UPDATE: Tigard’s Long-Term Water Supply Options

1. UPDATE: Tigard’s Long-Term Water Supply Options IWB / Tigard City Council Joint Meeting April 15, 2003

2. WHY? Tigard is unable to independently provide for: • Current water demands • Future water demands To meet demand, Tigard purchases water from: • Joint Water Commission • City of Portland Water Bureau

3. Tigard Water Demands 2002 Average Daily Demand (ADD) • 6.0 million gallons per day 2002 Peak Daily Demand (PDD) • 13.84 million gallons per day Future Demands (2010) • ADD - 6.76 million gallons per day • PDD - 17.15 million gallons per day

4. IDENTIFIED OPTIONS Become a partial owner of: • Joint Water Commission; or • Proposed Bull Run Regional Drinking Water Agency

5. Bull Run Regional Drinking Water Agency

6. Proposed BRRDWA Portland Water Bureau - 1. No regionalization at this time • Phase III Assessment • Additional Time 2. Begin renegotiation process of wholesale contracts

7. Estimated Cost of Portland Contracts Over 30 Years Total Cost = $666.2 Million

8. Options for Relationships • Currently based on vendor-customer relationship • Proposing vendor-customer relationship • Authority may be based on collaborative relationship

9. Current Contract Methodology • O&M costs based on budget • Peak-season costs allocated using changes in demand • Rate of return based on index • Use of replacement cost depreciation

10. Revised Pricing Proposal • O&M based on actual historical expenditures • True-up for O&M and capital costs based on actual use • Use of original cost depreciation • Rate of return based on PDX’s interest rate on long-term debt and a premium

11. Method for O&M Calculation • Current approach based on budget not expenditures • Proposal based on 3-year average of actual O&M expenditures • Average expenditures adjusted for inflation

12. Joint Water Commission

13. Joint Water Commission • Collective Water Supply Agency • Trask & Tualatin River Watersheds • Current Owners

14. ASSETS • 70 MGD Treatment Plant • Barney & Scoggins Reservoir • 20MG Finished Water Reservoir • Transmission Lines

15. Membership Model Currently Receiving: • 2 million gallons per day Initial Nomination (2003): • 4 million gallons per day Total Nomination (2018): • 18 million gallons a day

16. Joining the JWC Initial Nomination: • 4 million gallons per day Initial Buy-In Cost: • $2 - $3 per gallon (of nomination) • Become partial owner of JWC assets • Does not buy water rights

17. Financial Considerations • Financing buy-in • Paying for growth • Cost of service analysis & rates • Buy In – Buy Back

18. Costs to be Paid Initial Buy-In Net Buy-In Usage Charge from Agency • Charged to members • Future operating expenses • Recovery of capital costs

19. Capital Improvement Plans Option 1: • Scoggins Dam Expansion • Treatment Plant Expansion Option 2: • Scoggins Dam Expansion • Dual Treatment Plant Sites

20. Tigard’s Costs for Projected Capital Expenditures

21. Contingent Upon Tigard’s 100% participation is contingent upon: • Buy-Back Provisions • Wheeling Issues

22. Implementation • How will Tigard buy-in? • When will it happen? • Will the costs be spread out over 40 years?

23. Now What? Portland Water Bureau • Renegotiate wholesale water contracts (05-05-03) Joint Water Commission • Continue negotiations • Participate in feasibility studies Other • Continue to pursue other water source opportunities

24. Quarterly Updates Next Meeting: July 15th, 2003 Joint IWB and Tigard City Council Meeting *Updates will be provided sooner if developments occur.