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10/12/2005 - Packet Completeness Review for Boards, Commissions and Committee Records CITY OF TIGARD Intergovernmental Water Board Name of Board, Commission or Committee I nr,�=h-e-x- Date of Meeting 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 x -� Signature -e/Ij l),arc Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and Unincorporated Area AGENDA Wednesday, October 12, 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—September 14,2005 Motion from Board for minute approval. 3. Long Term Water Supply Update—Dennis Koellermeier(20 minutes) 4. Informational Items—Dennis Koellermeier Items will be discussed briefly if time allows—otherwise printed information 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,November 9, 2005, 5:30 p.m. — Water Auditorium; 9. Adjournment—Approximate Time 7:00 p.m. 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), (f)&(h)to discuss labor relations,real property transactions,current and pending litigation issues and to consider records that are exempt by law from public inspection. All discussions within this session are confidential;therefore nothing from this meeting may be disclosed by those present. Representatives of the news Linediallowed to attend this session,but must not disclose any information discussed during this session. 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 Sign-in Sheet for Intergovernmental Water Board Meeting October 12, 2005 Name (Please Print) Do you want to speak to the Board? 1" Regional Water Sales Agreement October 3, 2005 Page i REGIONAL WATER SALES AGREEMENT TABLE OF CONTENTS Page 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.................................................................................... 18 SECTION 7—RATES AND CHARGES FOR GUARANTEED PURCHASE WATER QUANTITY............................................................................................................. 20 SECTION 8 - RATES AND CHARGES FOR INTERRUPTIBLE WATER................................. 30 SECTION 9 - WATER SYSTEM PLANNING AND COOPERATION....................................... 31 SECTION 10 - RESERVATION OF SYSTEM CAPACITY......................................................... 32 SECTION I 1 - CONNECTIONS AND METERING..................................................................... 33 SECTION 12 - PURCHASER-SUPPLIED WATER TO CITY RESIDENTS............................... 34 SECTION 13 - WATER RESOURCE CONSERVATION ............................................................ 35 SECTION 14— WATER CURTAILMENT AND PROTECTION OF THE WATER SYSTEM.. 38 SECTION 15 — BILLING AND PAYMENT..................................................................................40 SECTION 16—JOINT FUNDING OF CAPITAL IMPROVEMENTS..........................................42 SECTION 17—DISPUTE RESOLUTION..................................................................................... 43 SECTION 18— WASHINGTON COUNTY SUPPLY LINE......................................................... 45 Regional Water Sales Agreement October 3, 2005 Page ii EXHIBITS EXHIBIT 1 —GUARANTEED PURCHASE QUANTITY, SEASONAL PEAKING FACTOR, DAILY PEAKING FACTOR, AND PRESSURES EXHIBIT 2—DEFINITION OF WATER SERVICE CHARACTERISTICS EXHIBIT 3 —RATE BASE ASSETS EXHIBIT 4—FUNCTIONAL ASSET GROUPS Regional Water Sales Agreement October 3, 2005 Page 1 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. 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. I a Regional Water Sales Agreement October 3, 2005 Page 2 SECTION 1 —NATURE OF SERVICE A. Subject to the terms 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 established pursuant to Section 4.1).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. 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 October 3, 2005 Page 3 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 October 3, 2005 Page 4 SECTION 3—DURATION OF AGREEMENT AND RENEWAL A. Initial Term This agreement shall become effective on July 1 of 2006 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. i B. Initial Five Year Non-Renewal Notice At any time during the five-year period from July 1, 2021, through June 30, 2026, 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 2026 If neither party gives notice of non-renewal on or after July 1, 2021, and prior to July 1, 2026, the contract shall continue for another ten years,through June 30, 2036. D. Subsequent Renewals After June 30, 2036 If this contract is renewed pursuant to Subsection 3.C. 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-re6ewal 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, 2036, pursuant to Subsection C above, then the non-renewal notice period during that term of the contract shall run from July 1, 2031, through June 30, 2036. 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, 2046. If the contract is extended to June 30, 2046, the next non-renewal notice period would then run from July 1, 2041, through June 30, 2046. Regional Water Sales Agreement October 3, 2005 Page 5 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 7.I. 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 October 3, 2005 Page 6 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, which may include: 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 demands, managing the system to minimize the impact of peak demand periods, Regional Water Sales Agreement October 3, 2005 Page 7 SECTION 4—(Continued) 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 City's 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, in 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. E. Rate Review Regional Water Sales Agreement October 3, 2005 Page 8 SECTION 4—(Continued) 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 be invited to 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 P P 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) Water Bureau O & M budget development and review will take place in a manner sufficiently timely to ensure Purchaser effective participation in the budget deliberations each year; (c) The WMAB will be provided the opportunity to participate in the budget development and review process, including steps such as: Regional Water Sales Agreement October 3, 2005 Page 9 SECTION 4—(Continued) (i) The Administrator will report to WMAB at the commencement of annual financial plan and budget preparation, and report each month to the WMAB on progress in the budget preparation and any particular budgetary issues or concerns related to that part of the water supply system used to serve the Purchaser and other members of the WMAB. Reports may be in writing or at WMAB meetings. (ii) A reasonable time, but no less than two weeks, prior to submission of the Water Bureau budget to the Mayor, the Administrator shall report to the WMAB on the current state of budget and financial plan preparation and provide his or her best estimate of the final budget for submission to the Mayor related to that part of the water supply system used to serve the Purchaser and other members of the WMAB and shall consult with the WMAB about the budget to be proposed to the Mayor. (iii) The Administrator will provide WMAB a presentation concerning the Water Bureau budget request to the Mayor and the Water Bureau financial plan for the following fiscal year and provide copies of the budget request and financial plan for review and comment. The budget request and the financial plan will be made available to WMAB on or as soon as reasonably possible after the date they are submitted to the Mayor. (iv) The City will advise Purchaser in writing of significant changes in the proposed Water Bureau Budget after its submission to the Mayor. (v) 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, may offer comments on the annual rate ordinance in writing or in personal testimony before the City Council. F. Protection of Confidential Information Information submitted to or produced by the WMAB or otherwise exchanged by the parties to this Agreement and similar wholesale water agreements may include documents related to the vulnerability or security of water supply systems. The parties agree that if either receives a public document request for such information, the party receiving that request shall, prior to release of any documents, expeditiously notify the entity about whose system information is sought and shall, in addition, assert all applicable exemptions to release of the documents available under the Oregon Public Records Law. Regional Water Sales Agreement October 3, 2005 Page 10 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 l 1. Guaranteed Purchase Quantity. For purposes of calculating annual rates and determining Purchaser's minimum payment, Purchaser's 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, unless changed pursuant to the terms of this contract. 2. Seasonal Peaking Factor. For purposes of calculating monthly demands and annual rates and determining Purchaser's minimum payment, Purchaser's "seasonal peaking factor" shall be the seasonal peaking factor identified in Exhibit 1 to this contract unless changed pursuant to the terms of this contract. "Seasonal 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 seasonal peaking factor excludes purchases of interruptible water. 3. Daily Peaking Factor. For purposes of calculating annual rates and determining Purchaser's minimum payment, Purchaser's"daily peaking factor" shall be the daily peaking factor identified in Exhibit 1 to this contract unless changed pursuant to the terms of this contract. "Daily peaking factor" is the ratio of the daily average derived from the Purchaser's highest three consecutive days of purchases to its annual average daily demand for the contract year. For purposes of ratemaking and calculating monthly demands, the daily peaking factor excludes purchases of interruptible water. 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 be reduced during the term of this contract except by a contract amendment. Regional Water Sales Agreement October 3, 2005 Page 11 SECTION 5—(Continued) 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 1 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 Purchaser under a similar wholesale water agreement 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 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 similar wholesale water agreement with the City. Withholding approval shall be deemed reasonable in the following circumstances only: the Administrator determines that the transfer would require changes in the City water system infrastructure or reduce the reliability of the water supply system. In these two circumstances, nonetheless, the Administrator shall endeavor to approve transfers with such conditions as he or she deems necessary or advisable to avoid the need to make 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. Withholding approval shall be deemed reasonable in the following circumstances only: the Administrator determines that the transfer would require changes in the City water system infrastructure, or reduce the reliability of the water supply system. In these two circumstances, nonetheless, the Administrator shall endeavor to approve sales of water with such Regional Water Sales Agreement October 3, 2005 Page 12 SECTION 5 —(Continued) conditions as he or she deems necessary or advisable to avoid the need to make changes in the City water system infrastructure, or reduction in the reliability of the water supply system. D. Changes in Seasonal 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 seasonal 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 seasonal peaking factor. Any requested change shall take effect on the first day of the next contract year and shall continue as Purchaser's seasonal peaking factor thereafter unless changed pursuant to the terms of this contract. Purchaser's requested seasonal 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. Upon receiving such a request, the City shall adjust the Purchaser's seasonal peaking factor unless the Administrator determines that to do so would reduce the reliability of the water supply system. 2. Excess Seasonal peaking factors (a) Except as provided in Section 5.D.2(b) below, if in any year Purchaser's actual seasonal peaking factor exceeds by more than 10%the seasonal peaking factor set by the terms of this contract for the purposes of calculating rates in that year, 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 seasonal 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 seasonal peaking factor to the actual excessive seasonal peaking factor for the purpose of calculating rates for a period of five years and the Purchaser shall not be entitled to reduce its seasonal peaking factor as described in Section 5.D.1 during this same five year period. If Regional Water Sales Agreement October 3, 2005 Page 13 SECTION 5— (Continued) the Administrator determines that honoring Purchaser's actual excessive seasonal 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 seasonal peaking factor and take steps he or she deems necessary or advisable to protect the system and other Purchasers, as provided in Section 51, Excess Demand. (b) The provisions of Section 5D.2(a) shall not apply if the excess seasonal 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. Changes In Daily Peaking Facto 1. Daily Peaking Factors For Contract Years 2 Through 5 (a) Except as it is changed upon Purchaser's request as provided in Section 5.E.1(b), for rate-making purposes in the second through fifth contract year, Purchaser's peaking factor shall be the average of its actual daily peaking factor for all previous contract years, based on demand data collected by the City. (b) At any time prior to December 1 of the first through fourth contract years, Purchaser may request that its daily peaking factor for the next year, as calculated in Section 5.E.1.(a), be altered up or down by no more than 20 percent. Except as provided in Section 5.E.3, for ratemaking purposes in the next year, the City shall use the daily peaking factor identified by the Purchaser consistent with this section, unless the Administrator determines that honoring the requested peaking factor would reduce the reliability of the system or threaten the water supply of any other wholesale purchaser of water from the City. 2. Daily Peaking Factors For Contract Years 6 And Thereafter (a) Except as it is changed upon Purchaser's request as provided in Section 5.E.2.(b), for rate-making purposes in the sixth and subsequent contract years, Purchaser's peaking factor shall be the average of its actual daily peaking factor for the five preceding years, based on demand data collected by the City. (b) By December 1 of the fifth contract year and each year thereafter, Purchaser may request that its daily peaking factor for the next year, as calculated in Section 5.E.2.(a) , be altered up or down by no more than 10 percent. Except as provided in Section 5.E.3., for ratemaking purposes in the next year, the City shall use the daily peaking factor identified by the Regional Water Sales Agreement October 3, 2005 Page 14 SECTION 5—(Continued) Purchaser consistent with this section, unless the Administrator determines that honoring the requested peaking factor would reduce the reliability of the system or threaten the water supply of any other wholesale purchaser of water from the City. 3. Excess Daily Peaking Factors (a) Beginning in contract year 3, and for each year thereafter, except as provided in Section 5.E.3(b) below, if in any year Purchaser's actual daily peaking factor exceeds by more than 20%the daily peaking factor set by the terms of this contract for purposes of calculating rates in that year, 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 daily 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. In addition, for five years after the year in which the Purchaser's actual daily peaking factor exceeds by more than 20%the daily peaking factor set by the terms of this contract for purposes of calculating rates in that year,the Administrator need not honor any request by Purchaser to alter the Purchaser's calculated daily peaking factor pursuant to Sections 5.E.I(b) or 5.E.2(b). (b) The provisions of Section 5E.3(a) shall not apply if the excess daily 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. F. Release Of Purchaser From Guaranteed Purchase Obligations 1. Changes in Guaranteed Purchase Quantities In Case Of Short-Term Curtailment (a) Reduction or Shift of Guaranteed Purchase Quantity 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 Regional Water Sales Agreement October 3, 2005 Page 15 SECTION 5—(Continued) 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.F.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 lie or she determines can be used to assist in snaking the calculations. (c) Seasonal Peaking Factor Effects Reductions or shifts of guaranteed purchase quantities pursuant to Section 5.F.1 shall not alter the Purchaser's seasonal or daily 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.F.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. (b) For purposes of Section 51.2, 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 period of curtailment or reduced water supply and the Purchaser's guaranteed purchase demand projections and such other information available to the Administrator that he or she believes can be used to assist in making the determination. (c) Procedure to Reduce Guaranteed Purchase Quantities Regional Water Sales Agreement October 3, 2005 Page 16 SECTION 5—(Continued) i. To reduce its guaranteed purchase quantity under 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 31 st day of the failure of supply, but not more than 60 days after supply has been fully reestablished. ii. Having given notice under Subsection 5.F.2(c)i, 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. 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. 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. 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. (e) The ten year period for judging this obligation shall restart at each renewal of this contract. (See Section 3.17.) G. 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 or advisable 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 -x. Regional Water Sales Agreement October 3, 2005 Page 17 SECTION 5 —(Continued) 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 fully recovered through a surcharge billed to Purchaser and added in equal installments to the Purchaser's monthly invoices during the four months following completion of construction. 2. Calculation of Excess Demands For purposes of Section 5.G, 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 WMAB. H. Increased System Capacity To Meet Increased Guaranteed Purchase Quantities 1. If Purchaser requests an increase in its guaranteed purchase quantity pursuant to Section 5.C.2 that, in the judgment of the Administrator, cannot prudently be granted because it exceeds the capacity of the system to deliver water to Purchaser, the Purchaser may request that the City undertake a study to determine what, if any, enhancements or alterations to the system, would produce sufficient system capacity to meet the increased guaranteed purchase quantity. 2. Upon Purchaser's written agreement to fund such a study of system enhancements or alterations, the City shall undertake the study. Provided that the City's obligation shall be contingent on the negotiation of a mutually satisfactory intergovernmental agreement between the City and Purchaser establishing the nature,timing, and funding of the study. 3. Upon completion of any system study provided for in this subsection, the Purchaser funding the study may request the City to undertake system enhancements or alterations sufficient to meet the increased Purchaser's proposed increased guaranteed purchase quantity. 4. Upon request for system enhancements or alterations, the City may agree to undertake the enhancements or alterations requested, under such terms and conditions as the City and Purchaser(or others) in writing mutually agree. The parties may utilize joint funding agreements, as provided for under Section 16 of this Agreement, or such other arrangements as are determined to be mutually beneficial at the time. Regional Water Sales Agreement October 3, 2005 Page 18 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.F 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 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 of each year 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. I Regional Water Sales Agreement October 3, 2005 Page 19 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 6.C. 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 October 3, 2005 Page 20 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 volumetric rates established as provided herein 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"A W WA Manual M 1") or in such updates as may occur from time to time, except for such deviations from AWWA Manual Ml 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. (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 Regional Water Sales Agreement October 3, 2005 Page 21 SECTION 7—(Continued) 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 under similar wholesale water agreements and the City's retail customers. (e) The City shall treat surcharges collected under Section 5.D.2 of 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 Ml. 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 Ml. 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 except that costs for water planning studies that are expensed rather than capitalized shall be included in the O & M expenses at their actual cost 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 on the funds expended from the time the costs were incurred by the City until the start of the following contract year. The interest rate shall be equivalent to the rate earned on the City's internal investment pool managed by the City Treasurer. 2. Allocations The City shall allocate O & M costs to cost functions applied in accepted cost of service rate- making contemplated by AWWA M-1, such as commodity, peak season demand (referred to as the seasonal peaking factor under this contract), peak three days system-wide demand (referred to as the daily peaking factor under this contract), customer, and equivalent meter service based Regional Water Sales Agreement October 3, 2005 Page 22 SECTION 7—(Continued) 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, total annual non-retail bills, meters, and size of meters respectively. Allocations may also be based on peak day or peak three day demands, but for those purposes the City may include Purchaser's total demands on the Portland water system, including guaranteed purchase quantities and actual purchases of interruptible water. Definitions of allocation factors are found in Exhibit 2, which is hereby incorporated and made part of this Agreement. 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 specified O& M expenses to exceed the O& M cost cap as defined in Section 7.I., the Administrator may alter the O & M component of Purchaser's rates in a manner that avoids that result. D. Capital Cost Allocations I. Capital costs are those expenditures that result in the acquisition of or addition of fixed assets that become part of the rate base. 2. Except as specifically provided herein, 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 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, based upon its retail water demand, and the respective wholesale customers, based upon each customer's guaranteed purchase amount. Regional Water Sales Agreement October 3, 2005 Page 23 SECTION 7—(Continued) 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 contained in a document entitled Functional Asset Groups 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. The Administrator shall provide a written explanation if"AB recommendations are not implemented and consult with WMAB regarding his determination. 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. For purposes of peak day and peak three day analysis, the City may include Purchaser's total demands on the Portland water system, including guaranteed purchase quantities and Purchaser's actual purchases of interruptible water. Definitions of these water service characteristics are provided 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. In Contract Year 5 and every five years thereafter during the term of this contract and any extensions, an independent third party shall be retained to conduct an audit of all steps of the then-currently employed process to allocate assets and O & M to customer classes. The expert shall be instructed, as the result of its audit, to recommend any changes necessary to ensure the continued accuracy of the cost allocations consistent with the terms of this contract and the AWWA M-I 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 December 1 of the contract year in which the expert is hired. Regional Water Sales Agreement October 3, 2005 Page 24 SECTION 7—(Continued) 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 and the Administrator concur that the recommendations should 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 or her determination. 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 or the City Water Bureau's embedded cost of debt on the previous December 1, whichever is higher, plus one-half of one percentage point (0.5%). If the Bond Buyer Revenue Bond 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 Administrator, 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 Regional Water Sales Agreement October 3, 2005 Page 25 SECTION 7—(Continued) available, an index measuring the interest rates on high quality, long-term, fixed rate municipal revenue bonds will be selected by the Administrator 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%). 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: Regional Water Sales Agreement October 3, 2005 Page 26 SECTION 7—(Continued) (a) Construction work in progress. (b) Assets that are fully depreciated, even though such assets may be still in service. 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. I. Operations And Maintenance Cost Control To help ensure 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 and all other wholesale purchasers under similar water sale agreements increased by the sum of two percentage points(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 I 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 0 & M expenses that exceed the 0 & M cost cap. If, however, the Regional Water Sales Agreement October 3, 2005 Page 27 SECTION 7—(Continued) City's actual O & M spending(including, but not limited to specified O & M expenses) is 90% or less than the City's budgeted O & M expenses for each of the prior four years,the increase in the fifth year shall be limited to the formula of 7.I.1 above. A new five year period shall commence at each renewal of this contract. 3. Specified O & M Expenses And Exclusions Specified O & M expenses shall be those O& M expenses, including associated overhead, incurred by the Ci ty swat r system to serve directly or indirectly, in hole or in part, the Purchaser and other purchasers under similar wholesale water agreements and that are properly allocated to Purchaser and all other purchasers under similar wholesale water agreements under the terms of their contracts, except for expenses or classes of expenses excluded by this Section 7.1. The Administrator shall make a determination of specified O& M expenses and exclusions in consultation with the WMAB each year during the ratemaking processes. 4. Specified O & M expenses shall not include and shall therefore, exclude, the following expenses or classes of expenses: (a) 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. i. Utilities, including electricity, water, sewer, natural gas, garbage and telephone. ii. Equipment rental, such as hoists, excavators, tools and other miscellaneous equipment not included in the City's fleet. iii. Operating supplies, such as treatment chemicals, lubricants and consumables related to system operation and maintenance. iv. Communication Services, including but not limited to telephone, radio, microwave and fiber-optic transmission of data, voice, video and related information. V. 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. vi. Additional costs identified by the Administrator from time to time that are beyond the control of the City to influence in a manner similar to the specific costs listed in this subsection. Provided that the City may not exempt any such additional costs from the cost Regional Water Sales Agreement October 3, 2005 Page 28 SECTION 7—(Continued) cap without first presenting proposed additions to the WMAB for review and comment. (b) The costs of PERS Pension Obligation Bonds (POBs) paid by the City of Portland Water Bureau. (c) 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 events 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 0 & M expense. (d) 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. (e) 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, reliability, security or quality of the water supply. The WMAB will be consulted regarding initial 0 & M costs of new facilities and new programs. The parties understand and agree that 0& 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. _ 5, Regional Water Sales Agreement October 3, 2005 Page 29 SECTION 7—(Continued) 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 of those expenses should be excluded from cost cap calculations as"new O &M" and which expenses should be included within the cost cap on what schedule. The Administrator shall advise Purchaser and WMAB of his determination. (f) Costs Incurred on Behalf of the Purchaser or WMAB These are costs to be paid by the City by mutual agreement of the City and Purchaser or the City and the WMAB. Lid'?� f Regional Water Sales Agreement October 3, 2005 Page 30 SECTION 8 - RATES AND CHARGES FOR INTERRUPTIBLE WATER A. Winter Interruptible Water 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 summer 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 October 3, 2005 Page 31 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 1. Each five years, at a minimum, starting on July 1 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, annual seasonal peaking factor, and daily peaking factor for a period of ten years including any anticipated increases in guaranteed purchase quantity. 2. In addition, in any other Contract Year in which unforeseen developments 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 demand and peaking factor 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 October 3, 2005 Page 32 SECTION 10 - RESERVATION OF SYSTEM CAPACITY At any time during the term of this contract, Purchaser and the City may enter a separate reserve capacity agreement. A reserve capacity agreement would enable Purchaser 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 October 3, 2005 Page 33 SECTION 1 I -CONNECTIONS AND METERING A. Meter Ownership and Responsibility Upon execution of this agreement, all existing water meters used to measure the water supplied by the City to the Purchaser, and associated facilities such as vaults, 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. 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. B. Meter Costs The cost of replacing the meter or meters and their operations and maintenance shall be included by the City in calculating Purchaser's rates. C. Meter Access The Purchaser shall be allowed reasonable access to meters and facilities for purposes of installing and maintaining telemetry equipment or other equipment related to the metering function. Regional Water Sales Agreement October 3, 2005 Page 34 SECTION 12 - PURCHASER-SUPPLIED WATER TO CITY RESIDENTS A. Water Supplies 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 subject to limitations of the available capacity of Purchaser's water distribution system. Water so delivered shall be metered by the City at its residents' individual services. B. Master Metering 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 be from the same source or sources as water that Purchaser delivers to its customers and shall meet all applicable drinking water regulatory requirements. 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. C. Charges For Water 1. 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. 2. Notwithstanding the foregoing, the Purchaser may conduct a cost-of-service study to determine the cost of serving City residents. If the cost-of-service exceeds the 125% of the wholesale water rate, Purchaser may adjust the charge to the City accordingly, but not above the actual cost of service. Regional Water Sales Agreement October 3, 2005 Page 35 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, WMAB 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 by the end of the fifth contract year. 2. Unless Purchaser serves a population of 1,000 or less, Purchaser shall, on or before the end of the second contract year, and every five years thereafter, submit a Water Conservation Plan for its water system to the WMAB. 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 Water Resource Department Water Management and Conservation Plan Rules, as they are from time to time amended. D. Review of Conservation Plan 1. The WMAB may, if it deems it advisable, adopt guidelines for the submission of water Conservation Plans. Regional Water Sales Agreement October 3, 2005 Page 36 SECTION 13—(Continued) 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 consider, at a minimum, 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. 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. Y- Regional Water Sales Agreement October 3, 2005 Page 37 SECTION 13— (Continued) 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 and updated as required by the State of Oregon pursuant to the Department of Water Resources Water Management and Conservation Plan Rules will in all cases be deemed sufficient to meet the requirements for a Conservation Plan under this agreement. (b) If 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. E. Periodic Conservation Plan Reporting I. Purchaser shall report annually to the WMAB regarding the implementation of its Conservation Plan. 2. Each five years after approval of its Conservation Plan, Purchaser shall report to the WMAB the estimated actual water savings from its Conservation Plan. Regional Water Sales Agreement October 3, 2005 Page 38 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. WMAB shall develop and recommend to the Administrator a Curtailment Plan. The Administrator shall adopt the recommended Curtailment Plan with such alterations as he or she deems necessary or advisable. 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 on them, even if one or more Purchasers individually do not meet the reductions required of its separate system. D. Whenever the Administrator has declared a water shortage, any adopted Curtailment Plan shall be in effect. If there is no adopted Curtailment plan, the Administrator shall require implementation of measures he or she deems necessary or advisable 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 contract year. E. If the Administrator declares a water shortage, Purchaser shall implement measures sufficient to meet the requirements of the Curtailment Plan (or other requirements of the Administrator 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 Purchasers of water under similar wholesale water agreements that result,jointly among the agreeing Purchasers, in a total reduction in system demand equivalent to that required in the Curtailment Plan or, if there is no Plan, the Administrator's order for proportional reductions. ;;Yr Regional Water Sales Agreement October 3, 2005 Page 39 SECTION 14—(Continued) F. The City shall monitor compliance with Curtailment Plan on a schedule established in the Plan or at least 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. Regional Water Sales Agreement April 6, 2005 Page 40 SECTION 15—BILLING AND PAYMENT A. Guaranteed Purchase Payment 1. Monthly Billing The City shall bill Purchaser its fixed monthly service charge plus a portion of its annual guaranteed purchase volumetric payment obligation each month. The monthly volumetric charge shall be the product of the monthly usage estimates, as determined in Sections 15.A.2(a) or(b)below, times that year's rate per unit of water. 2. Monthly Usage Estimates (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. (b) 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 seasonal 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 seasonal 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 seasonal peaking factors, to make rates and to operate the system. 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 Regional Water Sales Agreement October 3, 2005 Page 41 SECTION 15—(Continued) 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 I 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 I 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. 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 earned on the City's internal investment pool managed by the City Treasurer on any disputed amounts found through dispute resolution or litigation to be due the City. Regional Water Sales Agreement October 3, 2005 Page 42 SECTION 16--IOINT 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 October 3, 2005 Page 43 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. li 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 terns. In the absence of Regional Water Sales Agreement October 3, 2005 Page 44 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 October 3, 2005 Page 45 SECTION 18 —WASHINGTON COUNTY SUPPLY LINE [Section inserted only in certain contracts as applicable] The City and Purchaser own portions of a transmission main known as the Washington County Supply Line. 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 October 3, 2005 Page 46 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 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 Purchaser's Attorney (Title) Date CITY OF PORTLAND: By Mayor Approved as to form: By Commissioner-in-Charge City Attorney Date Exhibit 1 Water District Usage Characteristics Template— attach to each Purchase Agreement City of XXX or YY Water District Guaranteed Purchase Quantity AA MGD Peak Season Purchase PS MGD Seasonal Peaking Factor PS/AA Highest Three Consecutive Das HCD MGD Daily Peaking Factor HCD/AA Pressures X to Y psi Existing Connections include: Location Connection size Meter# Example Sample Water District Guaranteed Purchase Quantity AA 8 MGD Peak Season Purchase PS 12 MGD Seasonal Peaking Factor PS/AA =1.5 Highest Three Consecutive Das (HCD) 16 Daily Peaking Factor HCD/AA = 2 Pressures X to Y psi Existing Connections include: Location Connection size Meter# 123 North Road 10" 123456 456 South Street 10 444442 Exhibit 2. Definitions of allocation factors Allocation to Water Service Parameters The functionalized items shall be allocated to the water service parameters listed below by the retail customer, wholesale customer and specific groups following the Commodity-Demand method described in the AWWA's Manual M1. Commodity Items Commodity items shall be identified as described in the AWWA Manual M1. These are items whose cost varies almost entirely directly with the amount of water supplied. Customer Items allocated to customer shall be allocated based on the number of accounts for each customer class. Equivalent Meter Items allocated to equivalent meter shall be allocated based on the number of equivalent meters. The equivalent meter ratios used to relate meters by size to the number of equivalent meters shall relate to the City's estimated costs of owning and maintaining the meters. Whenever possible, the values listed in the AWWA Manual M1 shall be used. Fire Any cost related to fire (either direct fire or indirect fire) shall be allocated to the parameter of fire. Since fire-related costs are incurred solely for the City, no fire related costs, except for the cost of water passing through the purchaser's meter, shall be included in the cost of water for the purchaser. Peak Day or Peak Three-Day Demand Items that are designed to meet the peak day or peak three-day needs of the system shall be allocated as Peak Day or Peak Three-Day Demand. Peak-Season Demand Items that are designed to meet the peak-season needs of the system shall be allocated as Peak Season Demand. Exhibit 3 Rate Base Assets Sample-to be updated annually Updated:June 2003 Annual Description Net Book Value De ree lation Arlington Heights-Distribution Storage-Arlington Heights Transmission and Reservoirs System 358,597 19,186 Arlington Heights-Pumping-Arlington Heights Transmission and Reservoirs System 15,228 3,046 Arnold-Distribution Storage-Arnold/Taylors Ferry Pump Station 183,767 9,668 Arnold-Pumping-Arnold/Taylors Ferry Pump Station 1,432,555 42,808 Burlingame 643-Distribution Storage-Westwood Reservoir 112,503 4,851 Burlingame 643-Distribution Storage-Burlingame Reservoirs 118,447 5,286 Burlingame 643-Distribution Transmission-Burlingame Distribution System 437,386 22,549 Burlingame 643-Pumping-Fulton/Carolina Pump Stations 363,922 28,584 Burlingame Regulated-Distribution Storage-Fulton/Carolina Pump Stations 146,221 8,368 Council Crest-Distribution Storage-Sam Jackson 59,913 1,724 Council Crest-Pumping-Sam Jackson 237,940 16,550 Indirect-Distribution Transmission-Indirect based on Distribution/Transmission Assets 5,710,449 816,989 Indirect-Distribution/Direct Fire-Indirect based on Distribution/Transmission Assets 1,802,686 129,823 Indirect-Indirect-Indirect Bureau Facilities 371,464 92,866 Indirect-Indirect-Rolling Stock and Labor Resource Assets 2,010,273 740,487 Indirect-Indirect-Sample Sations (Prorated) 193,100 16,652 Indirect-Indirect-Indirect based on Distribution/Transmission Assets 996,159 85,782 Indirect-Indirect-Indirect 308,313 32,634 Joint-Conduits-All Other Headworks Facilities $395 $0 Joint-Conduits-Conduit Nos. 1 and 5 Rights of Way 1,970,333 0 Joint-Conduits-Conduit Nos. 2, 3 and 4 Headworks to Powell Butte Res. 18,161,452 570,779 Joint-Customer/Billing/Meters-Customer/Billing 926,938 202,664 Joint-Equivalent Meters/Services-Wholesale User's Taps/Master Meter Facilities 27,907 3,022 Joint-Equivalent Meters/Services-Not Included in TM 3,162,724 197,396 Joint-Indirect-Water Control Center and Lab 5,151,201 580,972 Joint-Indirect-Sam Jackson 35,611 8,903 Joint-Source of Supply-Bull Run Watershed Lands 317,112 0 Joint-Source of Supply-Bull Run Dam Nos. 1 and 2 7,953,023 435,549 Joint-Source of Supply-All Other Headworks Facilities 10,259,501 325,919 Joint-Source of Supply-Sandy River Maintenance Facility 303,819 12,537 Joint-Source of Supply-Columbia River Southshore Wellfield 29,541,002 1,601,827 Joint-Terminal Storage-Powell Butte Reservoir and Properties 8,217,762 235,524 Joint-Transmission-Rolling Stock and Labor Resource Assets 60,611 1,478 Annual Description Net Book Value Depreciation Joint-Treatment-All Other Headworks Facilities 2,238,401 106,651 Joint-Treatment-Lusted Treatment Plant Site 7,887,740 358,812 Joint-Treatment-Columbia River Southshore Wellfield 241,659 22,951 Joint-Treatment-Water Control Center and Lab 4,285,715 183,073 Joint-Treatment-Residual Analyzers (Prorated) 132,770 16,070 Mt. Tabor 411-Distribution Storage-Kelly Butte Reservoir 322,239 18,174 Mt. Tabor 411-Distribution Storage-Mt. Tabor Reservoir Nos. 1 and 5 2,792,160 177,550 Mt. Tabor 411-Transmission-Transmission System from Powell Butte Reservoir to Mt. Tabor Res. 106,657 11,462 Pipe-Indirect-Transmission System from Powell Butte Reservoir to Mt. Tabor Res. 0 0 Pipe-Indirect-Indirect based on Distribution/Transmission Assets 12,000 1,500 Pipe-Pipe-Pipe 144,093,521 4,278,566 Portland Heights-Distribution Storage-Sam Jackson 179,570 7,379 Portland Heights-Pumping-Sam Jackson 3,203 283 Sam Jackson PS-Pumping-Sam Jackson 117,425 6,401 Special Vaults-Distribution Transmission-Fulton/Carolina Pump Stations 1,576 78 Special Vaults-Distribution Transmission-Vaults 88,071 4,717 Washington Park 229-Distribution Storage-Washington Park 229 851,402 32,114 Washington Park 229-Treatment-Washington Park 229 24,848 637 Washington Park 299-Distribution Storage-Washington Park Reservoir No. 3 829,082 35,705 Washington Park 299-Distribution Storage-Sam Jackson 125,315 5,228 Washington Park 299-Transmission-Transmission System from Mt. Tabor Reservoirs to Washington Park Res. 20,433 462 Washington Park Common-Distribution Storage-Washington Park Reservoir No. 3 700,680 49,166 Washington Park PS-Distribution Storage-Washington Park Reservoir No. 3 51,592 2,326 Washington Park PS-Pumping-Washington Park Reservoir No. 3 22,139 3,690 Washington Park PS-Pumping-Washington Park Pump Station Nos. 1, 2 and 3 466,286 34,397 Totals do not include assets that serve only Portland retail service area $266,542,797 $11,611,818 Exhibit 4 Functional asset groups include the following general categories (see also Table 14 below): • Source of Supply • Terminal Storage and Conduits • Treatment • Treatment Chemicals and Power • Burlingame 643 Pumping and Storage / Power • Arnold Pumping and Storage / Power • Arlington Heights Pumping and Storage / Power • Tabor 411 Storage • Parkrose 261 Storage • Portland Heights Pumping and Storage / Power • Washington Park 229 Storage, Pumping, and Treatment / Power & Chemicals • Council Crest Pumping and Storage / Power • Calvary Pumping and Storage / Power • Burlingame Regulated Pumping and Storage / Power • Washington Park 299 Pumping and Storage / Power • Joint Equivalent Meters • Washington County Supply Line — Portland Only • Retail Direct and Indirect • Indirect Storage / Pipe • Indirect Table 14 Water Cost-of-Service Niodel-Commodity/Demand Method Portland Region Wholesale Water Pur►•eyors Allocation of Water Demands by User Groups Model Version February 2005 Next planned update:Spring,2006 Sam N ashington Washington Jackson Parkrose Burlingame Burlingame Park 299 NNashington Park Pump Pump Portland Council Arlington Portland Customer Class Joint R'CSI. Tabor 411 261 643 Regulated Arnold Trans. Park 229 Station Station Heights Crest Heights Calvary Retail Service Area I Water Cas 100.0% 00% 00% 00% 00% 0.0% 00% 00% 00% 000% 00% 0.0% 00% 0.0% 0.0% 00% Citv of Gresham 1000% 0.0% 0.0% 26% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 00% 0.0% 0.0% 00% Lusted Water District 1000% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% 00% Pleasant Home Water District 100.0% 00% 0.0% 00% 0.0% 000/. 0.0% 00% 00% 0.0% 0.0% 0.0% 00% 0.0% 0.0% 00% Rockwood Water PUD 100.0% 00% 2.5% 0.0% 0.0% 00% 0.0% 00% 0.0% 0.0% 00% 0.0% 00% 00% 0.0% 0.0% Palatine Hill Water District 1000% 0.0% 100.0% 0.0% 0.0% 00% 0 0% 100.0% 100.0% 0.0% 00% 0.0% 00% 00% 0.0% 0.0% Burlington Water District 11000% 00% 100.0% 0.0% 0.0% 0.0% 00% 100.0% 1000% 00% 00% 0.0% 0.0% 0.0% 0.0% 00% Lake Grove Water District 100.0% 00% 1000% 0.0% 100.0% 00% 1000% 19% 00% 0.0% 0.0% 0.0% 00% 0.0% 0.01/0 00% City of Tigard 1000% 00% 1000% 00% 1000% 00% 0.0% 19% 00% 0 0% 0.0% 0.0% 00% 0.0% 0.0% 00% Valley View 100.0% 00% 100.0% 0.0% 00% 0.00/0 0.0% 100.0% 0.0% 40% 960% 1000% 100.0% 0.0% 0.0% 0.0% West Slope Water District 1000% 00% 1000% 00% 00% 00% 0.0% 1000% 00% 100.0% 00% 00% 0.0% 1000% 00% 00% TV W D 100.0% 96.1% 58% 0.0% 58% 0.0% 0.0"/0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 00% Raleigh Water District 1000% 100.0% 1.9% 0.0% 19% 0.0% 0.0% 0.0% 00% 00% 0.0% 0.0% 0.0% 00% 0.0% 00% City of Tualatin 1000% 100.0% 1.9% 0.0% 19% 0.0% 0.0% 0.0% 0.0% 00% 0.0% 0.0% 0.0% 00% 0.0% 00% Crtv of Portland 1000% 0.1% 98.0% 30% 7 5% 13% 17% 250% 13 5% 37% 47% 17% 0.8% 29% 2.0% 1000% Bradley Crnr Baylor Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASR-1R ASR-2R Total MG MG in MGD MGD lTVWD- MGD MGD MGD Recovery Recovery PurJProd. Storage MGD 9/1/05 1.547701 4.299884 0 0.592611 1.59 1.030949 9.061145 18.28 9.541145 9/2/05 1.558622 4.294368 0.142606 0.642211 1.58 1.119276 9.337083 17.34 10.27708 9/3/05 0.852226 4.893932 0.726861 0.541911 1.58 1.117035 9.711965 17.62 9.431965 9/4/05 1.663821 4.592726 0.461022 0.640594 1.58 1.114546 10.052709 18.06 9.612709 9/5/05 1.679768 4.529236 0 0.544499 1.58 1.113431 9.446934 18.19 9.316934 9/6/05 1.667546 4.563361 0.393291 0.640168 1.59 1.113993 9.968359 17.62 10.53836 917105 1.664824 4.571396 0.130616 0.607354 1.58 1.108364 9.66255292 17.57 9.712553 9/8/05 1.657388 4.584126 0.214983 0.621214 1.59 1.106854 9.77456516 17.85 9.494565 9/9/05 1.646348 4.562796 0.141581 0.561793 1.58 1.105353 9.59787132 18.1 9.347871 9/10/05 1.314281 4.567246 0 0.315394 1.59 0.587441 8.37436208 18.57 7.904362 9/11/05 1.656521 4.573177 0 0 1.59 0 7.8196978 18.56 7.829698 9/12/05 1.675834 4.52398 0 0.082804 1.58 1.06451 8.92712776 18.3 9.187128 9/13/05 1.676193 4.541487 0 0.383171 1.59 1.111131 9.301982 18.84 8.761982 9/14/05 1.675774 4.286531 0 0.097988 1.58 1.111673 8.751966 19.03 8.561966 9115/05 1.647559 4.234687 0 0 1.25 1.108833 8.241079 19.5 7.771079 9/16/05 1.659183 3.955226 0.064215 0.058344 1.06 0.317123 7.114091 18.43 8.184091 9/17/05 1.665706 3.813779 0 0.020158 1.08 1.110557 7.6902 19.44 6.6802 9/18/05 1.668518 3.756003 0 0 1.07 1.110583 7.605104 20.09 6.955104 9/19/05 1.669266 3.735513 0 0 1.08 1.104186 7.588965 19.18 8.498965 9/20/05 1.670164 3.787514 0 0 1.36 1.102796 7.920474 18.89 8.210474 9/21/05 1.675998 2.787866 0 0.326509 1.51 1.102071 7.402444 18.34 7.952444 9/22105 1.346579 3.671941 0 0.020285 1.52 1.100911 7.659716 18.37 7.629716 9/23/05 1.658346 3.668918 0 0 1.51 1.101141 7.938405 18.49 7.818405 9/24/05 1.650148 3.663347 0 0 1.51 1.099868 7.923363 19.14 7.273363 9/25/05 1.662654 3.630034 0 0 1.51 1.100149 7.902837 19.08 7.962837 9/26/05 1.624806 3.670949 0 0.025708 1.52 1.099273 7.940736 18.24 8.780736 9/27/05 1.651763 3.663641 0 0.100576 1.52 1.10122 8.0372 18.39 7.8872 9/28/05 1.589589 3.686057 0 0 1.5 1.099122 7.874768 18.75 7.514768 9/29/05 1.265526 3.674168 0 0 1.5 1.097947 7.537641 19.28 7.007641 9/30/05 1.061292 3.226616 0 0 1.5 1.020249 6.808157 19.31 6.778157 TOTALS 47.10394 122.0105 0 2.275175 6.823291 0 44.18 30.58059 0 252.9735 556.85 252.4235 AVES 1.570131 4.067017 0.075839 0.227443 #DIV/0! 1.472667 1.019353 #DIV/0! 8.43245 18.56167 8.414117 September 2005 Water Purchases 12 -- 10 ■ASR-2R Recovery 0 � ■ASR-1 R Recovery $ �� ■JWC in MGD R v ❑Tualatin in MGD C 6 ®Well#2 in MGD 0 0TVWD in MGD = 4 ❑Bull run/TVWD-MGD 2 ❑Bull Run in MGD ■Lake O.in MGD 0 o`.) o'ooh�yo o`° of or1b� oO�� y `O yo`' oO y `O tiy `'� yoooooootioo Ii o R3 o ooo Q3 o ey �y c; o� CO; Date September 2005 Water Demands & Storage 25 Lake O.in MGD Bull Run in MGD 20 Bull run/TVWD-MGD TVWD in MGD c 15 Well#2 in MGD Tualatin in MGD CD --W-JWC in MGD C 0 1 D �,.��n^�,� ASR-1 R Recovery ASR-2R Recovery -0 Total MG Pur./Prod. 5 MG in Storage +, Demand in MG if) 0 0 In Lo U-) u) N 0 0 if) 0 U7 to 0 to � N N N ON N OOO O O O O O O O O O O OO O O O O O Z O 64 c7 a N aj 0N N Co N rn rn rn rn rn rn rn rn rn rn rn rn rn rn o� rn rn o� rn rn rn Date ASR-1R ASR-2R Temp in F To&From Comments Injection in Injection in Storage MG MGD MGD 85 0.48 75 0.94 75 -0.28 72 -0.44 76 -0.13 81 0.57 84 0.05 84 -0.28 70 -0.25 68 -0.47 70 0.01 75 0.26 77 -0.54 73 -0.19 67 -0.47 63 1.07 68 -1.01 73 -0.65 75 0.91 71 0.29 75 0.55 67 -0.03 70 -0.12 71 -0.65 75 0.06 78 0.84 70 -0.15 76 -0.36 72 -0.53 68 -0.03 #DIV/0! #DIV/0! 73.46667 GD Bradley Crnr Baylor Date Lake O.in Bull Run in Bull run TVWD in Well#2 in Tualatin in JWC in MGD ASRAR ASR-2R Total MG MG in Demand in MGD MGD /TVWD- MGD MGD MGD Recovery Recovery Pur./Prod. Storage MG MGD 10/01/05 1.052256 3.180539 1.51 0.104789 5.847584 19.92 5.237584 10/02/05 1.051239 3.135114 1.48 0 5.666353 20.13 5.456353 10/03/05 1.051717 3.135088 1.48 0 5.666805 19.73 6.066805 10/04/05 1.049234 2.628529 1.5 0.016886 5.194649 19.7 5.224649 10/05/05 1.035232 2.614728 1.5 0 5.149% 19.82 5.02996 10/06/05 0.822979 2.618571 1.49 0.063769 4.995319 19.97 4.845319 10/07/05 0 2.611301 1.49 1.115171 5.216472 20.21 4.976472 10/08/05 0 2.619259 1.49 1.045192 5.154451 20.88 4.484451 10/09/05 0 2.594744 1.49 0.620764 4.705508 20.64 4.945508 10/10/05 0 2.589446 1.5 1.049667 5.139113 20.2 5.579113 10/11/05 0 2.613219 1.5 0 4.113219 19.49 4.823219 10/12/05 0 19.49 10/13/05 0 0 10/14/05 0 0 10/15/05 0 0 10/16/05 0 0 10/17/05 0 0 10/18/05 0 0 10/19/05 0 0 10/20/05 0 0 10/21/05 0 0 10/22/05 0 0 10/23/05 0 0 10/24/05 0 0 10/25/05 0 0 10/26/05 0 0 10/27/05 0 0 10/28/05 0 0 10/29/05 0 0 10/30/05 0 0 10/31/05 0 0 TOTALS 6.062657 30.34054 0 0 0 0 16.43 4.016238 0 56.84943 220.69 76.15943 AVES 0.551151 2.758231 #DIV/0! #DIV/0! #DIV/01 1.493636 0.365113 #DIV/0! 1.833853 20.06273 2.456756 October 2005 Water Purchases 7 6 ■ASR-2R Recovery N ®ASR-1 R Recovery 0 5 ■JWC in MGD w 4 ❑Tualatin in MGD 0 0 Well#2 in MGD C 3 0 OTVWD in MGD 2 ❑Bull run/TVWD-MGD ❑Bull Run in MGD 1 ■Lake O.in MGD 0 O� Ob O� O� \�O \�O \�O \,LO \�O \�O \�O \TO \TO \TO \,y0 \TO \�O \TO 10 \rO p��� p�^b pA p�^p p�N p�O p� p�A p�1,110 p� � \ N Date October 2005 Water Demands & Storage 25 Lake O.in MGD Bull Run in MGD 20 Bull run/TVWD-MGD TVWD in MGD HIIIIIIIIIIIIIIIWell#2 in MGD 0 15 Tualatin in MGD --*-JWC in MGD c ASR-1 R Recovery 10 ASR-2R Recovery -4 Total MG Pur./Prod. 5 -� _ MG in Storage Demand in MG 0 ,;..;..;..;..;..;..;..;..;..;..;.. ;..;.. ;..;.. ;. ;..;.y U� 0 Lo Lo In In m to Ln In N to Ln u) N u) In 0 In m N to Ln to Ln N LO 0 In Lo 0 O O O O O O O O OO 2 _O O O O q O O O O O O 0 O O O O O O O O (7` M 4 in m r- co m O - N Av N o r` co m O c,4 (1 V l!7 w r- w m O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O Date ASRAR ASR-2RTemp in F To&From Comments Injection in Injection in Storage MG MGD MGD 63 -0.61 56 -0.21 59 0.4 61 0.03 68 -0.12 62 -0.15 64 -0.24 59 -0.67 66 0.24 62 0.44 0.71 19.49 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 #DIV/0! #DIV/0! 62 GD ` 1 r ".7 r 1f ,_ W082DO5020PDX 000000.00 00 9114105 WATER SUPPLY FEASIBILITY PROJECT TIGARD , OREGON September 2005 vo +CH2MHILL_ WATER SUPPLY FEASIBILITY PROJECT TIGARD, OR lt% 8332�`°� ,0°R SEPTEMBER, 2005 o 91g '9-r L. CH2M HILL EXPIRES: /" 311 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 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 QWC)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 cfs 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' 1/16/1918 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 Y.section corner 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 comer 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 cis 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 Iess 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 Certificate/Permit 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 cls 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 Iess 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 8 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 MMD is 26 mgd while the projected Tigard MDD 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)An alternative 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 a O z O >n> a0y O O e5 q i (W9� Z S d S = N ¢ Z Oa, O z O a a ♦ ♦ 0 z 0 4 a d N 4 N Q P TREATED P P WATER TO DISTRIBUTION LL 0, RAW FLASH FLOCCULATION SEDIMENTATION OZONE FILTERS CLEARWELL FINISHED CLACKAMAS WATER MIX , CONTACTORS WATER RIVER PUMP (FUTURE) � I 1 PUMPING STATION RECYCLEP DRIEDSOLJDS 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 lagoons 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. Cal2acitx: 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 settlers 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 HILUS 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. n Table 4-2 Comparative Cost Estimating Phase 1997 Plan Estimate 1997 Plan Estimate Component 1997 Plan Component CI-12M HILL Alternative Used in Cost Estimate System Component Expand 16 to 32 mgd ENR Adjusted to 2005 CH2M 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 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 SODI U 4AV19 ?pW�eUTURE) POLYALUMINUM CARBON DIOXIDE CHLORIDE A FIS IVER PAC LIME P P TREATED P P 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 Linn'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 37.5%/(6/16U$1.13 62.5%/$1.87 Raw Water Pipeline $5.5 33.3%/(6/18)1$1.83 66.7%/$3.67 WTP Expansion $20.0 37.5%/(6116Y$7.5 62.5%/$12.5 Finished Water Pipeline $14.0 46.7%/(14/30)/$6.54 53.3%/$7.46 Bonita Pump Station Expansion $2.0 100%/$2.0 0%1$0 SFWB/West Linn Facilities $1.5 100%/$1..5 0%/$0 21 Construction Contingencies(30%) $14.0 44.6%1$6.24 55.4%1$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 ICA 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 WATER LEVEL BACKWASH WAGTC AIR UHrn;1i0�lIAMI CFFIV!!NT _ FLNut FILTER TQ W A STE ^LFARWELL • BACKWASH 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 0.03µm,whereas MF membranes have a nominal pore size of between 0.05 and 0.5 µm. 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. 1p 1.01J lop loop lo00p Dissolved Organics Sand �1 Bacteria Viruses 0 0 Cysts Salts Colloids t� Media Filtration Microfiltration Ultrafiltration ® 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 01 :'l 1 l 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 AA Immersed Ultrafiltration System 1 i• ' h 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 Actiflos(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 arc 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 trdet P. 1311f77L' i'hrri(it'd EPI fh'►)t 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 Superpulsatore, manufactured by Infilco Degremont, Inc. In the Superpulsatorv, 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 Superpulsatort 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/ftz. 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 Upnow Clarifier Schematic V Effluent V Effluent 17 77777, Influent Sludge ZLY Blowdown s 'Tigard studies tapping Clackamas River water from Lake Oswego By LUCIANA LOPEZ with Portland so that the City with Portland,he said.Although no A partnership between the two spread the cost of upgrading or re- term supply, or they're not willing THE OREGONIAN Council will have options, said decisions have been made,he said, cities could benefit Lake Oswego, placing infrastructure over a larger to provide it,we will need to talk to Tigard is considering using Dennis Koellermeier,Tigard's pub- "Tigard has a goal of being in an as well, said Joel Komarek Lake population,he said. them about some kind of bridge -Clackamas River water,via a treat- lic works director. ownership position of its water Oswego's city engineer. Komarek declined to discuss the contract" for perhaps as long as ment plant in Lake Oswego,as the The Lake Oswego option "does source." The city's plant can treat as costs of an expansion, but he three years,he said. city's main source of water after a took promising,"Koellermeier said. Tigard uses some water from much as 16 million gallons a day. noted that the process, necessary Tigard is keeping an eye on contract with Portland expires in "From a technical standpoint it Lake Oswego, which has drawn Although Lake Oswego uses less to supply Tigard with more water, Sherwood, where residents are 2007. does appear that lake Oswego and water from the Clackamas River than that, as much as 14 million could take two to five years. The city is launching a pre- Tigard could get together and de- since 1967. But most of Tigard's gallons a day in peak season, that Because Tigard's current water slated to vote in November on us engineering study to figure out velop some additional water water—6 million gallons on an av- won't always be the case.The city contracts expire in 2007,that might ing treated Willamette River water. how much time and money would rights." erage day, but as much as 13 mil- could expand the plant's capacity not be soon enough to switch "be needed to make such a plan Joining with Lake Oswego would lion gallons on peak days—comes to about 32 million gallons a day, water sources, said Craig Prosser, work. give Tigard ownership rights,Koel- from Portland,which uses the Bull Komarek said. Tigard's city manager. S However,Tigard is continuing to lermeier said,with equity in the in- Run watershed and the Columbia Partnering with another city "if we can't get an acceptable Luciana Lopez:503-294-5976; negotiate a long-term contract frastructure. That's not the case South Shore well field. would allow Lake Oswego to contract with Portland for a long- lucianalopez@news.oregonian.com (� Don't let water issueget muddied by ersonal feelings� (Soapboxes are guest opinions from our Mays made some ill-advised statements Not just Portland.True,many past cus- readers. and an}vone is welcome to write SOAPBOX that HE was not going to purchase water tomers of Portland would like reassur- one. Kurt Kristencen is a Sherwood resi- BURT KRISTENSEN from Portland's Bull Run. Subsequent to ance that Portland will not treat the Bull dent and a member of the regional group this,Mr. Leonard huffed and puffed a bit, Run water responsibility as a money- p Citizens for Safe Water. -Rework-for all simply pour their toxins into the river apparently,and decided that Portland making concession. residents in the region to assure that resi- and smile when the river thins out their was not going to waste any time prepar- It would,in my personal opinion,be dents and their children will have safe toxins to EPA and DEQ standards. ing a cost proposal for Sherwood. more appropriate if Mr. Mays and Mr. O water for their families,"he says.) My personal position is simple: NOT This,of course,was exactly what Leonard remember that they are public N. YET! Not until legislators address the May wanted to add fuel to his campaign servants,speaking at the discretion of Residents of the city of Sherwood are issue of toxic mixing zones like adults. to promote almost unlimited growth of voters and not with personal power or facing a traumatic decision on how to Until then they are asking us to flush Sherwood to 35,000 to 50,000 residents ego.Certainly Mr.Mays and most of his secure adequate water supplies for their twice and then drink. with water from the Willamette River: council are up for re-election next year. city.They face a ballot next month where With this background, I want to The home builders need assurance that Perhaps,with a"no"vote on the ballot a"yes"vote will allow the cunent city address the sad public squabble between affordable water will be available.They and a replacement for Mr. Mays and his leaders to connect to Wilsonville's water the city of Sherwood and the city of are not,evidently,concerned about the supporters we might again be able to r treatment plant. Portland.Apparently, Sherwood Mayor desires of current residents to have a return to a regional solution to our water With a"yes"vote,residents will he Keith Mays,was attending a meeting quality life with quality water.Just needs. drinking water that passes the current with the Home Builders Association,or growth. As part of this recipe,municipalities EPA drinking standards. However,a lot such,to raise funds,support and public Mr. Leonard's subsequent letter to and voters would do well to insist that of us are uncomfortable with the politi- pressure for the clever Willamette River The Times was understandable; in part it legislators stop the toxic mixing zones cized process with which EPA and DEQ Water Coalition. was similar to the reactions I see my and curb the use of commercial pesti- ignore Oregon's toxic mixing zone con- According to Randy Leonard,water middle school students have to bully cides a bit so that some time in the future cept: It allows polluters to take advantage commissioner for the city of Portland,he behavior.After all, Bull Run water,by the beautiful Willamette will be clean of the quick-flowing Willamette;they had a staff member present when Keith law,belongs to citizens of the region. again.And drinkable. A2 ■ October 6, 2005 TheTimes ■TT New coup require q water option could ire smaller dam Officials consider using the Hillsboro. District and a member of the Willamette Should county officials decide to use Willamette River as an alternative The addition of a second option to the River Water Coalition. more Willamette River water, the original proposal is in part a response to a Wilsonville treatment plant would need to source of drinking water request by the U.S. Bureau of Reclamation, 'Dead wrong' be expanded. which is expected to help fund the project. The plant is 14 miles upstream from the By AMYJO BROWN The bureau is conducting an environ- Cities on the east side of the county are Willamette Falls at Oregon City,which, its Of The Times mental impact study on the proposal to raise already taking a look at the Willamette proponents say, acts as a barrier against the dam at Hagg Lake, and officials felt River's potential water supply as their water downstream contaminants. They also note HILLSBORO — Washington County uncomfortable having only one option to contracts with the city of Portland near that water from the plant exceeds U.S. officials are considering scaling back their consider, said Dave Nelsom, the resources expiration. Environmental Protection Agency drinking plans to raise the dam at Henry Hagg Lake. manager for the lower Columbia area. The city of Sherwood will ask voters water standards. Last spring, a committee of water users "We need it to meet our standards," Nov. 8 in a special election to authorize Officials say it is unlikely that residents voted to raise the Scoggins Dam by 40 feet Nelsom said."(One option)is fairly unusu- using the Willamette River as their drinking of western Washington County, whose to solve the county's long-term water sup- al for environmental impact statements.We water.The Tualatin Valley Water District is water comes from the Coast Range moun- ply needs,which are expected to double in weren't convinced it could be adequately also likely to ask its district residents next tains,would face the decision of whether to the next 45 years. defended" spring to approve accessing water from the tap into the Willamette River. Now, however,officials are looking at a The second option is also,in part,a reac- Willamette, Burke said. Even a reduced extension of the dam at second option that involves tapping the tion to the changing feelings throughout the The cities of Tigard and Tualatin are also Hagg Lake should meet the needs of that Willamette River for municipal drinking county regarding use of the Willamette investigating the possible use of the river for part of the county, according to Todd water in some parts of the county. Such a River. Although the river has had a reputa- their drinking water supply. Heidgerken, a spokesman for the Tualatin move would require only a 25-foot exten- tion for poor water quality,its treatment and "The water is safe," said Burke, who Valley Water District, while the cities sion of the dam at Hagg Lake, which is use by the city of Wilsonville is changing added he was once an opponent to building already considering the Willamette River located south of Forest Grove. minds. the Willamette River Water Treatment option would be the ones to make the The committee of water users will dis- "It seems to me it's responsible to look Plant, which is on a 20-acre parcel on the switch. cuss the new idea at a public meeting at the Willamette,and it's time to look at the banks of the river in Wilsonville. Thursday at the Clean Water Services Rock Willamette;' said Richard Burke, a com- "I was wrong.I was dead wrong;'Burke 8 Conma reporter AwyJo Brawn. 503-546- Creek Wastewater Treatment Facility in missioner with the Tualatin Valley Water said. 0749:abro%-n(ac-oimmneuvpaperc.rom. IUIN A4 Thursday,October 6,2005 Those options include continued completing the environ-ental impact study of expanding the reservoir storage capaci- Po � � ��� , ty of Hagg Lake in western Washington County. Discussion er o e� e S and debate within local communities of the option to use treat- ed Willamette River water is another option to consider. A mix of many water source options, along with a supply of water from Portland's Bull Run system,might in fact be the best way But issue is morethanpriLC to achieve the Westside's needs for a reliable,geographically balanced, high quality, safe and affordable supply of drinking water that also allows sufficient water for agriculture and nnouncement this week of a draft improving the flow of the Tualatin River. agreement between the city of Portland The time to evaluate all options- including using a mix of and suburban communities that buy water sources- is now. The requirement for all regional water water from the Portland Water Bureau providers and users to consider and adopt a regional water is a major step in being able to provide strategy should begin now. One natural or man-made disaster needed water supplies for the region could affect the Bull Run system and throw much of the over the next half century. Portland region into chaos. Growth continues unabated. The The agreement would provide Portland area economy and residential customers deserve to `% increased stability in water rates for know that the future as far as water supplies is certain. °A Portland's suburban water customers Choices,choices,choices. Greg DiLoreto,Tualatin Valley include the cities of Tigard and Tualatin and the Tualatin Water District's general manager, Wednesday said his district Valley Water District. Some customers, including Tigard and board would be prepared to make a decision in May regarding Tualatin,would see rates fall initially. Both outcomes would the many options for water supply, including blending Portland go a long way to improving relations between Portland and its water with water from the Willamette or water from the joint suburban customers,who have long complained that the Water water commission that is considering expansion of the Hagg Bureau was a bullish partner. Lake reservoir. It's time to do so, he emphasized for the dis- But Portland's offer is not the only piece in the regional trict's customers that reside throughout the Beaverton and water puzzle.And water rate stability and initial price reduc- Tigard areas of eastern Washington County. "It's like juggling tions should not be the sole factors that local cities and water three balls. We have been doing this for three years. It's time districts should consider in deciding to accept or reject to catch one" Portland's proposal by the city's May 22 deadline. But it's also important to realize that any decisions by indi- Westside governments must not only plan for long-term vidual local cities or water districts don't relieve the require- sources of fairly priced drinking water. They also must ensure ment for developing a comprehensive regional water strategy. that water supplies for domestic and business use are going to Representatives from throughout the Metro area, including the be reliably available, geographically balanced, safe and of high city of Portland, must develop this strategy. quality. Decision makers also need to realize that the Westside also must make a commitment to provide sufficient irrigation water for agriculture and to continue to improve the flow and THE TIMES' EDITORIAL VIEWS — Editorials environmental improvement of the Tualatin River. This is a tall order to fill.And deadlines to plan how to bet- (written by Editor and Publisher Steve Clark, ter serve these responsibilities are fast approaching. By 2050, Managing Editor Mikel Kelly and News Editor Westside water usage is expected to double,and Hillsboro and Kevin Harden) appear in the space above and Tigard expect that their communities'water consumption will represent the opinion of the newspaper's man- exceed supply within the next decade.Addressing these needs agement.To discuss those views, call Clark at comprehensively doesn't occur overnight. 503-546-0714 (selark@eommnewspapers.eom), That's why we favor local cities and water districts contmu- Kelly at 503-546-0737 (mkelly@COmmneWS a- ing to explore all water source options-not just reliance on a P sole source provider of water such as the city of Portland. pers.com), Harden at 503-546-0736 (khard- en@commnewspapers.com) or writeTimes Newspapers, P.O. Box 370, Beaverton 97075.