, California. Once the officer is trained, he can then come back to the Department and present the training to all patrol personnel. The specific technique we are interested in is the "PIT", or Pursuit Intervention Technique, which you may have seen on television on some of the news shows. It is a procedure where a police car will come up in a pursuit of lower speeds to the rear side of a vehicle being pursued and bump the car in a controlled manner, thus ending the pursuit. In addition to the training, we will need to equip our cars with different types of front bars to prevent any damage. The Portland Police Bureau has been training, equipping and using this procedure for several months and has yet to create any substantial damage to a patrol car, while successfully resolving numerous pursuits. The money to provide this training will be coming out of a block grant we currently have, as would the money to equip the first five cars. I have had a discussion with the Finance Director because of the timeframe issue. We may end up having to pay out of the General Fund and then reimburse from the grant. There are adequate funds in the budget to provide this, and the transfer from the grant should be within this fiscal year. Thank you very much for your consideration of this training. If you have any questions, please feel free to contact me at your convenience. ►~~~~►►~►N Authorization PQ Ce Officer EXT' # 614 JOB TITLE Yes NO of -T►~ DPSST# 33686 ® No Budgeted Item? ❑ DEPT ACCT•# ? ❑ Yes Mandatory Training TRAINING DATES From: Feb. 28.2000 Pickering to each TA sub RS. TO also Feb 29 2000 NAME Greg be attached olice pursuits. To: Legal Intervention Instucrtor agendas UST temming from p TION ounty kshoplMeetin9 LOCA ardino C Title of Training Ce anagement to reduce snideur uits. cEOF TRIP (Complete C°nferen it or m that stems from p City.. San Bern ptJRPO.. inovative idea the danger and liability State- Califomia , update officers in new' attempt to educate officers to reduce Costs $ included StMATERIALS gQO~ Sheriff s Office ❑ Mail Check Vendor Count Costs 750.00 San Bernardino Address 0 Hold For employee REGISTRATJON Mailing Office Mail Check ❑ Reimburse Vendor Count Sheriffs CitylStateiZlP San Bernardino Hold For Employee Mailing Address phone # 18958 Institution Road ❑ Reimburse costs $ 223 ~ Citylstatefzip California 92407 ~RpNSPOP MT04 San Bernardino, Phone # 7550 UL ❑ Mail Check 949 887' 65.96 Vendor to ee Y to rate incl tax = LpI)GING Costs $ 131. 9 V"'~`'~ ❑ Hold For Emp 2129100 Dail Address Dates to sta : 2127100 Mail Check Mailing Travel Agency to bill ❑ Vendor CitylState(ZIP F of Tigard Address Hold For Employee Mailing phone # IStatelZip ❑ Reimburse 31¢ per mile City miles @ !MILEAGE Reimburse advance phone # CI to deduct any outstanding ❑ Advance 1 authorize the tY pate Confirmation # ❑ Reimburse amount advanced. any excess Bead !MEALS Advance Date pER DIEM reimburse the City of Tigard Date Dept. reimburse $ 5"v. ~U 1 agree to J QZ council BY signing this travel authormenlt is not made, su ervisor Date a check, if re a Date from m 1-11- 00 ity an er E oyee Date Human Resources Director travtng•dot ourse Calendar Page 3 of 6 z:inenrrs uepartment. Direct Billling:N1A Legal Intervention Instru Cor(5 ur co Intended Audience: Law Enforcement Use of Force optoins for vece Tuition: Post Plan:N/A pursuits RegKter for $750 payable to San this course Bernardino County Back Fill:N/A Course Content: lu- Sheriffs Department. Pursuit and High Risk Tactics, Road Spikes and Electronic Scramblers, Not a P.O.S.T Certified Direct Billling:N/A Pursuit Immobilizatin Technique, Course. Delay Force and Principles of Training. Motorcycle Basic Academy (10 day 80 hour course) Intended Audience: Law Enforcement Equiptment Requirements: Tuition: Post Plan: III Your department to furnish / Rcpister for $1,109.00 payable to enforcement motorcycle that meets this course San Bernardino County all factory specifications. Sheriffs Department. Back FiII:NO 12/6/99-12/17/99 2330.32550-99005 We have direct billing Prerequisites: with P.O.S.T for this Direct Billling:YES Basic P.O.S.T certification Full-Time course. You save Peach Officer; Possession of a valid $1,109.00. driver's license with motorcycle endorsement. Motorcycle Rental: $550.00 (limited Dress Code: number available). Jumpsuit or Class B approved boots, soles less than 3/4 in. D.O.T. motorcycle helmet, leather gloves, safety glasses and rain gear. Certification: This course is certified by P.O.S.T T.R.R forms must be submitted on the first day of class. (P.O.S.T Plan III) Motorcycle Instructor (10 day 80 hour course) Intended Audience: Law Enforcement Equiptment Requirements: i Tuition: Post Plan:lll Your department to furnish Register for $1,159.00 payable to enforcement motorcycle that meets this course San Bernardino County all factory specifications. Sheriffs Department. Back FiII:NO 11/29/99-12/10/99 2330-21540-99002 Prerequisites: Motorcycle Rental: Direct Billling:NO Successful completion of P.O.S.T 80 $550.00 (limited hour Motorcycle Basic Academy or number available). tis equivalent. Current enforcement rider. Dress Code: Jumpsuit or Class B approved boots, soles less than 3/4 in. D.O.T. H motorcycle helmet, leather gloves, j safety glasses and rain gear. Certification: 3 This course is certified by P.O.S.T rq T.R.R forms must be submitted on a the first day of class. (P.O.S.T Plan 111) Motorcycle On/Off-Road (5 day 40 hour course) Intended Audience: Law Enforcement Equiptment Requirements: + Tuition: Post Plan: IV Your department to furnish Register tot $605 payable to San enforcement motorcycle that meets ~0 this course Bernardino County Rork Fill-MCI http://www.evoc.org/coursedetaiIs.asp 1/5/00 Available Flights Pagel of 4 DISCOUNT TRAVEL PICK FLIGHT We have searched all airlines for availability and and found these to be the best fares and times based on your request. Click Here to change your request. AVAILABLE FLIGHTS Ala Best Time and Price Best 5 Prices Available Best 5 Times Available $149.00 Total price for 1 Passenger .r~.1r) 1~/_.~1111ft AS Flight # 450 Boeing 737-400 Passenger Sun 02/27/00 Departs 11:21AM PDX Portland International Airport Duration 2:06 E-Ticket Flight Arrives 01:27PM ONT Ontario International Airport Ior/_ ~1~11ft AS Flight # 405 McDonnell Douglas MD-80 Tue 02/2/9'/000 Departs 07:56PM ONT Ontario International Airport Duration 2:18 E-Ticket Flight Arrives 10:14PM PDX Portland International Airport ~ wr.~ ae rrn•Y:7 $149.00 Total price for 1 Passenger AS Flight # 450 Boeing 737-400 Passenger Sun 02/27/00 Departs 11:21AM PDX Portland International Airport Duration 2:06 E-Ticket Flight Arrives 01:27PM ONT Ontario International Airport AS Flight # 465 Boeing 737-400 Passenger TTue 02/29/00 Departs 02:OOPM ONT Ontario International Airport Duration 2:18 E-Ticket Flight Arrives 04:18PM PDX Portland International Airport 149.00 Total price for i Passenger AS Flight # 450 Boeing 737-400 Passenger sun 02/27/00 Departs 11:21AM PDX Portland International Airport Duration 2:06 E-Ticket Flight Arrives 01:27PM ONT Ontario International Airport _7-Aw/__.~~~11`i AS Flight # 439 Boeing 737-400 Passenger Tue 02/29/00 Departs 09:39AM ONT Ontario International Airport Duration 2:19 E-Ticket Flight Arrives 11:58AM PDX Portland International Airport http://bookl.lowestfare.com/viewFlights.asp?DIV=&DEP'r= 1/8/00 111111NE11 Jill= Available Flights Page 2 of 4 $149,00 Total price for 1 Passenger 10l/ 111(1-or AS Flight # 432 Boeing 737-400 Passenger Sun 02/27/00 !Departs 08:50AM PDX Portland International Airport Duration 2:06 E-Ticket Flight Arrives 10:56AM ONT Ontario International Airport /<fi~ssc~//~~Ef AS Flight # 405 McDonnell Douglas MD-80 Tue 02//29/000 Departs 07:56PM ONT Ontario International Airport Duration 2:18 E-Ticket Flight Arrives 10:14PM PDX Portland International Airport $149.00 Total price for 1 Passenger ► -AS Flight # 432 Boeing 7a7-400 Passenger Sun 02/27/00 Departs 08:50AM PDX Portland International Airport Duration 2:06 E-Ticket Flight Arrives 10:56AM ONT Ontario International Airport AS Flight # 465 Boeing 737-400 Passenger Tue 02/29/0'0Departs 02:OOPM ONT Ontario International Airport Duration 2:18 E-Ticket Flight Arrives 04:18PM PDX Portland International Airport $226,00 Total price for 1 Passenger UA Flight # 2407 Boeing 737-500 Passenger Sun 02/27/00 Departs 10:35AM PDX Portland International Airport Duration E-Ticket Flight Arrives 12:21PM SFO SFO International Airport Stopping at SFO International Airport (SFO) Departs 01:17PM SFO SFO International Airport Arrives 02:33PM ONT Ontario International Airport ql r UA Flight # 5436 Embraer 120 Brasilia Tue 02/29/00 Departs 06:551PM ONT Ontario International Airport Duration E-Ticket Flight Arrives 07:25PM LAX Los Angeles International Airport Connecting at Los Angeles International Airport (LAX) UA Flight # 2612 Boeing 737-500 Passenger Departs 08:20PM LAX Los Angeles International Airport Arrives 10:41PM PDX Portland International Airport 223.00 Total rice for 1 Passenger IUVV.441/1 i UA Flight # 2407 Boeing 737-500 Passenger Sun 02/27/00 Departs 10:35AM PDX Portland International Airport Duration E-Ticket Flight Arrives 12:21PM SFO SFO International Airport Stopping at SFO International Airport (SFO) Departs 01:17PM SFO SFO International Airport Arrives 02:33PM ONT Ontario International Airport UA Flight # 2270 Boeing 737-500 Passenger Tue 02/29/00 Departs 05:57PM ONT Ontario International Airport Duration E-Ticket Flight Arrives 07:17PM SFO SFO International Airport http://book I .lowcstfarc.cotiVvicwFlights.asp'?DIV=&DEI'T= 1/8/00 L1:1 U 11/11L11 1 V 1 1..Li SAN BERNARDINO COUNT' SHERIFF'S DEPARTMENT - TRAINING DIVISION Phone (909) 887-7550 Fax (909) 887-7575 E-mail: evoc@sanbemardinosheriff.org BAR:TOW LJ a Advanced Officer Training a. (GHRC-North) PALM/KENDAL f ■ EXIT Cuenio Rzncho R ~ Ce cmon=a~ A :VOC Gsrage 29 Motarcyele 1 M , lames Meet Here San Bernardino • t~ • O Los Angeles County Basic ■ 1-10 FWV Cade f U w voc ; ONO G11RC ■ ONTA 10 to ❑ ; Intern ional Airport • 60 F • ~ w 0 I? 41~ r- CORONA hDIRECTIONS: 3 ~ San Diego From Orange County: 91 South to 15 North to 215 South; Exit Pahn/Kendall... oI>nty 1 From Los Angeles County: 10 East to 15 North to 215 South; Exit Palm/Kendall... ..When you exit Palm/Kendall make a left (it does not (natter if you exit 215 North HILTON RADISSON LA QUINTA ,)r 215 South, you still make a left). Palm turns into institution Rd. Continue on San Bernardino San Bernardio San Bernardino 0hstitution Rd. to Verdemont Ranch and make a right. EVOC will be through the (909) 889-0133 (909) 381-6181 (909) 888-7571 mirst parking lot on your right hand side. 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Daily Rate: 59.00 United States Dollars (Daily per room) Total Rate: 59.00 United States Dollars Tax Information: ' TAX" 11.8 PERCENT NOT INCLUDED IN RATE Additional Charges: Extra Crib - No charge Extra Adult Rollaway - 8.00 United States Dollars Guarantee Policy: CREDIT CARD REQUIRED Deposit Policy: GUARANTEE WITH CREDIT CARD Cancel Policy: CANCEL BY GPM HOTEL TIME ON DATE OF ARRIVAL Customer Information: Required information fields are blue First Name: Last Name: Telephone: " The only acceptable characters in the phone number are O, land- Email Address: " A reservation confirmation will be sent to the email address provided. To ensure receipt of email confirmation, it is important yoru• correct email adrb•cas is provided. 7 Street Address: I r City: https://www.trave lweb.com/booker/AppLogic+bookcr.liotel.book.Bookrq 1/8/00 CzEzffl~l IM