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PROPOSED BULL RUN REGION DRINKING WATER AGENCY

PROPOSED BULL RUN REGION DRINKING WATER AGENCY. HISTORY. In March 2001, Commissioner Sten proposed the formation of a new governmental structure to provide ownership and management of the region’s water sources.

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PROPOSED BULL RUN REGION DRINKING WATER AGENCY

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  1. PROPOSED BULL RUN REGIONDRINKING WATER AGENCY

  2. HISTORY In March 2001, Commissioner Sten proposed the formation of a new governmental structure to provide ownership and management of the region’s water sources. In August of 2001, a dozen interested water providers joined together to research Commissioner Sten’s proposal.

  3. Regional Water System

  4. Purpose of Phase I • Achieve a consensus on goals. • Adopt a criteria. • Investigate governance models. • Provide public information.

  5. Key Findings of Phase I • Significant interest does exist. • To start, supply should be limited to the Bull Run Watershed and the Columbia South Shore Wellfield systems.

  6. Purpose of Phase II • Analyze governance alternatives. • Develop financial models. • Create a public involvement plan. • Determine the facilities that would be a part of a regional supply and transmission system.

  7. Key Findings of Phase II • Formation is feasible. • No apparent “fatal flaws” discovered. • Proposed Regional System will consist of the Bull Run and Columbia South Shore Wellfield sources and the Washington County Supply Line.

  8. Key Findings of Phase II(cont.) • Form Agency under an ORS 190 intergovernmental agreement. • Engineering analyses provided information on facilities. • Financial analyses provided information on the estimated range of values of facilities to be purchased and transferred.

  9. Key Findings of Phase II(cont.) • Legal and governance analyses addressed the key issues of the project. • Principles of Agreement were developed. • Criteria No. 1 through 15 were met as established by the Policy Steering Committee during Phase I.

  10. Proposed Agency Concept • New Agency will own, operate and maintain regional water supply. • Constitute under an ORS 190 intergovernmental agreement. • Portland Water Bureau will contribute supply system assets consisting of Bull Run & Columbia South Shore Wellfield systems to Agency and receive credit for their value.

  11. Proposed Agency Concept (cont.) • Agreements to allow Agency use of water rights. • Washington County Supply Line will be contributed to the Agency and credit for its value will be received. • Agency will undertake supply system improvement projects. • Agency may assume the wholesale water sales contracts.

  12. Proposed Agency Concept (cont.) • Staff of new Agency will consist primarily of the staff of the Portland Water Bureau. • Agency will have the authority to provide any water related services. • Portland Water Bureau will retain ownership of its distribution system, which will be managed, operated and maintained by the Agency.

  13. ENGINEERING Components • Bull Run Watershed lands; • Bull Run Dam (No. 1 and 2); • Conduits; • Columbia South Shore Wellfield; • Powell Butte Reservoir and properties; and • Washington County Supply Line.

  14. SYSTEM ASSETS MAP

  15. Impacts Creation of a regional agency provides the opportunity of system operation improvements including more efficient and coordinated use of the storage and transmission facilities.

  16. Operational Issues The Engineering Working Group recommends the establishment of a supply and transmission system operations group. Key operational issues include: • Wheeling • Optimal Seasonal Operations • Degree of Benefit

  17. A New Supply Line The Regional Water Supply Plan calls for regional transmission system improvements within the next 10 years including the construction of Washington County Supply Line Number 2. This project is excluded from the proposed Agency preliminary capital improvement program list.

  18. GOVERNANCE Options Evaluated 1. ORS 190 Inter-governmental Agreement 2. ORS 261 People’s Utility Districts 3. ORS 264 Water Districts 4. ORS 268 Regional Service Districts 5. ORS 450 Water Authorities

  19. Local governments agree to provide certain functions together. Board consists of elected officials from members. Agency formed: Owns assets; Sets wholesale rates; Collects revenues; and Operates facilities. Intergovernmental Agreement

  20. Citizens vote to create PUD. 5 member Board elected by zone. PUD: Owns assets; Sets wholesale rates; Collects revenues and Operates facilities Water Power People’s Utility District

  21. Recommendation ORS 190: Inter-Governmental Agreement Recommended by elected officials for it: • Provides control by local government. • Board consists of elected officials. • Control which water sources are used.

  22. Principles of Agreement • Section 1: Definitions • Section 2: Agency Organization • Section 3: The System • Section 4: System Use • Section 5: System Expansion • Section 6: Operations & Maintenance

  23. Principles of Agreement (cont.) • Section 7: Rates and Charges • Section 8: Water Sales to Outside Parties • Section 9: Withdrawal, Termination • Section 10: Liability • Section 11: Dispute Resolution

  24. Section 2: Agency Organization • Board appointed by Parties - one per member. • Board has full powers to act. • Clear separation of Agency staff. • There will be a transition process. • Staff transferring into the new Agency will be under state law provisions.

  25. Section 2: Agency Organization (cont) • Agency is an enterprise utility, getting funds from rates, revenue bonds, SDCs, grants, but not GO bonds or property taxes. • Agency will establish a regional SDC to finance growth.

  26. Member Agencies Board of Directors Agency Director Supply System Staff Distribution System Staff General Agency Organization

  27. Agency Functions & Assets Principal Functions • O&M on System physical assets. • Contractual services for others • Wholesale contracts • Plan, finance, build system improvements Principal Assets • Portland Supply System • Washington County Supply Line • New projects built by Agency • Cash or in-lieu funds from members

  28. Section 3: The System • Bull Run rights to water are not part of assets, but Agency has has use of them. • Parties own an undivided interest in the System. • Parties authorize Agency to bond & build defined list of capital improvements.

  29. Section 3: The System (cont.) • Ownership in Agency will be valued at book value. • Existing Parties can increase and/or decrease ownership.

  30. Section 4: System Use • Parties are not buying a right to a defined maximum daily capacity purchase. • Parties agree to a minimum allocation of water for rolling 10-year period. • Parties “nominate” water needs each year and the Board adjust them to fit available water. • Agency supplies only Bull Run or well field water, except in emergencies.

  31. Section 4: System Use (cont.) • Parties have first right to water available, subject to wholesale contracts. • Portland agrees to wheel water through its distribution system to west-side parties. • Board establishes conservation and curtailment policies.

  32. Section 5: System Expansion • Agency will expand System to meet needs of the Parties. Section 6: System O & M • System will be operated to meet generally accepted utility standards. • Agency may operate distribution systems of the parties or others, and provide other water-related services.

  33. Conceptual Approach to Contractual Operations Contractee Functions • Continues to own its system • Pays fee to Agency to operate system and for other functions, as agreed • Sets rates for services to its customers • Provides capital for system improvements Agency Functions • O&M on Contractee’s System • Monthly billing for services • Other services as requested: e.g. capital planning, construction

  34. Section 7: Rates and Charges • Parties pay for water on cost-of-service basis -- no subsidies or excess profits. • Growth pays for growth. • Contract services pay full costs.

  35. Section 8: Water Sales to Outside Parties • Portland will assign existing wholesale contracts to Agency. • Agency will develop model wholesale contract.

  36. Section 9: Withdrawal, Termination • Agency guarantees to buy out anyone leaving at a defined unit value and terms. • Parties may be removed as owners involuntarily if they fail to meet terms of the Agreement.

  37. Section 10: Liability • Liability for backing the revenue bonds and other debt of the Agency is apportioned to the Parties according to their ownership. • Agency covers tort liability for Board members and staff.

  38. Section 11: Dispute Resolution • Three step dispute resolution process is set up. • Decisions by supermajority of the Board are deemed final - appeal to the courts.

  39. Unresolved Issues • Valuation of Portland Water Bureau and Washington County Supply Line assets. • Voting process of the Board. • Actual process of transition to the new Agency.

  40. Unresolved Issues (cont.) • Amount of water the agency would be required to provide under existing contracts assumed by the Agency. • Level of nomination of the participating agencies. • Remedies for participating agencies that overuse the system.

  41. Discussion & Questions Next Workshop: 11/12/02 Topics: Finance & Public Involvement

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