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03/20/2008 - Minutes Intergovernmental Water Board (IWB) Meeting Minutes March 20, 2008 Tigard City Hall Red Rock Conference Room 13125 SW Hall Blvd Tigard, OR 97223 Members Present. Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham Julie Russell Representing the Tigard Water District Bill Scheiderich Member At-Large Dick Winn Representing the City of King City Members Absent. None Staff Present. Public Works Director Dennis Koellermeier Water Quality & Supply Supervisor John Goodrich IWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions Commissioner Carroll called the meeting to order at 5:28 p.m. 2. Approval of Minutes — February 13, 2008 Commissioner Buehner motioned to approve the February 13, 2008 minutes; Commissioner Winn seconded the motion. The minutes were approved by unanimous vote, with Commissioners Buehner, Carroll, Russell, Scheiderich and Winn voting yes. 3. Public Comments: None 4. Discussion of the Fourth Amendment to the Joint Funding Agreement for the Tualatin Basin Water Supply Project Mr. Koellermeier provided background on this item. Cost estimates for this fiscal year and next fiscal year were included in packet information. Partners in the project are trying to arrange funding and are anxious to know if Tigard will continue its participation. If Tigard does not participate, costs will be distributed among other partners. Mr. Koellermeier provided the following update on the TBWSP: • The governance agreement is nearing completion. This must be in place in order to accept the title from the federal government. Although some issues still remain, like the existing power subsidy for the Tualatin Valley Irrigation District, the agreement appears to be acceptable to most of the partners. • Since the Tualatin Valley Water District has signed on, they are trying to accelerate the project. They want the project to be operational before their Portland Water Contract expires. • There are still many project"unknowns" and cost estimates may be conservative. Intergovernmental Water Board Minutes March 20,2008 1 • The partners have asked for Tigard's decision on whether it will remain in the project by June 1, 2008. • In anticipation of this decision, cost and other information for the various water sources was being updated and will be presented at the Board's April 8 meeting. Commissioner Scheiderich briefed the Board on following TBWSP issues: • Power Subsidies The federal government currently provides power subsidies to the Tualatin Valley Irrigation District. Should title transfer take place, agreements would require the new owners to honor the existing power subsidies; the partners would have to subsidize the power costs of the irrigation district. • Recouping Existing Investment Should Tigard withdraw from the partnership, there is no mechanism in place to recoup money already invested in the project. However, both Tualatin Valley Water District and Clean Water Services would like to obtain more than their allocated share of TBWSP water. Commissioner Scheiderich suggested Tigard should remain in the project until it determines it does not need the water, at which time it could sell its share back to other partners. Mr. Koellermeier interjected Tigard had spent about $1 million on the project to date. Of that $1 million, about $200,000 was used to purchase property and could be recovered. Clean Water Services has offered to front the $2 million for Forest Grove's portion of the project, giving the city a buy-back option in the future. Mr. Koellermeier asked Clean Water Services for a similar arrangement, but he has not received a formal response. Tigard's comparable cost would be about $80 million. The financial commitment associated with the fourth amendment would be $3,031,579 over the next year. Mr. Koellermeier estimated Tigard's costs the following year to be about $4 million. Mr. Koellermeier said he has approached the other partners about returning the balance of Tigard's investment in the form of wholesale water when the project is completed. The partners were not receptive to this idea. Commissioner Buehner: • Said the Board had to spend money in order to "stay at the table" with regard to the TBWSP and was aware that money invested may not be recouped. • Expressed concern over subsidizing the irrigation district. • Said the money being discussed for the TBWSP could instead be used to fund the start up of the Lake Oswego Expansion and Water Partnership. Mr. Koellermeier said Tigard's share of the TBWSP would be in excess of$200 million, with the transmission line alone, costing between $50 and $75 million. This cost would likely be financed over a 30 year period. However, since Tigard will only be able to obtain 14 million gallons per day, the City will likely need to develop additional water sources before the financing for the TBWSP is paid off. Mr. Koellermeier responded to a question about how much further Tigard could proceed before it was committed to the entire project. Once the partnership begins to actually build the facility, Tigard would be contractually obligated to fund its share of the entire Intergovemmental Water Board Minutes March 20,2008 2 project. The fourth amendment will fund completion of the title transfer process and the start of project design and permitting. Commissioner Buehner asked staff to find out what Tigard's share of the irrigation subsidy would be if the project goes forward under local ownership. Mr. Koellermeier relayed that it now appeared that title transfer would not save the partnership any money. The Board discussed the TBWSP in relation to other water options. Mr. Koellermeier advised that a decision not to participate in the TBWSP will affect the city's status on the Joint Water Commission. It is possible the city could still receive water through the TBWSP without being an owner. Commissioner Buehner expressed her support of the Lake Oswego Expansion and Water Partnership as opposed to the TBWSP. The Board discussed the timelines for the Lake Oswego and Tualatin Basin projects, along with the TBWSP June 1 decision date. If theTBWSP partners don't receive an answer by then, it will be assumed Tigard is out of the project. The Board will need to make a decision regarding its participation in the TBWSP at their April 8 meeting. Commissioner Scheiderich asserted the TBWSP will be built, while other possible water projects have not been finalized. He advocated continuing with the TBWSP for the time being. Commissioner Carroll said that without some other agreement in place for future water, continuing with the TBWSP basically provided a $3 million "insurance policy" that the Tigard Water Service Area would have water. He also expressed support for keeping other long-term water options open. The Board asked Mr. Koellermeier to get clarification from TBWSP partners on whether the fourth amendment and the $3 million payment would commit the city to the entire project, or if it could abandon the project at a later date. Commissioner Carroll said the $3 million investment in the TBWSP would allow more time for the city to solidify the agreement on the Lake Oswego Expansion and Water Partnership. The Board discussed using its clout as a partner of the TBWSP to move the June 1 decision deadline back. Commissioner Carroll summarized the Board's discussion by directing Mr. Koellermeier to find out how long the Board can delay its decision to participate in the TBWSP and how much money will be required to fund the project while the decision is postponed. The Board agreed it needed to remain in the TBWSP until the Lake Oswego Expansion and Water Partnership, or some other water option, is finalized. Commissioner Buehner relayed that the upcoming intergovernmental agreement (IGA) between Tigard and Lake Oswego would commit the two cities to the Lake Oswego Intergovemmental Water Board Minutes March 20,2008 3 Expansion and Water Partnership. Mr. Koellermeier said a summary of the IGA will be presented at the April 15 meeting. Mr. Koellermeier confirmed he would investigate delaying the TBWSP decision and the corresponding cost resulting from such a delay. 5. Discuss Proposed Budget and Community Investment Program Mr. Koellermeier distributed two handouts which are on file in the IWB record. He explained the handouts were in draft form and about 85 percent complete. The handout marked "650" is the annual expenditure budget for water and the other handout was an overview of Community Investment Program projects related to water. Mr. Koellermeier summarized the handouts. Expenditures are relatively flat. Future water rates will be based on these documents. He noted the list of capital improvement projects is accurate, but the figures were not accurate. 6. Water Supply Update Mr. Goodrich reported: • Aquifer storage and recovery wells are full at 262.9 million gallons. • Average demand is 4.2 million gallons per day, which is normal for this time of year. • The school district has signed the intergovernmental agreement regarding their well and this agreement is on the Tigard City Council's March 25 agenda. June 17 is the start date for construction, with a completion date of June 30. License agreements with the two property owners affected by the proposed work on the other well on Titan Lane are in draft form. Work can start as soon as the license agreements are signed and the contract is awarded. 7. Informational Items • Update on Tigard Water District/City of Tigard Lawsuit Mr. Koellermeier distributed a court document which is on file in the IWB record. A judge dismissed the Tigard Water District's suit against the City of Tigard for administrative reasons. Tigard Water District has refiled the same suit. Commissioner Russell provided the Board with a statement from the Tigard Water District's attorney. The statement is on file in the IWB record. The Board discussed a handout on reclaimed water from a recent Tigard City Council meeting. Commissioner Buehner said Clean Water Services may be reevaluating its position on the use of reclaimed water in downtown Tigard. 8. Non-Agenda Items Mr. Koellermeier summarized a handout on contaminated water in western national parks. The handout is on file in the IWB record. 9. Future Agenda Items • Update on water partnership negotiations with the City of Lake Oswego. • Discussion of Water Rates • Review: - Proposed revisions to the credit for leak policy. Intergovernmental Water Board Minutes March 20,2008 4 - Proposed revisions to the Billing and Collection of Utility Charges section of the Tigard Municipal Code. - The billing insert policy. Mr. Koellermeier said a recommendation on water rates would come before the Board at a future meeting. 10. Next Meetings • Special Meeting, April 8, 2008, 5:30 p.m. Tigard Public Works Building, 8777 SW Burnham Street, Tigard, Oregon • Special Joint Meeting with the Tigard City Council, April 8, 2008, 7:30 p.m. City of Tigard Town Hall, 13125 SW Hall Blvd., Tigard, Oregon • Special Joint Meeting with the Tigard and Lake Oswego City Councils, April 15, 2008, 7 p.m., Lake Oswego City Hall, 380 A Avenue, Lake Oswego 11.Adjournment At 7:08 p.m. Commissioner Scheiderich motioned to adjourn the meeting; Commissioner Winn seconded the motion. The meeting was adjourned by unanimous vote, with Commissioners Buehner, Carroll, Russell, Scheiderich and Winn voting yes. —F �z G v g ��s-fb IWB Chair Greer A. Gaston, IWB Recorder Date: T Intergovernmental Water Board Minutes March 20,2008 5