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11/14/2012 - Minutes Intergovernmental Water Board JXX/B) Minutes SERVING TIGARD,KING CITY,DURHAM AND TIGARD WATER DISTRICT MEETING DATE: Wednesday, November 14, 2012, 5:30 p.m. MEETING LOCATION: Tigard Public Works Building 8777 SW Burnham Street Tigard, OR 97223 Members Present: Gretchen Buehner Representing the City of Tigard Ken Henschel Representing the Tigard Water District Keith Jehnke Representing the City of Durham Dick Winn Representing the City of King City Andrew Barrett Member-At-Large Members Absent: None City of Tigard Staff Present: Dennis Koellermeier Public Works Director John Goodrich Utility Division Manager Greer Gaston IWB Recorder 1. Call to Order, Roll Call and Introductions Commissioner Winn called the meeting to order at 5:32 p.m. 2. Approval of Minutes — September 12, 2012 Commissioner Buehner moved to approve the September 12, 2012, minutes. Commissioner Henschel seconded the motion. The motion passed by unanimous vote of the commissioners present,with Commissioners Barrett, Buehner, Henschel,Jehnke and Winn voting yes. 3. Public Comments There were no comments from the public. 4. Water Supply Update Mr. Goodrich reported: ■ Average water use for the month of October was about 4.5 million gallons per day (mgd). This is about .5 mgd more than was used in October 2011. Page 1 of 6 ■ At present aquifer storage and recovery (ASR) well 1 is being utilized for native groundwater storage. ■ Ninety million gallons of water are currently stored in ASR well 2. Injection started today, and staff expects to store about 215 million gallons of water prior to next summer. This amounts to about a 48-day supply. ■ The winter edition of Know H2O went out last week. An article announcing another 14 percent rate increase was included in the publication. Mr. Goodrich is tracking customer calls generated by the article. Note:More information on Know H2O appears under agenda item 7. ■ The board discussed water rates as they pertain to meter size and fixture count. Later in the meeting, Mr. Goodrich provided the commissioners with handouts on information and calculations related to meter size and fixture count. The handouts are on file in the I" record. 5. Update on the Draft Intergovernmental Agreement for Water Service Mr. Koellermeier noted the draft IGA (intergovernmental agreement) for water service (King City Version), dated October 26, 2012, and had been handed out to the commissioners. The IGA is on file in the IWB record. Mr. Koellermeier reported: • The City of Tigard (COT) will take the 1994 state law approach. The approach would mirror that of a private utility such as Portland General Electric or Clean Water Services. Each of the IWB jurisdictions (Durham, King City and the Tigard Water District) could decide to turn its distribution assets over to the COT and have Tigard maintain those assets or retain its assets and pay for service via a service agreement. ■ A franchise fee/right of way fee paid by Tigard to the IWB jurisdictions is included in the IGA; Mr. Koellermeier suggested debt service should be excluded from the fee computations. ■ King City had concerns about the COT serving areas annexed in the future and proposed that Tigard would be responsible for providing water within the legally recognized boundaries of any of the member jurisdictions. If those boundaries are extended, Tigard would supply water to new areas within the boundaries. ■ There had been discussion on whether to disband the IWB and instead have the COT report directly to other city governments/district as a part of its budget process. Page 2 of 6 ■ King City asked about restricting the provision of water service outside municipal boundaries. Language to this effect will be incorporated into the IGA. ■ The agreement would be perpetual; this addresses the concern about a future water source for member jurisdictions. ■ The COT would like to get out of business of buying and selling assets from and between the member jurisdictions. If, years from now, a jurisdiction would like to take its water system back from the COT, and the COT had invested more than the average cost to maintain system, the COT would ask for some type of true up to that cost. In such a scenario, the COT could become a water wholesaler and provide water to that jurisdiction; the jurisdiction would run its own water system. Commissioner Winn indicated King City was interested in turning its infrastructure over to the COT. He considered the new arrangement with the COT similar to other utilities. Mr. Koellermeier mentioned that the member jurisdictions may decide to enter into one agreement, or separate agreements could be made with each jurisdiction. In response to the bullet point above, Commissioner Jehnke questioned—if the City of Durham turned its water system over to the COT and then decided to take the system back—it may have to pay additional costs. Mr. Koellermeier replied that a jurisdiction can decide to hold on to its distribution system and have Tigard run it. If a disproportionate amount of Tigard's operation and maintenance budget is used to improve or repair the jurisdiction's system, and the jurisdiction subsequently decides not to have Tigard run its system, then the jurisdiction would be responsible for the excess operational and maintenance costs. ■ The other scenario would be if a jurisdiction turned everything over to COT. The COT would figure the cost into the rates and distribute it evenly over the entire service area. ■ The COT is still unsure of the differential cost issues with the above scenarios. ■ The COT is in its first year of a 20-year debt repayment scenario. If the member jurisdictions want to explore other water providers/options, now is the time to explore those options—before the jurisdictions' customers fund several years of debt service payments. Page 3 of 6 ■ The COT City Council liked the direction of moving away from a partnership to a service provider role. Commissioner Buehner added the COT City Council typically works in conjunction with some type of an advisory board, like the IWB. Commissioner Winn recommended additional discussion set up as a future agenda item; other commissioners concurred. Mr. Koellermeier stated an updated draft IGA will be available soon; he will distribute this to the IWB members. The commissioners agreed to wait until the updated draft IGA receives further refinement before taking it back to their respective cities/district. The board will revisit the updated version of the agreement at an upcoming meeting. 6. Residential Backflow Device Service Pilot Program Mr. Goodrich briefed the board on a new approach to Tigard's backflow prevention program. The COT currently has 4737 residential customers with backflow devices. Most of the devices are related to irrigation systems. The state requires these devices be tested annually to ensure they are functioning properly. Tigard's commercial customers are at 100-percent compliance. Over the past few years, there has been a decline in residential compliance; compliance for residential customers is as follows: Year Percentage of Residents in Compliance 2009 72 % 2010 76 % 2011 60 % 2012 57 Based on administrative rules reviewed by the IWB and put into place last year, Tigard has the authority to turn off a person's water should they fail to comply with backflow testing requirements. The COT has been monitoring Tualatin Valley Water District's (TVWD's) backflow program. Under this voluntary program, TVWD hires a third party (or parties) to test program participants' backflow devices. The testing cost—typically less than the market price—is added to the participants'water bill. TVWD's program has been successful, with 75- to 80-percent compliance. TVWD will also test backflow devices of customers Page 4 of 6 who did not enroll in the voluntary program; as a penalty, these customers pay a higher rate for testing. The COT must get authorization to check private plumbing devices, like backflow devices, on private property. COT is starting to formulate a new program, similar to TVWD's program. The COT may contract with a third party to perform testing. This may result in possible cost savings that can be passed on to customers. The program would be a voluntary. A customer may sign up Tigard's program or forego the program and perform his/her own testing. If customer fails to do either, the COT could either send out the third party contractor to do the testing or could turn off the customer's water until the device is tested. Mr. Koellermeier noted water customers with and without backflow devices are currently paying for the administrative costs associated with Tigard's backflow prevention program. He raised the question of whether customers without backflow devices should be subsidizing program costs for customers who do have the devices. The options are under review and will be discussed at a later date. 7. Informational Items ■ The winter edition of Know H2O was included in the meeting packet and is on file in the I" record. The board was briefed on Know H2O under agenda item 4. However, it was noted that staff had provided an old edition of Know H2O in the commissioners' packets. Ms. Gaston distributed the current winter 2012 edition. This edition is on file in the I" record. 8. Non-Agenda Items Mr. Koellermeier acknowledged confidential correspondence had been provided to the commissioners in a separate envelope. Commissioner Henschel requested an update on the Lake Oswego Tigard Water Partnership's land use application in West Linn. Mr. Koellermeier reported: The West Linn Planning Commission (WLPC) denied Lake Oswego/Tigard land use application for the water treatment plant and pipeline. The basis of their denial is that the application did not meet code requirement benefit whereby the projects have to provide some benefit to the West Linn community. Once the Planning Commission's findings are adopted, Lake Oswego/Tigard will likely file an appeal with the West Linn City Page 5 of 6 Council (WLCC). Lake Oswego and Tigard expects the appeal to result in a multi- meeting public hearing. The partnership enacted a slow down for projects with long lead times. Lake Oswego/Tigard can delay about$2.5 million in expenditures for about three months without affecting the overall project schedule. Other alternatives are being considered, should the WLCC deny the appeal. 9. Next Meeting December 12, 2012, at 5:30 p.m. Public Works Auditorium, 8777 SW Burnham Street,Tigard, Oregon 10. Adjournment At 6:55 p.m. Commissioner Henschel moved to adjourn the meeting. Commissioner Buchner seconded the motion. The meeting adjourned by unanimous vote of the Commissioners present, with Commissioners Barrett, Buchner, Henschel,Jenke, and W' n voting yes. r Gretchen I3uehne I B Tice-Chair Greer Gaston, IWB Recorder Date: �" �' Date: ■ r�-- Page 6 of 6