Loading...
01/10/2007 - Packet Completeness Review for Boards, Commissions 3: and Committee Records CITY OF TIGARD Intergovernmental Water Board Name of Board, Commission or Committee TVW LA C. -.4 10 Date of Mee&g To the best of my knowledge this is the complete meeting packet. I was not the meeting organizer nor did I attend the meeting; I am simply the employee preparing the paper record for archiving.This record came from Greer Gaston's office in the Public Works Building. Kristie Peerman Print Name Signature Z/2-Z/L3 Date Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and Unincorporated Area AGENDA Wednesday, January 10, 2007 Tigard Water Building 5:30 p.m. 8777 SW Burnham Street Tigard, OR 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call. 2. Public Comments Call for any comments from the public. 3. Approval of Minutes —December 13, 2006 Motion from Board for minute approval. 4. Water Building/Asset Discussion Continued-Dennis Koellermeier(30 minutes) 5. Update on Cach Creek Area Annexation —Dennis Koellermeier(5 minutes) 6. Informational Items —Dennis Koellermeier 7. Non-Agenda Items Call for non-agenda items from Board. 8. Next Meeting — February 14, 2007, 5:30 p.m. - Tigard Public Library, 2"d Floor Conference Room, 13500 SW Hall Blvd., Tigard, Oregon 9. Adjournment Motion for adjournment. A light dinner will be provided. Executive Session: The Intergovernmental Water Board may go into Executive Session. If an Executive Session is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose any information discussed. No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. Sign-in Sheet Intergovernmental Water Board Meeting Date: Name Do you wish If yes, please give your address please print to speak to the Board? John Q. Public Yes 13125 SW Hall Blvd. Tigard OR 97223 Intergovernmental Water Board Meeting Minutes January 10, 2007 Tigard Water Building 8777 SW Burnham Street Tigard, Oregon Members Present: Gretchen Buehner, Patrick Carroll, George Rhine, Bill Scheiderich, and Dick Winn Members Absent: None Staff Present: Public Works Director Dennis Koellermeier IWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions The meeting was called to order at 5:33 p.m. 2. Public Comments: None 3. Approval of Minutes —December 13, 2006 Commissioner Winn motioned to approve the December 13, 2006, minutes; Commissioner Carroll seconded the motion. Commissioner Buehner abstained from the vote since she had not attended the meeting. The motion was approved by a majority vote of 4-0-1 , with four yes votes and one abstention. Note: Item 5 was heard before item 4. 4. Water Building/Asset Discussion Continued Commissioner Scheiderich pointed out the memo from Clark Balfour on the Canterbury property which was before each of the Commissioners. Mr. Koellermeier provided background on three real property issues the Board has discussed over the past year. Mr. Koellermeier noted each of the three properties has a unique set of circumstances. The three properties and their status are as follows: ■ Clute property - Both the Board and the Tigard City Council have declared the property as surplus. - Despite various attempts, the property did not sell on the open market. Intergovernmental Water Board Minutes January 10,2007 1 Since the property didn't sell, the City of Tigard decided to consider constructing a park on the site. If the City were to proceed with the park, the property would be transferred from a water asset to a park asset. The Clute property was purchased before 1994 and is considered a system asset. The property has been partitioned and appraised. Process to Dispose: • The next step to dispose of the property would be for the Board to come up with a selling price to present to the Tigard City Council. • The City Council could either purchase the property or put the property back on the open market. ■ Canterbury property - A large portion of the Canterbury property is surplus to the operation of the water system. - The City of Tigard is proposing the surplus portion of the property be converted to an other asset and be transferred to the City; Tigard would like to construct a park on the surplus portion of the site. - The City of Tigard would like to have issue resolved by July in order to construct the park in the next fiscal year. - The property was a Tigard Water District (TWD) asset before the 1993 IGA was created. - The property has never been partitioned. - It was Attorney Balfour's opinion that the IWB was the decision- making body with regard to the disposition of the surplus property. - Packet information from a consulting engineer says there was no need for the surplus property as it relates to the reservoir. - Mr. Koellermeier proposed an easement be granted in the event an ASR well is ever contemplated. - Process to Dispose: • IWB needs to declare the property surplus and authorize the minor partition application process. • Once completed, the TWD would deed the surplus property to the City of Tigard. Commissioner Rhine said the TWD had heard from many constituents during the recent incorporation attempt of Bull Mountain. These constituents were not in favor of the property being transferred. He indicated the TWD needed to have further discussion regarding the transfer of the Canterbury property. Mr. Koellermeier said he and the Chairperson of the TWD had discussed the possible transfer and both are seeking a positive outcome for all parties involved. Intergovernmental Water Board Minutes January 10,2007 2 • Water building - The City of Tigard is planning to remodel and upgrade the water building and replace the building's HVAC systems; a $600,000 investment in the water building. - It is messy for the City to make such an investment when the building has such a complicated ownership structure. - Some of Tigard's Public Works staff must be relocated because their existing work place will be demolished as part of an upcoming road project. Following the water building remodel, Public Works staff could be housed in this facility. - When the City of Tigard took over the operational aspects of the water system, the City's finance operation moved into the water building. - A portion of the building is still used by the water and sanitary sewer divisions. - Since 1994, about one-third of the water building has been directly used for water-related functions. - The water building was completely omitted in the asset allocation and description in the 1994 IGA. At that time, the building was used solely for the operation of the water system and it is reasonable to assume the building would have been considered a system asset. As such, transfer would follow a process similar to that proposed for the Canterbury property and outlined in the IGA. - IWB partners' value in the building only exists if they were to withdraw from the group. The formula related to such a withdrawal is what could be used to identify the value of each partner's assets. - Process to Dispose: • Establish the value of the land, which does not depreciate. • Calculate the value of the building based on the depreciation schedule. • Mr. Koellermeier suggested part of the disposal transaction could guarantee the City would provide work space for water- related functions as long as the existing IWB relationship continues. In other words, IWB rate payers would not be asked to fund the construction of another facility to house water-related functions at some future time. • The City of Tigard would pay minority owners for their share of the building/property based on ownership percentages as outlined in the IGA. • Minority owners would give the City clear title to the building/property. Intergovernmental Water Board Minutes January 10,2007 3 In response to an inquiry from Commissioner Scheiderich, Mr. Koellermeier confirmed: - Four to five water billing staff are housed in City Hall. - The plan is to house twelve or thirteen additional water division staff in the remodeled water building. - Equipment is stored at the water building and at the Canterbury site. - Operational and maintenance costs are calculated through an allocation formula and are shared among building users by way of interfund transfers. - Depreciation costs are not included in this allocation formula. Commissioner Scheiderich directed the discussion to IWB members' disposition of their interest in the water building. Mr. Koellermeier noted, as part of Tigard's planning process, the water building was expected to remain in public use. Commissioner Buehner added the City Center Advisory Committee and the Tigard City Council have incorporated the water building into the downtown plan. Commissioner Scheiderich inquired whether the Board's preferred disposition would be to sell the building to Tigard or to dispose of the facility by some other means. If sold to Tigard, some agreement regarding the housing of the water- related functions/staff would need to reached. If the members agree to liquidate the water building and Tigard pays the assessed value, then space issues for the water function will need to be addressed. Mr. Koellermeier stated the current plan is all water functions, except billing, to be housed in water building. Commissioner Carroll asked about the ramifications of the water building being intentionally omitted from the IGA. Mr. Koellermeier clarified, per the IGA, the TWD pledged all assets. However, the report that deals with the assets and liabilities is silent regarding the water building. Commissioners Scheiderich and Winn stated the building was a system asset. Mr. Koellermeier added the building had been used as though it was a system asset. Commissioner Scheiderich said viewing the building as a system asset gives each IWB member a share. Commissioner Carroll expressed a preference to come to an equitable monetary agreement with the City of Tigard and maintain the building as a system asset of the water district. Commissioner Scheiderich asked if that meant charging the City of Tigard rent and then crediting that money back to the water system. Commissioner Carroll suggested the transaction be monetarily neutral and the only issue would be ownership. He suggested Tigard could sign a ten-year lease Intergovernmental Water Board Minutes January 10,2007 4 and the Board could consider issuing credits for the City's financial investment in the building. Commissioner Winn suggested the asset be transferred to the City of Tigard. Commissioner Buehner said the agreement was deficient and the asset issue needed to be resolved. Regarding the disposition of the water building, she said each IWB member's interest should be determined and a method developed to credit them or buy them out. Commissioner Buehner said she supported a transfer. Commissioner Rhine said he did not object to an equitable transfer. He asked if such a transaction would affect water rates. Mr. Koellermeier responded rates do not have a depreciation reserve. Therefore, the transfer would have no impact on rates unless another water facility was constructed. To address this issue, Mr. Koellermeier again proposed some sort of guarantee be incorporated into an agreement stipulating King City, Durham and TWD rate payers would not be asked to fund the construction of another water facility. Commissioner Scheiderich proposed the IWB could also transfer a percentage interest in the water building, exempting whatever percentage of the facility was needed to operate the water division. Commissioner Scheiderich suggested the each Board member discuss the property transfer matter with their respective cities/TWD prior to the next IWB meeting. Commissioner Winn requested a brief written description of options. Commissioner Scheiderich indicated staff could prepare the description and would he edit the document. In response to a question from Commissioner Carroll, Mr. Koellermeier said almost all public works staff would be relocated to the water building following the building remodel. Commissioner Carroll suggested it may be in the best interest of water customers to use the water building as a potential revenue source to affect water rates. Commissioner Scheiderich asked if the water building, or a portion of the water building, was sold or rented, what did the Board want to do with the money. He suggested some options might be putting the money in a capital improvement fund, providing a rate rebate, or sending a check to IWB members. Commissioner Carroll said his preference would be to keep the money for water- related needs. He noted the cost of future capital improvements and the need to Intergovernmental Water Board Minutes January 10, 2007 5 build reserves. He reiterated his desire that assets be used for water-related needs which benefit all rate payers. Commissioner Scheiderich said this could also be a discussion item when this matter was considered by the member cities and the TWD. Commissioner Buehner said she would seek a formal opinion from the Tigard City Council, but added the Council was concerned about the impending cost of capital improvements. Any money should go into a communal fund dedicated to the long-term water source. Commissioner Rhine concurred. He added there was some inequity in buying out minority owners. The money would go into the general funds of King City and Durham and the checking account of the TWD. The TWD has no way to spend that money. Commissioner Carroll asserted the agreement should be rewritten to say that any asset, irrelevant of when or how it came into the system, is an asset of the system's rate payers. He went on to say parks, roads, and green spaces were not the Board's concern and he didn't think such discussions should take place. He said the Board's focus should be to represent the rate payers of the water system. Commissioner Carroll stressed the real issue was whether the City of Tigard was willing to pay the fair market value for property and use property proceeds to benefit rate payers. Commissioner Buehner added the Board's decision should take into account the possibility of a water system expansion. Commissioner Scheiderich explained that whether through a property sale or rental, money would be generated and the Board needed to discuss how this money would be dealt with. Commissioner Winn said the rate payers are the Tigard water department. The rates paid reflect the health of the water organization. Commissioner Scheiderich confirmed Commissioner Winn supported putting any proceeds into a communal water fund. The dissolution of assets formula in the IGA was discussed. The formula is based on a combination of assessed value and the number of water customers. Commissioner Carroll noted the formula becomes a moot point if all the money goes into a capital expenditure fund. Commissioner Scheiderich summarized the consensus was to place the money in a capital fund. Mr. Koellermeier recapped the options: ■ Outright sale of the entire water building. Intergovernmental Water Board Minutes January 10,2007 6 ■ Sale of a portion of the water building while reserving some fractional part of the building for water-related uses. Mr. Koellermeier asked if the Board's intent was to create a new agreement that would function as a water-asset only operation and offer a level of equality across all users. He noted this would be a very different from the existing IGA. Commissioner Carroll responded that he was not suggesting Board representation change. The Board has always given each member one vote, despite the fact that some members represent more water customers than others. He questioned whether this arrangement would continue with a new agreement. Commissioner Carroll added it was important to view the matter as a water delivery system. Water customers are essentially the same and pay the same rates, no matter what city they live in. He stated, in the past, the entire water system was considered when making decisions and this is how the system operated until the property disposition issues arose. Commissioner Rhine commented the transactions involved disposing of a surplus water asset and putting the proceeds towards another water system asset. He said this was simply improving the asset base. Commissioner Carroll agreed, but declared that Tigard wanted the Canterbury at no cost. This offers no benefit to the rate payers. Commissioner Carroll added he had no issue disposing of the water building if there was a better use for the money and provided there is a financial benefit to the rate payers. Note: Item 4 was heard after item 5. 5. Update on Cach Creek Area Annexation Mr. Koellermeier reported the petitioners have withdrawn their challenge and the annexation will stand. 6. Informational Items Mr. Koellermeier pointed out a Survey for Asbestos report regarding the Clute property and advised asbestos and lead mitigation issues will add some costs to building disposal. Options for disposing of the house include: deconstruction, a process whereby the building is basically recycled, demolition, or "Learn to Burn" with the fire department. Learn to Burn appears to be the least expensive option. 7. Non-Agenda Items: Commissioner Winn indicated Nancy Duthie is no longer the King City alternate to the IWB. He noted King City needs to choose another alternate. Intergovernmental Water Board Minutes January 10,2007 7 8. Next Meeting— Wednesday, February 14, 2007, 5:30 p.m., Tigard Public Library, 2nd Floor Conference Room 9. Adjournment: At 6:32 p.m. Commissioner Rhine motioned to adjourn the meeting; Commissioner Winn seconded the motion. Commissioner Scheiderich adjourned the meeting. �f44- .�6y Greer A. Gaston, IWB Recorder Date: hI'LGLLr Intergovernmental Water Board Minutes January 10,2007 8 Agenda Item No.: IWB Meeting Date: Intergovernmental Water Board Meeting Minutes December 13, 2006 Tigard Water Building 8777 SW Burnham Street Tigard, Oregon Members Present: Patrick Carroll, Janet Zeider (alternate for George Rhine), Dick Winn and Sydney Sherwood (alternate for Tom Woodruff) Members Absent: Tom Woodruff, George Rhine, Bill Scheiderich Staff Present: Public Works Director Dennis Koellermeier Water Quality & Supply Supervisor John Goodrich Financial & Information Services Director Bob Sesnon IWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions The meeting was called to order at 5:36 p.m. Note: Item 3 was heard before item 2. 2. Public Comments: None 3. Approval of Minutes — November 8, 2006 Commissioner Winn motioned to approve the November 8, 2006, minutes; Commissioner Sherwood seconded the motion. The motion was approved by unanimous vote. Note: Item 2 was heard after item 3. 4. Dareen Cook Credit for Leak Request Mr. Koellermeier introduced Mr. Sesnon. Mr. Sesnon provided the Board with the details surrounding the leak and the credit for leak policy. Ms. Cook's grandson explained that he replaced the water line and the leak was repaired promptly. Commissioner Winn pointed out the Board had spilt the difference of the remaining balance with previous customers. Intergovernmental Water Board Minutes December 13,2006 1 The total cost was $813 and a $351.26 credit had already been issued. The Board discussed splitting the remaining balance, which would result in an additional credit of$230. Commissioner Winn motioned to follow past practice and split the difference between the credit already issued and the total bill; Commissioner Sherwood seconded. The motion was approved by unanimous vote. 5. Water Building/Asset Discussion Mr. Koellermeier explained he and Mr. Sesnon would present this item. Mr. Koellermeier noted he was not proposing any action be taken at this meeting, but was seeking to identify a process to deal with the issue of assets. Mr. Koellermeier referred to materials contained in the Board's packet. Mr. Koellermeier said Bev Froude, Chairperson of Tigard Water District (TWD), suggested the Board develop a process to decide what it wanted to accomplish related to assets. The process could include public hearings in order to get community input. Mr. Koellermeier proposed the Board might want to consider an amendment to the intergovernmental agreement to resolve asset issues once and for all. He added this resolution should be a win-win situation for all the IWB members. Current asset issues include the water building and Canterbury property. With regard to Canterbury, Mr. Koellermeier said the agreement had been satisfied, and, in reality, this was surplus property. He proposed a surplus property disposal process because the City of Tigard wants to use the property to build a park. He added a lease of the property might work, but this fails to resolve the question of how to address assets. In order to use system development charge funds to develop the park, the park would need to be on Tigard's books; this may preclude a lease. Mr. Koellermeier relayed the water building was not addressed in the 1993 agreement. The City of Tigard plans to make substantial improvements to the water building and the facility may be affected by long-term downtown planning. He noted the building could change use sometime in the future. Commissioner Carroll interjected the building could not change use without the Board's approval. Mr. Koellermeier proposed the Board open a discussion in which each of the partners could state what they would like to accomplish. He noted King City and Durham owned a very small share of the water building and he was unclear what their corporate interest would be in continuing to do so. He acknowledged the Board might want to protect its ownership of the building to be sure water customers are not asked to pay for a new facility in the future. Intergovernmental Water Board Minutes December 13,2006 2 Mr. Koellermeier advised that from Tigard's perspective it was "messy" for the City to make an investment in an asset with multiple owners. Commissioner Carroll responded the improvements could be considered lease tenant improvements. Mr. Koellermeier said that improvements made by public, non-profit entities might be given different consideration than improvements made by private, for-profit organizations. In order to craft solution that works for everyone, Mr. Koellermeier proposed the Board discuss what each of the members might like to accomplish and protect regarding mutually-owned assets. Commissioner Carroll noted that although Tigard owned a 70 percent interest in the water building, the building was really owned by the rate payers. Mr. Koellermeier explained the rate payers are not an entity, whereas the Cities of Tigard and Durham exist as entities. He added the agreements were made between the City of Tigard and the cities of King City, Durham and the TWD. Commissioner Carroll asserted there was an obligation to the water system, not to the City of Tigard. He acknowledged the Board could decide to enter into some type of agreement with Tigard. He pointed out Mr. Koellermeier's interests lie with the City of Tigard and Tigard water customers. Commissioner Carroll said the water building should be dedicated for uses related to the water system. There was a discussion about the differentiation between the City of Tigard and the water district. Mr. Koellermeier acknowledged he represents both the Board and the City of Tigard and this was why he was seeking an amenable solution to the issue. Commissioner Winn stated the financial health of the City of Tigard's water department is reflected in rate payers' water bills. Water customers, like King City and Durham, are affected by the success of Tigard's water department. Commissioner Winn added King City has a small interest in the water building. Since King City can't do anything with that interest, he asked if King City's share of the facility might be purchased by the City of Tigard. King City could use the revenue. Mr. Koellermeier provided some historical background. The Board acquired the water building through a legislative process; no money was exchanged. Basically, custodial duties associated with this asset shifted from one public entity to another. If he were a Board member, Mr. Koellermeier said he might want a guarantee that Tigard would not increase the administration costs and subsequently raise rates for the use of the building. An agreement could be crafted to address any such concerns the Board may have. Commissioner Winn noted his reading of the agreement clearly says the building belongs to the City of Tigard. Commissioner Carroll disagreed. Intergovernmental Water Board Minutes December 13,2006 3 Mr. Koellermeier added the attorney hired by the TWD arrived at generally the same conclusion as Commissioner Winn. The attorney said if one party wanted to change the condition of an asset without the cooperation of the other partners, the issue would likely end up in court. The attorney concluded the party pursuing the change would likely prevail as long as the change was consistent with state law. Commissioner Carroll said it did not make sense for the original parties to enter into such an agreement regarding common assets. The water building is an asset of the water district and should only be used as such. There should be no other consideration. Any City of Tigard use of the water building should be done by agreement between the water board, the Board and the City of Tigard. Commissioner Sherwood noted the agreement didn't clearly define how the assets were to be addressed. She relayed that Gretchen Buehner would soon be serving as Tigard's representative on the Board. She is an attorney and will be helpful in resolving these asset issues. Commissioner Sherwood said there is a genuine need to get the matter addressed and resolved. She spoke in support of working together to clarify the asset ownership issue. Commissioner Winn reiterated the original parties came up with this agreement and all the resources, including those of the TWD, were put into the pot. The agreement says the entity taking over jurisdiction also takes over the asset. Mr. Koellermeier, speaking for the City of Tigard, commented Tigard did not want to create a hostile relationship with its IWB partners. Thus, he was proposing an agreement or amendment to the current agreement be developed in the hope of resolving current and future asset ownership issues. Audience member and Chairperson of the TWD, Bev Froude, provided historical information about the original agreement and suggested there should be an additional discussion of this matter. Mr. Koellermeier summarized that the City of Tigard was going to make an investment in the water building and it's reasonable to get the asset issue resolved as a part of that process. Mr. Koellermeier also mentioned the Canterbury property, noting he expected the park would be in the construction phase by July 2007. Commissioner Carroll asserted if the Board sold a piece of the Canterbury property to the City of Tigard, then profits from the sale should be used to fund water-related projects. Mr. Koellermeier responded this was not how state law was structured. Commissioner Carroll said if state law was on Tigard's side, then Tigard should go ahead and "steal" the assets. Intergovernmental Water Board Minutes December 13,2006 4 Commissioner Sherwood interjected the City of Tigard was not seeking to take over, but wanted to find a solution that was fair to everybody. With regard to the Canterbury property, Mr. Koellermeier discussed the difference between system assets and other assets. The attorney representing the TWD suggested the Canterbury property be partitioned if Tigard wanted to convert the surplus property to a park. Commissioner Carroll remarked the creation of a park at the Canterbury site would not provide any benefit to the rate payers of Durham. He declared any money from the sale of such assets should benefit the water system. Mr. Koellermeier acknowledged Commissioner Carroll's suggestion made sense if the Board intended to sell the property on the open market. He noted the situation might be viewed differently when converting the property from one type of public use to another. Commissioner Carroll responded the public use was for the benefit of the City of Tigard. Mr. Koellermeier said a park at the Canterbury site would be the closest park to the unincorporated area. Commissioner Sherwood suggested the discussion be continued to the next meeting when Tigard's new representative, Gretchen Buehner, would be in attendance. 6. Update on Annexation/Bull Mountain Incorporation Legal Challenge Mr. Koellermeier reported there was no new information regarding the Cach Creek area annexation. He advised this item will be on the next agenda. He noted the final vote on the incorporation of Bull Mountain has been certified; formation of the new city did not pass. 7. Follow-up Discussion on the Joint Meeting with Tigard and Lake Oswego City Councils The Board discussed their recent water partnership meeting with the Lake Oswego and Tigard City Councils. Mr. Koellermeier said he had received positive feedback from Lake Oswego. He added there would be another meeting in February or March and expects the partnership will be more attractive to Lake Oswego as that city begins to explore the cost of capital improvements. Commissioner Carroll pointed out that Lake Oswego would be less likely to lose its water rights if they were being used. The Board expressed concern about Lake Oswego's time line. Intergovernmental Water Board Minutes December 13,2006 5 Mr. Koellermeier said he planned to provide the Board with information on cost and governance issues related to the partnership prior to the next joint meeting. 8. Informational Items Term expirations for Commissioners Woodruff and Winn were discussed. It was noted: - Councilor Gretchen Buehner will take over Councilor Woodruffs assignment to represent the City of Tigard on the IWB. - Councilor Woodruff will continue to represent Tigard on other water- related matters. - Councilor Sherwood will continue to serve as Tigard's alternate representative to the IWB. - Commissioner Winn reported he will serve another term as King City's representative to the IWB. 9. Non-Agenda Items: None 10. Next Meeting— Wednesday, January 10, 2007, 5:30 p.m. — Water Auditorium 11. Adjournment At 6:34 p.m. Commissioner Sherwood motioned to adjourn the meeting; Commissioner Winn seconded the motion. The motion was approved by unanimous vote. Greer A. Gaston, IWB Recorder Date: Intergovernmental Water Board Minutes December 13,2006 6 Agenda Item No.: 4 Me a e: IWB May I D. 20o(0 CABLE HUSTON BENEDICT HAAGENSEN & LLOYD LLP ATTORNEYS AT LAW SUITE 2000 1001 SW FIVM AVENUE PORTLANp,OREGON 97204-1136 TELEPHONE(503)224-3092 FACSIMILE(503)224-3176 CLARK I.BALFOUR cbslfour(achbh.com www:cablehuston.com April 21, 2006 Submitted at the IWB Meeting VIA EMAIL AND REGULAR MAIL , By; 211"! Ist Comm c George Rhine,President Date: 10 " 07 Agenda Item No.: 4 Board of Commissioners Tigard Water District 15361 SW Ashley Drive Tigard, OR 97224 Re: Canterbury Hill Reservoir Dear President Rhine and Board Members: You asked questions regarding the Intergovernmental Agreement Between the City of Tigard and the Tigard Water District for Delivery of Water Service(IGWA) effective January 1, 1994, and the disposition of the real property commonly known as the"Canterbury Hill Reservoir Site." My understanding is that this site was acquired in the name of Tigard Water District. It contains two reservoirs,jointly called"Reservoir No. 1,"and referred to as Asset No. SE-22RES and Pump Station No. 1,referred to as Asset SE-50 PST, in the Tigard Water District's System Assets and Liabilities Final Report dated November, 1994,prepared by Economic Engineering Services, Inc. The City of Tigard subsequently constructed an ASR well on the site. My understanding is that the Tigard Water District is still the record title holder to this single parcel of property. Discussions have been ongoing whether the remainder of the property is necessary for water system purposes or could be used for other uses such as City parks and open space. 1. How is the Real Property Asset defined Under the Intergovernmental Water Agreement(IGWA)? The 1994 IGWA was executed on the heels of the statutory withdrawal of District territory and assets by the Cities of Tigard,Durham, and King City. By ORS 222.540,the City may withdraw the District's assets,except those necessary to serve the remaining area of the District not absorbed by the City. The Water District transferred all assets to the Cities,not just infrastructure, in the 1994 Agreement. The Cities and District in turn pledged the assets to the \\dc03\docs\nijs\My Docunicnlslcib\27351-TWD\RliincLir2.doc Corvallis Oftiee—582 NW Van Buren,Corvallis,OR 97330(541)754-7477 CABLE HUSTON BENEDICT HAAGENSEN&LLOYD LLP George Rhine,President Board of Commissioners of the Tigard Water District April 21, 2006 Page 2 City of Tigard whereby Tigard would manage, operate, and maintain the water system for all parties to the IGWA, including the District. Assets were defined as real,personal and intangible property in Section 4A (1). Assets were divided into two groups: A. System Assets: assets necessary for the operation of Tigard's water supply system throughout the original District,not including those other assets of Tigard. This was further defined as"water mains, service installation, structures, facilities, improvements or other property necessary for operation of the City of Tigard's water supply system throughout the original District." (See Section 4A(2) (a)). B. Other Assets: "assets not necessary for the operation of the City of Tigard's water supply system throughout the original District. Other assets shall become the property of the jurisdiction in which the asset is located." (See Section 4A(2) (b)). Section 4B goes on to state that all system assets and other assets shall be pledged by the Cities and District to Tigard. All system assets and other assets shall be managed by Tigard and shall be utilized by Tigard in order to provide water services to properties,residences, and businesses in the original District. In our opinion, the subject real property is a system asset. First, it is the parcel upon which are situated major system assets identified in the November, 1994 System Assets and Liabilities Report. The land is integral to the improvement. The Intergovernmental Agreement that I reviewed does not have an exhibit or schedule that states this subject property was deemed a system asset or other asset. However, the system asset study followed closely upon the creation of the Intergovernmental Water Agreement and the parties have treated similar property as system assets over the past 12 years. The parties have designated this as a system asset by its inclusion in the 1994 System Asset Report. Second,past conduct indicates that the site is a system asset. The Intergovernmental Water Board has faced a similar issue on the Menlor Reservoir site(Clute Property)in the summer of 2000. Various and sundry minutes from June 13,2000 through October, 2000,reflect statements by the City of Tigard and other members of the Intergovernmental Water Board (including District representatives)that it was a system asset,that a portion of the Menlor site was no longer needed and voted to partition the Menlor site and sell the property. The Intergovernmental Water Board authorized the City of Tigard to apply for a minor land partition. The City of Tigard recognized in its Council minutes that the Intergovernmental Water Board needed to make decisions on the disposition of system or capital assets. Upon receipt of partition approval,the City declared the property surplus under its procedures. \\dc03\docs\mjs\My Documents\cib\27351-TWD\RhioeLtr2.doc A, CABLE HUSTON BENEDICr HAAGENSEN&LLOYD LLP George Rhine, President Board of Commissioners of the Tigard Water District April 21, 2006 Page 4 withhold consent and vote no without having a reasonable basis for doing so based upon current and long-term water supply operations. It would be prudent for the Board to seek an opinion of its engineers or consultants. We do not believe this issue was discussed in the Menlor site. We understand the Intergovernmental Water Board voted unanimously to have the City of Tigard move forward with the partition application. Therefore,while past practice shows this type of process, there apparently were no dissents to that action. In this case,there may be some dissent by the Tigard Water Board, which would result in a non-unanimous decision. In that case, one or more of the other parties could seek a judicial determination to declare: (1) The action of a majority Intergovernmental Water Board is sufficient to declare property system assets unnecessary for water system improvements and to transfer it; or (2) If unanimity is required, then the District did not have a reasonable basis to decline. If not, the court could compel consent under the cooperative clauses. This is a system asset. The decision to partition and convert to other uses or sale would require a vote of the Intergovernmental Water Board. Section 5H requires unanimity and past practice seems to give credence to that. But,the decision by a member to decline is not unfettered. It must be based on a reasonable analysis that the system asset is needed in the future and should remain. The opinion of the Water Board's engineer would have great weight. 3. If the City of Bull Mountain is formed over the Remaining Area of the Tigard Water District, can it become a member of the Intergovernmental Water Board? As indicated in the recitals of the 1994 Agreement, the Tigard Water District presently encompasses unincorporated territory that was part of the original District. All of the original territory of the District within Tigard, King City and Durham was withdrawn in 1993, leaving this remnant. If the City of Bull Mountain is formed over the entire remnant territory of the District,the provisions of ORS 522.510 would apply: whenever the entire area of a water district becomes incorporated in or annexed to a City in accordance with law,the District shall be extinguished and the City shall,upon the effective date of such incorporation or annexation, succeed to all the assets and become charged with all the liabilities, obligations and functions of the District. If this occurs,then the new City would succeed to all the rights, obligations and properties of the District. Once again,we come back to paragraph 511,where it indicates that neither the benefits received by the District or the obligations incurred under the terms of this Agreement are \\dc03\docsNmjs\My Documents\cib\2735I-TWD\RhineLtr2.doc .A CABLE HUSTON BLNEDICT HAAGF.NSFN&LLOYD LLP George Rhine,President Board of Commissioners of the Tigard Water District April 21, 2006 Page 5 assignable or in any manner transferable by the District without the written consent of the City. I do not believe this clause would stand up in the face of the statutory directive of ORS 222.510, which compels the transfer. However,that would be an issue for the new City of Bull Mountain to take up with the other Cities as part of the Intergovernmental Water Agreement or at the courthouse. I believe the state statute would prevail in this instance. 4. Intergovernmental Water Board Agreement. The parties have worked with this agreement for 12 years. Past minutes reflect that the parties recognize a need to rework the document. The foregoing discussion points to that need and the parties should give this serious consideration to amending the agreement to obtain more clarity. I hope this answers your questions. I look forward to meeting with the Board on April 24, 2006. Very truly yours„ Clark I. Balfour CIB:Injs \\dc03Wocs\mjsWy Documents\cih\27351-TWD\Rhinel ir2.doc t Agenda Item No.• 1WB at MEMORANDUM TIGARD TO: Intergovernmental Water Board FROM: Dennis Koellermeier, Public Works Di for RE: Water Building DATE: December 1, 2006 Staff has scheduled an agenda item for your December 13 meeting to begin a discussion about the water building as an asset. As background information, staff has updated the proportionate interest allocations of assets based on the IGA formula. This information and the Division of Original District Assets section from the IGA are attached for your review. Submitted at the IWB Meeting By: Coahnued discussion from I2-a-D4o Date: I- I D- D'+ Agenda Item No.: 4- i City of Tigard Analysis of Proportionate Interest Allocations Updated from Tigard Water District System Assets and Liabilities Final Report- November 1994 Allocation Basis Real Market Consumption* Value** Meters* (A) (B) (C) District 641,523 880,511,030 3,671 Tigard 2,015,062 2,822,340,560 12,196 King City 130,395 201,727,000 1,238 Durham 74,115 116,051,350 358 2,861,095 4,020,629,940 17,463 Proportionate Interests Proportionate Change From Interests Original District 22.42% 21.90% 21.02% 21.78% 4.19% Tigard 70.43% 70.20% 69.84% 70.16% -3.23% King City 4.56% 5.02% 7.09% 5.55% -1.16% Durham 2.59% 2.89% 2.05% 2.51% 0.20% 100.00% 100.00% 100.00% 100.00% 0.00% "Other Assets" Percentages For Allocations District Tigard King City Durham District, Tigard, King City 22.34% 71.96% 5.69% 0.00% 100.00% District, Tigard 23.69% 76.31% 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96.55% 0.00% 3.45% 100.00% * Consumption and Meters Updated as of October 31, 2006 ** Real Market Value (RMV) Updated as of November 7, 2006 City of Tigard Analysis of Proportionate Interest Allocations Tigard Water District System Assets and Liabilities Final Report- November 1994 Allocation Basis Consumption RMV Meters (A) (B) (C) District 284,282 388,224,542 2,091 Tigard 1,347,248 1,460,215,489 8,565 King City 99,110 121,669,954 1,019 Durham 32,537 58,547,786 262 1,763,177 2,028,657,771 11,937 Proportionate Interests Proportionate Interests District 16.12% 19.14% 17.52% 17.59% Tigard 76.41% 71.98% 71.75% 73.38% King City 5.62% 6.00% 8.54% 6.72% Durham 1.85% 2.89% 2.19% 2.31% 100.00% 100.00% 100.00% 100.00% "Other Assets" Percentages For Allocations District Tigard King City Durham District, Tigard, King City 18.01% 75.11% 6.88% 0.00% 100.00% District, Tigard 19.35% 80.65% 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96.94% 0.00% 3.06% 100.00% 1 4. Division of Original District Assets. A. Pursuant to ORS .222.540(4) , the District agrees that the division of assets after withdrawal from the original District by the Cities shall be consistent with the following concepts: (1) Assets include real, personal and intangible property. "Intangible property" includes but is not limited to: moneys, checks, drafts, deposits, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard's water supply system throughout the original District, not including those "other assets" of Tigard. Personal and intangible property are system assets. Water mains, service installations, structures, facilities, improvements or other property necessary for operation of the City of Tigard's water supply system throughout the original District are system assets. b. Other Assets: Assets not necessary for the operation of the City of Tigard's water supply system throughout the original District. Other assets shall become the property of the jurisdiction in which the asset is located. Water mains, service installations, structures, facilities, improvements or other property not necessary for the operation of the City of Tigard's water supply system throughout the original District are other assets. B. All system assets and other assets shall be pledged by the Cities and the District to Tigard. All system assets and other assets shall be managed by Tigard and shall be utilized by Tigard in order to provide water services to properties, residences and businesses in the original District. C. Should one of the Cities or the District terminate its water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based upon the following formula: Jurisdiction's Proportionate Interest = (A + B + C)/3 A = Jurisdiction's Percentage of Current Consumption in original District B = Jurisdiction's Percentage of Current Real Market value in original District INTERGOVERNMENTAL AGREEMENT TIGARD/WATER DISTRICT - 5 (12/23/93 - FINAL') C = Jurisdiction's Percentage of Current Meters in original District The Cities" and the District'w s proportionate interest in a system asset capital improvement shall be based upon the capital improvement's depreciated value. The depreciated value shall be based upon the useful life of the capital improvement under generally accepted accounting principles using a straight line method of depreciation. D. Upon termination of this Agreement, other assets shall become the property of the jurisdiction in which the asset is located. 5. Asset Ownership/Water Rates/Revenues. A. Tigard's Utilization of Assets. (1) The Parties agree that all system assets in which the Parties have an undetermined proportionate interest and all other assets received as a result of the division of assets after withdrawal from the original District by the Cities shall be utilized by Tigard in order to provide water services to properties, residences and businesses in the original District. The District's ownership interest in the assets shall remain though the assets are being utilized by Tigard, unless and until transferred to Tigard by agreement or operation of law. Tigard will maintain and insure the real and personal property assets it utilizes. The Parties agree to execute all documents necessary to allow utilization of the assets by Tigard. (2) Tigard agrees that it will maintain, preserve and keep the assets it utilizes in good repair and working order. Tigard may appropriate from the water fund all moneys necessary to meet this obligation. (3) Tigard shall keep the assets free of all levies, liens and encumbrances except those created by this Agreement or consented to by the governing body of the District in writing. The Parties to this Agreement contemplate that the assets will be used for a governmental or proprietary purpose by Tigard and, therefore, that the assets will be exempt from all property taxes. Nevertheless, if the use, possession or acquisition of the assets are determined to be subject to taxation, Tigard shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to the assets. Tigard shall pay all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the assets_ Where there is shared use of the INTERGOVERNMENTAL AGREEMENT TIGARD/WATER DISTRICT - 6 (12/23/93 - FINAL) City of Tigard 13125 SW Hall Blvd. It-gard, OR 97223 Phone: 503-6394171 TIGARD FAX T'RANSMIT'TAL Date January 4, 2007 Number of pages including cover sheet 3 To: .The City of King City(Fax No.503-639-3771) ,,k(The City of Durham(Fax No.503-598-8595) From: Greer Gaston Co: City of Tigard Fax #: 503.684.8840 Ph #: 503.718.2592 SUBJECT: Intergovem xntal Water Board Meeting Notice and Agenda MESSAGE: Please post the attached notice and agenda for the upcoming meeting of the Intergovernmental Water Board. Thank you. 1AENGTAX.DOT Intergovernmental Water Board Serving Tigard, King Cid, Durham and Unincorporated Area MEETING NOTICE Wednesday, January 10, 2007 5:30 p.m. City of Tigard Water Auditorium 8777 SW Burnham Tigard, Oregon 97223 Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and Unincorporated Area AGENDA' Wednesday, January 10, 2007 Tigard Water Building 5:30 p.m. 8777 SW Burnham Street Tigard, OR 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call. 2. Public Comments Call for any comments from the public. 3. Approval of Minutes —December 13, 2006 Motion from Board for minute approval. 4. Water Building/Asset Discussion Continued- Dennis Koellermeier(30 minutes) 5. Update on Cach Creek Area Annexation —Dennis Koellermeier(5 minutes) 6. Informational Items —Dennis Koellermeier 7. Non-Agenda Items Call for non-agenda items from Board. 8. Next Meeting —February 14, 2007, 5:30 p.m. - Tigard Public Library, 2"d Floor Conference Room, 13500 SW Hall Blvd., Tigard, Oregon 9. Adjournment Motion for adjournment. A light dinner will be provided. Executive Session: The Intergovernmental Water Board may go into Executive Session. If an Executive Session is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose any information discussed. No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 1 /4/2007 4 : 08PM Last Transaction Date Time Type Identification Duration Pages Result 01 /04 04 : 07p Fax Sent 5036393771 1 : 03 3 0K hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 1 /4/2007 4 : 11PM Last Transaction Date Time Type Identification Duration Pages Result 01 /04 04: 10p Fax Sent 5035988595 1 : 03 3 OK