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12/09/2009 - Minutes Intergovernmental Water Board (1WB) Meeting Minutes December 9, 2009 Tigard Public Works Building 8777 SW Burnham Street Tigard, OR 97223 Members Present. Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham Ken Henschel Representing the Tigard Water District Dick Winn Representing the City of King City Bill Scheiderich Member At-Large Members Absent. None Staff Present. Public Works Director Dennis Koellermeier Utility Division Manager John Goodrich IWB Recorder Kathy Mollusky 1. Call to Order, Roll Call and Introductions Commissioner Carroll called the meeting to order at 5:36 p.m. 2. Approval of Minutes — November 12, 2009 Commissioner Buehner motioned to approve the November 12, 2009 minutes; Commissioner Henschel seconded the motion. The minutes were approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Scheiderich and Winn voting yes. 3. Public Comments: None 4. Water Supply Update Mr. Goodrich reported that ASR injection started December 1. Currently, the rate of injection is at 1,100 gallons per minute into ASR 2. This will continue until it is full, then injection into ASR 1 will begin. Water demand is currently averaging 4 to 4.2 million gallons per day. On Saturday, November 27, around 1:00 p.m. a boil water event occurred. Portland Water Bureau (PWB) released this information to the media around 5:00 p.m. During this four-hour time period, there was some confusion on PWB's part, which resulted in citizens in the City of Tigard (COT) being informed to boil water until staff could verify that Tigard's system was not affected. Once verified, staff changed the message. COT also posted the information on the website Monday morning. COT staff is speaking with PWB about the missteps that happened. Unfortunately, this occurred on a four-day weekend when PWB customer service staff and the state were on furlough. The message has to be approved by the state before being released to the public and the media. Intergovernmental Water Board Minutes December 9,2009 1 PWB lifted the boil water notice Sunday evening. PWB has spent a week trying to determine what the cause was. They isolated and drained the affected reservoir, but have not found anything that specifically points to the contamination. They think ducks might have caused it. A boil water notice is not something any water district wants to do. COT is making sure all the communication tools are in place to notify people if it is ever needed. When there is a positive sample, then an additional three samples must be taken. One upstream, one downstream, and one where the original sample was taken. Those samples take 24-hours to run. For PWB, the one upstream and one downstream came back negative. The resample in the same place came back positive. Under state law, PWB has 24-hours to notify the public of the boil water notice. Commissioner Henschel inquired as to how many hours pass before the first indication and public notification occurs. Mr. Goodrich responded between 24- to 48-hours. Mr. Koellermeier clarified that PWB followed the letter of law exactly. COT has discussed what we would do differently. An option COT has is our reverse 911 system that can dial every customer in the system. The state still has to approve the message before we send it out. A suburb just cannot get a message out as well as the City of Portland. Portland dominates the media so suburbs have had to create other methods. The timing would not change; staff still has to go through the test and retest process, but COT's methods of getting the message out to people is more efficient. Commissioner Henschel inquired as to what the downside would be of notifying people even if the first sample turns out to be a false positive. It is common to have the first test positive. Sometimes it is the process of taking the water sample that is contaminated, not the water. For instance, the sampler touches the end of the bottle or the bottle was contaminated during processing. That is why the system is has a two-step approach in verifying results in the system. The reason it was confusing for everyone was the initial message that stated everything west of the Willamette River was affected. Mr. Koellermeier did not want to trust the media for information; he wanted verification from PWB. It was around 6:00 p.m. before we could verify TWSA was not receiving water from the problem reservoir and we asked the media to change the message to clarify which specific areas west of the Willamette River were affected. Mr. Carroll inquired as to how many water districts PWB supplies. Mr. Koellermeier thinks 17 or 18 separate districts. Portland guidelines state they are supposed to be in constant contact with the districts. The Public Information Officer at the time was a laboratory supervisor who may not have known the protocol for communicating with the wholesalers. Commissioners Buehner and Carroll requested that Mr. Koellermeier send a letter to Randy Leonard, Portland Water Board Commissioner regarding their handling of the situation. The board stated that Portland should be told they have to notify all the wholesale providers. Commissioner Carroll stated it is unacceptable that COT was not notified as per the agreement. Mr. Koellermeier agreed that PWB let their customers down. He suspects we will fix these issues. We will not change protocol at the state level for dealing with first notification versus second notification because there is a lot of science behind this we have not discussed tonight. It is appropriate for the IWB to express displeasure with how PWB treated the wholesalers through lack of information. Commissioner Carroll wants COT notified within hours of potential problem so we can make decisions, like to turn the water off. Mr. Koellermeier stated that in this Intergovernmental water Board Minutes December 9,2009 2 case, with this particular problem, if we were contaminated that contamination would already be throughout the system. In different instances, we do have the capacity to isolate one supply from another. We are probably one of the few wholesalers that have that luxury to change the source of supply. Commissioner Buehner asked if it would be appropriate for PWB to give the 18 districts a heads up so everybody was ready if the second positive came in. Mr. Goodrich said PWB is looking at changing their protocol to provide notice to the wholesalers regarding this type of event. They have only had 14 since 1990, which works out to less than one per year. One per year for a system their size indicates a fairly clean system. They take around 200 samples per month. It is very easy to contaminate the bottle with a bib nozzle, sampler's thumb, etc. Commissioner Winn wants COT to notify the IWB as soon as they know of a situation. Mr. Koellermeier could have activated our CodeRed phone system, but by then the media began clarifying the message regarding areas of impact. He did not call IWB members because the media message was being disseminated properly at that point. Mr. Koellermeier stated that we could change that procedure, if necessary. 5. Credit for Water Leak Mr. Koellermeier stated that the IWB recently passed a policy to allow COT staff to issue credit for water leaks. However, this is imbedded in COT ordinance, which has not been changed at the council level yet. These policies and code changes have: not been put on the agenda because staff wanted to put through all the policy issues at one time. Commissioner Buehner motioned to approve credit Commissioner Scheiderich second the motion. The credit for the water leak was approved by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Scheiderich and Winn voting yes. 6. Informational Items a. Update from Commissioner Buehner on Lake Oswego/City of Tigard Oversight Committee activities. Commissioner Buehner reported the Lake Oswego/City of Tigard Oversight Committee has not met since IWB's last meeting. b. Advertisement Submitted for Member-at-Large Position A copy of the advertisement is in the IWB package. It is in the newspapers, on our website, etc. Commissioner Scheiderich would like applicants to come to our January meeting so we could ask them a few questions and they could introduce themselves. He would like to do this in open session. Depending on the number of applicants, it can occur in one meeting or two meetings. 7. Non-Agenda Items Commissioner Scheiderich inquired about the status of buying into the Sherwood pipeline. Mr. Koellermeier is waiting to hear from the City of Sherwood. Both the City of Tualatin and COT have budgeted for this purchase. The first offer was to buy an option to exercise later. if it was not exercised, the down payment would be lost. The City of Sherwood asked if we wanted to abandon the Lake Oswego operation and go in full with them. Mr. Koellermeier informed them we were not willing to do that at this time. Clark Balfour is drafting an agreement to make us partners through the Willamette River Water Coalition. Mr. Koellermeier expects to have something for the IWB in three months. Intergovernmental Water Board Minutes December 9,2009 3 • Commissioner Buehner requested an update on Haag Lake. The IWB decided not to do the Haag Lake project and the costs keep going up. It has been in the paper that the Lake Oswego project costs are going up. Mr. Koellermeier stated that the scope of the Lake Oswego project did not change and there is no new information on costs. The 2006 estimate was escalated through the construction period out to 2016. A 6% multiplier was used, which is a 60% increase if you add 10 years to that initial number. The scope of the Haag Lake project has changed substantially. The existing dam is seismically deficient according to the seismic evaluation. This is a federal government issue. They have three options: (1) spend money fixing the dam, (2) put money in for new dam, or(3) lower the water in the lake to mitigate the potential issue. The technical solution that works best for the project is to have the federal government contribute to a new dam downstream from the existing dam. This has pushed the project costs to above $1 billion. It is not yet determined how much of that cost will be federal obligation and when the cash will start flowing to pay for the project, which will cause the project to cost more. The participation of the federal government is outside of the timeline the partners have been working towards to fix the issue so the IWB's decision was a good one. • Mr. Koellermeier answered the question posed last week regarding TWD board members needing ratification of issues from their board before they can contribute to a vote here at the IWB. The legal opinion is that this is a TWD decision made by their board. State law does not impose it. It is a decision to be made between the parties, if they want TWD to amend their operating rules. TWD is taking COT'S legal opinion back to their board to make a decision. 8. Discussion of Draft 1993 Intergovernmental Agreements between Durham and the City of Tigard, King City and the City of Tigard, and the Tigard Water District and the City of Tigard—Commissioner Scheiderich The Board wanted to review the changes from last month prior to continuing with the agreement. Page 2, Paragraph 1 B-- It was made clearer that the Parties are delegating legal complexities, such as the ability to adopt the system development charges, to Tigard. Page 2, Paragraph 1C— It was pointed out that all revenues are pledged to Tigard, except those shares of system revenues that are allocated to each Party's control and disposition under Section 7E of the Agreement. Page 2, Paragraph-2B —Tigard may terminate this Agreement after 30-days notice of default. This is standard language. Page 3, Paragraph 2C—This restates that if a Party terminates, Tigard will try to negotiate a wholesale water agreement contract. This does not obligate Tigard to provide water, just obligates the City to try to negotiate a contract. Page 3, Paragraph 3—This was changed to say the member-at-large must reside in the service area. Further down it says the member representing the Parry shall be authorized to act on behalf of that Party. The IWB, by majority vote, may declare a member's position to be vacant with three unexcused absences. Intergovernmental Water Board Minutes December 9,2009 4 Page 3, Paragraph 5A—Clarified that the IWB shall schedule regular meetings. Page 3, Paragraph 5B -Tigard shall budget and provide staff support for the IWB. Page 4, Paragraph 5C— One public meeting is to be held annually with the governing bodies of the served Parties and Tigard City Council. Page 4, Paragraph 6A—Will be numbered correctly, there are no additional changes. Majority vote is the majority of all five members present. Page 4, Paragraph 6B--The majority vote of the parties shall be final and binding on Tigard. Page 4, Paragraph 6130)— If COT wanted to provide water service to a new wholesale customer, this should require a majority vote of the Parties. Serving new members could risk the integrity of the system. A wholesale customer means territory, a city or district, not an individual customer. Commissioner Buehner inquired if the agreement should have different provisions for Areas 63 and 64 that are already included in our long-term plan to serve. The Board did not feel separate provisions were necessary. Mr. Koellermeier is concerned the new Agreement language removes the tenant that we are under no obligation to serve outside of the boundary. The concern with this language is that [WB can force Tigard to serve outside of the current boundary. This would be contrary to the current City policies. The revision agreement at this time states that the IWB must vote on a proposal from Tigard to supply water outside of the area. Commissioner Scheiderich Will clarify the wording to state that the Board must ratify a proposal by Tigard to supply water to an area outside the existing area. Page 4, Paragraph 6B(3)— Changed the word "supply" to "source The Lake Oswego agreement is binding on Tigard, but it was not imposed by the IWB. This agreement says that if the IWB wanted to invest in Sherwood and COT did not want to, the IWB could not vote to make it happen. Page 5, Paragraph 7(A)—All the Parties own all the assets. The state law on annexation reads that assets that are of no use to the city withdrawing just go away. This Agreement does not differentiate between system assets versus other assets. The Parties pledge all assets until withdrawal. On termination, the Parties decide what assets in the ground are unique to the service area and divide off the rest of the system. Other assets follow state law. Page 5, Paragraph 7B--Commissioner Scheiderich will reword the last sentence. If ownership shares change from time to time, it does not matter until termination. We will bring ownership shares current at time of termination only. Page 5, Paragraph 7C— If it is not real estate, it is a straight-line depreciation. Real property shall be valued by an independent appraisal. Page 5, Paragraph 7D—The [WB does not have consensus concerning when real estate is sold. Should all proceeds go into the Capita[ Improvement fund or to each city to dispose of as they wish? TWD needs to relook at this; they thought it referred to termination. Intergovernmental water Board Minutes December 9,2009 5 Page 6, Paragraph 7E— General accounting standards require every city to put a value of pipeline in the annual budget. If we agree to this agreement, all property—existing and new - needs to re-deeded. The pipeline from Lake Oswego is listed as part of Lake Oswego/Tigard agreement; it is removed from the Parties here. The agreement specifically states that the asset is a part of the partnership, the agreement with Lake Oswego would have to be amended to change. Commissioner Carroll inquired as to why would this asset not be everyone's since everyone pays for it. There are several ways to finance this agreement. The decision was made that it should be self-supported by revenues. The existing Agreement did not allow a revenue bond sale by anyone but Tigard. Commissioner Carroll wants the assets converted to system assets as they are paid off. We take title as system paid off, ownership as we get benefit from it. In 2016, that which has property will be re-titled to say Tigard and Lake Oswego has some percent ownership. The IWB should have their percentage ownership of Tigard's piece. Assets have value when they are half paid off. At some point those assets revert to system assets. Mr. Koellermeier stated that if that is the pleasure of group, put it in the Agreement. Lake Oswego pipe is the only system asset not in here. Mr. Koellermeier does not know how Tigard City Council will react to this. Page 6, Paragraph 7F—The IWB does not agree on this issue. Tigard wants to treat everyone the same. The IWB will revisit this issue at the next meeting. Page 6, Paragraph 7G —Tigard shall make the auditorium meeting space available at no cost to the Parties whether or not the meeting is related to the water system. The IWB stopped the discussion and will continue next month starting with (8) Division of Assets on Termination or Dissolution. 9. Future Agenda Items • PGE is driven by PGE's timeline. • We are continuing to work on the Tenancy-In-Common agreements (doing survey work, getting property descriptions) and checking legal description. • Approve Water System Master Plan. 10. Next Meeting: January 13, 2010 at 5:30 p.m. Tigard Public Works Building, 8777 SW Burnham Street, Tigard, Oregon 10. Adjournment At 7:25 p.m., Commissioner Winn motioned to adjourn the meeting; Commissioner Buehner seconded the motion. The meeting was adjourned by unanimous vote of the Commissioners present, with Commissioners Buehner, Carroll, Henschel, Scheiderich and Winn voting yes. IVVB Chair Kathy Mollusky, IWB R carder Date: Intergovernmental Water Board Minutes December 9,2009 6