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09/14/2005 - Packet Completeness Review _ for Boards,, Commissions and Committee Records CITY OF TIGARD Intergovernmental Water Board Name of Board,Commission or Committee -cry, h-e'r /4, 2-(205 Date of fleeting 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 3/, l)a�c Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and Unincorporated Area AGENDA Wednesday; September 14, 2005 5:30 p.m. 1. Call to Order,Roll Call and Introductions Motion to call meeting to order, staff to take roll call. 2. Approval of Minutes—July 13, 2005 Motion from Board for minute approval. 3. Lake Oswego Feasibility Study Update—Bob Fuller, CHZM Hill(20 minutes) 4. Long Term Water Supply Update—Dennis Koellermeier(20 minutes) 5. Informational Items—Dennis Koellermeier Items will be discussed briefly if time allows—otherwise printed info. Will be distributed. 6. Public Comments Call for any comments from public. 7. Non Agenda Items Call for non-agenda items from Board. 8. Next Meeting- Wednesday, October 12, 2005, 5:30 p.m. — Water Auditorium; Also: Joint Meeting with Tigard City Council, Tuesday,September 20, 2005, 7:30 p.m., Town Hall 9. Adjournment—Approximate Time 7:00 pan. Motion for adjournment. A light dinner will be provided. Executive Session: The Intergovernmental Water Board may go into Executive Session under the provisions of ORS 192.660(1) (d), (e), 69 &(h)to discuss labor relations, real property transactions, current and pending litigation issues and to consider records that are exempt by law firom public inspection. 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. Intergovernmental Water oar Serving Tigard, King City, Durham and Unincorporated Area MEETING NOTICE Wednesday, September 14, 2005 5:30 p.m. City of Tigard Water Auditorium 8777 SW Burnham Street Tigard, Oregon 97223 Intergovernmental Water Board Meeting Minutes September 14, 2005 Members Present: Patrick Carroll, Dick Winn, Bill Scheiderich, Tom Woodruff, Janet Zeider Staff Present: Dennis Koellermeier and Twila Willson Visitors: Sidney Sherwood, Bob Fuller, Henrietta Cochrun 1. Call to Order, Roll Call and Introductions Commissioner Bill Scheiderich called the meeting to order at 7:31 p.m. Sidney Sherwood, Alternate representative from the City of Tigard was in attendance. Commissioner Tom Woodruff arrived late (7:33 p.m.) 2. Approval of Minutes—July 13, 2005 Commissioner Patrick Carroll motioned to approve the minutes, Commissioner Dick Winn seconded the motion and the board voted unanimously to approve the minutes from the July 13, 2005, Intergovernmental Water Board (IWB) meeting. 3. Lake Oswego Feasibility Study Update—Bob Fuller, CH2M Hill Bob Fuller's feasibility study presentation included a review of the drivers for a regional cooperation whereby the City of Tigard might obtain water rights from the City of Lake Oswego and the South Fork Water Board. Tigard ° Owns no water source ° Totally dependent on others for water ° ASR development, but needs source for water Lake Oswego ° Has more water rights than they anticipate using ° Will require an additional 10 mgd of intake, raw water pipeline, treatment, and finished water pipeline capacity to serve the build-out demand ° Economic advantage for Lake Oswego to partner with Tigard to develop water source South Fork Water Board ° Has more water rights than they anticipate using ° Economic advantage to them to provide source water Intergovernmental Water Board September 14,2005 DRAFT 1 ° Finished water option would be wheeled through West Linn to the Lake Oswego finished water pipeline Construction Cost Estimate: ° Intake Facility to increase firm pumping capacity to 32 mgd = $3.0m ° Raw Water Pipeline to accommodate 18 mdg = $5.5m ° Water Treatment Plant Expansion to expand from 16 to 32 mgd - $20m ° Finished Water Pipeline = $14m ° Bonita Pump Station expansion from 8 to 14 mdg = $2.0m ° SFWB/West Linn facilities expand capacity from 6 to 8 = $1.5m ° Construction contingencies (30%) _ $14m ° Total estimated construction costs = $60m ° Tigard's share = $26.76m ° Lake Oswego's share = $33.24m This study and discussion is currently only on a staff level basis at this point. Lake Oswego would have to pay about $40m of the $60m total with or without a partner to help with the cost sharing. Dennis Koellermeier said he anticipated the Intergovernmental Water Board (IWB) and Tigard City Council and Lake Oswego Council will push through some budget amounts in order to proceed with the next phase. Next step will be to make a presentation to the Lake Oswego City Council. The board's consensus was to proceed with the negotiations. 4. Long Term Water Supply Update— Dennis Koellermeier Dennis Koellermeier reported that the summer water peaking season appeared to be over, although there never really was one. The reservoir cleaning is done while reservoirs were on line by a diver so nothing was lost. The ASR well projects are going well. The Hagg Lake project is in the EIS phase. The Bureau of Reclamation (BOR) has requested a second alternative. They are now considering the second alternative to be a lesser dam raise at 25 feet rather than 40 ft. and removing some of the participants who would be using the Willamette River. Tigard will soon have some economic analysis comparisons with the Joint Water Commission (JWC) and Willamette River. The Willamette River Water Coalition is meeting this week in the City of Sherwood and the meeting is open to anyone interested in attending. The Sherwood City Council is sending information to their citizens about going to the Willamette River as a water source and they will be putting it to the vote in November. The Tualatin Valley Water Intergovernmental Water Board September 14,2005 DRAFT 2 District will probably vote on the same issue in the spring. Tigard will then have the opportunity to either partner with them or stand back and see what happens. Commissioner Tom Woodruff apologized for his spotty attendance due to his work schedule and explained that Councilor Sidney Sherwood will stand in at meetings during his absence. 5. Informational Items—Dennis Koellermeier A large packet of information, including several newspaper articles, was distributed for the board members to review at their leisure. 6. Public Comments There were no public comments. 7. Non Agenda Items On Thursday, September 15, at 7:00 pm, there is a meeting scheduled at the Sherwood Police Dept. and all IWB members are invited to attend. 8. Next Meeting- Wednesday, October 12, 2005, 5:30 p.m. — Water Auditorium Also: Joint Meeting with Tigard City Council, Tuesday, September 20, 2005, 7:30 p.m., Town Hall 9. Adjournment—Approximate Time 7:00 p.m. The meeting adjourned at 6:38 pm. Intergovernmental Water Board September 14,2005 DRAFT 3 Intergovernmental Water Board Meeting Minutes July 13, 2005 Members Present: Patrick Carroll, Dick Winn, Bill Scheiderich, Tom Woodruff, Janet Zeider Staff Present: Dennis Koellermeier and Twila Willson Visitors: Henrietta Cochrun, Norm Penner, Marc Delphine 9. Call to Order, Roll Call and Introductions Commissioner Bill Scheiderich called the meeting to order at 5:39 p.m. Commissioner Scheiderich acknowledged Norm Penner's presence in the audience and thanked him for his past service as a commissioner on the Intergovernmental Water Board (IWB). 2. Approval of Minutes—June 8, 2005 Commissioner Patrick Carroll motioned to approve the minutes, Commissioner Dick Winn seconded the motion, and the board voted unanimously to accept the minutes as presented for the June 8, 2005, meeting. 3. Discussion of Tualatin Basin Water Supply Project— Third Amendment to Agreement Dennis Koellermeier distributed several handouts including the Tualatin Water Supply Project and Feasibility Report and a memo from Tom Vanderplaat, Project Manager. The asset situation with the JWC is a questionable issue. The City of Tigard currently has assets, as do some of the other members. The issues surrounding the terms and conditions of those allocations would be addressed in the 4"' Amendment which is currently being worked on, but will take several months for completion. Phase 3 charges to members to proceed with the next step are substantial. The Tualatin Basin Water Supply Project (TBWSP) includes more than just the dam raise project and was designed in a broader way so as to appeal to the federal government. Some partners have withdrawn from the partnership which reallocates their costs to the remaining members. Costs are high for Tigard at $558,528 for this next phase. Tigard has a19.47% share. Sherwood is leaning away from this project and is looking primarily at the Willamette River and City of Portland for their water supply sources. Intergovernmental Water Board July 13,2005 DRAFT 1 A fatal flaw in the project has now been discovered with the studies. The other members have also taken this to their boards for approval to advance with the next phase of the project. A separate management group manages this project, not just the Joint Water Commission (JWC). The Bureau of Reclamation and Clean Water Services have a hand in this also. Dennis Koellermeier asked that the board make their recommendations about the next phase. The letter from Tom Vanderplaat discusses the 4'" Amendment, but the board could wait until that amendment is presented to the board before making a decision. The board discussed the issue and came to a consensus that they would wait until Amendment 4 was presented to them before acting on the issue. Mr. Koellermeier said he would return with clarification to the board's questions and concerns as it became available. 4. Long Term Water Supply Update— Dennis Koellermeier Mr. Koellermeier distributed a reprint of a Portland Tribune article dated 7/12/05 entitled Leonard seeks to calm the waters, that deals with Portland's new city commissioner's. The article contains a lot of misinformation and the wholesale customers have taken objection to Commissioner Leonard's statements in the article. Mr. Koellermeier said that Mr. Leonard attended a regional meeting on Monday and stated the contract negotiations were over as far as Portland was concerned and they would not make other changes. His approach was far different that his predecessor. A draft of a letter that was drawn up by the Water Managers Advisory Board to send to the Editor was also distributed. Mr. Koellermeier asked for recommendations from the board about the letter to the Editor; they indicated the letter looked fine and we should continue to look elsewhere for water. It appeared that nothing was any different than before and the managers were not getting anywhere with the contract negotiations. The City of Portland has made it clear that they do not want partners to acquire ownership in the Bull Run water. Tigard is currently getting water from the City of Lake Oswego and a modified agreement is being prepared with them. Tigard could potentially work with Lake Oswego to pay to make improvements to their system. Lake Oswego has surplus rights to the Clackamas River (junior and senior rights) that they do not think they will ever be about to use all of. South Fork could potentially lease Tigard water rights and we could then work with Lake Oswego to meet both of our needs. Discussion went back to the letter to the Editor and what the other partners' comments might be. Direction from the board was for Tigard not to send the letter in their name. 5. Informational Items—Dennis Koellermeier Intergovernmental Water Board July 13,2005 DRAFT 2 6. Public Comments Marc Delphine, Commissioner on the Tigard Water District Board, asked how to get all the process moving faster and what need to be done to get things rolling toward other water sources. Dennis Koellermeier said that the Sherwood City Council meeting was scheduled for tomorrow night. Sherwood could decide to go with the Wilsonville Treatment Plant and have citizens vote on that possibility in November. The Willamette River Water Coalition members would be able to join that project. Components of the pipeline could be constructed now even if we don't go with them to the Willamette River. Dennis Koellermeier advised bringing the Lake Oswego options further along before taking the Willamette River issue to a citizen vote. Pipe and pump capacity improvements are needed, but Lake Oswego has plenty of water rights. If both agencies worked together to build a treatment plant, an alliance could be made to pay for those improvements and Lake Oswego would buy it back from Tigard or could even split the improvement projects into two projects. Commissioner Tom Woodruff commented that it looked as though the Clackamas River would be the most effective way to go. The Willamette River is still a very volatile issue. A survey was taken of the board, which were favorable toward continuing to pursue the Willamette River as a possibility. 7. Non Agenda Items Mr. Koellermeier reported that the JWC projects were moving along at a good rate. There were some short term improvements on the treatment plant and reservoir on the hill, but Tigard was not involved with those project improvements. Tigard's water use has been low. Two construction projects have taken place, one with the County at Olsen Rd., which involved Tigard being shut off from using Portland water for about a week; a failed pressure reducing valve was also installed last week and that project required another shutdown of several days. There have been no adverse affects from these shutdowns. The board asked for information at future meetings about how the Portland contract worked when Portland shuts off our water. 8. Next Meeting- Wednesday, August 10, 2005, 5:30 p.m. — Water Auditorium 9. Adjournment—Approximate Time 7:00 p.m. The meeting adjourned at 6:33 p.m. Intergovernmental Water Board July 13,2005 DRAFT 3 Sign-in Sheet for Intergovernmental Water Board Meeting September 14, 2005 Name (Please Print) Do you want to speak to the Board? Tigard Water Supply Feasibility Project Presented to the Intergovernmental Water Board September 14, 2005 by CH2MHILL Ti' gard ' s Source Alternatives • JWC (Trask-Tualatin) • City Of Lake Oswego (Clackamas River) • South Fork Water Board (Clackamas River) • Willamette River Water Treatment Plant (WTP owned by Wilsonville and Tualatin Valley Water District) • City Of Portland (Bull Run and Columbia Well Field ) Drivers for regional cooperation • Tigard owns no source • Totally dependent on others to provide water to the City. • ASR that is being developed now and needs source water for ASR • Wants to obtain ownership in a water supply and can potentially achieve that goal working with Lake Oswego and SFWB . Drivers for regional cooperation • Lake Oswego has more water rights than they anticipate using Lake Oswego will require an additional 10 mgd of intake , raw water pipeline , treatment, and finished water pipeline capacity to serve the build-out demand . • Economic advantage for Lake Oswego to partner with Tigard to develop the Lake Oswego source facilities Drivers for regional cooperation • SFWB has more water rights than they anticipate using • Economic advantage to SFWB to provide source water to Tigard • The finished water option would be wheeled through West Linn to the Lake Oswego finished water pipeline . Report Evaluates Water Source Feasibility • Water Source Opportunities • Raw Water Diversion Requirements and Raw Water Conveyance • Water Treatment Plant (WTP) Expansion • Finished Water Pipeline • Capital Construction Cost Estimates • Conclusions Summary of Clackamas River Water Rights Held by Lake Oswego and SFWB Total Permitted Certificated Remaining Rights and Rights (or Permitted Pending Pending Rights to Applications Certification) Certificate (mgd) (mgd) (mgd) *South Fork 52.66 18.34 34.32 Water Board •City of Lake 38.14 16 22.14 Oswego Total 90.80 34.34 56.46 Table 2-1 Tigard and Lake Oswego Maximum Day Demands Water Provider MDD - 2005 MDD — Build-Out •Tigard 12 20 •City of Lake 13 26 Oswego Total 26 46 Table 2-5 1997 Facility Plan Recommended LO WTP Process Configuration J Q H W W W W ~ cc � J W aOco a O G. O >- O Q d C9W ZU 2 (n< = O¢ O j Z j0 < -c U pH ¢ O 0¢ C W QQ O< O� UJ d SLL U V1 Q NU <J c TREATED P g P WATER TO DISTRIBUTION LL C. RAW FLASH FLOCCULATION SEDIMENTATION OZONE FILTERS CLEARWELL FINISHED CLACKAMAS WATER MIX , CONTACTORS WATER RIVER PUMP (FUTURE) PUMPING STATION RECYCLE 04 A DRIEDSOLIDS TO LANDFILL RECLAIMED SOLIDS WATER LAGOONS PUMP STATION Figure 1 Alternative L4 INTP Process Configuration W W mx F O J (Z Q O Z O = O 2O 3 0 0 O 0 Z Q J 0 to - w U SO U i O0 U za Q U � Q — TREATED 2 P l �. P WATER TO DISTRIBUTION RAW FLASH iIMMERSED 0 UV CLEARWELL FINISHED CLACKAMAS WATER MIX BLANKET MEMBRANE ¢DISINFECTION WATER RIVER STATION < (FUTURE) PUMPING W¢ oLU J CL CENTRATE TO SEWER SLUDGE CAKE RECLAIMED THICKENER BACKWASH TO LANDFILL WATER SURGE DEWATERING PUMP CENTRIFU STATION Figure 2 Ca p YRequirementsacit from Various Sources (m-gd ) Water Provider Option 1 Option 2 Option 3 Option 4 Option 5 Tigard LO WTP 20 14 6 6 14 Tigard ASR 6 6 6 6 Lake OsfWest 8 Linn Willamette River 8 Tigard Subtotal 20 20 20 20 20 Lake Oswego LO WTP 26 26 26 26 18 West LinnISFWB 8 Lake Oswego 26 26 26 26 26 Subtotal Total Demands 46 46 46 46 46 LO WTP Ultimate 46 40 32 32 32 Capacity Table 3-3 Water Supply System Construction Cost Estimate System Component Capacity (mgd) Estimated Cost Mil. Intake Facility Increase firm pumping capacity to 32 $3.0 Raw Water Pipeline Size for 18 $5.5 WTP Expansion Expand from 16 to 32 $20.0 Finished Water Pipeline Size for 30 (22 + 8) $14.0 Bonita Pump Station Expand capacity from 8 to 14 $2.0 Expansion SFWBIWest Linn Expand capacity from 6 to 8 $1 .5 Facilities Construction $14.0 Contingencies (30%) Total Estimated $60 Construction Cost Table 6-1 Water Supply System Construction Cost Sharing System Component Cost ($Mil) Tigard Share Lake Oswego Share Intake Facility $3.0 37.5%1(6116)/$1.13 62.50/d$1.87 Raw Water Pipeline $5.5 33.3%1(6118)1$1.83 66.70/d$3.67 WTP Expansion $20.0 37.5%/(6116)1$7.5 62.50/d$12.5 Finished Water Pipeline $14.0 46.7%1(14130)1$6.54 53.30/d$7.46 Bonita Pump Station $2.0 100%1$2.0 0%1$0 Expansion SFWBMest Linn Facilities $1.5 100001..5 0%/$0 Construction Contingencies 14.0 44.60/d$6.24 55.40/d$7.76 (30%) Total Estimated Construction $60.0 $26.76 $33.24 Cost Table 6-2 t 8 Ques 1 ions 1 to y 7P y as7 . r rT ,. r, w Katrina's arrival into Alabama =^ , ` QUESTIONS/COMMENTS ? L f L i W082005020PDX 000000.00.00 9114105 WATER SUPPLY FEASIBILITY PROJECT TIGARD , OREGON September 2005 is 46111` CH2MHILL WATER SUPPLY FEASIBILITY PROJECT TIGARD, OR tp PROF , 8332 SEPTEMBER, 2005 L. F CH2M HILL FXPli-ts: /7- 7777l Water Supply Feasibility Project Table of Contents Section 1 -General Background Section 2-Water Source Opportunities Section 3 - Raw Water Diversion Requirements and Raw Water Conveyance Section 4-Water Treatment Plant (WTP) Expansion Section 5 -Finished Water Pipeline Section 6-Capital Construction Cost Estimates Section 7- Conclusions Appendix-A i Section 1 - General Background For some time the City of Tigard has been evaluating opportunities to augment or own an adequate water supply to satisfy long-term demands of the system.Tigard has recently become a part of the joint Water Commission (JWC) through an intergovernmental agreement. Currently the system receives water from the City of Portland (directly and through Tualatin Valley Water District's Metzger system)and from the JWC,wheeled through the City of Beaverton system.Historically Tigard has received water from Lake Oswego and still has the infrastructure in place for use as an emergency connection. Tigard has a maximum day demand now of about 12 million gallons per day (mgd) and expects an ultimate demand of about 20 mgd. The water supply alternatives to satisfy the ultimate demand are several,some being able to provide the full demand and others may be one of two or three source alternatives needed to satisfy the full demand. Aquifer Storage and Recovery (ASR)is being investigated currently and is expected to be able to provide up to 6 mgd of summer time capacity,reducing the required peaking source from others.The source alternatives are: • JWC(Trask-Tualatin), • City of Portland (Bull Run and Columbia Well Field), • City of Lake Oswego (Clackamas River) • South Fork Water Board (Clackamas River) • Wilsonville Water Treatment Plant(Willamette River Water Treatment Plant owned by Wilsonville and Tualatin Valley Water District) This scope of work focuses on the feasibility of obtaining a water supply for Tigard by acquiring up to 20 mgd of water rights from Lake Oswego and South Fork Water Board (SFWB), and working jointly with Lake Oswego to construct any required intake (expansion),raw water pipeline,water treatment plant,and finished water pipeline capable of up to the 20 mgd Tigard requirement and the additional capacity required for Lake Oswego to meet their ultimate maximum day demands anticipated. The drivers for the water purveyors to enter into an arrangement described above are different for each: Tigard -Tigard owns no source except the ASR that is being developed now.Even then there is no source water ownership to supply the ASR facility.ASR is more a resource management tool than a pure source of water, thus they are totally dependent on others to provide water to the City.Tigard wants to obtain ownership in a water supply and can possibly achieve that goal in working with Lake Oswego and SFWB. Lake Oswego-Lake Oswego has more water rights than they anticipate using when the city is at build-out.Lake Oswego will require up to an additional 10 mgd of intake,raw water pipeline,treatment,and finished water pipeline capacity to serve the build-out demand.There is a definite economic advantage for Lake Oswego to partner with Tigard to further develop the Lake Oswego source facilities expansion to provide the balance of Lake Oswego's needs and to supply Tigard demands to the extent water rights will provide it. 2 SFWB -SFWB has more water rights than they anticipate using when the two cities of Oregon City and West Linn are at build-out.There is an economic advantage to SFWB to provide source water to Tigard, be it raw water treated at the Lake Oswego WTP or finished water.SFWB can apply to WRD for obtaining another point of diversion which would be at the Lake Oswego intake site.They would place the amount agreed between SFWB and Tigard at that diversion.SFWB would either lease or sell the water rights to Tigard. An additional intake would need to be constructed for diversion of more than 32 mgd.To confirm Lake Oswego's existing intake structure is capable of 32 mgd,additional evaluation must be done to determine the hydraulic capability of the wet well portion of the intake.The finished water option would be wheeled through West Linn to the Lake Oswego finished water pipeline.This study will include a review of the alternatives available for getting water supply from SFWB. This report includes the following Sections: • Water Source Opportunities • Raw Water Diversion Requirements and Raw Water Conveyance • Water Treatment Plant(WTP)Expansion • Finished Water Pipeline • Capital Construction Cost Estimates • Conclusions Section 2 - Water Source Opportunities This section includes a review of the water rights held by Lake Oswego and SFWB, comparing their holdings with their anticipated buildout needs. For the scope of the rest of the feasibility report we will assume that Lake Oswego has 6 mgd available for Tigard and SFWB has 8 mgd available during the peak season for a total of 14 mgd,and that the Tigard ASR will provide 6 mgd for a total of 20 mgd. The water rights held by Lake Oswego and SFWB are shown in Table 2-1. 3 TABLE 2-1 Summary of Clackamas River Water Rights Held by Lake Oswego and SFWBI Total Permitted Certificated Rights Remaining Rights and Pending (or Pending Permitted Rights Applications Certification) to Certificate (mgd) (mgd) (mgd) South Fork Water 52.66 18.34 34.32 Board City of Lake Oswego 38.14 16 22.14 Total 90.80 34.34 56.46 ' Rounding error may have been introduced in conversion from cis to mgd.Actual cis should be used when making certification application. 2 Actual permitted total is 74.98 mgd. The likely reduced amount available in summer and early fall because of low stream flows is 52.66 mgd. Mgd=million gallons per day. cfs=cubic feet per second. South Fork Water Board The South Fork Water Board (SFWB) manages four surface water right permits on the Clackamas River (see Table 2-2). Of these, one right supplying 3.88 mgd has been certificated and one partial proof of 14.46 mgd has been submitted to OWRD for review. The sum of the total rights permitted is 74.98 mgd. Low-flow conditions may result in the limitation of South Fork water rights to a total of 52.66 mgd of water from the Clackamas River if permits P-9982 and P-3778 are restricted to a combined total of 9.7 mgd. Any restriction imposed would only be during low flow months. Otherwise the full permit amount is available. South Fork's new intake will be used as the POD for these rights. All of South Fork's rights are senior to the in stream water rights and all the other municipal water rights on the Clackamas River except for the City of Gladstone's 1951 Certificate C79828 for 4 cubic feet per second (cfs). 4 TABLE 2-2 Clackamas River Water Rights Managed by South Fork Water Board Amount Total Remaining Certificate/Permit Right to No.(Application Certificate Priority Permit Holder No.) mgd cfs Status (mgd) POD' Date City of Oregon City2 P-3778(S-5942) 12.93 20 Likely only able to certificate 5 Section 29' 1116/1918 5 mgd because of low stream flows City of Oregon City2 P-9982(S-11007) 19.39 30 Likely only able to certificate 5 Section 292 8/11/1926; and City of West 5 mgd because of low 1/16/1931 Linn stream flows South Fork Water P-22581 38.78 60 Partial proof of 14.46 mgd 24.32 SFWB new 8/3/1953 Board(SFWB)3 (S-28676) has been submitted intake South Fork Water T6162 confirming 3.88 6.0 T6162 order cancelled 0 SFWB old 7/17/1914 Board right of C1067 C1067,but a confirming right intake (P-2257) was to be issued.Status of confirming right unknown. Total Permit 74.98 116 34.32 Total Anticipated 52.66 ' Section 29 refers to the intakes authorized as follows: P-3778 point of diversion(POD):Section 29 T4S R5E WM at a point from which the'/.section comer between Sections 29 and 30 bears N 37 degrees and 3 minutes W 1402.0'distant. P-9982 POD:From south fork near SW comer of S29,being upstream approximately 1,300 feet from the junction of Memaloose Creek and South Fork.From Memaloose Creek,South 18 degrees 6 minutes East,4.042 feet from the NW corner of S29. 2 The water right P-9982 is permitted for a total of 30 cubic feet per second(cfs)(19.39 million gallons per day[mgd]), 10 cfs to supplement Permit 2257(C1067)from Memaloose Creek and 20 cfs from South Fork to supplement P3778.South Fork believes that because of low stream flows,likely only 15 cfs(9.2 mgd)would be available to certificate.The actual amount is to be determined in the future from long-term monitoring data. 3 POD changed by Declaratory Ruling,Vol.49,p.173. In stream water right is 400 cfs July 1 -Sept 15 and 640 cfs Sept 16-June 30 from Three Lynx to mouth. POD=point of diversion. City of Lake Oswego Lake Oswego holds two surface water permits on the Clackamas River,for a total of 38.14 mgd (see Table 2-3). A partial proof of 16 mgd of the larger senior permit (32.32 mgd) has been submitted to OWRD and is awaiting certification.The city also holds a permit for 3.88 mgd on the Willamette River and a groundwater right for 0.29 mgd. The groundwater right represents less than 1 percent of the water supply used by the city, and typically is used only in the summer. 5 TABLE 2-3 Clackamas River Water Rights Managed by City of Lake Oswego CertificatelPermit Amount Total Remaining No.(Application Right to Priority Permit Holder No.) mgd cfs Status Certificate(mgd) POD Date City of Lake Oswego S-32410(S-43365) 32.32 50 Certificate received 16.16 LO 3/14/1967 (LO) for 25 cfs of this permit. City of Lake Oswego S-37839(S-50819) 5.82 9.0 Permit 5.82 LO 7/5/1975 Total 38.14 59 22.14 mgd=million gallons per day. cfs=cubic feet per second. POD=point of diversion. The instream water rights are of particular interest because they are senior to Lake Oswego's 1975 right of 9 cfs. The size and timing of the instream right is shown in Table 2-4 Table 2-4 Clackamas River Water Rights Managed by OWRD as Instream Water Rights Flow in Critical Months Certificate River Mile (mgd)* (cfs) Priority Date Number C-59490 47.8 to 0 258.5 400 cfs(July an d August) 5/25/1966 C-59491 47.8 to 0 413.6 640 cfs(last half of September through June) 8/26/1968 258.5 C-59492 -65.1 to 0 155.1 240 cfs(October through June) 5/25/1966 96.9 150 cfs(July through September) 1 Note that the certificates provide flow in cfs. Flow in mgd is calculated. 2 mgd=million gallons per day. 3 cfs=cubic feet per second.. The maximum day demands (MDD)for Lake Oswego and Tigard estimated in recent water master plans for each entity are used for this water supply evaluation.The Table 2-5 shows these values as they will be used in the following sections to determine the opportunities for service from Lake Oswego and SFWB to Tigard. 6 TABLE 2-5 Tigard and Lake Oswego Maximum Day Demands(mgd) Water Provider MDD-2005 MDD—Build-Out Tigard 12 20 City of Lake Oswego 13 26 Total 26 46 Notes: 1)Tigard source requirements from Lake Oswego WTP of 20 mgd for MMD projection can be reduced to about 14 mgd when 6 mgd of ASR capacity is installed. 2)Using high estimated projection for Stafford Urban Reserve Area(URA)Lake Oswego's MDD is 26 mgd.Without Stafford URA projection for MDD is 19 mgd. Section 3 - Raw Water Diversion Requirements and Raw Water Conveyance The raw water diversion and conveyance facilities for Lake Oswego and SFWB require improvements to fully support the demands from Tigard. Table 3-1 shows the intake,raw waterline, WTP, and the finished waterline capacities. TABLE 3-1 Supply Components Capacities(in million-gallons-per-day[mgd]) Water Provider Intake Raw Waterline WTP Finished Waterline Pumping/Structure City of Lake Oswego 16/32 14 16 10 SFWB 20/53 22.5 30 30 Both Lake Oswego and SFWB have completed facilities plans that give an understanding of the expansion opportunities at each facility. Lake Oswego has property to expand to the full Clackamas water rights holdings and perhaps more. To exceed the capacity that can fit onto the original WTP 6.05 acre-site, the city will have a permitting challenge that is unclear at this time if it could be overcome. There is likely the ability to construct 32 mgd on the original site using newer space-saving technologies. The SFWB water supply facilities can be constructed up to the expected summertime flow available,53 mgd. 7 TABLE 3-2 Tigard and Lake Oswego Maximum Day Demands(mgd) Water Provider MDD-2005 MDD—Build-Out Tigard 12 20 City of Lake Oswego 13 26 Total 25 46 Notes: 1)Tigard source requirements from Lake Oswego WTP of 20 mgd for MMD projection can be reduced to about 14 mgd when 6 mgd of ASR capacity is installed. 2)Using high estimated projection for Stafford Urban Reserve Area(URA)Lake Oswego's MDD is 26 mgd.Without Stafford URA projection for MDD is 19 mgd. The sum of 2005 MDDs for Tigard and Lake Oswego exceed the existing WTP capacity by 9 mgd.We recommend expanding the existing 16 mgd WTP to 32 mgd to provide some cushion for demand growth and further evaluation of need.This expansion uses the full 32 mgd of the water rights senior to the instream water right.In addition, the existing intake fish screens are designed for a capacity of 32 mgd.An evaluation of the existing wet well is needed to determine the existing pumping capacity. There is a potential of receiving 2 to 6 mgd or perhaps more of SFWB capacity via the West Linn/Lake Oswego emergency intertie.The hydraulics and intertie capacity from West Linn to Lake Oswego have not been determined but should be able to pass at least the design capacity designed for the Lake Oswego to West Linn direction which is 5.76 mgd. Testing to confirm actual flow capability under presumed operating conditions would be prudent. The West Linn transmission system would have to be studied (Flow testing to confirm actual Flow capability under presumed operating conditions would be prudent) to determine the firm capacity from the SFWB during a MDD scenario with the existing system. In addition the evaluation could consider what improvements are required to obtain 8 mgd via West Linn. A modification of the Intertie IGA would have to occur if a change is made to the way the intertie is used. The Portland Water Bureau (PWB) intertie could be improved to obtain 8 mgd into the Lake Oswego system.The system improvements in the Lake Oswego system need to be considered.Perhaps either or both of these interties could be improved with less expense than expanding the Lake Oswego WTP beyond the 32 mgd capacity.These options can be compared at a later date with the WTP expansion to accurately determine the most feasible way to proceed when more than 32 mgd is needed. Tigard could consider buying into an additional source in the future if it were needed to satisfy some of the build-out capacity requirements. The Willamette River would likely be available. If in 15 to 20 years there has been successful operational experience evident with the Willamette River WTP at Wilsonville, the Tigard citizens may wish to obtain some capacity from Tualatin Valley Water District, the owner of 83-percent of the Willamette B River intake and 33-percent of the treatment facility.Tigard has a pending water right application to divert up to 40 cfs at the Willamette River WTP intake. Several options are possible for satisfying the Tigard maximum day demand. Table 3-3 shows four combinations of sources that could be available for Tigard. Table 3-3 Capacity Requirements from Various Supply Sources(mgd) Water Provider Option 1 Option 2 Option 3 Option 4 Option 5 Tigard LO WTP 20 14 6 6 14 Tigard ASR 6 6 6 6 Lake Os/West Linn 8 Willamette River 8 Tigard Subtotal 20 20 20 20 20 Lake Oswego LO WTP 26 26 26 26 18 West Linn/SFWB 8 Lake Oswego Subtotal 26 26 26 26 26 Total Demands 46 46 46 46 46 LO WTP Ultimate 46 40 32 32 32 Capacity These options are further defined below. Option 1 - Need expansion of WTP to 46 mgd minimum. - Need to obtain additional point of diversion (POD) for SFWB water right to Lake Oswego intake (16 mgd to get senior priority). - Size water rights, raw water pipeline, and finished water pipeline for 48 mgd total (multiple of 16 mgd) Option 2 - Need expansion of WTP to 40 mgd - Need to obtain additional POD for SFWB water right to Lake Oswego intake (8 mgd to get senior priority) - Size water rights, raw water pipeline, and finished water pipeline for 40 mgd (multiple of 8 mgd) Option 3 - Need expansion of WTP to 32 mgd - Contract finished water purchase with SFWB/West Linn for 4 mgd. 9 - Contract finished water purchase with PWB for 4 mgd. - Alternative is to get 8 mgd from only one-SFWB/West Linn or PWB - Size raw water pipeline for 32 mgd total;size finished water pipeline for 36 to 40 mgd total. - Tigard to rely on ASR for 6 mgd capacity of the required 20 mgd Option 4 - Need expansion of WTP to 32 mgd - Contract with TVWD for 8 mgd (coordinate with timing of TVWD's need) - Size raw water and finished water pipelines for 32 mgd total Option 5 - Need expansion of WTP to 32 mgd - Contract with West Linn/SFWB for 8 mgd to Lake Oswego. - Rely on Tigard ASR for 6 mgd capacity of the required 20 mgd. - Raw water pipeline sized for 32 mgd (for possible future capacity and for redundancy for existing (nearly 40 year) old pipe. - Finished water pipeline sized for 40 mgd total (32 mgd-WTP;8 mgd-SFWB via West Linn) Any of the options could include upfront buy-in to the existing Lake Oswego supply facilities by Tigard,providing for early ownership of facilities and the earliest evidence of a successful IGA that would be negotiated between Lake Oswego and Tigard. Of the options shown,one would require the ultimate WTP capacity to be 46 mgd,one that would require the ultimate capacity to be 40 mgd,and two that would allow the maximum capacity to be 32 mgd,the amount of intake structural and screen capacity. By using the senior and junior water rights Lake Oswego can obtain 38 mgd from the river at the intake. Any additional diversion would require a permit amendment of SFWB rights to obtain an additional point of diversion at the Lake Oswego intake.To have senior rights for all the water needed, 14 mgd of SFWB rights would be needed. If Lake Oswego included their own 6 mgd of junior rights in the diversion,only 8 mgd of SFWB rights would be required. The raw water pipeline size will depend on the ultimate diversion requirements.The routing can be similar to the existing line. Consideration should be given to horizontal directional drilling(HDD) under the Willamette River to minimize the permitting requirements.The permitting requirements and construction techniques should be further evaluated in future concept/preliminary design tasks. Section 4 - Water Treatment Plant (WTP) Expansion Introduction and 1997 Facility Plan Review The purpose of this section is to present findings and recommendations resulting from review of the 1997 Lake Oswego Water Treatment Plant(LOWTP) Facility Plan(1997 Plan). The 1997 Plan provides a roadmap for upgrading and expanding the LOWTP from the current 16 mgd capacity to an ultimate capacity of 48 mgd with incremental expansions to 10 24 and 32 mgd.The 1997 Plan recommends a conventional treatment process for the LOWTP. Since 1997, there have been advances in water treatment technologies that we believe merit evaluation in preliminary design stages of future upgrade and expansion projects. In addition,key assumptions in the Plan should be revisited,including the following: • Tigard has developed Aquifer Storage and Recovery (ASR) wells to augment peak summer demand. This technology tends to reduce the needed treatment plant capacity as water is treated and stored during winter low demand periods. This will have the effect of reducing Tigard's peak demands.The source water for the ASR wells would come from winter(off-peak)WTP production. • As discussed elsewhere in this report, the LOWTP site constraints and intake capacity are reasons to consider limiting the LOWTP capacity to 32 mgd. • Winter demands are approximately one-half the summer peak or maximum day demand (MDD). Therefore,the expanded 32 mgd LOWTP would have capacity to meet winter demands for both communities and supply recharge supply for the Tigard ASR storage. [To maximize winter production,winter/spring raw water quality may dictate process selection and sizing.] • The projected Lake Oswego MDD is 26 mgd while the projected Tigard MOD is 20 mgd. Treatment capacity is typically sized for the MDD. The following table presents the basic planning data which is discussed in more detail elsewhere in this report: TABLE 4-1 Lake Oswego and Tigard Source/Treatment Capacity Source Lake Oswego Tigard Combined LOWTP(Clackamas River) 26 mgd 6 mgd 32 mgd ASR n/a 6 mgd 6 mgd Lake Oswego/West Linn 8 mgd 8 mgd Total 26 mgd 20 mgd 46 mgd Note: 1)M altemative is to obtain 8 mgd via West Linn and not obtain any from PWB. The 1997 Plan assumed that the Willamette river would be the raw water source for the LOWTP beyond the 38 mgd capacity. If the Lake Oswego WTP capacity is expanded beyond 38 mgd,an alternative to tapping the Willamette River as a Lake Oswego WTP source is to obtain Clackamas River rights from SFWB and add the Lake Oswego intake as another point of diversion. A schematic of the process configuration recommended in the 1997 Facility Plan is presented in Figure 1. Refer to attached site plans from the same report. Some key process recommendations from the 1997 Plan include the following: • Replace inline mechanical mixer with pump diffuser flash mixer in conjunction with first plant expansion. (Construction completed) • Upgrade the current Direct Filtration process(with contact basins) to a Conventional process with addition of flocculation and sedimentation unit processes. The conceptual design includes retrofit of the existing contact basins with flocculators,high rate tube or plate clarifiers and sludge removal equipment. Construct new basins in kind with 3- stage flocculation with 30 minutes detention time and high-rate sedimentation basins with assumed loading rate of 1.5 gpm/sf. • Upgrade existing filters and construct new filters with deeper basin geometry and gravel less underdrain system for deeper bed depth and higher filtration rate. (Construction completed filter upgrades to dual media and gravel less underdrain.) • Replace unlined sludge settling ponds with concrete lined lagoons which will thicken and dewater the plant residuals. (Construction completed)The supernatant from the lagoons will be recycled. • Add a 2.2 MG finished water clearwell with the first plant expansion. • Addition of the following chemical systems: liquid cationic polymer and carbon dioxide, and site planning for possible future addition of ammonia,and ozone. (Completed improvements,including liquid polymer and carbon dioxide chemical systems.) • Upgrade of lime,PAC,and chlorine storage and feed systems. The Plan recommends switching from gaseous chlorine to sodium hypochlorite(bulk or onsite generated). A bulk lime silo storage system with saturator is recommended to replace the bag feed system. Similarly,a PAC slurry tank storage and feed system is recommended. (Completed improvements, including sodium hypochlorite and bulk lime storage.) Other key assumptions from the 1997 Plan include the following: • The Willamette River will be the source of supply for the LOWTP for capacity beyond 38 mgd capacity. • Proprietary high-rate clarifiers were not recommended for reasons of cost,process stability,and ease of operation. • Because of site constraints the ultimate expanded plant layout includes 8 new filters which increases the filter loading rate from current 5.1 gpm/sf to 6.6 gpm/sf. The higher design filtration rate was based on lower solids loading with addition of the flocculation and sedimentation processes,improved filter design, and optimized pretreatment. • The recommendation to add 2.2 MG of storage capacity satisfies disinfection requirements,however,falls short of the recommended volumes (10% to 20% of plant capacity). 12 FIGURE 1 1997 Facility Plan Recommended LOWTP Process Configuration W w � a & 0 0xs g O v z x0 d O a 0 p ? UQ C (� Z x V a y a 4 m z m P TREATED PD WATER TO DISTRIBUTION 03 e[H* RAW FLASH FLOCCULATION SEDIMENTATION OZONE FILTERS CLEARWELL FINISHED CLACKAMAS WATER MIX , CONTACTORS WATER RIVER PUMP (FUTURE) PUMPING STATION RECYCLEP DRIEDSOUDS TO LANDFILL RECLAIMED SOLIDS WATER LAGOONS PUMP STATION 13 1997 Plan Process Evaluation Because of the limited scope of this study,our process evaluation will consist of a brief assessment of the 1997 Plan process recommendations followed by alternative recommendations. More detailed predesign studies are recommended to validate these preliminary recommendations and to establish water specific design criteria. At the very least,the alternative processes discussed should be evaluated during preliminary design phase of next expansion project. In general,the 1997 Plan recommends a conservative process for the future LOWTP. The conventional process with coagulation/flash mix,flocculation, sedimentation,media filtration,and disinfection is a robust process that will meet all current and known forthcoming water quality regulations. It is a process suitable for treating Clackamas River, Willamette River,or a combination of the two sources.Although additional processes of ozone and/or UV may be appropriate when treating the Willamette River. The proposed conventional process and method of solids handling are space intensive and as laid out cannot fit on the current 6.05 Acre site. Beyond 24 mgd capacity,the City owned, adjoining Mapleton Frontage property is required to site solids handling lagoons. It is our understanding that adding sludge thickening/dewatering Iagoons on the 3.3 Acre Mapleton Frontage site will likely meet with resistance from local residents and perhaps planning department. While the 1997 Plan is schematic,it depicts construction of new facilities abutting existing older structures. While this is feasible,our experience is that it is oftentimes best to separate new facilities from older to allow for upgrades,e.g.,deeper filter basins,and to avoid building code issues. This approach can also be lower construction cost. Based on site constraints and advances in technology,we recommend evaluating alternative processes that result in smaller footprints and better fit within the original 6.0 acre-plant site. Ca aci :An assumption is made that the ultimate LOWTP capacity will match the 32 mgd existing Clackamas River intake capacity. [An alternative to match plant capacity to the 38 mgd Lake Oswego Clackamas water rights could also be considered,however,requires an expansion of the existing intake.] Rapid Mixer:The choice between an inline mechanical mixer and a pumped injection type mixer is largely an engineer/owner preference. Both types of mixers will meet the process needs for the future plant. Flocculation:The 1997 Plan conceptual design criteria is standard for the industry. The multiple mixers and drives take up considerable space on site. The decision to not consider proprietary clarifiers that combine the flocculation and sedimentation steps should be revisited based on site constraints. Sedimentation: The high-rate tube or plate settlers are both effective clarifier technologies. The 1997 Plan leaves the choice of tubes or plates open and provides a conservative footprint which would accommodate either process. Plates typically provide double the capacity of tubes in the same footprint. In general,we recommend plates over tubes because they are higher rate and substantially more durable. Tube settlers have a 10 to 15 year expected life. Plate settler's life is about _years. Plates are substantially more expensive than tubes first cost. 14 Filters:The recommendation to go with deeper filters with gravel less underdrains is consistent with industry trends. While the justifications given in the Plan are reasonable,we would not recommend increasing the design filtration rate above approximately 5 gpm/sf simply to accommodate site constraints. Deeper filters will require air scour for more effective cleaning. Clearwell:We concur with the clearwell capacity goals in the report. From an operational perspective,you can never have too much. Looking for opportunities to reduce the footprint of other unit processes will potentially allow for more storage capacity on site. This is one component,if buried,that may be permitable on the Mapleton Frontage parcel. Solids Handling: The proposed lagoons are low-tech and an effective means of handling plant residuals, and generally is the preferred alternative where sufficient land is available. For the LOWTP we would recommend mechanical thickening and dewatering facilities to reduce handling and better fit the existing site. Disinfection:The recommendation to stay with free chlorine disinfection appears valid for the Clackamas source. Chloramination provides the City with an alternative method to control DBPs at low cost in the future,if needed. Ultraviolet Irradiation (UV) should be considered as a possible future primary disinfection process. UV was not known to be an effective inactivator of Cryptosporidium and other pathogens when the Plan was prepared. Chemical Systems:We generally concur with the proposed chemical system upgrades and additions. Alternatives to lime should be evaluated for reduced maintenance. Proposed Alternative Process Our approach to developing an alternative process for the LOWTP consists of the following steps: 1. Select the recommended filtration technology 2. Select the disinfection strategy and DBP goals 3. Select the appropriate pretreatment to compliment filters and meet aesthetic goals Filters:As an alternative to media filters,we recommend membrane micro filtration or ultrafiltration for the upgraded and expanded LOWTP. Since the Facility Plan was completed,membrane technologies have emerged as a viable, economical alternative to media filters. They have been embraced by the water industry primarily because they provide a positive barrier against microbial pathogen transmission and other inherent advantages including small footprint,automation,increased disinfection inactivation/removal credit,product water not dependent upon optimized coagulation chemistry,and potential for reduced pretreatment and sludge production. Membranes are generally well positioned for the future regulations. In the last 5 years,CH2M HILL's Corvallis office has designed membrane plants for several communities including Warrenton,Young's River,Pendleton,Albany-Millersburg Joint Water System,and Salmon Idaho. Capacities range from less than 1 mgd to 16 mgd. The Albany-Millersburg plant can be expanded to 26 mgd. Membrane plants in the 50 to 100 mgd capacity range are being built in the U.S. 15 A fundamental switch in treatment process poses some significant challenges and therefore, needs to be carefully evaluated. A full evaluation is beyond the scope of this study. With that said,the source water quality and LOWTP site constraints appear to be a good match for membranes. The switch to membranes could be phased in with old and new processes operated together. Immersed membrane technologies are likely the most economical membrane alternative for the LOWTP. Immersed membrane systems are being retrofitted into existing filter basins in some water treatment plant renovations. We would recommend continuing with free chlorine disinfection until a change is necessitated by regulation. The possibility of adding UV and/or ammonia to combine chlorine provide future operational flexibility toward meeting more stringent DBP regulations. The site should be planned for these processes in lieu of ozonation. Microfiltration and ultrafiltration membranes act as strainers and without pretreatment would not be effective at removing organics or controlling seasonal taste and odors. PAC, while considered a high-maintenance chemical system,has been effective at controlling T&Os,is compatible with membranes, and should be maintained. [If the City continues with media filters,GAC filter adsorbers are an effective alternative to anthracite and silica sand filters. This alternative was not discussed in the 1997 report. The Corvallis,Oregon Taylor WTP has been operating filter adsorbers since 1995 with good results.] PAC slurry storage and feed systems reduce handling and dust issues,and are a good choice for the future plant. Alternatively a bulk'super-sack' PAC feed system could be considered,and may provide chemical management advantages over the slurry system. The 1-ton super-sacks are positioned over the feed hopper using a hoist and trolley system to minimize bag handling. Clarification can reduce solids loading on the membranes and allow for higher flux rates and lower membrane equipment cost. In addition,clarification step may be necessary to maximize winter production to provide ASR recharge. If required,or if clarification/membrane combination results in lower overall cost,an Infilco Degremont SuperPulsator TM clarifier should be considered. This high-rate,upflow solids contact clarifier is reasonably responsive to changing water quality conditions and provides extended retention time for PAC in the solids blanket. The clarifier is mechanically simple with no submerged equipment. Actiflo is an even higher rate clarifier technology utilizing ballasted sand to enhance floc settling;however,it does not compliment the PAC adsorptive process. It is likely that the clarifier could be used seasonally and bypassed for much of the year. A description of the SuperPulsator TM process is attached. The LOWTP has insufficient space on the 6.05 acre site for lagooning the plant residuals. Mechanical thickening and dewatering is higher cost,however,provides a better fit for this plant and site. The backwash wastewater would be equalized and pumped to gravity thickeners. The blow-down from the thickeners would be dewatered using centrifuges. Alternative Conceptual Design A schematic of the recommended alternative process configuration is presented in Figure 2. Relative footprints of the major process recommendations are depicted on the 32 mgd site 16 plan from the 1997 Plan. The high rate processes discussed will provide an expansion to 32 mgd within the original 6.05 acre-site. Expansion to 32 mgd is near the maximum capacity that could be constructed on the original site.This should be confirmed in further concept/preliminary design tasks. Cost Estimates Our approach to the cost evaluation included the following steps: 1. Update the 1997 Facility Plan costs to 2005 dollars. The January 1997 Seattle ENR cost index of 6020 was adjusted upwards. The May 2005 ENR is 8195,for an adjustment factor of 1.361. 2.Using CH2M HILL's Parametric Cost Estimating System(CPES) the cost of the proposed alternative process was estimated. This process consists of inputting preliminary sizing criteria into costing spreadsheets. The software has modules for all major unit processes and is updated periodically to reflect current equipment and materials pricing and recent project costs. 3. For a better comparison between the 1997 Plan estimate and the proposed alternative process, CPES was used to estimate the 1997 Plan proposed improvements. For the CPES generated estimates,the two LOWTP process alternatives appear comparable. The conventional process recommended in the 1997 Plan is approximately 15 percent lower cost than the membrane alternative. If clarification is not required for pretreatment ahead of the membranes, the costs will be comparable. For the conceptual design and order-of- magnitude cost estimates,the difference in cost may not be significant. Additionally,the proposed alternative process may provide significant benefits beyond the first time cost. Table 4-2 shows the varying cost estimates as described in this section. 17 Table 4-2 Comparative Cost Estimating Phase 1997 Plan Estimate 1997 Plan Estimate Component 1997 Plan Component CH2M HILL Alternative Used in Cost Estimate System Component Expand 16 to 32 mgd ENR Adjusted to 2005 CH21VI HILL CPES Cost CPES Cost Estimate(2) Rapid Mixer ? ? $413,000 Rapid Mixer $413,000 $ 500,000 Convert Exst Contact Basins 16 to 24 mgd $1,200,000 $1,633,355 Construct New Floc/Sed Basins 16 to 24 mgd $1,800,000 $2,450,033 Flocculators $1,500,000 Construct New Conventional Floc/Sed Basins 24 to 32 mgd $1,200,000 $1,633,355 Lamella Plate Clarifiers $4,150,000 Floc/Sed Subtotal SuperPulsatorsTM $3,100,000 $ 3,100,000 Construct New Filters 16 to 24 mgd $700,000 $952,791 16 mgd New Filter Cap $3,300,000 Membranes $7,950,000 $ 10,000,000 Construct New Filters 24 to 32 mgd $700,000 $952,791 Allowance Hydraulic Upgrades 16 to 24 mgd $200,000 $272,226 Hydraulic Upgrades $544,452 Allowance Hydr Upgrades 24 to 32 mgd $200,000 $272,226 Filter Subtotal Construct New 2.2 MG Res 16 to 24 mgd $900,000 $1,225,017 New 2.2 MG Clearwell $1,540,000 Clearwell $1,540,000 $ 1,600,000 Construct New FW Pumping Station 16 to 24 mgd $1,000,000 $1,361,130 Pumping Upgrades $1,633,355 Pumping Upgrades $1,633,355 $ 2,000,000 Install Added Pumping Capacity 24 to 32 mgd $200,000 $272,226 Equalization Basin $200,000 $ 300,000 Construct New Lagoons 16 to 24 mgd $300,000 $408,339 New Lagoons $800,000 Gravity Thickener $670,000 $ 800,000 Construct New Lagoons 24 to 32 mgd $300,000 $408,339 New Lagoons $800,000 Centrifuges $1,625,000 $ 1,700,000 Solids Handling Subtotal If Total Estimated Construction Cost $8,700,000 $11,841,827 $14,680,807 $17,131,355 $ 20,000,000 FIGURE 2 Recommended Alternative LOWTP Process Configuration SODIUtu qyA &W OELITURE) POLYALUMINUM CARBON DIOXIDE CHLORIDE Al%?ER PAC LIME P P TREATED PP WATER TO DISTRIBUTION RAW FLASH PULSED- IMMERSED UV CLEARWELL FINISHED CLACKAMAS WATER MIX BLANKET MEMBRANE DISINFECTION WATER RIVER PUMP CLARIFIER FILTRATION (FUTURE) PUMPING STATION DEWATERING POLYMER P P CENTRATE TO SEWER SLUDGE CAKE RECLAIMED THICKENER BACKWASH TO LANDFILL WATER SURGE DEWATERING PUMP CENTRIFUGE STATION 19 Section 5 - Finished Water Pipeline The existing 24-inch finished water pipeline is at capacity with the 16 mgd WTP output. Any increased WTP capacity will trigger new finished water pipeline construction.The new pipeline would be sized to carry the expected flow in excess of the current 16 mgd,whether it is from the WTP or the WTP plus SFWB via West Linn(if contracted for MDD flow augmentation). To realize the cost saving of carrying the flow required for Lake Oswego and for Tigard,the new pipeline would need to follow the general alignment of the existing 24-inch pipeline to Lake Oswego's Waluga Reservoir.Tigard currently can obtain supply through the existing Bonita Pump Station.It is capable of pumping up to 8 mgd at a head of 90 feet,lifting it to 410 feet elevation. For Tigard to obtain all its water supply from Lake Oswego,the Bonita Pump Station would have to be increased to 20 mgd. If Tigard has ASR in place to provide 6 mgd of summer capacity to the system,the Bonita pump Station would only have to be capable of 14 mgd,or an expansion of 6 mgd.Further evaluation is required to determine if the expansion can be accomplished on the available property.The full length from the WTP to Waluga Reservoir is about 30,000 lineal feet. Further evaluation is required to determine if the piping from Waluga to the Bonita Pump Station is adequate to flow Lake Oswego's needs and Tigard's.Tigard's water model should be run to determine the Tigard system capability to receive 14 to 20 mgd from the Bonita Pump Station. An alternative that could be evaluated is providing a way to offset a portion of Lake Oswego's need for the existing 24-inch pipeline from the downtown area of Lake Oswego to the Waluga Reservoir.Some amount could be offset by diverting water in the downtown area by pumping to higher service levels from that point.This alternative implementation may delay the need to construct the last half of the transmission line for some years,allow a downsizing of it, or both. Section 6 - Capital Construction Cost Estimates The project assumed for the preparation of cost estimates is based on expanding the Lake Oswego WTP to 32 mgd,Tigard's MDD being 20 mgd and Lake Oswego's MDD being 26 mgd. Tigard's 20 mgd demand is assumed to be satisfied with: • 6 mgd of developed ASR, • at least 6 mgd from Lake Oswego's intake and WTP,and • the balance of up to 8 mgd being provided from SFWB via West Linri s system. This approach: • uses the existing Lake Oswego intake to its maximum without requiring significant additional structural expansion or a new intake and all the permitting required for that type of project. • uses the entire senior Clackamas River right of Lake Oswego and senior rights of SFWB. • maximizes the ASR opportunity in Tigard 20 — which reduces reliance on others during peak demand periods and — reduces treatment plant and transmission costs. • Provides for IGAs for system buy-in. The raw water pipeline will be sized so that the combination of the existing and new pipeline can supply 38 mgd (total of Lake Oswego's Clackamas River rights).This study assumes the new pipeline will be 30-inches in diameter. The source water for the ASR facility would come from the Lake Oswego WTP capacity and /or SFWB as these two sources will supply the needed water for ASR source water and the daily demand during the non-peak times of the year.The ASR source water supply rate is assumed to be no more than 3 mgd during the storage phase, or half the ultimate capacity of the ASR facility. The concept-level estimated construction cost and the cost sharing between Tigard and Lake Oswego are shown in Tables 6-1 and 6-2. TABLE 6-1 Water Supply System Construction Cost Estimate System Component Capacity Estimated Cost Intake Facility Increase firm pumping capacity to 32 mgd $3.0 Raw Water Pipeline Size for 18 mgd $5.5 WTP Expansion Expand from 16 mgd to 32 mgd $20.0 Finished Water Pipeline Size for 30 mgd(22 mgd/LO*8 mgd/SFWB) $14.0 Bonita Pump Station Expansion Expand capacity from 8 mgd to 14 mgd $2.0 SFWB/West Linn Facilities Expand capacity from 6 mgd to 8 mgd $1.5 Construction Contingencies(30%) $14.0 Total Estimated Construction Cost $60 TABLE 6-2 Water Supply System Construction Cost Sharing System Component Cost($Mil) Tigard Share Lake Oswego Share Intake Facility $3.0 37.50/./(6/16N$1.13 62.50/o/$1.87 Raw Water Pipeline $5.5 33.3%/(6118Y$1.83 66.7%/$3.67 WTP Expansion $20.0 37.50/6/(6116Y$7.5 62.50/o/$12.5 Finished Water Pipeline $14.0 46.7%/(14/30)/$6.54 53.3%/$7.46 Bonita Pump Station Expansion $2.0 1000/o/$2.0 0%/$0 SFWB/West Linn Facilities $1.5 100%/$1..5 0%/$0 21 Construction Contingencies(30%) $14.0 44.60/o/$6.24 55.4%/$7.76 Total Estimated Construction Cost $60.0 $26.76 $33.24 Note: This cost opinion is in September 2005 dollars and is construction cost only. It does not include future escalation,unusual material cost increase,sales tax,engineering,financing,construction management or O&M costs. The cost opinion shown has been prepared for guidance in project evaluation from the information available at the time of preparation. The final costs of the project will depend on actual labor and material costs,actual site conditions,productivity,competitive market conditions,final project scope,final project schedule and other variable factors. As a result,the final project costs will vary from the cost presented above. Because of these factors,funding needs must be carefully reviewed prior to making specific financial decisions or establishing final budgets. Section 7 - Conclusions The limited scope of this work does provide for an opportunity to assess the current situation regarding demand projections, available and potential capital facilities, and interest in having a cooperative effort among water purveyors for sharing water rights and existing and new facilities to satisfy regional demands. A cooperative approach will provide significant cost savings to both Tigard and Lake Oswego as Tigard seeks to develop ownership in a water supply and to Lake Oswego as they expand water supply facilities to meet future demands. Other benefits to Lake Oswego and SFWB including 1) emergency backfeed of Portland Water Bureau or Joint Water Commission water in case of catastrophic issues on the Clackamas River and 2)construction of a significant portion of the southern segment of the regional water providers transmission system. Additional study is warranted to analyze the specifics of the design requirements,permitting needs,and intergovernmental agreements (IGAs). The design requirements will be based on the desired capacities for each system component as agreed to by all parties. The following are examples of optional sizing and study efforts: • The raw water pipeline could be sized for the full Lake Oswego Clackamas River water rights totaling 38 mgd or sized for the WTP capacity of 32 mgd, based on the decision to use or not to use the junior rights. • The finished water pipeline could be sized for 1) the full water rights plus up to 8 mgd from South Fork via the West Linn system,or 2)just the WTP 32 mgd plus the 8 mgd from South Fork, or 3) allow for the existing pipeline to be rehabilitated and left in service, thus making the new finished pipeline needing to handle 30 mgd, and 4)other combinations may be considered. • Another study effort required is the evaluation of treatment processes to construct. • The Lake Oswego-West Linn intertie and West Linn delivery system needs to be evaluated to determine if 8 mgd can be obtained through their system. The federal, state and local permitting requirements need to be further defined and a strategy for success formulated. A negotiated IGA with Lake Oswego should include ownership interests in the Lake Oswego water rights, intake, WTP,and raw and finished pipelines. An 22 IGA with SFWB can consider either wholesale purchase of water from SFWB via West Linn or some facilities ownership such as water rights, intake, WTP, and transmission pipeline. An IGA with West Linn would provide a way to wheel water through their system to the new Lake Oswego-Tigard finished waterline near the existing West Linn-Lake Oswego intertie. 23 Appendix A - Alternative Processes The following paragraphs provide descriptions of the alternative processes discussed in the Tigard Water Supply Study. Filtration Granular Media Filters The 1997 Facility Plan recommends additional upgraded media filters for the LOWTP. Dual media filters are still the most common filters found at water treatment plants today.Most designs are anthracite/sand or GAC/sand,possibly with a high-density garnet sand (mixed media).The LOWTP filters are a mixed media design. The typical media bed design is a shallow bed with 18 to 24 inches of anthracite or GAC followed by 9 to 12 inches of sand.Media sizes can vary to balance the particle removal and headloss,but the most common media size for the sand part of the filter is 0.5 mm(effective size),while the anthracite and GAC can range from 0.8 to 1.2 mm(effective size).Dual media filters exhibit additional headloss as compared to deep bed monomedia designs,but they provide equal finished water quality.The smaller sand media provides a barrier to particle breakthrough at higher loading rates or long filter run times.The finer the media, the greater the protection;however headloss increases with the finer media, thereby reducing filter productivity. A dual media filter is usually less productive than a monomedia filter,but depending upon the filter influent water quality,this may not be an important factor to consider. 24 FIGURE A.1 Granular Media Filter Schematic INFLUENT WATE R LF VFL 0 tj SAC KWASH WWiTt AM U"KAO 4AIN scvuc+ �I CF MU PLUM_ T 1lUM FILTER TO WASTE 7mua ^LEARWELL I7 AWASH Membranes With the increasingly stringent requirements for better drinking water quality and reduction in use of disinfectants because of health concerns, the drinking water industry has looked into alternative processes to conventional treatment. Membrane treatment is gaining popularity in the U.S.The long-term experience with membranes is limited at this time,but installed capacity in the U.S. is in the hundreds of mgd. Membrane processes can be separated into four basic categories—reverse osmosis, nanofiltration,ultrafiltration,and microfiltration. Reverse osmosis (RO) and nanofiltration (NF) are used to remove dissolved inorganic compounds such as sodium,calcium,and magnesium ions,or dissolved organic compounds such as humic and fulvic acids that make up the primary source of DBP precursors.They operate at transmembrane pressures of about 80 to 1,200 psi, depending upon the source water quality and degree of separation required. Some uses for RO and NF include desalination of seawater and membrane softening, respectively. Ultrafiltration (UF)and microfiltration (MF), on the other hand,cannot remove dissolved materials,and are limited to removal of particles. OF membranes have a nominal pore size of between 0.003 and 0.03 µm,whereas MF membranes have a nominal pore size of between 0.05 and 0.5 gm. MF membranes,because of the pore size,are limited to removal of Giardia and Cryptosporidium,while OF membranes have the added feature of removing not only Giardia 25 and Cryptosporidium but also viruses. NF membranes remove particles but also can remove most DBP precursors and some dissolved salts. RO membranes remove everything the other membranes do,plus almost all dissolved salts. Figure A.2 shows the particle size removal capacity of each type of membrane. FIGURE A.2 Membrane Process Application Guide 0.001p 0.01p 0. lp l.op lop loop l000p Dissolved Organics Sand 0 Bacteria Viruses 0 0 Cysts Salts Colloids 0 Media Filtration Microfiltration Ultrafiltration 0 Nanofiltration Reverse Osmosis The earliest commercially available OF and MF membrane systems designed to filter-sterilize liquids are known as pressure-driven, hollow-fiber membranes. (Figure A.3). The liquid is passed either from the outside to the inside (lumen) of the hollow fiber (outside-in) or from the lumen to the outside of the fiber (inside-out). The hollow fibers are installed in vessels, which provide support for the pressure necessary to drive the liquid through the membrane pores. These units use water, air, or air/water backwash systems. 26 FIGURE A.3 Pressurized Microfiltration System r Immersed membranes are a relatively recent development in membrane process configuration. In this process, hollow fiber membranes are installed (immersed) in a raw water vessel and a small vacuum is applied to their downstream side. (Figure AA). This process is much more energy efficient and can result in a smaller footprint than pressure- driven configurations.Process air is introduced at the bottom of the membrane feed vessel, which creates turbulence in the tank effectively scrubbing the solids from the membrane surface. 27 FIGURE A.4 Immersed Ultrafiltration System z The advantage of a solids separation barrier with a known diameter makes MF or OF a feasible technology for control of microbes and provides effective filtration while achieving reasonable recovery of the product water. Product water recovery for MF and OF membranes ranges from 85 to 95 percent and can be even higher in some cases. Advantages and disadvantages of membrane treatment compared to conventional treatment are: Advantages Disadvantages Increased particle and turbidity removal Pretreatment of raw water is necessary to maintain treatment capacity Reliability of consistent effluent quality Need to clean membranes using acids or surfactants (new waste stream) Removal of pathogens(protozoa and bacteria [MF], Production of a more concentrated backwash stream protozoa, bacteria, viruses[UF]) (particles and pathogens) Ease of automation of the treatment system Capital costs are still high as compared to most other processes More flexibility in being able to meet future finished water quality goals 28 Backwash Treatment and Recycle Filter Backwash Treatment Filter backwash water typically represents 2 to 5 percent of the total water processed at a plant.The most applicable technology for any treatment option that uses granular media filters is the treatment of spent backwash water through the use of an equalization basin followed by a thickener.This process can produce a clarified effluent that can be discharged to a sanitary sewer or local stream (with an NPDES permit),or it can be recycled to the head of the plant. Recycle of treated backwash water must be handled carefully to ensure that proper treatment is still achieved by the water treatment processes.The recycle stream should be added at the head of the plant prior to flash mixing and should be returned at an equalized rate so that the flow is less than 10 percent of the total influent flow.The solids stream from the equalization and clarification processes needs to be handled by some measure of solids treatment,as discussed later in this section. Membrane Concentrate Treatment Membranes form a semipermeable barrier in the water treatment process and produce a concentrated waste of the rejected constituents in the raw water.Treatment of the membrane concentrate from MF or OF systems is usually much easier than that from an NF system because of the smaller pore size and removal of some molecular size compounds that can significantly affect the pH of the concentrate.Membranes are also periodically backwashed, which produces washwater that must also be treated. Typical concentrate from an MF or OF system can be treated by the same treatment methods as those used for backwash recycle,or another membrane can be used with a high recovery rate to produce high quality filtrate that can be recycled or disposed of.The small volume of remaining concentrate can be combined with other solids residuals(if present) for further processing or possibly disposed of in a sanitary sewer. A secondary waste stream that must be dealt with is that produced during cleaning of the membranes.Membranes are typically cleaned with low or high pH solutions on a periodic basis to maintain adequate production through the membrane.Treatment of this waste stream is usually done by using a tank for pH neutralization of the spent cleaning solution followed by a sanitary sewer discharge. Solids Handling Processes Solid residuals produced by treatment of backwash water or membrane concentrate,as well as residuals produced from coagulation processes,must be treated before final disposal.The treatment methods employed are designed to increase the percent solids of the residuals to decrease the total volume and therefore reduce the final disposal costs.State and local regulations may also influence the level of residuals treatment or the options available to the Authority for treatment of these solids.The solids concentration of metal hydroxide residuals treated by each process type is: 29 • Thickening less than 8 percent solids • Dewatering between 8 to 35 percent solids • Drying greater than 35 percent solids Thickening Thickening is usually the first step in reducing the quantity of solid residuals.The effectiveness of the thickening process has a large impact on any downstream solids treatment.The water removed from the solids during the thickening process can be disposed of or recycled to the head of the plant, allowing for additional recovery of source water in addition to any backwash water recycle. Gravity Thickeners.The most common method of thickening is the use of gravity thickeners. This method is used in most locations as the initial step in treatment.The thickener is usually a circular shaped settling basin that is operated in either a batch or continuous flow mode. The bottom of the thickener has either a hopper or scraper mechanism to remove the thickened solids.Solids can typically be thickened to 1 to 2 percent solids without polymer addition. Addition of polymer can increase the solids concentration as well as the quality of the supernatant for recycle.The thickener can also be used to provide some residuals storage and equalization to achieve constant solids flow to downstream processes. Dewatering Centrifuges.Centrifugal dewatering of solids is a process that uses the force generated by a fast rotation of a cylindrical bowl to separate solids from liquids.The main types of centrifuges used to dewater WTP residuals are basket and solid bowl.The solid bowl is the most common type used.It is a rotating cylindrical conical bowl with a scroll that rotates with the bowl at a different speed and carries the dewatered sludge to a discharge point.The centrate from the process is discharged from the shell of the bowl.Centrifuges can operate in either a cocurrent or countercurrent flow,although most centrifuges in the U.S. are of the countercurrent design. Polymers are usually used to help condition the sludge before centrifugation.Typical solids concentrations can range from 15 to 30 percent with feed solids in the 1 to 3 percent range. The space required for the unit is minimal,and centrifugation is a proven technology. However the energy requirements are high,and the centrate waste stream may have a high concentration of suspended solids that may be difficult to treat or recycle. CLARIFICATION TECHNOLOGIES • The majority of solids occurring naturally in the raw water and added in the coagulation process are removed as settled sludge. Inclined (Plate or Tube)Settlers. This is the clarification technology recommended in the 1997 Facility Plan. Inclined plates can be installed in a sedimentation tank to improve clarification. Many high-rate clarifiers, including the Superpulsatore and Actiflo®(both to be discussed later), also utilize the inclined settler technology. The inclined plates and tubes both improve settling efficiency by reducing the distance the particles must travel. The inclined 30 settlers can achieve surface loading rates in the 1 to 5 gpm/ftz range. Typically tube settlers, which are 2 to 3 feet deep, can double the loading rate to 2.0 to 2.5 gpm/sf. The deeper, 6 to 7 feet deep, parallel plates can achieve effective surface loading rates of 3 to 5 gpm/sf. The higher the loading rate, the smaller the required footprint, therefore, these clarification technologies are popular for retrofits. Mechanical sludge removal equipment is required for efficient operation. A tube settler schematic is presented in Figure A.S. FIGURE A.5 Tube Settler Schematic Inlet V Chiritieci red,fit Upflow Blanket Clarifiers. Upflow blanket clarifiers, also known as solids contact units, combine rapid mixing, flocculation, and sedimentation in one unit. These clarifiers are designed to maintain a large volume of flocculated solids within the unit, which enhances flocculation by encouraging interparticle collisions. The flocculated solids (solids blanket) are usually maintained at a set volume in the contactor, and cohesion of the blanket is achieved through the use of a polymer in addition to the coagulant. Upflow clarifiers are popular because of their higher loading rate, thus, reduced size. One such unit is the Superpulsatorv, manufactured by Infilco Degremont, Inc. In the Superpulsator$, rapid mixing occurs upstream of the unit where coagulant is added to begin the formation of floc. After rapid mixing, a polymer is added to promote sludge blanket cohesion. The coagulated water then enters the unit. The Superpulsatore uses a vacuum pump and vacuum chamber to produce a pulsing effect within the flocculation zone. The pulsing of the solids blanket expands the blanket and increases the rate of interparticle collisions. Clarification occurs with the aid of inclined settlers (tubes or plates) above the sludge blanket that settle the remaining floc. The clarified effluent is discharged at the top of the unit. Solids are maintained in the unit at a set height by use of a solids overflow weir. Solids overflow into a hopper and can be removed at a set interval. Typical solids concentrations range from 0.5 to 2 percent in the concentrated sludge. These units have loading rates of up to 3 gpm/fta. At these loading rates the detention time is approximately 45 minutes, much less than conventional clarification. A polymer is required at doses between 0.1 to 0.4 mg/L for cohesion of the sludge blanket. These units have no submerged moving parts or mechanisms, and the sludge blanket is self-leveling. These units have been shown to be effective at removing turbidity and TOC. Since the sludge is partially 31 recirculated increasing the sludge age, use of powered activated carbon (PAC) is particularly effective at removing taste and odor(T&O)-causing compounds in these units. FIGURE A.6 Upflow Clarifier Schematic Effluent a Effluent Influent Sludge j Vj Blowdown 32 Regional Water Sales Agreement October 19, 2004 Page 1 DRAFT - U • • . SECTION 7- RATES AND CHARGES FOR GUARANTEED PURCHASE WATER QUANTITY A. Rate Making In General 1. The rate structure for Purchaser's guaranteed purchase quantity of water shall consist of(a) a fixed monthly charge calculated using the cost of service of typical non-volumetric services such as, but not limited to, meter reading, billing, meter purchases, meter maintenance, and relevant overhead and (b) a volume charge calculated using a single volumetric rate times the Purchaser's guaranteed purchase quantity. 2. The City shall annually establish rates and charges for the Purchaser's fixed monthly charge and guaranteed purchase quantities that do not exceed charges calculated using the principles and standards of this Section 7. (a) Determination of revenue requirements using the utility basis of revenue requirements and cost of service principles as described in Manual of Water Supply Practices- MI. Principles of Water Rates, Fees and Charges. Fifth Edition. Denver: 2000 published by the American Water Works Association (hereafter"AWWA Manual M I") or in such updates as may occur from time to time, except for such deviations from AWWA Manual M 1 as are described or permitted by this contract. A cost of service computer model will be used to calculate the revenue requirements, cost allocations, and resulting rates. (b) The components used to determine the revenue requirements under the utility basis shall be: 1. Operation and Maintenance (hereafter "O&M") costs; 2. Return on Investment; and 3. Depreciation. (c) Purchaser shall not be charged for the costs incurred by the City that are incurred for the sole purpose of serving the City's retail customers. For the costs incurred serving both the Purchaser and the City's retail customers, Purchaser shall be charged an amount that equals its proportionate share of the cost, using standard cost-of-service principles, as generally described in AWWA Manual M1, unless stated otherwise herein. SECTION 7-(Continued) Regional Water Sales Agreement October 19, 2004 Page 2 DRAFT • • (d) The parties understand that the City may enter into similar wholesale water sale agreements with other water utilities. If the City does so, the charges to Purchaser shall continue to be based on the Purchaser's proportionate share of the cost to serve the Purchaser, based on the Purchaser's proportionate share of total demand on the system, including demand of other purchasers and the City's retail customers. (e) The City shall treat surcharges collected under this agreement as an offset to the otherwise estimated annual revenue requirements for all wholesale and retail customers of the system. B. Cost Allocations-- In General 1. Costs shall be allocated to the Purchaser in accordance with generally accepted ratemaking practices and procedures, as described in AWWA Manual M1, as it may be updated from time to time, except to the extent that the procedures specified herein may deviate from the practices and procedures of AWWA Manual M1. In general, unless specified otherwise in the agreement, costs shall be allocated based on the proportionate share of costs of the assets and other revenue requirements, as provided in AWWA Manual M1. 2. Cost allocation for purposes of this contract shall be based on the "commodity demand"methodology, as defined in AWWA Manual M1, unless otherwise agreed to by Purchaser and the Administrator. C. O & M Cost Allocation 1. Definition For purposes of this agreement O&M expenses include the operations, maintenance, and associated overhead expenses of the City's water supply system as adopted in the City's annual budget process for the year for which the rate will be in effect. 2. Allocations The City shall allocate O&M costs on the same basis as capital costs are allocated, as described in Section 7.D.2. below. SECTION 7—(Continued) 3. Special Allocation to Avoid Cost Cap In any year that the Administrator determines that standard allocation of the O&M expenses contained in the City Budget will cause an exceedence of the O&M cost cap, the Administrator Regional Water Sales Agreement October 19, 2004 Page 3 DRAFT U • • . • 3.3 may alter the O&M component if Purchaser's rates in a manner that avoids exceedence of the cost cap. D. Capital Cost Allocations 1. Capital costs are those expenditures that result in the acquisition of or addition of fixed assets that become part of the rate base. 2. Capital costs shall be allocated based on Purchaser's guaranteed purchase quantity in a five-step process using best professional judgment. First, system assets included in the rate base shall be allocated to functional asset groups (such as source, transmission, pumping, customer, equivalent meter). Second, the resulting system assets by functional asset group shall be allocated to water service characteristics (such as commodity, peak season demand, peak three days demand). Third, the assets allocated to each water service characteristic shall be allocated to customer classes based on their respective percentages of the water demands related to each water service characteristic. The City shall classify customer classes as retail and wholesale and shall treat each wholesale customer that serves more than 200 service connections as an individual customer class. Fourth, the asset costs allocated to each customer shall be multiplied by the rate of return to determine the return on investment for each customer class. Fifth, the allocation of the working capital component of the rate base shall be allocated to customer classes in proportion to the allocation of all other rate base assets. 3. In performing these allocations, items that solely serve the City's retail customers shall be allocated to retail customers. Items that solely serve the Purchaser and other wholesale customers shall be allocated to wholesale customers. Items that serve the City and any wholesale customers shall be allocated proportionately to the City and the respective wholesale customers. 4. For the purposes of these allocations, functional asset groups are collections of common water system assets or facilities that are used to provide water service to customers. The City's functional asset group designations shall be specific enough that customer classes are not allocated costs to support assets or facilities that do not provide service or benefit to them. Definitions of functional asset groups and their allocations to customers shall be consistent with the findings Regional Water Sales Agreement October 19, 2004 Page 4 DRAFT - U • • . SECTION 7—(Continued) contained in a document entitled [we will produce and name a report reflecting engineering and finance work group] unless circumstances change, in which case the allocations will also be changed to reflect the use or benefit of assets and facilities under normal operating conditions. Any changes in definitions of functional asset groups shall be presented to the WMAB for review and comment. 5. For the purposes of these allocations, water service characteristics may include such things as commodity,peak season demand, peak three days demand, customer, equivalent meter, and fire. Definitions of these water service characteristics are provided in Exhibit 2. [Use Bernice Bagnall's definitions in Exhibit 2] 6. The allocations of assets to functional asset groups and subsequently to water service characteristics may vary from time to time as changes to the system and its operation may occur. The revised allocations, if any such revisions occur, shall be used in the annual rate setting process, and if no revisions occur, then the previously adopted allocations shall be used for annual rate setting. The entire set of these allocations, including the initial allocations and any subsequent changes, shall be reviewed in the Cost Allocation Audits, as described in Section 7.E. below. E. Cost Allocation Audits 1. Every five years during the term of this contract and any extensions, starting with contract year 5, an independent third party shall be retained to conduct an audit of currently employed asset allocations to functional groups and O&M allocations. The expert shall be instructed, as the result of its audit,to recommend any changes necessary to assure the continued accuracy of the cost allocations consistent with the terms of this contract and the AWWA M-1 manual. The expert shall be selected by a majority vote of the WMAB and the auditor expense shall be included in O & M expenses and allocated accordingly. The expert's report shall be completed by November 1 of the contract year in which it is hired. 2. Expert recommendations for cost allocations shall be reviewed by the WMAB and shall be implemented by the Administrator in the contract year following receipt of the recommendations unless: (1) a majority of the WMAB direct that the recommendations not be implemented or(2) the Administrator determines that it would be imprudent to adopt any or all of the recommendations. In case the Administrator reaches a determination of imprudence, he or she shall explain his or her determination in writing to the WMAB and consult with WMAB concerning his determination. In the event Purchaser disagrees with the Regional Water Sales Agreement October 19, 2004 Page DRAFT - U SECTION 7—(Continued) Administrator's determination, the matter shall be treated as outlined in Section 17, Dispute Resolution. F. Depreciation of Capital Assets 1. Depreciation expense shall be the annual depreciation expense on assets that are used, in total or in part, to serve the Purchaser, either directly or indirectly. Depreciation shall be calculated on the original cost of the assets and on a straight- line basis, using City accounting estimates of the useful lives of the assets in accordance with Generally Accepted Accounting Principles, which may differ from the actual useful lives of those assets. 2. The parties understand and agree that the assets being depreciated for these purposes may include backup facilities and other redundant facilities that may be idle for long periods of time, but which the City has determined still provide a service function to the system and the Purchaser by virtue of their backup and redundancy functions. 3. Depreciation shall not be charged for assets that are no longer able to provide service to the Purchaser or whose accounting life has expired, unless otherwise agreed to by the parties. G. Return On Investment Return on investment shall equal the rate of return multiplied by the value of system assets (the rate base) that serve the Purchaser. 1. Rate of Return The rate of return for each year shall be the percentage rate of the Bond Buyer Revenue Bond Index as published by the newspaper The Bond Buyer on the previous December 1, plus one-half on one percentage point (0.5%). If this referenced index ceases to be available, the Administrator shall notify the Purchaser and consult with WMAB regarding identification of a substitute index. The substitute index shall be selected by the City, in consultation with the WMAB, and shall be widely available to dealers in municipal securities, and measure the interest rate of high quality, long-term, fixed rate municipal securities. If available, an index measuring the interest rates on high quality, long- term, fixed rate municipal revenue bonds will be selected by the City over a comparable general obligation bond index. Upon identification of a substitute index, the rate of return on this contract shall be the percentage rate of a substitute index plus one-half on one percentage point (0.5%). Regional Water Sales Agreement October 19, 2004 Page 6 DRAFT - U • • . SECTION 7—(Continued) 2. Rate Base The rate base shall equal: (a) Working capital, consisting of an amount equal to an average of 45 days of operation and maintenance costs for the water system supply, transmission, storage and pumping facilities that are incurred to provide service directly or indirectly to non-retail customers. (b) The remaining un-depreciated value, i.e., book value, of all assets that provide service, directly or indirectly, in whole or in part, to the Purchaser, including water system supply, transmission, storage, and pumping facilities, equipment, and appurtenances and any other water system assets that provide service directly or indirectly to the general water supply and transmission portion of the water system, thereby providing water supply to non-retail water customers of the City. These assets may include backup facilities and other redundant facilities that may be idle for long periods of time, but which the City has determined still provide a service to the system and Purchaser. For such assets providing water supply benefit to both retail and non-retail customers, the assets included in the rate base shall be allocated proportionately as previously described herein. (c) The assets initially included in the Rate Base, as of the date of this agreement, are listed in Exhibit 3. Each year, the City shall produce a new Rate Base asset list and provide it to Purchaser during the rate-making process as provided in Section 4, WMAB. (d) After the first year of this contract, the assets included in the Rate Base assets shall be updated each year to include all water system capital assets listed and valued in Water Bureau documents used to produce the City's most recent Comprehensive Annual Financial Report and its supporting documentation, which may include capitalized interest on some or all of the relevant assets. 3. Rate Base Exclusions The Rate Base shall exclude the following items: (a) Construction work in progress. (b) Assets that are fully depreciated, even though such assets may be still in service. Regional Water Sales Agreement October 19, 2004 Page 7 DRAFT - U • • . SECTION 7 — (Continued) H. Prepayment of Capital Cost Share The Purchaser may elect to pay its share of capital cost allocations for new water system assets in a lump sum cash payment or other mutually agreed upon payment terms in lieu of paying annualized rates for depreciation and rate of return for the new facilities. If Purchaser makes such cash payment, the portion of the asset cost being prepaid by the Purchaser shall be deducted from the value of the specified assets in the rate base used to calculate the Purchaser's rates. By making such cash payment, Purchaser does not obtain an ownership interest in the specified assets unless Purchaser and the City have entered into a supplemental joint ownership agreement as specified in Section 16, Joint Funding of Capital Improvements. 1. Operations And Maintenance Cost Control To help assure stability and predictability of wholesale rates and to permit recovery of costs of service, increases in specified O & M expenses shall be subject to limitations described below. These limits do not apply to capital costs,recovery on investment, or O&M expenses that are not specified O&M expenses. 1. O & M Cost Cap The O &M Cost cap is the prior year's specified O & M expense allocated to Purchaser increased by the sum of 2%plus the annual rate of change of the "selected CPI." (a) Selected CPI shall mean the CPI-Urban, West Urban (ref CUUR0400SAO) for January 1 of the year new rates are calculated, e.g., CPI of January 1, 2006, will be used to assess O&M increases in rates for July 1, 2006. If this referenced index ceases to be available, the Administrator shall notify the Purchaser and consult with WMAB regarding identification of a substitute index. (b) Specified O&M expenses are those City O&M expenses defined in Subsection H.3 below, Specified O&M Expenses and Exclusions. 2. Cost Cap Limitation The City may not more than once in any consecutive five year period include in the calculation of Purchaser's rates, "specified O&M expenses"that exceed the O &M cost cap. Provided that a new five year period shall commence at each renewal of this contract. Regional Water Sales Agreement October 19, 2004 Page 8 DRAFT - U • • . SECTION 7— (Continued) 3. Specified O & M Expenses And Exclusions (a) Specified O & M expenses shall be those expenses, including associated overhead, incurred by the City's water system to serve directly or indirectly, in whole or in part, the Purchaser, that are properly allocated to Purchaser under the terms of this contract and that are reasonably considered to be O & M expenses using the utility basis of revenue requirements and cost of service principles as described in the AWWA M1 Manual except for expenses or classes of expenses excluded by this Section TH. The Administrator shall make determination of specified O&M expenses and exclusions in consultation with the WMAB each year during the ratemaking processes. (b) Specified O & M expenses shall not include and shall therefore, exclude, the following expenses or classes of expenses: i. Pass-Through Costs. These are costs that the parties agree are generally beyond the reasonable control of the City water system to influence. For purposes of this contract, pass through costs are those listed here and such future or currently unidentified costs that are similar to those here and are similarly beyond the control of the City to influence. • Utilities, including electricity, water, sewer, natural gas, garbage and telephone. • Equipment rental, such as hoists, excavators, tools and other miscellaneous equipment not included in the City's fleet. • Operating supplies, such as treatment chemicals, lubricants and consumables related to system operation and maintenance. • Communication Services, including but not limited to telephone, radio, microwave and fiber-optic transmission of data, voice, video and related information. • Insurance or the expenses of self-insurance, other than workers compensation, including but not limited to costs for general liability, property, casualty and fleet coverage. SECTION 7 —(Continued) Regional Water Sales Agreement October 19, 2004 Page 9 DRAFT - U • • . ii. The costs of PERS Pension Obligation Bonds (POBs) iii. Costs In Response to Unexpected Events or Circumstances (i) These are costs that arise unexpectedly or as the result of Acts of God, malevolent acts, contamination of the water supply, or events beyond the City's control, the consequences of which evens or circumstances could not have been avoided through the exercise of the standards of care common and usual in the municipal water supply industry. (ii) The City and Purchaser shall, within 120 days of the onset of such unexpected costs commence good faith negotiations to determine what, if any, of the costs of responding to the event or circumstances, which are otherwise excluded, should be included within the Specified O & M expense. iv. Costs Associated With Planning Studies These are costs to pay for City planning studies related to the Water Supply System including those studies in the City's Water Bureau Capital Improvement Program that are expensed rather than capitalized. When calculating Purchaser's water rates, costs for such planning studies shall be based on actual cost of such studies rather than budgeted or anticipated costs. When use of actual costs for such studies results in a delay of recovery of costs associated with such studies, Purchaser shall also be charged interest at a rate equivalent to the rate paid by the State Investment Pool for Local Governments on such funds that were prepaid by the City from the time the expense was incurred by the City until the start of the following contract year. V. Costs Associated With New Facilities Or Programs (i) These are first time or initial increases to O&M expenses (which may affect more than one fiscal year) associated with operation and maintenance of new facilities or the functioning of new programs. New programs may include such things as responses to new state or federal mandates or regulations, or activities to improve the efficiency, Regional Water Sales Agreement October 19, 2004 Page 10 DRAFT - Upd SECTION 7— (Continued) reliability, security or quality of the water supply, The WMAB will be consulted regarding initial O&M costs of new facilities and new programs. The parties understand and agree that O&M costs may increase in any given year in order to implement new programs or to operate or maintain new facilities without exceeding the cost cap. (ii) Once O&M expenses for new programs or facilities are established and have become a routine part of the City's water system budget, however, those of the expenses that are not otherwise excluded from"specified O&M costs," (pass through costs, PERS expenses listed in Subsection 2 above, costs in response to unexpected events or circumstances, or costs associated with planning studies) shall be included in future calculations of the increase in specified O&M expenses. (iii) As O&M expenses for new facilities or new programs arise, the Administrator shall consult with WMAB concerning the expenses and then determine which expenses should be excluded from cost cap calculations as "new O & M" and which new expenses should be included within the cost cap on what schedule. The Administrator shall advise Purchaser and WMAB of his determination. vi. Costs Incurred on Behalf of the Purchaser or WMAB These are costs to paid by the City by mutual agreement of the City and Purchaser or WMAB Regional Water Sales Agreement October 19, 2004 Page 11 DRAFT - U • • . Regional Water Sales Agreement October 19, 2004 6 Page i 0 0 o 0 REGIONAL WATER SALES AGREEMENT TABLE OF CONTENTS Paye RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 1 —NATURE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 SECTION 2 —WATER REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 3 —DURATION OF AGREEMENT AND RENEWAL . . . . . :. . . . . . . . . .4 SECTION 4—WATER MANAGERS ADVISORY BOARD . . . . . . . . . . . . . . . . . . . . .6 SECTION 5 —GUARANTEED PURCHASE WATER QUANTITIES . . . . . . . . . . . . 10 SECTION 6 - INTERRUPTIBLE WATER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 7 —RATES AND CHARGES FOR GUARANTEED PURCHASE WATER QUANTITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 8 - RATES AND CHARGES FOR INTERRUPTIBLE WATER . . . . . . . . .29 SECTION 9 - WATER SYSTEM PLANNING AND COOPERATION . . . . . . . . . . . . 30 SECTION 10 - RESERVATION OF SYSTEM CAPACITY . . . . . . . . . . . . . . . . . . . . . 31 SECTION 11 —CONNECTIONS AND METERING . . . . . . . . . . . . . . . . . . . . . . . . . . .32 SECTION 12 —PURCHASER-SUPPLIED WATER TO CITY RESIDENTS . . . . . . . .33 SECTION 13 —WATER RESOURCE CONSERVATION . . . . . . . . . . . . . . . . . . . . . . 34 SECTION 14—WATER CURTAILMENT AND PROTECTION OF THE WATER SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 SECTION 15 —BILLING AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 SECTION 16—JOINT FUNDING OF CAPITAL IMPROVEMENTS . . . . . . . . . . . . . 41 Regional Water Sales Agreement p2v October 19, 2004 0 Page ii 0 0 o 0 SECTION 17—DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 SECTION 18—WASHINGTON COUNTY SUPPLY LINE . . . . . . . . . . . . . . . . . . . . .44 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 EXHIBITS EXHIBIT 1 —GUARANTEED PURCHASE QUANTITY, PEAKING FACTOR, FLOWS AND PRESSURES EXHIBIT 2—DEFINITION OF WATER SERVICE CHARACTERISTS EXHIBIT 3 —RATE BASE ASSETS Regional Water Sales Agreement p October 19, 2004 Page 1 Q 0 O O THIS AGREEMENT is entered into by and between , herein called "Purchaser," and the CITY OF PORTLAND, a municipal corporation of the State of Oregon, herein called "City." The parties recite: A. Purchaser is a municipal corporation of the State of Oregon and is authorized by its charter or by state law or both to operate a municipal water system. B. City is a municipal corporation of the State of Oregon and is authorized by Chapter XI of the Charter of the City of Portland to maintain water works for the furnishing of water to the city, its property, its inhabitants, and the places and people along or in the vicinity of the pipes, conduits or aqueducts constructed or used for that purpose. The Council of the City is further authorized to enter into contracts for the supply of water by the city and to sell water to persons,public and private, outside the city, on terms and conditions the Council finds appropriate. C. City is further authorized by Section 2-105(a)4 of its Charter to enter into agreements, without limitation as to term, as the Council finds appropriate for cooperation, consolidation and maintenance of services with any other public corporation or unit of government. D. ORS 190.003 to 190.110 authorize units of local government to enter into intergovernmental agreements for the performance of their duties or for the exercise of powers conferred upon them. I E. The service and commodity provided by City pursuant to this Agreement are a special contract service and are not provided by City as a common utility service. Regional Water Sales Agreement p October 19, 2004 Page 2 o O Q O SECTION 1 —NATURE OF SERVICE A. Subject to the terns and conditions contained herein, City agrees to furnish and sell, and Purchaser agrees to purchase a firm supply of potable water on an annual basis for the life of this Agreement. The City further agrees to furnish and sell an interruptible supply of water to be made available for purchase at the City's discretion subject to terms of this agreement. B. Water is to be delivered to the purchaser at the place or places, at such pressure or pressures, and at such flow rate or flow rates as are set forth on Exhibit 1. Provided that the City is not obligated to meet Purchaser's demands for water during any period of time that Purchaser operates its system not in compliance with operational rules pursuant to Section 4.D.1. C. The City shall deliver water to the purchaser from the same source or sources of water that City delivers to City inhabitants. The City shall meet all applicable drinking water regulatory requirements up to the purchaser's point of delivery. D. Purchaser's supply of water shall be reduced or terminated only in accordance with the terms of this agreement, including the procedures and priorities established under Section 14 of this Agreement. E. Purchaser recognizes and agrees that no liability for damages shall attach to the City on account of any failure of supply or changes in pressure, flow rate, or water quality due to circumstances beyond the reasonable control of the City acting in accordance with standards of care common and usual in the municipal water supply industry. Examples of such circumstances include, but are not limited to, natural events such as earthquakes, landslides and floods, and human-caused events such as terrorism, malevolent acts, contamination of the water supply, and acts of war. F. The parties agree and acknowledge that the City of Portland is the owner and operator of the water supply, storage, transmission, and treatment system, and all facilities and infrastructure associated with the storage, treatment, transmission, and distribution systems used in its utility operations. The purchase of water or any other commodity or service under this agreement shall not constitute purchase of ownership rights to water or any portion of the water system owned and operated by the City, except as may be specified herein or may be established by separate agreement. Nothing in this agreement shall preclude the parties from entering separate agreements involving joint ownership or joint operation of system elements. Regional Water Sales Agreement D October 19, 2004 Page 3 0 0 Q Q SECTION 2—WATER REGULATIONS A. Purchaser hereby agrees to abide by and be bound by the terms and provisions of Chapter 21.28 of the Code of the City of Portland, Oregon, as it presently exists or as may be amended to comply with federal and state law, during the life of this agreement, to the extent to which such terms and provisions do not conflict with any material provisions of this agreement. Regional Water Sales Agreement D October 19, 2004 Page 4 o O Q 0 SECTION 3 —DURATION OF AGREEMENT AND RENEWAL A. Initial Term This agreement shall become effective on July I of 2005 and shall continue in effect thereafter under the terms of this section, unless terminated as provided herein. Each "contract year" shall run from July 1 through June 30. B. Initial Five Year Non-Renewal Notice At any time during the five-year period from July 1, 2020, through June 30, 2025, either party may give a written notice of non-renewal. If such notice is issued, the contract will terminate on the next June 30 at least five years but not more than six years from the date of the notice. C. First Renewal in 2025 If neither party gives notice of non-renewal on or after July 1, 2020, and prior to July 1, 2025, the contract shall continue for another ten years, through June 30, 2035. D. Subsequent Renewals After June 30, 2035 If this contract is renewed pursuant to Subsection 3C above, then the contract shall also be repeatedly renewed for ten year intervals after June 30, 2035, and every ten years thereafter, unless one of the parties gives a notice of non-renewal under the terms of Subsection E below. E. Five-Year Non-Renewal Notice Either party may provide a written non-renewal notice any time during the second five years of each ten-year renewal period. If either party gives a notice of non-renewal during the non- renewal notice period, the contract will terminate on the next June 30 at least five years but not more than six years from the date of the notice. For example, if this contract is renewed through June 30, 2035, pursuant to Subsection C above, then the non-renewal notice period during that term of the contract shall run from July 1, 2030, through June 30, 2035. If either party gives written notice of non-renewal during that period of time, the contract shall terminate on the next June 30 five years or more but less than six years from the date of the notice. If no party gives notice of non-renewal during that period, the contract will be automatically extended through June 30, 2045. If the contract is extended to June 30, 2045, the next non-renewal notice period would then run from July 1, 2040, through June 30, 2045. Regional Water Sales Agreement p October 19, 2004 Q Page 5 o O Q 0 SECTION 3 —(Continued) F. Effect of Renewals on Cost Cap and Supply Reliability The five-year period used to judge the City's compliance with the cost cap established by Subsection TH shall be restarted at each renewal of this contract. The ten-year period used in calculating the City compliance with its reliability obligations described in Section 5.E.2 shall be restarted at each renewal of this contract. Regional Water Sales Agreement D October 19, 2004 Page 6 o O Q SECTION 4—WATER MANAGERS ADVISORY BOARD A. General A Water Managers Advisory Board(WMAB)shall be established no later than thirty(30) days after five or more Purchasers have approved a Water Sales Agreement with the City that includes this provision, and will continue during the term of this agreement. Purchaser is eligible for participation in the WMAB. The WMAB shall consist of two representatives of the City Bureau of Water Works, to be named by the Administrator, and one representative of each participating entity that has signed a contract to purchase water from the City containing a provision allowing its participation on the WMAB. The City of Portland Water Bureau will provide staff support to the WMAB and will be responsible for keeping the official records. B. Meetings and Bylaws The WMAB shall meet regularly to communicate with and make recommendations to the Administrator regarding matters relating to the City's sale of water to participating purchasers. The WMAB may adopt such bylaws concerning its organization and governance as a majority of the membership shall see fit. The role of this Board is advisory in nature and, except as specified herein, no rule, bylaw, or action of the WMAB may alter any term of this agreement. C. Committees The WMAB shall be responsible for establishing committees as needed to address ongoing needs, such as: 1. Water Resource Conservation—Possible responsibilities for such a committee are outlined in Section 13 —Water Resource Conservation; 2. Operations Coordination—Possible responsibilities for such a committee may include coordinating supply system routine and emergency operations among the City and its wholesale Purchaser with the goal of providing efficient and cost- effective system operations; and 3. Other committees, as identified by the WMAB. D. Creation of Operating and Information Standards 1. The WMAB shall recommend to the Administrator standard water system operating practices necessary or advisable to enhance the efficiency, reliability, and cost-effectiveness of the supply,transmission, and storage of water provided under this agreement. These standard operating practices will address issues such as, but not necessarily limited to, forecasting seasonal demands, forecasting peak Regional Water Sales Agreement p October 19, 2004 Q Page 7 Q Q O Q SECTION 4 —(Continued) demands, managing the system to minimize the impact of peak demand periods, security and emergency management, use of storage, and timing of deliveries of water. Pending recommendations from the WMAB, the Administrator shall adopt interim operating practices and upon receipt of the recommendations, the Administrator shall adopt the recommendations, with such alterations as he or she deems necessary or advisable. The Purchaser agrees to operate its system in a manner consistent with such established operating practices and in keeping with responsible use of the water supply system. 2. The WMAB shall recommend to the Administrator what information and data he or she shall require each participating Purchaser to provide,an order to allow efficient, reliable, and cost-effective provision of water under this Agreement. The Administrator shall adopt these recommended information requirements, with such alterations as he or she deems necessary or advisable. Such information may include,but is not necessarily limited to: (a) System maps with mains, pump stations, tanks, and supply connections; (b) Connections and usage from other supply sources; (c) Total existing and new service connections by category; (d) Key benchmarks to be identified by the Operations Group such as but not limited to standards for operational norms, notification deadlines, protocols for communication; (e) Water quality data; (f) Purchaser facilities' standards for operation to minimize peak and emergency events; and (g) Emergency contact information for each provider and any agreements that have been signed by individual providers to address emergency response. 3. The WMAB shall periodically evaluate Purchasers' compliance with the information requirements and standard operating procedures and shall provide the Water Bureau Administrator with findings and recommendations to assure ongoing compliance. Regional Water Sales Agreement p October 19, 2004 Page 8 Q Q Q SECTION 4—(Continued) E. Rate Review In order to provide timely notification to Purchaser of proposed changes in rates;charges, and rate design and an opportunity for Purchaser to evaluate such proposals and be heard before the City Council, City agrees that the following steps shall be taken annually. 1. Capital Improvement Program. (a) On an annual basis, Purchaser, through the WMAB, shall participate in development of that portion of the Water Bureau's Capital Improvement Plan addressing capital improvements used to serve Purchaser or other participating Purchasers; (b) Capital planning will take place in a manner sufficiently timely to ensure Purchaser effective participation in the City's capital budget deliberations each year; (c) City and WMAB will identify criteria to be considered in prioritizing capital improvement projects. City will also share its proposed ranking of projects for funding and completion and its proposed schedule for such capital improvements. Purchaser will be provided reasonable opportunity to present suggestions and recommendations for changes to the proposed Capital Improvement Plan, specific capital projects, and for improvements in the capital planning and financing process; (d) At a minimum, the City will host at least one meeting a year to discuss the Water Bureau's Capital Improvement Plan on a schedule sufficient to allow Purchaser participation in the City's capital budget deliberations each year. 2. Operation & Maintenance Budget (a) On an annual basis, Purchaser, through the WMAB, shall participate in review of the Water Bureau's Operations and Maintenance budget for the water supply system used to serve Purchaser or other participating Purchasers; (b) O&M budget development and review will take place in a manner sufficiently timely to ensure Purchaser effective participation in the City's budget deliberations each year; Regional Water Sales Agreement D October 19, 2004 Page 9 O 0 o SECTION 4—(Continued) (c) The WMAB will be provided the opportunity to participate in the budget development and review process, including steps such as: • The City will make available to WMAB a presentation of its budget request and financial plans for the following fiscal year. • The City will advise Purchaser in writing of significant changes in the proposed Water Bureau Budget. • When the City Bureau of Water Works files its annual rate ordinance with the City Council Clerk, a copy of said ordinance will be forwarded to Purchaser, accompanied by a letter giving the dates on which the City Council is scheduled to consider rates. 3. Purchaser, through the WMAB, is encouraged to offer comments on the annual rate ordinance in writing or in personal testimony before the City Council. Regional Water Sales Agreement D October 19, 2004 Page 10 qP09 a SECTION 5—GUARANTEED PURCHASE WATER QUANTITIES A. General Guaranteed Purchase Payment Obligations Unless excused by some other provision of this Contract, Purchaser agrees to pay City each year a sum of money (its "guaranteed purchase payment") equal to the annual water rate applicable to Purchaser for that year times the Purchaser's"guaranteed purchase" quantity of water. Payments shall be made as provided in Section 15, Billing and Payment. B. Guaranteed Purchase Quantities And Peaking Factors 1. Initial Guaranteed Purchase Quantities,Peaking Factor, And Peaking Limitations (a) Guaranteed Purchase Quantity. For purposes of calculating annual rates and determining Purchaser's minimum payment, Purchaser's initial guaranteed purchase quantity(expressed in annual average daily demand and in total monthly demands) shall be the quantity identified in Exhibit 1 to this contract. (b) Seasonal Peaking Factor. For purposes of calculating monthly demands and annual rates and determining Purchaser's minimum payment, Purchaser's initial "seasonal peaking factor" shall be the peaking factor identified in Exhibit 1 to this contract. "Peaking factor" is the ratio of the Purchaser's guaranteed purchase average daily demand placed on the City system during the "peak season"to the Purchaser's guaranteed purchase annual average daily demand. For this calculation"peak season" is the period of time from July 1 through September 30. For purposes of ratemaking and calculating monthly demands, the peaking factor excludes purchases of interruptible water. 2. Annual Guaranteed Purchase Demand Projections (a) No later than March 15 of each year, Purchaser shall submit to the City a projection of its demands for the next year, by month, which demands must total to the Purchaser's guaranteed purchase quantity and must be consistent with the Purchaser's seasonal peaking factor. It is recognized these demand projections will be estimates and actual demands may vary from projected demands but such departures from estimates do not relieve the Purchaser from obligations such as guaranteed purchase quantity and adherence to seasonal peaking factor, as specified elsewhere in this agreement. Regional Water Sales Agreement O October 19, 2004 0 Page 11 O O O a SECTION 5—(Continued) (b) The City shall provide Purchaser a confirmation of Purchaser's final projected demand numbers and will report projected demand numbers for all wholesale and retail demands to the WMAB no later than May 1 of each year. (c) If the Purchaser has not by March 15 of each year submitted its projected demands for the next year or if a timely submission is inconsistent with the Purchaser's then current contractual guaranteed purchase quantity and peaking factor,the Administrator shall consult with Purchaser to obtain new or revised projected demands. If thereafter the Purchaser does not submit projected demands that are consistent with its then current contractual guaranteed purchase quantity and peaking factors, the Administrator may use the previous year's demand projections or other projections that are consistent with Purchaser's contractual guaranteed purchase quantity and peaking factors, to make rates and to operate the system. C. Changes In Guaranteed Purchase Quantities 1. Reductions In Guaranteed Purchase Quantities Except as specifically provided for in this contract, Purchaser's guaranteed purchase quantity may not reduced during the term of this contract except by a contract amendment. 2. Increases in Guaranteed Purchase Quantities On any March 15 during the term of this contract, Purchaser may request that its guaranteed purchase quantity be increased. The Administrator may accept or reject such request, in whole or in part. The Administrator shall respond to any request for an increase in guaranteed purchase by May I of the same year the request is made. Unless otherwise agreed by Purchaser and the City, any increases in guaranteed purchase agreed to under this provision shall be effective for the remaining term of the contract. If on any March 15,more than one participating Purchaser requests an increase in guaranteed purchase and the Administrator determines that he or she can prudently approve some increase in guaranteed purchases,but cannot approve all pending requests in total, then the Administrator may grant such overall increase in guaranteed purchase as he or she deems prudent, provided that when granting partial approvals of more than one request, the Administrator shall grant such approvals in proportion to the then existing guaranteed purchase quantity of each requesting Purchaser compared to the total of then existing guaranteed purchase quantities of all requesting Purchasers. If the Administrator cannot grant Purchaser's original request in total, the Purchaser Regional Water Sales Agreement D October 19, 2004 Page 12 O 0 Q SECTION 5—(Continued) may elect to withdraw its requested increase in guaranteed purchase quantity. All increases in guaranteed purchase quantities shall be confirmed in writing and signed by both parties. 3. Transfers of Guaranteed Purchase Quantities With approval of the Administrator, which shall not be unreasonably withheld, Purchaser may alter its guaranteed purchase quantity(and its guaranteed purchase obligation)by transferring all or some of its guaranteed purchase quantity to another municipal entity with a valid contract to purchase water on a wholesale basis from the City. The Administrator need not approve any transfer if he determines that to do so would require changes in the City water system infrastructure, or reduce the reliability of the water supply system. The Administrator may approve transfers with such conditions as he deems necessary to prevent changes in the City water system infrastructure, or reduction in the reliability of the water supply system. 4. Sale of Guaranteed Purchase Water Purchaser may sell water purchased from the City as part of its guaranteed purchase quantity to other water suppliers, upon approval of the Administrator, which will not be unreasonably withheld. The Administrator need not approve any sale of water if he determines that to do so would require changes in the City water system infrastructure, or reduce the reliability of the water supply system. The Administrator may approve sales of water with such conditions as he deems necessary to prevent changes in the City water system infrastructure, or reduction in the reliability of the water supply system. D. Changes in Peaking Factor 1. Requested Changes to Seasonal Peaking Factor Subject to limitations of Section 5.D.2(a)below, at any time prior to December 1 of each year of the second through fifth year of this contract,Purchaser may request in writing that its seasonal peaking factor for Years 3 through 6 of this Contract be changed from that identified for Year 1, as set out in Section 5.13.1(b) above. Purchaser's requested peaking factor shall be no less than the average of the Purchaser's actual seasonal peaking factor for the previous years under this contract. Prior to December 1 of Contract Year 6 and every year thereafter, Purchaser may request in writing a change in Purchaser's peaking factor. Purchaser's requested peaking factor shall be no less than the average of the Purchaser's actual seasonal peaking factor for the five previous years under this contract. Regional Water Sales Agreement D October 19, 2004 Page 13 O O a SECTION 5 —(Continued) Upon receiving such a request, the City shall adjust the Purchaser's peaking factor unless the Administrator determines that to do so would reduce the reliability of the water supply system. 2. Excess Peaking Factors (a) Except as provided in Section 5.D.2(b) below, if in any year Purchaser's actual peaking factor exceeds by more than 10% the then current peaking factor set by the terms of this contract, the Administrator shall recalculate the year's rates and in the next available contract year shall impose on the Purchaser a surcharge equal to the difference in the Purchaser's guaranteed purchase payment under the original rates and the Purchaser's guaranteed purchase payment under the rates as recalculated using the Purchaser's actual peaking factors. When calculating rates for the year in which the surcharge is to be collected, the City shall treat the surcharge as an offset to the otherwise estimated annual revenue requirements for all wholesale and retail customers of the system. The Administrator may also increase the Purchaser's peaking factor to the actual excessive peaking factor for the purpose of calculating rates for a period of five years and the Purchaser shall not be entitled to reduce its peaking factor as described in Section 5.D.1 during this same five year period. If the Administrator determines that honoring Purchaser's actual excessive peaking factor for the five year period would reduce the reliability of the system or threaten the water supply of any other wholesale purchaser of water from the City, he or she may refuse to honor the increased peaking factor and take steps necessary to protect the system and other Purchasers, as provided in Section 5.17, Excess Demand. (b) The provisions of Section 5D.2(a) shall not apply if the excess peaking factor resulted from the direct result of Acts of God, malevolent acts, contamination of the water supply, or events beyond the Purchaser's control if the consequences of any such circumstance or event could not have been avoided through the exercise of the standards of care common and usual in the municipal water supply industry. E. Release Of Purchaser From Guaranteed Purchase Obligations 1. Changes in Guaranteed Purchase Quantities In Case Of Short-Term Curtailment I (a) Reduction or Shift of Guaranteed Purchase Quantity Regional Water Sales Agreement D October 19, 2004 Page 14 V 6 O O Q 0 SECTION 5—(Continued) Purchaser's guaranteed purchase quantity(and, as appropriate, its guaranteed purchase annual payment) shall be altered, at Purchaser's request, for any year in which the Purchaser acts on a request by the City to reduce or curtail demand below its established guaranteed purchase quantity for more than five consecutive days. Any request must be made in writing to the City within 30 days after the Purchaser is no longer reducing or curtailing demand upon the City's request. At Purchaser's option, the quantity of water it did not purchase during a reduction or curtailment period of more than 5 consecutive days shall either: (a) be excluded from that year's guaranteed purchase quantity or (b)be shifted to another time of the year when curtailment is not in effect. Provided, however, that the Administrator need not honor a request to shift quantities to other times if he or she determines that to do so would threaten the reliability of the water system. (b) Quantification of Reduction or Shift in Guaranteed Purchase Quantity For purposes of Section 5.E.1, the Administrator shall calculate the reduction in water used by the Purchaser(and, therefore, the amount of the guaranteed purchase quantity reduction or shift)by considering the difference between the Purchaser's actual water usage during the period of curtailment or water use reductions and the Purchaser's guaranteed purchase demand projections for the same period and such other information available to the Administrator that he or she determines can be used to assist in making the calculations. (c) Peaking Factor Effects Reductions or shifts of guaranteed purchase quantities pursuant to Section 5.E.1 shall not alter the Purchaser's peaking factors for purposes of future ratemaking. 2. Changes in Guaranteed Purchase Quantities In Case of Failure of Supply (a) Except as provided in Section 5.E.2(d)below, if the City fails to supply Purchaser's guaranteed purchase demand for more than 30 consecutive days more than one time in any period of ten consecutive years, the Purchaser may declare its intention to reduce its guaranteed purchase quantity pursuant to this Subsection. Regional Water Sales Agreement p October 19, 2004 Page 15 O 0 Q 0 SECTION 5—(Continued) (b) For purposes of Section 5.E.2, the Administrator shall determine if there } has been a failure to meet guaranteed purchase obligations by considering the difference between the Purchaser's actual water usage during the i t t/S period of curtailment or reduced water supply and the Purchaser's 14Th guaranteed purchase demand projections and such other information available to the Administrator that he or she believes can be used to assist V))11 r in making the determination. 1061 (c) Procedure to Reduce Guaranteed Purchase Quantities i. To reduce its guaranteed purchase quantity upder this Subsection, Purchaser must give written notice to the City of its intent to do so. The notice must be given any time after the 31st day of the failure of supply,but not more than 60 days after supply has been fully reestablished. ii. Having given notice, Purchaser may thereafter reduce its guaranteed purchase from the City by up to 10%of the guaranteed purchase quantity in effect the day before the failure of supply each year for the remaining years of the then current contract term and the next ten year term if the contract is renewed. Provided that to continue reducing its minimum quantity after any contract renewal, Purchaser must give written notice to the City of its intent on or before the date of renewal. iii. To reduce its guaranteed purchase for any contract year, Purchaser must provide written notice of the reduction to the City no later than December 31 of the preceding contract year. iv. If Purchaser elects to reduce its guaranteed purchase quantities pursuant to the terms of this Subsection, all other terms of the contract shall continue in effect. (d) Purchaser shall not have the option to reduce its guaranteed purchase obligation under this Subsection if the City's failure to supply Purchaser's guaranteed purchase was caused by Acts of God, malevolent acts, contamination of the water supply,or events beyond the City's control if the consequences of any such circumstance or event could not have been avoided through the exercise of the standards of care common and usual in the municipal water supply industry. Regional Water Sales Agreement D October 19, 2004 0 Page 16 O O Q 0 SECTION 5—(Continued) (e) The ten year period for judging this obligation shall restart at each renewal of this contract. (See Section 3.F.) F. Excess Demands 1. Reduction in Supply Should Purchaser place demands on the system in excess of that agreed to between City and Purchaser or not in compliance with the Operating Standards adopted pursuant to Section 4, WMAB, in a manner that jeopardizes the reliability and safety of the Portland water system or compromises the City's ability to meet its obligations to other customers, the Administrator may take such steps as are necessary to protect the system. Such actions may include,but are not limited to reducing the supply of water flowing to the Purchaser. If the water system infrastructure does not allow the Administrator to make such supply reductions, the Administrator may construct control devices as may be needed to suitably control Purchaser's demands. The cost of such improvements shall be included as a surcharge on the Purchaser's bills during the four months following completion of construction. 2. Calculation of Excess Demands For purposes of Section 5.17, the Administrator shall determine whether Purchaser has imposed excess demands on the system using any information available to the Administrator that he or she determines can be used to assist in making the determination. The Administrator's determination shall be subject to review and comment by the WKkB. Regional Water Sales Agreement October 19, 2004 Page 17 O O Q SECTION 6 - INTERRUPTIBLE WATER A. In General Purchaser may purchase water over and above its guaranteed purchase quantities under the terms and conditions set forth herein. Such water shall be termed interruptible water. Except as provided herein, the City is not obligated to sell interruptible water to Purchaser. Further, City may cease providing interruptible water at any time under procedures of Section 6.17 below, even after the Administrator has accepted an offer to purchase interruptible water under procedures of Sections 6.13, 6.0 and 6.13 below. B. Winter Interruptible Water From October 1 through May 31,Purchaser may offer to purchase winter interruptible water on one day's verbal or written notice to the City. The City may provide interruptible water to Purchaser if the Administrator determines it is prudent to do so and if the Administrator accepts the Purchaser's offer either verbally or in writing. C. Summer Interruptible Water 1. From June 1 through September 30, Purchaser may request to purchase summer interruptible water using the procedures established in this Section 6.C. 2. No later than March 15 of each year, Purchaser may submit to the City, in writing, its offer to purchase summer season interruptible water supplies. The offer must identify the quantities of water to be purchased, by month, for the next June through September period. 3. No later than April 15, City shall respond in writing to Purchaser's request for interruptible water, based on the Administrator's prudent estimates of system capacity and operational requirements. If the Administrator accepts Purchaser's offer without changes,then the Purchaser is obligated to purchase and the City is obligated to sell the designated quantity of summer interruptible water under the terms of this contract. 4. If the Administrator determines that it would not be prudent to agree to meet all timely requests for summer interruptible water from all Purchasers, he or she shall offer the total quantity of interruptible water he or she deems to be prudent to all requesting Purchasers as follows: each Purchaser shall be offered a quantity of interruptible water proportional to its guaranteed purchase quantity in comparison to the total of the guaranteed purchase quantities of all requesting Purchasers. Regional Water Sales Agreement D October 19, 2004 Page 18 0 0 0 Q SECTION 6 - (Continued) 5. If the Administrator offers to supply Purchaser less than the full amount of summer interruptible water requested by the Purchaser, Purchaser must, within 15 days of the Administrator's offer, accept or reject the offer. If Purchaser accepts the offer, then Purchaser is obligated to purchase and the City is obligated to sell that quantity of summer interruptible water under the terms of this contract. D. Additional Sales of Interruptible Water Notwithstanding the other provisions of Section 6, each contract year after the Administrator has confirmed sales of summer interruptible water under Subsection 6C above, the Purchaser may buy and the City, acting through the Administrator, may sell additional interruptible water at that year's summer season interruptible rate and on such other terms as are mutually agreeable. E. Confirmed Summer Interruptible Water Payment 1. Purchaser's Obligation to Make Payment Once Purchaser and the City have agreed on a quantity of interruptible water under the terms of this section, and subject to the billing provisions of Section 15 of this Contract, except as provided in Section 6.E. 2 below, the Purchaser shall pay the City for that quantity of water agreed to at the price established by Section 8 of this Contract. The amount due shall be termed the confirmed interruptible water payment. 2. Reduction in Confirmed Interruptible Water Payment If the City fails to deliver any of the confirmed quantity of interruptible water, the Purchaser shall be excused from paying a portion of its confirmed interruptible water payment equal to the quantity of water not delivered times the price of interruptible water. F. Reduction or Elimination of Interruptible Water In the event of an emergency or other condition under which continued supply of interruptible water jeopardizes the reliability of the water system, the City may cease providing interruptible water at any time on one day's written or verbal notice to the Purchaser. Under all other circumstances,the City may cease providing interruptible water at any time on 21 days written or verbal notice to the Purchaser. Regional Water Sales Agreement p October 19, 2004 Page 19 O O Q SECTION 7—RATES AND CHARGES FOR GUARANTEED PURCHASE WATER QUANTITY A. Rate Making In General 1. The rate structure for Purchaser's guaranteed purchase quantity of water shall consist of(a) a fixed monthly charge calculated using the cost of service of typical non-volumetric services such as,but not limited to, meter reading, billing, meter purchases, meter maintenance, and relevant overhead and (b) a volume charge calculated using a single volumetric rate times the Purchaser's guaranteed purchase quantity. 2. The City shall annually establish rates and charges for the Purchaser's fixed monthly charge and guaranteed purchase quantities that do not exceed charges calculated using the principles and standards of this Section 7. (a) Determination of revenue requirements using the utility basis of revenue requirements and cost of service principles as described in Manual of Water Supply Practices—M 1. Principles of Water Rates, Fees and Charges. Fifth Edition. Denver: 2000 published by the American Water Works Association (hereafter"AWWA Manual M1")or in such updates as may occur from time to time, except for such deviations from AWWA Manual M1 as are described or permitted by this contract. A cost of service computer model will be used to calculate the revenue requirements, cost allocations, and resulting rates. (b) The components used to determine the revenue requirements under the utility basis shall be: 1. Operation and Maintenance(hereafter "O&M") costs; 2. Return on Investment; and 3. Depreciation. (c) Purchaser shall not be charged for the costs incurred by the City that are incurred for the sole purpose of serving the City's retail customers. For the costs incurred serving both the Purchaser and the City's retail customers,Purchaser shall be charged an amount that equals its proportionate share of the cost, using standard cost-of-service principles, as generally described in AWWA Manual M1, unless stated otherwise herein. Regional Water Sales Agreement p October 19, 2004 Page 20 0 O O Q SECTION 7—(Continued) (d) The parties understand that the City may enter into similar wholesale water sale agreements with other water utilities. If the City does so, the charges to Purchaser shall continue to be based on the Purchaser's proportionate share of the cost to serve the Purchaser,based on the Purchaser's proportionate share of total demand on the system, including demand of other purchasers and the City's retail customers. (e) The City shall treat surcharges collected under this agreement as an offset to the otherwise estimated annual revenue requirements for all wholesale and retail customers of the system. B. Cost Allocations—In General 1. Costs shall be allocated to the Purchaser in accordance with generally accepted ratemaking practices and procedures, as described in AWWA Manual M1, as it may be updated from time to time, except to the extent that the procedures specified herein may deviate from the practices and procedures of AWWA Manual M1. In general, unless specified otherwise in the agreement, costs shall be allocated based on the proportionate share of costs of the assets and other revenue requirements, as provided in AWWA Manual MI. 2. Cost allocation for purposes of this contract shall be based on the "commodity demand"methodology, as defined in AWWA Manual M1, unless otherwise agreed to by Purchaser and the Administrator. C. O &M Cost Allocation 1. Definition For purposes of this agreement O&M expenses include the operations, maintenance, and associated overhead expenses of the City's water supply system as adopted in the City's annual budget process for the year for which the rate will be in effect. 2. Allocations The City shall allocate O&M costs to the cost functions of commodity, peak season demand, peak three days demand, customer, and equivalent meter service based on the City's best professional engineering judgment. The City shall then allocate O&M costs allocated to these respective cost functions to the Purchaser based on the Purchaser's proportionate share of retail demand and non-retail guaranteed purchase quantities for annual average demand, peak season demand,peak three days demand, total annual non-retail bills,meters, and size of meters respectively. Regional Water Sales Agreement D October 19, 2004 Page 21 Q O D o SECTION 7—(Continued) 3. Special Allocation to Avoid Cost Cap In any year that the Administrator determines that standard allocation of the O&M expenses contained in the City Budget will cause an exceedence of the O&M cost cap, the Administrator may alter the O&M component if Purchaser's rates in a manner that avoids exceedence of the cost cap. D. Capital Cost Allocations 1. Capital costs are those expenditures that result in the acquisition of or addition of fixed assets that become part of the rate base. 2. Capital costs shall be allocated based on Purchaser's guaranteed purchase quantity in a five-step process using best professional judgment. First, system assets included in the rate base shall be allocated to functional asset groups. Second, the resulting system assets by functional asset group shall be allocated to water service characteristics. Third, the assets allocated to each water service characteristic shall be allocated to customer classes based on their respective percentages of the water demands related to each water service characteristic. The City shall classify customer classes as retail and wholesale and shall treat each wholesale customer that serves more than 200 service connections as an individual customer class. Fourth, the asset costs allocated to each customer shall be multiplied by the rate of return to determine the return on investment for each customer class. Fifth, the allocation of the working capital component of the rate base shall be allocated to customer classes in proportion to the allocation of all other rate base assets. 3. In performing these allocations, items that solely serve the City's retail customers shall be allocated to retail customers. Items that solely serve the Purchaser and other wholesale customers shall be allocated to wholesale customers. Items that serve the City and any wholesale customers shall be allocated proportionately to the City and the respective wholesale customers. 4. For the purposes of these allocations, functional asset groups are collections of common water system assets or facilities that are used to provide water service to customers. The City's functional asset group designations shall be specific enough that customer classes are not allocated costs to support assets or facilities that do not provide service or benefit to them. Definitions of functional asset groups and their allocations to customers shall be consistent with the findings Regional Water Sales Agreement D October 19, 2004 Page 22 O O Q SECTION 7—(Continued) contained in a document entitled [we will produce and name a report reflecting engineering and finance work group] unless circumstances change, in which case the allocations will also be changed to reflect the use or benefit of assets and facilities under normal operating conditions. Any changes in definitions of functional asset groups shall be presented to the WMAB for review and comment. 5. For the purposes of these allocations, water service characteristics may include such things as commodity, peak season demand, peak three days demand, customer, equivalent meter, and fire. Definitions of these water service characteristics are provided in Exhibit 2. [Use Bernice Bagnall's definitions in Exhibit 2] 6. The allocations of assets to functional asset groups and subsequently to water service characteristics may vary from time to time as changes to the system and its operation may occur. The revised allocations, if any such revisions occur, shall be used in the annual rate setting process, and if no revisions occur, then the previously adopted allocations shall be used for annual rate setting. The entire set of these allocations, including the initial allocations and any subsequent changes, shall be reviewed in the Cost Allocation Audits, as described in Section 7.E. below. E. Cost Allocation Audits 1. Every five years during the term of this contract and any extensions, starting with contract year 5, an independent third party shall be retained to conduct an audit of currently employed asset allocations to functional groups and O&M allocations. The expert shall be instructed,as the result of its audit, to recommend any changes necessary to assure the continued accuracy of the cost allocations consistent with the terms of this contract and the AWWA M-1 manual. The expert shall be selected by a majority vote of the WMAB and the auditor expense shall be included in O & M expenses and allocated accordingly. The expert's report shall be completed by November 1 of the contract year in which it is hired. 2. Expert recommendations for cost allocations shall be reviewed by the WMAB and shall be implemented by the Administrator in the contract year following receipt of the recommendations unless: (1) a majority of the WMAB direct that the recommendations not be implemented or(2) the Administrator determines that it would be imprudent to adopt any or all of the recommendations. In case the Administrator reaches a determination of imprudence, he or she shall explain his or her determination in writing to the WMAB and consult with WMAB concerning his determination. In the event Purchaser disagrees with the Regional Water Sales Agreement p October 19, 2004 Q Page 23 El O O Q SECTION 7 —(Continued) Administrator's determination, the matter shall be treated as outlined in Section 17, Dispute Resolution. F. Depreciation of Capital Assets 1. Depreciation expense shall be the annual depreciation expense on assets that are used, in total or in part, to serve the Purchaser, either directly or indirectly. Depreciation shall be calculated on the original cost of the assets and on a straight-line basis, using City accounting estimates of the useful lives of the assets in accordance with Generally Accepted Accounting Principles, which may differ from the actual useful lives of those assets. 2. The parties understand and agree that the assets being depreciated for these purposes may include backup facilities and other redundant facilities that may be idle for long periods of time, but which the City has determined still provide a service function to the system and the Purchaser by virtue of their backup and redundancy functions. 3. Depreciation shall not be charged for assets that are no longer able to provide service to the Purchaser or whose accounting life has expired, unless otherwise agreed to by the parties. G. Return On Investment Return on investment shall equal the rate of return multiplied by the value of system assets (the rate base) that serve the Purchaser. 1. Rate of Return The rate of return for each year shall be the percentage rate of the Bond Buyer Revenue Bond Index as published by the newspaper The Bond Buyer on the previous December 1, plus one-half on one percentage point(0.5%). If this referenced index ceases to be available, the Administrator shall notify the Purchaser and consult with WMAB regarding identification of a substitute index. The substitute index shall be selected by the City, in consultation with the WMAB, and shall be widely available to dealers in municipal securities, and measure the interest rate of high quality, long-term, fixed rate municipal securities. If available, an index measuring the interest rates on high quality, long- term, fixed rate municipal revenue bonds will be selected by the City over a comparable general obligation bond index. Upon identification of a substitute index, the rate of return on this contract shall be the percentage rate of a substitute index plus one-half on one percentage point (0.5%). Regional Water Sales Agreement D October 19,2004 Page 24 0 O O Q SECTION 7—(Continued) 2. Rate Base The rate base shall equal: - (a) Working capital, consisting of an amount equal to an average of 45 days of operation and maintenance costs for the water system supply, transmission, storage and pumping facilities that are incurred to provide service directly or indirectly to non-retail customers. (b) The remaining un-depreciated value, i.e.,book value, of all assets that provide service, directly or indirectly, in whole or in part, to the Purchaser, including water system supply, transmission, storage, and pumping facilities, equipment, and appurtenances and any other water system assets that provide service directly or indirectly to the general water supply and transmission portion of the water system, thereby providing water supply to non-retail water customers of the City. These assets may include backup facilities and other redundant facilities that may be idle for long periods of time,but which the City has determined still provide a service to the system and Purchaser. For such assets providing water supply benefit to both retail and non-retail customers, the assets included in the rate base shall be allocated proportionately as previously described herein. (c) The assets initially included in the Rate Base, as of the date of this agreement, are listed in Exhibit 3. Each year, the City shall produce a new Rate Base asset list and provide it to Purchaser during the rate-making process as provided in Section 4, WIv1AB. (d) After the first year of this contract,the assets included in the Rate Base assets shall be updated each year to include all water system capital assets listed and valued in Water Bureau documents used to produce the City's most recent Comprehensive Annual Financial Report and its supporting documentation,which may include capitalized interest on some or all of the relevant assets. 3. Rate Base Exclusions The Rate Base shall exclude the following items: (a) Construction work in progress. (b) Assets that are fully depreciated, even though such assets may be still in service. Regional Water Sales Agreement D October 19, 2004 Page 25 0 0 o a SECTION 7— (Continued) H. Prepayment of Capital Cost Share The Purchaser may elect to pay its share of capital cost allocations for new watetr system assets in a lump sum cash payment or other mutually agreed upon payment terms in lieu of paying annualized rates for depreciation and rate of return for the new facilities. If Purchaser makes such cash payment, the portion of the asset cost being prepaid by the Purchaser shall be deducted from the value of the specified assets in the rate base used to calculate the Purchaser's rates. By making such cash payment, Purchaser does not obtain an ownership interest in the specified assets unless Purchaser and the City have entered into a supplemental joint ownership agreement as specified in Section 16, Joint Funding of Capital Improvements. I. Operations And Maintenance Cost Control To help assure stability and predictability of wholesale rates and to permit recovery of costs of service, increases in specified O & M expenses shall be subject to limitations described below. These limits do not apply to capital costs, recovery on investment, or O&M expenses that are not specified O&M expenses. 1. O &M Cost Cap The O &M Cost cap is the prior year's specified O & M expense allocated to Purchaser increased by the sum of 2% plus the annual rate of change of the "selected CPI." (a) Selected CPI shall mean the CPI-Urban, West Urban (ref CUUR0400SAO) for January 1 of the year new rates are calculated, e.g., CPI of January 1,2006,will be used to assess O&M increases in rates for July 1, 2006. If this referenced index ceases to be available, the Administrator shall notify the Purchaser and consult with WMAB regarding identification of a substitute index. (b) Specified O&M expenses are those City O&M expenses defined in Subsection H.3 below, Specified O&M Expenses and Exclusions. 2. Cost Cap Limitation The City may not more than once in any consecutive five year period include in the calculation of Purchaser's rates, "specified O&M expenses" that exceed the O & M cost cap. Provided that a new five year period shall commence at each renewal of this contract. Regional Water Sales Agreement p October 19, 2004 Page 26 O O Q 0 SECTION 7— (Continued) 3. Specified O & M Expenses And Exclusions (a) Specified O& M expenses shall be those expenses, including associated overhead, incurred by the City's water system to serve directly or indirectly, in whole or in part,the Purchaser, that are properly allocated to Purchaser under the terms of this contract and that are reasonably considered to be O & M expenses using the utility basis of revenue requirements and cost of service principles as described in the AWWA M 1 Manual except for expenses or classes of expenses excluded by this Section TH. The Administrator shall make determination of specified O&M expenses and exclusions in consultation with.the WMAB each year during the ratemaking processes. (b) Specified O & M expenses shall not include and shall therefore, exclude, the following expenses or classes of expenses: i. Pass-Through Costs. These are costs that the parties agree are generally beyond the reasonable control of the City water system to influence. For purposes of this contract, pass through costs are those listed here and such future or currently unidentified costs that are similar to those here and are similarly beyond the control of the City to influence. • Utilities, including electricity,water, sewer, natural gas, garbage and telephone. • Equipment rental, such as hoists, excavators, tools and other miscellaneous equipment not included in the City's fleet. • Operating supplies, such as treatment chemicals, lubricants and consumables related to system operation and maintenance. • Communication Services, including but not limited to telephone,radio,microwave and fiber-optic transmission of data, voice, video and related information. • Insurance or the expenses of self-insurance, other than workers compensation, including but not limited to costs for general liability, property, casualty and fleet coverage. Regional Water Sales Agreement D October 19, 2004 Page 27 Q O O Q SECTION 7— (Continued) ii. The costs of PERS Pension Obligation Bonds (POBs) ill. Costs In Response to Unexpected Events or Circumstances (i) These are costs that arise unexpectedly or as the result of Acts of God, malevolent acts, contamination of the water supply, or events beyond the City's control, the consequences of which evens or circumstances could not have been avoided through the exercise of the standards of care common and usual in the municipal water supply industry. (ii) The City and Purchaser shall, within 120 days of the onset of such unexpected costs commence good faith negotiations to determine what, if any, of the costs of responding to the event or circumstances, which are otherwise excluded, should be included within the Specified O & M expense. iv. Costs Associated With Planning Studies These are costs to pay for City planning studies related to the Water Supply System including those studies in the City's Water Bureau Capital Improvement Program that are expensed rather than capitalized. When calculating Purchaser's water rates, costs for such planning studies shall be based on actual cost of such studies rather than budgeted or anticipated costs. When use of actual costs for such studies results in a delay of recovery of costs associated with such studies, Purchaser shall also be charged interest at a rate equivalent to the rate paid by the State Investment Pool for Local Governments on such funds that were prepaid by the City from the time the expense was incurred by the City until the start of the following contract year. V. Costs Associated With New Facilities Or Programs (i) These are first time or initial increases to O&M expenses (which may affect more than one fiscal year) associated with operation and maintenance of new facilities or the functioning of new programs. New programs may include such things as responses to new state or federal mandates or regulations, or activities to improve the efficiency, Regional Water Sales Agreement p October 19, 2004 Page 28 O Q Q 0 SECTION 7—(Continued) reliability, security or quality of the water supply, The WMAB will be consulted regarding initial O&M costs of new facilities and new programs. The partes understand and agree that O&M costs may increase in any given year in order to implement new programs or to operate or maintain new facilities without exceeding the cost cap. (ii) Once O&M expenses for new programs or facilities are established and have become a routine part of the City's water system budget, however, those of the expenses that are not otherwise excluded from "specified O&M costs," (pass through costs, PERS expenses listed in Subsection 2 above, costs in response to unexpected events or circumstances, or costs associated with planning studies) shall be included in future calculations of the increase in specified O&M expenses. (iii) As O&M expenses for new facilities or new programs arise, the Administrator shall consult with WMAB concerning the expenses and then determine which expenses should be excluded from cost cap calculations as "new O & M" and which new expenses should be included within the cost cap on what schedule. The Administrator shall advise Purchaser and WMAB of his determination. vi. Costs Incurred on Behalf of the Purchaser or WMAB These are costs to paid by the City by mutual agreement of the City and Purchaser or WMAB. Regional Water Sales Agreement p October 19, 2004 Page 29 O 0 Q SECTION 8 - RATES AND CHARGES FOR INTERRUPTIBLE WATER A. Winter Interni tible Water VP The price of winter interruptible water shall be twenty percent (20%) of the Purchaser's rate for that year for its guaranteed purchase water quantity, plus any extra delivery costs (such as extra pumping) incurred by the City to deliver the water that are not included within the rate for the guaranteed purchase quantity. B. Summer Interruptible Water The price of peak season interruptible water shall be forty-five percent (45%) of the Purchaser's rate for that year for its guaranteed purchase water quantity, plus any extra delivery costs (such as extra pumping) incurred by the City to deliver the water that are not included within the rate for the guaranteed purchase quantity. Regional Water Sales Agreement p October 19, 2004 0 Page 30 0 O 0 Q a SECTION 9 - WATER SYSTEM PLANNING AND COOPERATION To facilitate regional water planning and resource development, Purchaser and the City agree as follows: A. Purchaser Projected Water Usage I. Each five years, at a minimum, starting on July I of Contract Year 5, Purchaser shall provide to the City estimates of the Purchaser's water demand to be purchased from the City by year for a period of ten years including any anticipated increases in guaranteed purchase quantity. 2. In addition, in any other Contract Year in which unforeseenAevelopments have significantly altered Purchaser's five year estimates, Purchaser shall provide the City with its revised estimates of it preferred use of Portland water for a ten year period. 3. The estimates provided for in this provision are for planning purposes only and do not commit the City or the Purchaser to either buy or supply any particular quantities of water. 4. The City shall provide WMAB a summary of the City's projected demands for all wholesale and retail demands by no later than May 1 of each year. B. City Evaluation of Capacity of Portland Water System 1. Whenever it receives revised planning and demand estimates from the Purchaser, the City shall provide the Purchaser with estimates of the capacity of the Portland water system to meet all projected system loads over the ten year planning horizon. 2. If the City determines that the Portland water system cannot meet the projected demands Purchaser and others have proposed to place on it over the ten year planning horizon, the City and Purchaser(together with other Purchasers who may wish to join the discussions)may initiate negotiations to determine if and how the Portland water system could meet the projected loads, either through reduction in demand or development of additional water system capacity. 3. In no case, however, does this contract obligate the City to sell, or Purchaser to pay for, water beyond the guaranteed purchase quantities established herein. Regional Water Sales Agreement A October 19, 2004 Page 31 0 0 0 Q 0 SECTION 10 - RESERVATION OF ADDITIONAL SYSTEM CAPACITY At any time during the term of this contract, Purchaser and the City may enter a reserve capacity agreement. Reserve capacity is the right to take a specified amount of additional water from the system at a specified future time. At a time to be specified in the reserve capacity agreement, the quantity of water reserved will be added to the Purchaser's guaranteed purchase quantity under this contract and will be used to calculate the Purchaser's guaranteed purchase payment thereafter. Unless specified otherwise in the reserve capacity agreement, costs for reserve capacity shall be charged at a rate equivalent to the rate of return on the proportionate share of the capital assets that would be used to make such capacity available, and shall be billed to the Purchaser in equal monthly installments. Purchaser will possess no right to use the additional capacity identified in its reserve agreement until the specified future time. The City may use any or all of the reserve capacity prior to the specified future time. Unless specified otherwise in the reserve capacity agreement, Purchaser shall provide the City written notice at least 90 days prior to the specified future time identifying if the Purchaser will (a) exercise its option to use the additional system capacity after the specified future time, (b) allow the reserve capacity agreement to expire without further action, or(c) request a new or amended reserve capacity agreement with a new specified future time. If a request for reserve capacity can only be met by adding new assets to the system, the City will not reserve capacity for the Purchaser until the parties have reached an agreement on the method for financing and the schedule for adding the assets to the system. Regional Water Sales Agreement p October 19, 2004 Page 32 O O O a SECTION I I —CONNECTIONS AND METERING Upon execution of this agreement, all existing water meters used to measure the water supplied by the City to the Purchaser shall become the property of the City. In addition, when a new meter or meters are required, the City shall install on Purchaser's main, at a point near the connection with the City's main, a water meter or meters that will at all times measure the water supplied by City to Purchaser and shall charge the Purchaser for this work. City shall maintain the meter or meters in proper working condition, including periodic testing, calibration, maintenance and replacement of the meter(s) based on generally accepted industry standards. City agrees to notify Purchaser prior to repairing the meter. The cost of replacing the meter or meters and their operations and maintenance shall be included by the City in calculating Purchaser's rates. Regional Water Sales Agreement D October 19, 2004 Page 33 P0 0 0 Q a SECTION 12 — PURCHASER-SUPPLIED WATER TO CITY RESIDENTS To the extent permitted by law, Purchaser agrees, when requested by the Administrator, to provide water supply to City residents in areas adjacent to Purchaser's water mains, said water to be metered by the City subject to limitation of the available capacity of Purchaser's water distribution system. The City and Purchaser shall review each situation where such arrangements exist and attempt to reach agreement on the need and feasibility of installing a master meter or master meters to register the volume of water delivered to City residents. The Purchaser agrees the water delivered to City residents will generally be of the same quality as water provided to its other customers. The Purchaser may request the City install a master meter if the local distribution system is shown to have demonstrated leakage or unaccounted water losses in excess of 10%of the average day demand of the City residents served by system or by mutual agreement of the parties. Improvements to the local distribution system shall be made by mutual agreement of the parties. The Purchaser may charge the City up to one hundred twenty-five percent (125%) of the guaranteed purchase wholesale water rate the City charges the Purchaser. The City will credit this amount to Purchaser. Such water will not be included in the calculation of total water purchases made by the Purchaser from the City. Notwithstanding the foregoing, at the option of Purchaser, the Purchaser may conduct a cost-of- service study to determine the cost of serving City residents. If the cost-of-service exceeds the 1256/o of the wholesale water rate,the charge to the City will be adjusted accordingly but not above the actual cost of service. Regional Water Sales Agreement D October 19, 2004 Page 34 0 O Q SECTION 13 —WATER RESOURCE CONSERVATION A. General 1. The obligations in this Section will apply to both the City and Purchaser. Both parties to this agreement intend that water to which the City holds water rights shall be used beneficially, efficiently, and without waste. 2. The parties encourage the development of joint conservation programs where such partnerships are of mutual benefit and produce increased efficiencies in program costs or water savings. Provided,however,that funding for joint conservation programs will be established by separate agreement between the interested parties. B. Water Managers Advisory Board The WMAB will foster and promote efficient use of water and best management practices as outlined further in this Section. It will also be the role of the WMAB to implement the provisions of this Section. In doing so, WIvLkB may assign tasks to a WMAB committee or to staff of participating purchasers subject in all cases to WMAB review and approval. C. Water Conservation Obligations and Submission of a Water Conservation Plan 1. The Purchaser must operate water systems that are fully metered at the individual customer level or have an implementation program to complete installation of such meters within five years of execution of this agreement. Unless Purchaser serves a population of 1,000 or less, Purchaser shall, on the first anniversary of the execution of this Agreement, and every five years after the execution of this Agreement, submit a Water Conservation Plan for its water system to the WMAB. t� 3. If Purchaser is a participant in the ORS 190 Agreement for the Regional Water Providers Consortium, it may submit the regional conservation programs as part of its Conservation Plan, but the Consortium programs,by themselves, do not constitute a Conservation Plan for the individual Purchaser. 4. Each Conservation Plan submitted must include programs specified in State of Oregon Administrative Rules Division 86, as they are from time to time amended. 5. Purchaser will report to the WMAB annually regarding the implementation of its Conservation Plan. Regional Water Sales Agreement D October 19, 2004 Page 35 0 0 Q t SECTION 13 —(Continued) 'd D. Review of Conservation Plan 1. The WMAB may, if it deems it advisable, adopt guidelines for the submission of water Conservation Plans. 2. Upon receipt of a Purchaser Conservation Plan, the WMAB will review the plan pursuant to the standards of this Section. In reviewing a Conservation Plan, the WMAB shall include ,but is not limited to, consideration of the following factors: (a) Whether the program contains the following mandatory programs i. Leak detection and repair programs, if required by State Rule, that meet Oregon Administrative Rule (OAR) 690-86-150(4)(e) and, if applicable, Subsection (6)(a). ii. Education and outreach programs required under OAR 690-86-150 (4)(f)• iii. Rate structures based on the quantity of water metered at the service connection as required by OAR 690-86-150 (4)(d). iv. A meter testing and maintenance program as required by OAR 690-86-150 (4)(c). V. An annual water audit as required by OAR 690-86-150 (4)(a). (b) Whether the Plan includes the following discretionary programs or a showing that a particular discretionary program is neither feasible nor appropriate to the Purchaser's service area. i. Technical and financial assistance programs to encourage and aid residential, commercial and industrial customers. ii. Supplier financed retrofitting or replacement of existing inefficient water using fixtures, including distribution of residential conservation kits and rebates for customer investments in water conservation. iii. Adoption of rate structures, billing schedules, and other associated programs that support and encourage water conservation. Regional Water Sales Agreement D October 19, 2004 Page 36O 0 Q 0 SECTION 13 —(Continued) iv. Water reuse, recycling, and non-potable water opportunities. V. Other measures identified by the water supplier that would improve water use efficiency. vi. Operation measures to reduce peak event impacts on the Portland system. 3. Within 180 days of receipt of the Purchaser's Conservation Plan, the WMAB shall approve or disapprove the Plan and advise the Purchaser in writing of its decision. (a) A Water Management and Conservation Plan approved by the State of Oregon pursuant to Division 86 of Department of Water Resources rules, and updated every five years, will in all cases be deemed sufficient to meet the requirements for a Conservation Plan under this agreement. (b) If the Purchaser is not required to have a Conservation Plan approved by the State of Oregon and the WMAB disapproves the Purchaser's Water Conservation Plan, it shall notify the Purchaser and provide the Purchaser with comments on the Plan's deficiencies. Within 180 days thereafter, Purchaser shall submit a revised Plan for review by the WMAB. Regional Water Sales Agreement W October 19, 2004 Page 37 O OV , O a SECTION 14—WATER CURTAILMENT AND PROTECTION OF THE WATER SYSTEM A. During times when water supplies are not adequate to meet the aggregate of all demands placed upon the Portland water system, the City and participating Purchasers need to have a plan in place to reduce or curtail demands so that fire, life, safety and other high priority needs are met. It is to the benefit of all of the users of the Portland water system that plans for curtailment be agreed upon in advance and that plans for curtailments be coordinated among water providers. B. By signing this agreement, Purchaser and City acknowledge that unforeseen or unavoidable circumstances may limit the amount of water available to City for sale and distribution, whether temporarily or permanently. Should the available supply fall below the aggregate of all demands placed on the City system, or should it be reasonably predicted that supply will fall below demands before other supplies are available, the Administrator of the Bureau of Water Works may declare that a water shortage is in effect. C. Whenever the Administrator has declared a water shortage, the City shall implement any adopted Curtailment Plan. If there is no adopted curtailment plan, the Administrator shall require implementation of measures to reduce all demands, retail and wholesale, proportionally based on annual retail usage for the previous contract year and on annual guaranteed purchase quantities (excluding interruptible water) furnished under this agreement for the previous complete contract year. D. The City and WMAB shall be responsible for developing a Curtailment Plan. The Curtailment Plan shall be designed to accomplish reductions in demand necessary, in the event of a water shortage, to protect the system's capacity to supply water for fire, life, safety, and other high priority needs. The curtailment plan shall establish procedures, as well, whereby two or more participating Purchasers may coordinate their demand reductions to accomplish,jointly, total necessary system demand reductions imposed n them, even if one or more Purchasers individually do not meet the reductions required of its separate system. E. If the Administrator declares a water shortage, Purchaser shall implement measures sufficient to meet the requirements of the Curtailment Plan (or other requirements for proportional reduction in demand if no Curtailment Plan has been adopted.) Purchaser may do this through implementation of measures contained in the Curtailment Plan, similarly effective measures found in Purchaser's own plan adopted under OAR Division 86 or required as part of a State declared drought under ORS 536.720-740, or through agreements with other Participating Purchasers that result,jointly among the agreeing Purchasers, in a total reduction in system demand equivalent to that required in the Regional Water Sales Agreement D October 19, 2004 Page 38 0 0 0 Q SECTION 14—(Continued) Curtailment Plan or, if there is no Plan, the Administrator's order for proportional reductions. F. The City shall monitor compliance with Curtailment Plan shall be conducted every two weeks throughout the duration of the declared water shortage. G. If, after the Administrator declares a water shortage, Purchaser is unable individually, or in cooperation with other purchasers as contemplated by Subsection E. above, to achieve the required reductions in the use of water supplied under this contract, the Administrator may act to reduce the amount of water supplied to the purchaser so that it does not exceed that amount specified under curtailment measures. c �� 1 Regional Water Sales Agreement D October 19, 2004 Page 39 Q O O Q SECTION 15—BILLING AND PAYMENT A. Guaranteed Purchase Payment The City shall bill Purchaser a portion of its annual guaranteed purchase payment each month. The monthly amount shall be calculated by multiplying each year's rate per unit times the confirmed monthly guaranteed purchase demand projections (Subsection 513.2). B. Summer Interruptible Water If the Purchaser and City have agreed to the sale of summer interruptible water, the City shall bill the Purchaser for the total confirmed interruptible water payment in four equal amounts for the months of June, July, August, and September. Provided, that if the City fails to deliver interruptible water requested by the Purchaser, the Purchaser shall be excused from paying the portion of its confirmed interruptible water payment equal to the quantity of water not delivered times the price of interruptible water. C. Billing for Water Purchases Above Guaranteed Purchase Amounts and Above Confirmed Peak Season Interruptible Water Quantities Within 62 days of the end of each contract year(that is, by September 1), the City shall review the Purchaser's meter records for the previous contract year under this agreement. If the Purchaser has taken water above either its guaranteed purchase amount or its confirmed peak season interruptible water quantities, the City shall bill Purchaser for those water deliveries no later than September 30. Charges shall be calculated as follows: If the Purchaser has taken at least its annual guaranteed purchase quantity over the full contract year, then water supplied to Purchaser from October 1 to May 31 in excess of its estimated monthly guaranteed purchase quantity for those same months shall be charged the appropriate rate for winter interruptible water times the quantity of excess water taken. If the Purchaser has taken at least its annual guaranteed purchase quantity over the full contract year, then water supplied to Purchaser from July 1 through September 30 in excess of the total of its estimated monthly guaranteed purchase quantity for those same months and its confirmed summer interruptible water quantities(if any) for those same months shall be charged the appropriate standard rate applicable to its guaranteed purchase quantity times the quantity of excess water taken. D. Payment Schedule Bills are due upon receipt, and subject to a collection fee if not paid on or before the thirtieth day following the billing date. Collection fees shall be established each year in the annual City ordinance establishing rates. Regional Water Sales Agreement D October 19, 2004 Page 40 O Q Q SECTION 15—(Continued) E. Charges In Case of Meter Failure Should any meter fail to measure accurately the water passing through said meter, the charge for water used during the time the meter is out of service shall be based on the City's estimates of the volume of water supplied based on usage patterns and statistics for prior periods. F. Disputes In the case of disputes over billings for water, Purchaser shall pay the undisputed amount when due and the disputed amount shall be resolved through Dispute Resolution. The Purchaser shall pay interest at a rate equivalent to the rate paid by the State Investment Pool for Local Governments on any disputed amounts found through dispute resolution or litigation to be due the City. Regional Water Sales Agreement D October 19, 2004 Page 41 O O Q SECTION 16 —JOINT FUNDING OF CAPITAL IMPROVEMENTS The City and Purchaser or group of Purchasers may enter into separate agreements for the purpose of mutually funding capital improvements where such improvements are determined to be in their mutual interest. The City and Purchasers or others involved in mutually funding capital improvements may also enter into separate agreements for the conditions and pricing of sale for water supplies derived from such mutually funded improvements. Such separate agreements may include provisions for acquisition of ownership of assets and/or capacity by Purchaser. If provided in the joint funding agreement, Purchaser may include its proportionate ownership share of such assets in its calculation of system develop charges and rates. Regional Water Sales Agreement D October 19, 2004 Page 42 0 0 Q SECTION 17—DISPUTE RESOLUTION In case of disputes arising out of this agreement, including disputes regarding the interpretation of any provision of the agreement, subject to the terms of this Section, either party may seek all remedies available at law or in equity. The parties agree, however, prior to commencement of any suit, they shall first engage in dispute resolution as provided in the Section. Step 1. Notice of Dispute Prior to commencement of litigation of a dispute, either party must first provide the other with a written notice describing the dispute and submitting the dispute to resolution under this Section. Such notice shall commence the dispute resolution process. Step 2. Negotiation Each party shall designate a person or persons to negotiate the dispute on its behalf, shall make a good faith effort to exchange information and data related to the dispute, and shall meet to negotiate a dispute resolution. If the dispute is resolved at this step, the parties will memorialize the agreement by a written determination of such resolution, signed by the designated representatives of the parties. Step 3. Mediation If the dispute has not been resolved within 45 days of the date of the notice of dispute, or such longer time as is mutually agreed by the parties,the parties shall submit the matter to mediation. The parties shall attempt in good faith to agree on a mediator. If they cannot agree, they shall request a list of five mediators from an entity or firm providing mediation services. The parties shall attempt in good faith mutually to agree on a mediator from the list provided, but if they cannot agree, each party shall select one name. The two selected shall select a third person and the dispute shall be heard by a panel of three mediators. Any common costs of mediation, including the cost of mediation, shall be borne equally by the parties. Each party shall bear its own individual costs therefore. Mediation shall not continue more than 105 days past the initial notice of dispute unless mutually agreed by the parties. If the dispute is resolved at this step, a written determination of such resolution shall be signed by the designated representatives of the parties. Step 4. Arbitration If the dispute has not been resolved through negotiation or mediation with the time set by this agreement, within 15 days of the end of mediation, or such other time as is mutually agreed, the parties may submit the dispute to arbitration under mutually agreeable terms. In the absence of Regional Water Sales Agreement D October 19, 2004 Page 43 0 0 o SECTION 17—(Continued) such an agreement, the dispute resolution process under this agreement shall be deemed ended and the parties shall be free to pursue other remedies. Any litigation between the parties arising under or regarding this agreement shall be conducted in the Multnomah County Circuit Court of Oregon. In any litigation, each party shall bear its own costs and attorney's fees. Regional Water Sales Agreement D October 19, 2004 Page 44 0 O O Q SECTION 18–WASHINGTON COUNTY SUPPLY LINE A. Washington County Supply Line [Section inserted only in certain contracts—or not necessary at all, if Washco agreement can be reached coincidentally with wholesale contract.] - The City and Purchaser own portions of a transmission main known as the Washington County Supply Line. They understand that proposals have been made to change uses of that line to better meet regional demands with water from the City's supply system. Provision for ownership and use of the Washington County Supply Line shall be made by separate agreement of the affected parties. Regional Water Sales Agreement p October 19, 2004 Page 45 Q 0 O Q IN WITNESS WHEREOF, Purchaser has,pursuant to official action of its governing body on the day of , 20_ , duly authorizing the same, caused its proper officers to execute this instrument on its behalf and its corporate seal to be affixed hereto, and City, pursuant to Ordinance No. 130672, Title 21, Water Regulations, of the Code of the City of Portland, Oregon, has caused this instrument to be signed by its Mayor and Commissioner-in-Charge of the Bureau of Water Works, all of which is in triplicate. PURCHASER: Purchaser By Approved as to form: (Title) Attest w Purchaser's Attorney (Title) Date CITY OF PORTLAND: By Mayor Approved as to form: By Commissioner-in-Charge City Attorney Date p��ect �'ce�ule, ""We are Gere -� CleanWaterr Services Our commitment is clear. " �I 2 )Ili Ii l�:�Z 2550 SW Hillsboro Highway it i lrli I�:� IN I:: Hillsboro,Oregon 97123 ).t)t)y ).01)1-06 ).00.5 Finalize alternatives Prepare DEIS publication and Prepare Final EIS and for EIS DEIS public review Record of Decision What happens in the EIS? The "proposed action" of a 40-foot raise of Scoggins Dam with a raw water pipeline pump-back, and other potential options that the US Bureau of �ti, ' ''° r �;,.�,.,,.,�. Reclamation may wish to consider,will be compared against a "no action" alternative. The Environmental - Impact Statement will identify potential environmental and social impacts of these alternatives as well as economic impacts and benefits. The EIS will also describe potential mitigation measures to minimize the impacts described. The analysis of environmental impacts includes the - following topics(as well as others): How C a 11 llearn more about • Soils and geology is'� asses e waiver a roveW 6 00'F Xl • • Hydrology h y hh the protect? • Water quality When a change to an existing dam is proposed,the • WetlandsOregon Dept.of Fish and Wildlife (ODFW) reviews ✓ Get on the mailing list for notice of meetings or r updates (send us an e-mail or call). a•, 'f • Fisheries fish passage requirements for the project. As part • Wildlife habitat ✓ Go to our web site at www.CleanWaterServices.org • Threatened, endangered of the EIS for this project,fish passage for a 40-foot ,,,,� WAl g and click on the water supply project for more a 40 and sensitive species raise of Scoggins Dam was reviewed. Project staff detailed project information. PARS • Recreation • Clea • Air quality studied habitat conditions and determined they are %/ Coineto�public meetings of die Polic SteeringConin-mmee. . Tualz • Noise not conducive to migratory fish above Scoggins T • City Land use and planning • Water rights woo" Request a presentation for a local group you belong to. :=� ' - - Dam. The project submitted a waiver application _ • City • roved in December 2004 which was a —_= -, ,, • City • Environmental justice p in p �--� • City • Visual resources February 2005. It is an agreement between ODFW For more information: Cit • Social and cultural resources Tom VanderPlaat y and the US Bureau of Reclamation that allows - • City When the Draft EIS (DEIS) is published, it will be Project Manager , Scoggins Dam to be raised without fish passage. If 503-681-5107 or vanderplaatt®CleanWaterServices.org distributed to interested parties for review and - In part comment.The public review process will also include the dam raise is approved,the project will provide Jeanna Cernazanu of Recl public information meetings and a public hearing mitigation that improves fish habitat in the basin Public Involvement Coordinator With p where testimony on the document will be heard. 503-681-3619 or cernazanuj®C1eanWaterServices.org Irri atic for all migratory species includingWinter steelhead, g The Final EIS will include public comments from this the citi Printed o«Endeavor Velvet,50%rrg «Y�ste a«d review process and agency responses. cutthroat trout and lamprey. 0 ere,«e«tartled, ,5%/nostcnn�sttrrter fidiforineee. Cornet Evaluating the Water Supply Options "AWuate in_s,fream flow is critical for maintainin wafer Water supply models have provided new information about the reliability that enough water could be captured il anWimprovinS fish 6a&faf Tom Wolf,Trout Unlimited each year to meet the projected demand by raising Scoggins Dam by 20 or 40 feet or building a new Stimson dam just downstream from Scoggins. These models show that none of the dam raises alone could meet the projected Other Water Supply Options Analyzed Extensive analysis has been done on both the Sain Creek need with a high level (90%) of reliability. A summary comparing the options based on recent technical work is Tunnel and raw water pipeline. The results will be shown on the chart below. The Water Supply Feasibility Study (WSFS) completed compiled into detailed reports. The concept of adding in 2004 found several water supply options to be feasible a pump-back to the raw water pipeline was suggested and these were recommended for further study. The by a stakeholder group. Analysis has shown this option Water Supply Option Advantages Disadvantages options included: could yield water more reliably than the Sain Creek • a 20' or 40' raise of Scoggins Dam Tunnel over time. 35'Stimson Dates–a new dam Slightly more storage capacity High cost of an entirely new dam; a new Stimson dam just downstream from constructed just below the than a 40-foot raise of Scoggins perimeter road impacts; stream, Scoggins Dam 4 existing Scoggins Dam Dam wetlands, fish and elk habitat an irrigation exchange pipeline from the impacts; and property impacts Willamette River including impacts to Stimson Mill Water conservation, aquifer storage and recovery and reuse would be a part of any future water supply Irrigation Exchange Pipeline A reliable supply source with Only meets portion of the water alternative, but could not adequately meet future demands �i`' from the Willamette River— fewer environmental impacts supply need (19,000 a/f); opposed either alone or in combination. Further study of a raw Tualatin Valley Irrigation District compared to other options by TVID Board of Directors water pipeline and Sain Creek Tunnel were also (TVID) would receive water recommended in the WSFS to identify their benefits in Ys°' from the Willamette River in augmenting water supply. exchange for Hagg Lake water Hagg Lake 20' Scoggins Dam raise Fewer environmental and Meets only a portion of future water private property impacts demand than other dam raises r 40' Scoggins Dam raise Lower cost than a Stimson dam Not highly reliable without sup- ; and fewer environmental impacts plemental sources Options to Augment Advantages Disadvantages Stored water Sain Creek Tunnel–A tunnel Could augment storage with Only 50% reliable by the year 2050 connecting the upper Tualatin additional 26,000 acre feet of River near Haines Falls to Hagg water '' Haines Falls- Upper Tualatin River Lake near the mouth of Sain Creek ' Project Pursues Federal Funding j Raw Water Pipeline A highly reliable source for Further analysis needed of the t� In 2003, with the assistance of the Oregon Congressional Pump-back--a pipeline that additional storage in Hagg Lake; possible impacts such as water ' " delegation, the project was granted federal authorization that allowed the US Bureau of Reclamation to participate would pump water from the would improve drinking water quality, fish habitat and water rights in the study. In November 2004, Congress approved Tualatin River back to Hagg quality and reduce loss of water $250,000 to partially fund the EIS for this project. Local Lake during high winter flows, supply that flows by the existing , and in summer take water from ;; ,,, partners are committing $3.97 million for the EIS which intake y"r is a majority of the cost. The amount requested from Hagg Lake to the JWC/TVID �.� `,�, Congress is $2.9 million. The partners will continue to pump station work with the Oregon Congressional delegation to seek the remaining $2.6 million in the FY 2006 federal budget. MARCH 2005 ' 1 Status of Water Sultion ppo S > Demand projections to 2050 include an additional need of y p 15,500 AF for water quality and 37,500 AF for municipal supply. Adopted in the Water Supply Total new demand by 2050 is projected to be 53,000 AF. > All future water supply alternatives assume additional Feasibility Study (WSFS ) conservation, higher levels of wastewater reuse, increased ASR programs and additional wholesale supply purchased from the City of Portland. SOURCE OPTIONS A 0 ail E • a ,, 6,000 10,000 26,000 53,000 11,000 19,000 t t ,• insufficient yield to 18% 50% 93% 25% insufficient yield to meet 2050 demand(3) : meet 2050 demand _ (4) Proportional to 40" Most impacts to feder- I Same as 40'raise Same as 40'raise Higher environmental Assumed lower envi- raise impacts, less pri- ally-owned property I alone, but additional alone,but additional impacts compared to ronmental impacts if vate property impact. around reservoir.IM- impacts to Upper Tu- impacts to lower 40'Scoggins raise. the 23-mile, 54-inch pacts private property alatin River flows and Tualatin River from inundates park access pipeline can be tun- in some locations. fisheries due to winter- winter-time diver- road and entrance.Dif- neled under multiple Provides benefits to time diversion of water sion. Potential water ficult access roadway stream crossings and water quality of Tuala- through Tunnel.Will quality impact to Hagg construction.Will sensitive areas. tin River.Will require require mitigation for Lake(currently under require mitigation for mitigation for wetlands wetlands and habitat. study).Will require wetlands and habitat. and habitat. mitigation for wetlands and habitat. 101 134 174 200 1 200 117-138(5) � . 0.3 0.3 0.4 0.9 0.3 0.4 21,500 14,100 7,000 5,400 20,600 6,300 assume costs can be allocated fairly for all options appears feasible for all dam options ability to get new water right in question • all options vulnerable to earthquake,natural disasters full replacement of affected facilities included in cost no impacts for pipeline alone • ,. bigger dam options have more impact minimal if located in public roadways equivalent for all options appears feasible for all dam options TVID opposed • acceptable for all options no additional additional 10-20 TAF additional 10-20 TAF additional 10-20 TAF additional 10-20 TAF no additional i dam construction has longer timeframe than pipeline option equivalent for all dam options may be more secure r 10 NO NO YES NO NO Insufficient yield, Insufficient yield, Insufficient yield, Meets projected Insufficient yield, Meets portion of meets portion of meets portion of meets portion of demands at reliability meets portion of demand target.Would demand target. demand target. Low demand target.Low >90% demand target. Low need to be combined reliability at 2050. reliability at 2050. reliability at 2050. 1 with dam raise.Ability Would need to be to obtain new water combined with Tunnel right is uncertain.TVID ($40M)or pump-back would be the recipient ($65M)to meet yield of Willamette River and reliability targets. supply, and on record as opposing this option. 1 1 + • (1)New yield is defined as the amount in excess of the current system (4)Irrigation exchange pipeline provides 19,000 AF at 100%reliability; AF 0&M yield under full contract demands. this is only 36%of the future demand increment Acre Feet Operations Ft Maintenance (2)This is only the reliability for the incremental demand component (5)low-end estimate assumes water can be obtained at agricultural ASR TAF from present to 2050(53,000 AF).The existing system reliability is 93% rate of$8/af. If water is priced at M&I rate of$1,500/af,cost increases Aquifer Storage and Recovery 1000 AF for M&I and 85%for CWS and TVID. by$21 M to high-end estimate. EIS TVID f3)A 20-foot raise of Scoggins Dam provides an additional 24,300 AF Environmental Impact Statement Tualatin Valley Irrigation District storage capacity,which only represents 46%of the future demand increment(and is still subject to dry year shortages) From: "Gary Firestone" <garyf@rcclawyers.com> To: <DENNIS@ci.tigard.or.us> Date: 8/22/2005 1:14:11 PM Subject: Re: IWB agreement Dennis: See below for my responses, which are listed after each question. Let me know if you have any additional questions. This message originates from the law firm of Ramis Crew Corrigan, LLP. This e-mail message and all attachments may contain legally privileged and confidential information intended solely for the use of the addressee. If you are not the intended recipient, you should immediately stop reading this message and delete it from your system. Any unauthorized reading, distribution, copying, or other use of this message or its attachments is strictly prohibited. All personal messages express solely the sender's views and not those of Ramis, Crew, Corrigan, LLP. This message may not be copied or distributed without this disclaimer. If you received this message in error, please notify us immediately at (503) 222-4402 or reply to the e-mail address above. >>> "Dennis Koellermeier" <DENNIS@ci.tigard.or.us> 08/18/05 01:20PM Gary, a couple of things have popped up I'd like your read on. I had Twila mail you a copy of the IWB agreement for your review. 1)Water building: as i read it, the water building is an "other asset" located in Tigard so it's tigards, and even if the District withdrew from the IWB the building would remain Tigards. Right? Right. 2)section 5.E, how does that work? Could this contract section trump Tigards charter amendment on the Willamette vote? No, the City cannot act contrary to its charter. If all other jurisdictions want Tigard water, Tigard will have two choices: (1) terminate the agreement, or (2) split the system so that Willamette water goes to the other entities, but not to Tigard. I note that this may not be physically or economically feasible. 3)We may be approaching a decision where some surplus property, orignally owned by the district, may be declared surplus and used for park improvements. Who decides this, the IWB , the District Board or the City Council? The IGA is silent as to surplus system assets. The best approach is an amendment to the IGA or a supplemental IGA to specifically address the issue. My recommendation would be the parties to agree that Tigard, as operator of the system, declare any surplus, but if proceeds are received from any sale of surplus facilities, that the amounts received be divided among the parties according to each jurisdiction's proportionate interests, as determined in Section 4.C. If the surplus property is an "other asset," then the jurisdiction where it is located would have the authority to declare it surplus, use it for other purposes, and otherwise treat it as being the property of that jurisdiciton (which it is). Section 4.A.(2)b. No big hurry on this this, call em if you have questions. Dennis Koellermeier Main #:503-639-4171 ex.2596 Direct#: 503-718-2596 Dennis@CI.Tigard.OR.US Proposed Final DRAFT: 8130105 Portland Wholesale Water Sales Agreement 1) Background/History Portland has agreements to sell drinking water to 19 water providers in the region. This includes Gresham and the Rockwood People's Utility District in East Portland, Tualatin, Tigard and the Tualatin Valley Water District (TVWD) west of the Willamette River. Attached is a list of the wholesale water providers and a map of the various service areas. The current agreements were negotiated in the late 1970's and are now beginning to expire. Most of the agreements will end in 2007. Portland has provided drinking water to some of these customers for over 100 years. Portland's water sources—the Bull Run watershed in the foothills of the Cascade Mountains and the Columbia South Shore Wellfield—regularly produce more water than is needed by Portland city customers. The sale of water to the wholesale customers has benefited both Portland's in-city retail ratepayers and the wholesale customers. The arrangement has provided revenue to the city, reducing costs for in-city customers. Wholesale customers in turn have regularly received drinking water originating in Bull Run Watershed, one of the most highly protected and ecologically preserved watersheds in the world. The wholesale customers constitute a significant portion of the City's water demand. They represent roughly 38% of the demand for water from the Portland supply system. The wholesale customers pay Portland for the use of the drinking water supply facilities that provide them with water, such as the large dams and treatment facilities in the Bull Run Watershed, the storage reservoirs at Powell Butte and the Columbia South Shore groundwater facilities. The wholesale customers do not pay for facilities and parts of the Portland water system that serve only City of Portland residents such as customer service, in town storage and local pipelines and meters. Overall, the wholesale customers provide roughly 21% of the city's water rate revenues. In May 2003, Portland and the major wholesale customers including Gresham, Rockwood PUD, Tigard, Tualatin, TVWD, West Slope Water District and the Raleigh Water District began negotiations for a new wholesale agreement. Portland formed a negotiations team that includes active participation by the City Attorney's Office, the Office of Management and Finance and the Office of the Commissioner-in-Charge. The negotiations have been a collaborative process involving key staff for all of the participating parties. The challenge of constructing an agreement that works for the several very different and distinct participating agencies has required several months of discussion, analysis and problem solving. Throughout the negotiations, all of the participating parties have regularly briefed board members, local decision makers and key stakeholders to the agreement regarding the content and progress of the discussions. Portland has briefed the City Council, a designated Portland Utility Review Board member and, more recently, an appointed citizen participant from the Friends of the Reservoirs. The agreement would also allow Portland, to sell reserve capacity at the City Council's discretion, to wholesale customers interested in buying additional water from the city in the future. Such an arrangement could only occur through a separate agreement requiring specific authorization from the participating agencies' governing board or city council. Reserve capacity is a commitment by Portland to make a certain amount of water available to a wholesale customer at a specified future date. The wholesale customer would pay the city for the commitment during the intervening years. The city would retain full use of the amount of water reserved through such an agreement, including the right to sell the water to other wholesale customers, until the date specified. The draft agreement includes clearly defined descriptions of the proposed wholesale rate methodology that is based on the American Water Works Association industry standard. A requirement for participants to conform to state conservation planning and program requirements and details about the process by which emergency curtailment of supply shall be implemented are in the draft agreement. A dispute resolution process is also described. The draft agreement maintains the current option for Portland and the wholesalers to consider future joint funding arrangements for new water system facilities through separate agreements requiring specific authorization from the governing board or city council of each participating agency. See the comparison table in section 4 for a brief comparison of major provisions between the existing and proposed water sales agreements. The negotiations teams from Portland and the wholesale customers have reached agreement on a draft version of a new sales agreement. All the participating parties support the current draft of the agreement and are ready to share and discuss it with the public and interested stakeholders to obtain feedback before taking formal action. Portland and the wholesale customers plan to begin a public review process for the draft agreement in October. City staff will be working with wholesale representatives to post the draft agreement and support documents on the Internet, provide informational briefings to interested stakeholders within the city including the Portland Utility Review Board and Friends of the Reservoirs and hold a City Council work session to brief the Council. Following this series of briefings, Portland staff and the wholesale customers will reconvene to discuss the public input. The wholesale entities plan to conduct individual public review processes in their own jurisdictions during that same period. Portland anticipates completing the city's public review process and offering a formal agreement to the wholesale customers through City Council action by March 1, 2006. If the wholesale customers accept the new agreement, the new terms will be incorporated into Portland's annual rate ordinance next May and go into effect starting July 1, 2006. 2) Draft Agreement Main Provisions The draft agreement is a model agreement that would serve as the basis for individual agreements between Portland and each wholesale customer. The agreement describes the terms and costs for a firm supply of drinking water for the wholesale customers from Portland's drinking water sources. The draft agreement has an initial term of 20 years with 10-year renewals thereafter. Either party must provide 5 years notice if it plans not to renew the agreement. The parties propose implementing the new agreement beginning in FY 2006-07. The draft agreement maintains and further clarifies the role of the Water Managers Advisory Board made up of representatives of all the wholesale customers and Portland to coordinate operational functions among the affected water systems and to provide a forum for the wholesalers to provide input on key items including budget and capital improvement program development. Under the draft agreement wholesalers would be responsible for the purchase of a specific volume of water from Portland each year called a guaranteed purchase quantity. Portland would be responsible to provide this quantity of water to the wholesale customer reliably for the life of the agreement. By mutual agreement, the guaranteed purchase quantity could increase but not decrease over the life of the agreement except under special circumstances. The draft agreement would allow wholesalers to resell water purchased from Portland and to trade guaranteed purchase quantities among other wholesale customers It would allow Portland to sell interruptible supplies of water to the wholesale customers at its discretion and at a discount. Interruptible water is water that Portland periodically has available to sell after it has satisfied the water needs of city residents and the guaranteed purchase quantities of the wholesaler customers. Interruptible water is almost always available each winter during the rainy season and is sometimes available in the summer. If Portland is able to sell this water when it is available, it will provide additional rate relief to Portland ratepayers and provide some relatively less expensive water to existing wholesale customers from time to time. Proposed4) Comparison Table Between Current and Proposed Model Wholesale Agreement Significant Provisions Current Agreement Agreement Nature of service • Water sold by Portland to wholesalers 0 Water sold by Portland to wholesalers described considered "surplus" and defined as "firm supply" Length of agreement 25 years with automatic 25-year renewal • 20 years with automatic 10-year renewal • 3-year notice for non-renewal 0 5-year notice for non-renewal by either party Joint operational guidelines (how the • Determined solely by Portland 0 Guidelines established jointly by Portland and wholesale customers and Portland wholesalers through Water Managers Advisory cooperate in operating their respective Board, reviewed, amended (if necessary) and water systems) adopted by Water Bureau Administrator Water Managers Advisory Board . Review of budget and CIP 0 Establish joint operational and data guidelines • Participate in budget and CIP development/review processes, input to City Council Water quantities 0 Minimum purchase based on percentage of 0 Guaranteed purchase quantity-- a specific, overall water supply, five-year average committed volume to be purchased from Portland • Can buy out of agreement over five years by 0 May be increased but not decreased except paying minimum purchase"penalty' under special circumstances • No buy out Sale of water to other entities 0 Prohibited unless authorized by Portland 0 Allowed, unless it creates undue risk to the Portland waters stem Reliability of supply 0 No obligation 0 If Portland fails to meet supply needs more than once in 10 years, purchaser may reduce purchase commitment by up to 10% per year Interruptible water 0 No provisions a Available at Portland discretion • Summer and Winter interruptible water priced at 45%, 20% of regular rate respectively if available Rates • Rate methodology not described in complete • Specific methodology based on American Water detail Works Association M1 Manual and Cost of Service Principles • Assets allocated based on customers' use of water system • O&M cost control mechanism Water conservation 0 No reference a Water management and conservation plans to conform to State regulations Joint funding for capital improvements • Allowed through agreement in which purchaser • Allowed for new facilities or for major pays its portion of bonded debt for new asset improvements to existing facilities by separate agreement • All terms related to joint funding arrangements determined by separate agreement Dispute resolution . None • Three steps: 1) Negotiation, 2) Mediation, 3) Arbitration/liti ation 3) Benefits of Draft Agreement to Participating Parties Wholesaler Benefits Portland Benefits Benefits to Both • Guaranteed firm supply of water • No increase in retail rates • Improved rate stability and • Anticipated reduction in unit assuming current wholesale predictability from year to year rate (in most cases) customers sign new agreement . Ability to share financial • Flexibility in managing demand • Guarantee of specific income responsibility for specific capital and financial obligations and customer base for 20 years projects in the future with City through trade of purchase • Opportunity to sell interruptible Council and Board approval obligations, interruptible water water and reserve capacity (if • Standard, industry-recognized purchases and resale of available) for additional rate methodology Portland water revenues and retail rate benefit • Adequate "ramping off' period • Opportunities to purchase • No mandate to expand system to end relationship reserve quantities to plan for or build specific infrastructure • Shared requirements for future demand • Adequate supply for Portland conservation and water • Increased definition of and its forecasted growth efficiency wholesaler role in water system maintained planning . Maintain the right to add • Defined cost control additional wholesale customers mechanism for retail (and wholesale) rate • Reliability "guarantee" with benefit prescribed remedies 1 WRWC 2 Willamette River Water Coalition Water For Our Communities September 7, 2005 Public Works Director Dennis Koellermeier Willamette River Water Commission 13125 SW Hall Blvd. Tigard, OR 97223 Dear Public Works Director Koellermeier, On behalf of The Willamette River Water Coalition (WRWC), I am pleased to invite you to an open house and briefing regarding our coalition's new education and information campaign. As you are aware,the WRWC is comprised of six local governments united for a common purpose -to preserve access to the Willamette River as a potential municipal and industrial water source. Members include Tigard, Tualatin, Sherwood, and Gladstone, as well as the Tualatin Valley Water District and the Canby Utility Board. Right now, many of the cities and communities in the Portland-area are considering a variety of options regarding their water supplies that will impact them for decades to come. As such, we feel it is important that the elected officials and staff of member jurisdictions are appropriately briefed. Details of the WRWC Open House follow: What: WRWC Open House and Briefing Who: Keith Mays, Mayor of the City of Sherwood and WRWC Chair Where: Sherwood Police Facility Community Room 20495 SW Borchers Drive When: Thursday, September 22, 2005 6:00—7:30 p.m. Tn an attempt to help _make'sencn n!it of the water options nvallable to many area residents, the WRWC has launched a website dedicated to offering important information about the Willamette River as a potential water source. Our website may be found at www.willametteriver.org. We welcome and encourage you to utilize the new website. I look forward to meeting with you on the 21"to discuss this important issue. Other WRWC board members will be in attendance to meet with you as well. Please contact Scenna Shipley with Pac/West Communications at 503-685-7578 or at Shipley_(&pacwestcom.com if you plan to attend. In the meantime, if needed please don't hesitate to contact me with any questions at(503) 675-3127. Best Regards, Keith Mays WRWC Board Chair 22400 Salamo Road Suite 201 West Linn, OR 97068 Ph. 503-650-1181 www.willametteriver.org UA THE OREGONIAN ♦ WEDNESDAY,AUGUST 17,2005 ' scoggAns. Members of the Willamette River Water Coalition include Ti- gard, Tualatin, Sherwood and Gladstone, as,well as the Tuala- D .CQt1Jd tin Valley Water District and the Canby Utility Board add 40 feet, The coalition has indicated that one of its memberswill ask voters, possibly.as early,, No- Q111C1trll S SaY . vember,to approve the Willam- ette as a drinking-water source. Such..a vote is bound to.stir considerable controversy.In the COUrlty C6mtPI sinner years following the city of QU Briani1S the idea' Wil- TOrY! sonville's.1999'decision to use fl Willamette River water,voters in of keeping.more water in Tigard and Tualatin overwhelm- Henry Hagg.Lake ingly approved amendments to their respective city charters re- By DANA TIMS quiring that separate votes be THE oxEGornnrr held in the future before the riv- er's water could be added to Raising the height of a dans at their municipal supply sources.. lienry Hagg Lake remains the Brian noted that controversy best and quicicest.way to guaran- while explaining that the Tuala- tee 50-year supplies of drinking tin Valley Water District holds water; irrigation sources and considerable rights to 'Wiliam- stream'-flow levels for residents ette River water. on Portland's ;suburban west . "The' science has one back side, Washington County Com- g missioher Tom Brian said Tues- and forth,"he said."It looks like day it s not as bad as people thought, but many still don't want it.,, Brian,in comments to the Ti= gard Chamber of Commerce,' Raising Scoggins'-Dam could said other options most nota} have an enhanced water supply lily renewing existing contracts available to consumers, farmers with.the a 'of Pordand:t o b and businesses`as early as 2011, ' Brian said.,The$6.8 million envi- BullRunwater and building new ronmental impact statement is pipelines to siphon Willamette scheduled.to.be completed next River water fromWilsonville-- year. also remain in play But'at.this point, with some So far,'' the proposal has cities'Bull Run contracts:sched sparked considerably less uproar uled,to expire as early as 2007, than pursuing a Willamette Riv the best and most cosf-effective er option. The only parties,to complai choice probably means-cobbcomplainso far,.Brian said, are $150 million from'a combing- primarily those whose proper tion.of.financing sgurces to raise.. ties fronting Hagg Lake would be inundated by increase.iri the Scoggins Darn by 40 feet,,Brian , saicL lakes surface level. That option, if approved:by Some are very worried about the federal Bureau of Reclama- mat," he said. "Others realized tion,would give the fast-growing: they would go from a wooded lot to waterfront property. and west-side.enough water,to grow weren't bothered at all." on through;at least 2050,he said. . BriaWs remarks come at a The city of Tigard also is par- time when.a number of area ticipating in planning for the Planning and government ages-<, project,.known as the Tualatin r . Basin Water Supply Project. cies are 'mapping how and' whhfuture supplies, We're keeping all of our op- f drinlangwater, tions. open,"'said Dennis Koel- A new oup based'in West lermeier,the city�s public works Linn, for.,in'stance' has just an- Vector.,. nounced a .public education campaign aimed at preserving Dd a.Tina:563-294-5973; access to the Willamette River as dnnatims@ne, regon an.com a potential municipatand indus trial water source. Gaotz,NEws WEDNESDAY Jtnr s20053A News-Tons,FUassr• OaEoox Hot temps prompt water releases BY HOLLY MiCHBLa the Tualatin, but Miller of THE NEWS-TimEs tweaks with the armomrt day- to-day to meet the rtvees [Us been a wet late spring, needs. Other water users, but enough tlike the Joint Water not wet e o keep the water I the o latinkeep Commission, draw water River from performing its from Barney annual disappearing act in - C an the'Cr.isk River ieReservoir,beat tri the summer. Coast Range' To combat the drop in During the lag-days of water levels, Clean Water summer, late August and Services started regular, ,water from Hagg g f, SSeepp [ambin d eservoir, strategic water releases from _ Barneyey combined with leaned Hagg Lake and Barney r` - wastewater account for 50 to maintain earlier this month " :._t percent *of the Tualatin to protect the rivets flow - '' Rhvees flow. and protect water quality. The goal Is to keep the That can sometimes rivers flow about 150 cubic strain reservoirs,but finding feet per second at water to keep the river raghug _ Farmington Bridge down- _ this year was easy after Hagg stream of Hillsboro.To put --- -' ---- take finally filled to comity that number in perspective, during the late spring. consider that wintertime flows at the same spot can _ reach 2,000 cis. "It's a delicate balancing act-'said Jan Miller, Water Resource program manager. To monitor the river,Muter - - uses the Washington County Watermaster s Web site, which dally lists flow levels at different points in the river. .�r':,'.if. She also checks the US co—y prom Geological Survey Web site for information on oxygen A cascade of water released from the dam at Bagg Lake begins its journey to the Tualatin River where it will help levels and water temperature. boost the stream flow,keeping It cool for nah. Low oxygen levels indicate the river is moving slow,gtv- Water temperature works Willamette. Hagg Lake just south of into account requests from ing the chemical processes N the same way-a slow river Once Miller analyzes the Forest Grove.There, techni- cities and Irrigation needs. that use oxygen more time to is a wanner river because it data and decides how much cians use flow meters to The dam releases an aver- do their work. That's bad spends longer In the hot sun water needs to be released for measure out how much water age of 35 cis, or 23 million news for fish, who use the before errmh'ine into the the day.she makes a call to the dam releases.also taking gallons•of water per day to LeonardownSherwoodwater talks ■ Comments By JIM REDDEN decided against such a deal.The wpich is meeting its own needs Kovatch, who said Mays por- "Just looking at the costs,the b suburban he Tribune bureau began preparing the pro wig► a water treatment plant [rayed Portland as a bully push Wilsonville option is more of y posal in response to a request along the river. The plant has Ing around the smaller regional fordable,"he said. town's mayor Sherwood residents may from Sherwood several weeks enough excess capacity to meet water districts that bought its Mays said consultants hired suggest he have no choice except to drink ago. Sherwood's future needs,too. water. by Sherwood have concluded it Willamette River water in the According to Leonard, al- "It's clear to me that he has al- "I felt like I walked into the would cost about$32 million for favors future because of a dispute though the proposal was still be- ready made up his mind Port- middle of a Portland ass whup- the city to hook up to the vcheaper between Portland city Com- ing finalized, Mays—speaking land's water is too expensive,so pin';'Kovatch said. Wilsonville plant,compared with alternative missioner Randy Leonard and before a meeting of the Home I don't see why we should even Mays admits he believes buy- between$48 million and$61 mil- Sherwood Mayor Keith Mays. Builders Association on Wednes- go through the charade of finish- ing water from Wilsonville lion to connect to Portland, to buying Last week Leonard directed day — said buying water from Ing the proposal.It takes a lot of LEONARD would be a better deal for Sher- whose water comes largely from .A— the Portland Water Bureau to Portland would be too expensive. staff time to ale are these pro- wood.But Mas says he simply the Bull Run Watershed east of r--- ---•• from Pe P P p Y y' P Y Portland stop developing a proposal to sell Leonard said that Mays made posals;'Leonard said. was presenting facts, not de- Portland. q water to Sherwood after con- it clear he'd prefer to buy water Wednesday's talk was aVend- meaning Portland, at the gath- ' t,*, eluding that Mays already has from the city of Wilsonville, ed by Leonard's chief of staff,Ty eying. See WITEA/Page 3 �� c� c n -i R�ar �-: v. 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O in•U: f 'ryi [r• F: ? f Z G N C A a CAp�-, '�, �' v n y O 1 J L. 10 3M SW-T THE OREGONIAN ♦ THURSDAY SEPTEMBER 8,2005 Portland comnussioner cuts off water talks with Sherwood ity Commissioner Randy place,"Leonard says about the ne- So either deal with Leonard on But that was a message that Sten projects that don't involve fixing Make this pretty, he tells a bu- Leonard's decision to gotiations with Sherwood Mayor his terms, he tells other water dis- couldn't sell once he lost his credi- stuff. reau employee. She asks for per- pull the rug out from un- Keith Mays, who couldn't' be tricts,or deal with the Willamette. bility over the billing fiasco. He's To show bureau managers he mission to hire a graphic designer. der Sherwood and its in- reached Friday. Over the years, many of the still convinced, though, that if means business, Leonard recently Again,Leonard says no.Instead,he tentions for our water is a sign of "At times," Leonard says about water districts have complained more suburbs buy water,it's better refused to sign more than $1 mil- buys her a fancy laptop computer things to come. the suburbs, "they're kind of hos- about Portland charging too much, for Portland ratepayers. lion in contracts,including one for and tells her to do it. Leonard, who was given over- tile to the Water Bureau.And criti- so we would have enoughto re- "At the end of the da Sten $330,000 to inject Bull Run water sight of the Water Bureau two Y Once the new logo is approved, cal." says, the region needs to come to- into some North Portland wells to months ago, isn't- interested in Ys' it will be painted on Water Bureau coddlingthe rest of the thirsty re- Then, two place our century- gether." make the well water taste better. cars and emblazoned on bureau ty old pipes and water- Leonard also wants'to change gion, begging citijes to dip their weeks ago, holdin structures. Just not, apparently, on, g letterhead. It will read: "We deliver cups into our pristine drinking Leonards chief of g Leonard's watch. He has a few the bureau's logo.So after taking a the best water in the world for the water from the Bull Run water- staff, Ty Kovatch, But Leonard's office tour of Bull Run—"It was breath overhears Mas recently finished ne- other sweeping changes in store, taking," he says. "I was speech- best price." shed. Y ��� Y • P talking bad aboutilLl gotiating a renewal too. less." — he draws a black-and- Say that 10 times fast. He says he's had it with that Portland's Water of those districts'20- "I want the whole focus and white picture of Mount Hood as kind of one-for-all philosophizing. Bureau at a Home S. RENEE year water contracts, mission of the Water Bureau to be seen from Bull Run, in the Cas- "I think that's not a good idea," which were to ire Leonard says. Builders Associa- MITCHELL � replacing the infrastructure, cades east of Sandy.And he writes S.Renee Mitchell:503-221-8142; tion meeting. in 2007. Leonard says, a new motto. smirch@news.oregonian.com That's why he abruptly cut off talks with Sherwood, which needs es. En h tattle And Leonard is Any leftover money,he says,will tales. End of discussion. Fetch a not trying to add more cities to the to figure out how to meet the de pay for employee salaries and mands of its exploding population P�of water elsewhere. mix "I'm reluctant to expand the other bureau operations. And, base. Sherwood asked Portland to Leonard's philosophy is this: customer base,"he says. Leonard vows, "We're going to do come up with a proposal so it Portland takes care of Portland Leonard's attitude is a dramatic it with the existing resources,to the could decide between Bull Run first.And the 19 water districts that departure from that of city com- extent that we can." water or Filtered liquid from the buy our drinking water wholesale missioner and former water chief That means no more foolish talk Willamette River. ought to feel fortunate to pay for Erik Sten. Sten's philosophy is ex- of capping the Mount "I was reluctant in the First the privilege. pand,expand,expand. Tabor g orwig r reservoirs. And no more consideration of a water-treatment plant at Bull Run,even if it means taking the feds to court. That also means no more special do-gooder ■ ■ o an wate ' gets soi ie coi ipetmtion Willamette River tempts purchasing excess water from gion's future water needs for a the Water Bureau on long-term long time,"Leonard said. cities to switch, which contracts that expire in 2007. The Willamette became a vi- _ Even as.they are renegotiat- able option in April 2002 when a You might not may cost metro residents ing the contracts with Portland, treatment plant along its banks, want to drink the some of the customers in Wash- owned by the city of Wilsonville untreated water By JIM REDDEN ington County are considering and the Tualatin Valley Water 4dW. being held by The Tribune switching to the Willamette. District, began operating. Offi- Kevin Batridge, "If enough customers switched, cially called the Willamette Riv- an employee at Portland Water Bureau we would have no choice but to er Water Treatment Plant, itthe Willamette IMAX rates could climb 10 percent . raise rates," said city Commis- provides Wilsonville residentsKIMLE River Water or more m coming years if a sioner Randy Leonard,who is in and businesses with all their Treatment Plant number of the bureau's sub- charge of the bureau. water—up to 5 million gallons in Wilsonville,but IMAX urban wholesale customers Leonard believes Portland a day on the hottest days. the finished switch from Bull Run water might be better off if the Wash The TVWD, which serves a ", product is as to treated water from the ington County customers began number of communities in t clean as or Willamette River. relying on the Willamette to meet Washington County, is not yet cleaner than that The customers — which in- their future needs,however. using the plant. Instead, it is from the Bull Run elude cities and water districts in "That would eliminate the buying water from Portland and Watershed, Multnomah, Washington and need to build a third dam in the the Joint Water Commission,a officials say. Clackamas counties—currently Bull Run Watershed,which has TRIBUNE PHOTO: subsidize Portland customers by been on the table to meet the re- See RKR/Page 6 'w JIM CLARK J/rM4:RA'.�s A�� .:.. :SAW.w1C !..F''34'W�°:1t1`YV'Efi.Y'7J.lR:- -4I'.'ia['�v�.{:TMX1FltlglMivN?�.5,:�-.n...�,y.s Tb'a<�d?: 1.?1.a.:311HFtlM".:..:.k-�,+`iv.KdilIKLZ..' -' •.. ...: - -,) 1`�" �_ Join us&give to the Northwest Medical Teams • NORI HVjW Hurricane Relief Fund,which enables them to w a e a e MEDICAL 1F�IIIAS Provide medical care, food,shelter and other R' ' " ' OR Phone: 800-959-HEAL (4325) l°) I N-,F R N A T I U N A L, INC. assts im(e to the victims. 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TRIBUNE PHOTOS:JIM CLARK, The Willamette River Water Treatment Plant's Kevin Batridge checks the dials on pumps that remove sediment from tanks at the Wilsonville facility. , Ri'ver.o Sherwood residents will vote,.." M From page 1 `i water district that provides Tu- alatin River water to parts of Washington County. According to the TVWD's communications director,Todd Heidgerken,the district invest- ed in the plant in 1999 to in- crease n crease its options for meeting " the future water needs of its rap- idly ap idly growing area. "When Wilsonville began X. _ planning for the plant,the dis- trict is trict board took advantage of y lY the opportunity to create a po- tential new source of water,". Heidgerken said. The district is considering whether to switch from Bull Run water to the Willamette when its current contract with the city = , - _) expires in June 2007. 10 "We are in the process of lay - O11 ing out all the water supply op- d tions and taking an objective re look atwhat we should do,"saidr , Heidgerken,whose district pro- ts1 vides water to communities: such as Cedar Hills, Progress. Reedville,Rock Creek and por- tions of Beaverton, Hillsboro A computer in the plant's control room shows the status of various components in the treatment process. 'is I and Tigard. arcitof Sherwood also is Currently,only the city of Wilsonville gets its water from the river,but other communities are considering using it.The considering using the a pipeline,however.Several years to ask voters to authorize using and Tualatin. Together, the Wilsonville-TVWD plant to meet ago, Sherwood voters passed a the Willamette. Ballots in the members hold the rights to draw"-I its future needs. Sherwood cur- ballot measure requiring the city vote-by-mail election will be tab- more than 100 million gallons ofAIJ rently relies on groundwater to obtain their approval before us- ulated Nov.8. water from the Willamette. J wells and Bull Run water pur- ing the river.The TVWD board of The TVWD has not yet sched- This year the coalition re-' chased through the TVWD.May- directors a short time later ap- uled an election to ask its voters tained Pac/West Communica_, or Keith Mays says Sherwood's proved an ordinance requiring to approve using the Willamette. tions, a Tigard public relations•11+ population is growing so fast that voter approval before using the But the district is part of a re- firm. Among other things, the,i'l the city must secure a new source river.Both requirements were im- gional agency that recently be- firm prepared a Web site and me=""1 of water, however, and he be- posed because of public concern gan a public relations campaign dia packet for the organization: 3 lieves'the plant is the best option. over the safety of the Willamette. on the benefits of using the Both push the treatment plant as- Switching to the Willamette Tuesday, the Sherwood City Willamette for drinking water. a good source of water capable of wouldn't be as easy as hooking up Council called a special election The agency, the Willamette serving large parts of the region,V. River Water Coalition, was for the foreseeable future. formed through a series of inter- "Every community needs a governmental• agreements in safe and reliable water supply. addition the TVWD, The Willamette River Water the coalition the coaa lition includd es the Canby Treatment Plant has the ability to Utility Board and the cities of _n ��-.—����11 Gladstone, Sherwood, Tigard See TREATMENT/Page 7 7 ,aN FIN PRINT ,r Portland Mbane September 9,2005 NEWS Tr ea 0_ � s Q n water . Va. ' .;i.:. rr :�• �,?.r.., ,.i, £ ..., , ..:''.� `'� f } '$ 'N.er '+.'''yT .:t•"y 7,"ar w,+..-�'a s rte_, .a�. p.� µs l.' .k E"From page G ' provide both a safe'and reliable water supply to meet our needs," reads its promotional material , It is unclear whether the com- munities om munities have the option of con tinning to draw on Portland for: all: of, their future needs Leonard says he is just begn ning to study'how much Port]% land's own water needs,are ex- pected to grow in coming years. `;It's possible that we should notcontract with new customers " or:promise' existing customers unlimited amounts of our water anymore.We might need the&nil � � � * - Run just to meet our own needs in r the_future,"Leonard said. n y 1892:a watershed year - - - The metropolitan area is blessed with'a variety of w4ovz sources,including the Bulltn w ,ti s,.fi r^ lM, �w:X.: .•"aY,-, rr w : Watershed,groundwater walls, Y i and a number of rivers;creeks =y f•_ -D-�` ,�, r rzf•+.. �L., and tributaries.Although many , of them are used throughout the region, the watershed, in w` Mount Hood National Forest— has been regarded as largest , .r single source of clean drinking �. water since President Benjamin Harrison first designated it as a - _.v 142;o00-acre national:forest re- serve in 1892. Harrison gave Portland the - - responsibility of managing the watershed and using its water. The city has built two dams in TRIBUNE PHOTO:JIM au the watershed that are capable Waw'is orad as a landscape element at the Willamette River Water Treatment Plant in Wilsonville.The facility can draw up to 120 million gallons of water a day from the river. of holding more than 15 billion gallons of water that is so pure it owned wells. The City Council slope toward the Willamette Sherwood and TVWD voters to produce toxins the EPA doesn't ter,whether the EPA requires needs only a little chlorine and narrowed down several options River. A man-made water fea- approve using it test for,the chemicals can com- or not.We've convinced our w ammonia to meet federal clean to two:buying water from Port- ture along the west side resem- Now the group is gearing up bine and create new toxins that ter is safe,"he said. water standards.The city occa- land and building the plant. bles a well overflowing into a to fight the Sherwood measure, no one even knows about,"says The Portland Water Bure: sionally supplements its Bull According to Bauman, the small stream. said member Glenn Brostrom,a group President Tom Long,who does not dispute Bauman Run water with well water dur- plant emerged as the preferred The facility is designed,to re- Sherwood resident. lives within the TVWD. • claims. ing summer months. option because it was far cheap- move impurities from the river, "We'll be campaigning Bauman says the finished "Of course, their water The city,currently provides er than the cost of building a beginning with intake screens against it,"he said. water from both the Willamette highly manufactured, whi between 80 million pipeline from Port- that keep fish, debris and dirt Brostrom and the other mem- and Bull Run watersheds ex- ours is natural," said Edd and 200 million land to Wilsonville, from entering the huge pipe that bers agree that the plant's wa- ceeds EPA standards. But Campbell,the bureau's resoun gallons of water a "Repeated and because Port- carries water to a buried,80-foot- ter meets EPA standards. But treatment plant officials have protection planning director. days to its residen- land could not deep holding tank.Four electric they are concerned that there produced an eight-page docu- Long and the others belies tial, business and testing shows guarantee the pumps pull water from the tank, are other harmful contaminants ment that says its water is Bull Run water is a bett( wholesale cus- the (Willamette 'long-term avail- then.gravity drives it through a in the river the EPA does not cleaner than Portland tap wa- choice,however,even if it cos tomers through- ability of the water series of rooms where sediment monitor. ter when it comes to such star- wholesale customers more tho out the region. Of River)water is at a set price. is removed and ozone is used to "The river passes through dards as turbidity and some Willamette River water. that amount, 15 almost ClWilsonville vot- break down organic materials. cities and past manufacturing contaminants, including ar- "You can't put a cost on yot Clean billion to 17.2 bil- ers approved $25 Chlorine is added to kill bacteria plants before it reaches sent and mercury. htakth,"he said. lion gallons a year enough to drink million in bonds to before the water is pumped to. Wilsonville, and they all dis- "We designed the plant to re- have'been boughtbuild the plant in four reservoirs around the city, charge into it.Not only do they move everything from the wa- jimredden@portlandtribune.com by 19 wholesale as It COmeS Out November 1999. A where it is distributed to homes. customers in the » building moratori and businesses. tri-county region. Of the river. um, imposed be- The plant also contains a lab-, r Population in- 1�; —Jeff Baumm, cause of the water oratory that frequently tests the creases in the past Wilsonville public shortage, was lift- water to make sure it meets all ' few decades have works director ed when the plant federal standards. raised questions was completed in about whether the watershed April 2002. Ours is natural can continue meeting the re- The TVWD board became a Wilsonville Public Works Di- f > . . gion's needs,however.The Wa- co-owner of the project by in- rector Jeff Bauman says the fin- ter Bureau has long considered vesting$17 million in it.Among ished water easily exceeds EPA the idea of building a third dam other things, that additional clean water standards. A main in the watershed that could po- money paid for an oversized in- reason the water is so clean,he tentially double its capacity, take system capable of drawing says, is the purity of the river Ar. Such a project would be ex- up to 120 million gallons of wa- where it flows past the plant. pensive and require federal ap- ter a day from the river, far "Repeated testing shows the proval,. however, which is far more than the 20 million gallons water is almost clean enough to I Illi I ILII ul I H111 from certain under current U.S. a da that Wilsonville officials drink as it comes out of the river," i u loon I It unl y Environmental Protection believe they will ever need. ' he said. Agency rules. Not everyone is convinced Now the Willamette River is Fadft bdu b we that the plant's water is safe.A emerging as another substantial From the outside, the plant grass-roots organization, Citi- source iti source of water for the region, looks more like a small subur- zens for Safe Water,has foughtiui courtesy of the treatment plant. ban elementary school than a for .years against using the The plant was built after pop- state-of-the-art water treatment Willamette as a drinking source. ulation and business increases facility.The series of contempo- Although. the group was not threatened to exceed the capac- rary red brick-and concrete able to prevent the Wilsonville ' ity of Wilsonville's previous wa- buildings at 10350 Arrowhead plant from being built, it sue- tersource,a series of eight city- Creek Road is built on a gentle cessfully campaigned to require.