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HomeMy WebLinkAboutApproved Minutes - 2010-10-11 SpecialCITY COUNCIL SPECIAL MEETING MINUTES October 11, 2010 Ma, or Jack D Hoffman called the special City Council meeting to order at 4:00 p.m. on October 11, 2010, in the Oswego Room, West End Building, 4010 Kruse Way. Present: Mayor Hoffman, Councilors Hennagin, Olson, Moncrieff, Tierney, Jordan and Vizzini. Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Joel Komarek, P.E. Project Director; and Brant Williams, Director of Economic and Capital Development 3. STUDY SESSION 3.1 Water Partnership Update Joel Komarek, P.E., Project Director, presented the Staff report by PowerPoint, which included the analysis of Lake Oswego's water system, which cannot reliably meet current or future planning needs. Conservation was a key element to the water supply portfolio and even with increased cost allocations to Lake Oswego, there would still be substantial benefit by having a partnership with Tigard. A key objective was source reliability involving the water rates of 38 million gallons per day (mgd) on the Clackamas River and the only way to insure access to that supply was through additional development. Lake Oswego, as a municipal water supplier, had an obligation to make sure that an adequate supply of safe drinking water could be provided to customers without being a burden on ratepayers. The current system had been producing 90 billion gallons of water but required constant vigilance and was now worn out; upgrades needed to occur. The potential for excess capacity would have significant value for regional uses and emergency supplies to other entities interested in alternative sources of water for domestic or emergency supplies. A $35 million net present value savings would accrue for Lake Oswego by having a partnership with Tigard. The Carollo Report noted that even with an aggressive conservation commitment, success was uncertain and expensive. Portland was spending over $800,000 annually in their conservation program; even if conservation were achieved, it would not eliminate the need for additional long- term capacity. Lake Oswego's share of new capacity was estimated at $106 million. The Carollo Report envisioned the allocation costs for the water treatment plant. New facility issues existed where hazardous chemicals and plant operators were working in the same structure. Replacement of equipment would require a new building. The larger cost proportion for the new facilities was allocated towards Lake Oswego. There would still be a majority share of capacity consisting of an 18 mgd capacity for Lake Oswego and 14 mgd capacity for Tigard. Mayor Hoffman asked if there was a valuation for the existing land used where Tigard would pay Lake Oswego for that value and pay for the right-of-ways and water rights. Mr. Komarek clarified there were no transfer of funds for water rights, but there was a buy -in payment for the land, which included property and easements that would be used by Tigard for expansion. Tigard paid for existing water systems properties, water plant, and reservoir properties. He confirmed for Mayor Hoffman there was no transfer of ownership of the water rights, which will remain in Lake Oswego's name with a portion of those rights pledged to Tigard. Mr. Komarek continued that in the Carollo Report the 38 mgd scenarios were updated, using two water treatment options available, with Ozone and without Ozone. After analysis, the water treatment and public health experts reached a consensus recommending that Ozone be included City Council Special Meeting Minutes Page 1 of 13 October 11, 2010 in any kind of expanded facility. The project team considered the need to continue the partnership with Tigard once updated costs caused Lake Oswego to accrue more than $20 million in costs. The team updated the Carollo Scenario 'A' involving the 24 mgd where Lake Oswego moved forward without a partnership. They reviewed other scenarios and what that would mean in deferring capital, need for partnership, and the reduction or need of excess water supply. The project team evaluated the net present value of that program and associated conservation program costs; net present value was the present value of future cash flows. The capital and future operating expense elements costs were projected out using a discount rate brought back to present value dollars. Lake Oswego's shares of the current net present value over 25 years, with the Ozone and without Ozone options, involved Scenario 'A' and Lake Oswego going it alone. Implementing a program to achieve 10% savings in 10 years would buy Lake Oswego 10 years of deferred capital expansion and an implementation of an expansion capacity to 21 mgd, completed by 2025. A similar result would occur under Scenario 'C', a more aggressive conservation of 25% overall savings over a 10 -year period, buying Lake Oswego 20 years of deferment of capital expansion with increment of supply implemented in 2030, completed by 2035. Mr. Komarek clarified for Councilor Tierney that Lake Oswego's share of $165 million over 25 years was the net present value of the two options, with Ozone or without Ozone, but in a partnership with Tigard. The $230 million previously reviewed with Council was capital figured in 2010 dollars; along with all the other costs that would continue to occur over the 25 years. He confirmed for Mayor Hoffman that a 2.92% discount rate was used and that $60 million was the net present value analysis over a 25 -year period. Mr. Komarek reviewed costs for a single-family ratepayer in Lake Oswego, involving a partnership, 38 mgd with Ozone and without Ozone, and the current rate strategy based upon the earlier escalated numbers; the proposal was close to matching up with Lake Oswego's prior adopted rate strategy. Also reviewed was the annual rate increases covering the period of 2007-2018 and the monthly water bill a single-family ratepayer would pay; these costs would only take effect with a partnership. The benefits of including Ozone would act as a barrier to emerging contaminants, eliminate the pre -chlorination step, and reduce the chlorine dose amount in the finished water to produce a higher quality of water. Councilor Olson understood by going to the standard filtration system the pre -dosing of chlorine was already being eliminated. Mr. Komarek verified with Keri Duncan, WTP Manager, that conventional treatment did eliminate the need to pre -chlorinate and that even without Ozone, pre -dosing would be eliminated. Ms. Duncan confirmed for Mr. Komarek that there was a beneficial effect on the dosing post filtration. More chlorine post filtration would occur and the total chlorine would increase without Ozone. She confirmed for Councilor Olson that it would be less than what was being added currently. Mr. Komarek discussed the typical practices used when the community complains of the quality of their water or when testing warrants. City response has a tendency to improve the situation, however, it is a responsive action and the water was not at the highest quality desired. He concluded his presentation, noting the objective at the joint Council meeting (with Tigard) in November was to obtain Council's recommendations for capital improvement on capacity, facilities, and Ozone. He added that Ursula Euler would be working on the master fees and utility rates that would be going into effect July 1, 2011; Tigard would be doing the same on a slightly delayed schedule. Mr. Komarek clarified for Councilor Olson the winter demand was about 4 mgd with an annual average of 6 mgd. Councilor Olson struggled with the 32 mgd and 38 mgd. She understood there was peak demand, which some years was only for two days. Her struggle included the huge system and the assumptions of taking on Stafford and other water districts; it was good to think about the future, but her concern was with the amount of water being used now and the water amount drawn from the Clackamas River. Mr. Komarek acknowledged Councilor Olson's concerns of building a big system, taking water out of the Clackamas, and stated the capacity size was somewhat related to Stafford and some of the other assumptions being made over the last 15 - years when talking about water supply planning. City Council Special Meeting Minutes Page 2 of 13 October 11, 2010 Mayor Hoffman suggested they could continue with the allocation they were currently using, fix the pumps and water treatment plant; if water ran out in the summer measures could then be taken that would be needed at that time. Mr. Komarek stated that would be a policy decision that could have consequences and those suggestions were part of the Scenario 'C' in the report. Jon Holland added that they looked at the scenarios of deferral and trying to conserve enough so the expansion would not have to happen. In considering various conservation rates, they quickly realized perpetual deferral was not an option. It would just defer 10 years for the 10% case and 20 years in the 25 % conservation case. The first phase was for immediate needs and the second phase of upgrades viould eventually have to kick in. Mr. Komarek was not sure of the size of immediate needs in terms of capital expense to take care of the deficiencies. Mr. Holland confirmed for Mr. Komarek that Phase I addressing Lake Oswego's immediate needs involved the 10% and 25% conservation scenarios that would be in the range of $40 - $60 million; these were not inconsequential upgrades and involved work at the intake, treatment plant, Waluga Reservoir, and Willamette River undercrossing. It would also include a $6 million refund payment to Tigard for their share of the partnership expenses. Mr. Komarek stated the refund payment would not apply if Lake Oswego only did the initial expansion, but maintained the partnership with Tigard where they would receive 14 mgd and Lake Oswego received 18 mgd; the next increment of supply would not occur. Mr. Holland verified for Councilor Tierney that $5 million in capital was needed to go from 32 mgd to 38 mgd, as most of the facilities were already being upgrade to 38 mgd. The only thing missing to reach the 38 mgd was one pump and its motor at the intake and increment of filtration and sedimentation capacity of the treatment plant; the rest of the system was compatible with the 38 mgd. Councilor Tierney believed the entire system was already done to 32 mgd, not 38 mgd, from intake through treatment and that the assumption of 38 mgd would be needed in the future. Mr. Holland stated there would be a small deduction, and the argument against that kind of economy was once the intake had to be replaced, the cost to take it from 16 mgd to 32 mgd was substantial; the cost to take it to 38 mgd was modest. He stated that all kinds of assumptions that could be made: growth, rates, what water districts do, and how much for Stafford; Foothills was another example not incorporated into previous growth assumptions. Lake Oswego had a 38 mgd water rate and between Lake Oswego and Tigard much of the demand of that water right, if not all of it, would occur over the course of a 10- to 20 -year timeframe; it was not 50 or 70 years. If there was excess capacity, a number of cities would be interested in buying in as partners or to buy the option of taking water on a peak capacity need during the summer. He viewed it two ways, with reasonable and not overly conservative growth projects, or based on demand that would be there for that water right, fully developed. What goes with that was the economy of scale; once you had to upgrade from a 36" to 42" pipeline it would no longer be a linear cost variation as it was with the diameter; that same logic applied to each facility. Councilor Tierney asked if the rate models were based on water used, not on water being sold and correlating with an increase of customers; assuming .5% per year; there was .5% more. Mr. Komarek confirmed that it was for Lake Oswego and would be different for Tigard. The forecasts for the initial expansion were that Tigard would need their allocation immediately. It would be based on how quickly Lake Oswego grows into its additional 2%, and then recognizing that developing additional supplies takes a decade, the question would be when do to start planning on the next increment of supply. Councilor Tierney was also concerned about the quantity and demand discussed by Councilor Olson. Lake Oswego had the right to the 38 mgd but the delta between the 32 mgd and the 38 mgd showed the majority of the cost was falling to Lake Oswego; Tigard had no right to it. Just looking at Lake Oswego's cost was very significant; the marginal cost of increasing the mgd falls to Lake Oswego. Councilor Hennagin noted there was a marginal cost of $5 million with a small increment if pipes were downsized from 42 to 36 inches; it may add a few extra million in cost. City Council Special Meeting Minutes Page 3 of 13 October 11, 2010 Councilor Olson understood that Tigard needed everything Lake Oswego could provide and more. There was no need to find people to purchase water if Lake Oswego had excess as Tigard would be interested, which would help to offset the cost. However, she was concerned with how much conservation would be needed to achieve the savings described in the 10- or 20-year option plan and what that would mean to the individual rate payer; how much less water would they have to use for Lake Oswego to reach that 10% or 20% conservation rate? Mr. Komarek stated that the goal should be achieving a 10% reduction in annual per capita use by year 10 or a 25% reduction by year 10, water consumption habits would need to be considered. Since everyone uses water differently determining what 10% or 2.5% less water use in the home on a per capita per day basis would be difficult to estimate. In his report, information was provided on communities who were successful or not at achieving even a 1 % reduction and spending millions a year to achieve that. A conservation savings could include citizens removing their lawns and replacing them with impervious surfaces. To reach the 25% level of conservation may require changes to Lake Oswego's development codes since a volunteer conservation plan may be difficult to achieve; a more mandatory or prescriptive plan would be the key to success of reaching that level. He reiterated it would be a marked change in what the community was doing today, with current assumptions of achieving .5% per year since the Carollo study was completed just to buy Lake Oswego enough time to implement the expansion by 2016 before peak days occur; peak days are already being exceeded occasionally. Mr. Komarek clarified for Councilor Olson that the capacity would have minimal effect if the wells went bad at Glen Moray and Rivergrove, as they are small users. The largest wholesale customer after Tigard was Lakegrove Water District who purchase on a peak day about'/ mgd, purchasing their summer water from Lake Oswego and their winter water from Portland. Councilor Olson referenced Councilor Tierney's comments on 32 mgd to 38 mgd increase and noted the $17 million to be added for Ozone, an increase in Lake Oswego's share of the costs; her concern was for all the cost increases. She stated the previous Council had implemented a tiered water rate several years ago with the goal of increasing conservation, she had not seen any data that this conservation had occurred. She would like to see that data before making a decision on Lake Oswego's future water supply and if the average use was 6 mgd, she still struggled with the 32 mgd and 38 mgd. Mr. Komarek clarified that of the 32 mgd, 14 mgd would be allocated to Tigard leaving Lake Oswego with 18 mgd. Historically, there are several summer days with a rate at 16 mgd or 17 mgd where Lake Oswego was not able to produce enough water. In order to meet the increased water needs, water would be taken from storage, which then required storage recovery by pumping 24/7. A successful recovery would be achieved if everything operated without failure. However, the minute something failed, capacity would return to the 12 mgd to 13 mgd with an unreliable capacity. If the pump failed, it would be difficult to replace as pumps are custom made, which could cause implementing a water restriction plan. Councilor Tierney asked for examples of other water utilities that did not produce water or alternatives for peak usage. It seemed to him that the need to increase capacity at a higher cost was only for a few days a year. Was there a way of managing the peak usage that would cost less? Mr. Komarek stated conservation helped as an alternative source to meet peak capacity needs rather than redesigning the current system. He was not sure of alternatives used by other water utilities, however if Lake Oswego chose not to redesign the current system with the peak hour being substantially higher than the peak day, certain hourly activities would need to be deleted. An alternative water source would provide supply but at a higher cost. Mr. Komarek clarified for Councilor Hennagin that there was a component in the reservoirs to meet that peak hour demand when capacity was exceeded, and that by adding another reservoir, capacity would cause operation and water quality issues. Keri Duncan, WTP Manager added that offsetting multiple days of peak summer demand by adding reservoir storage would cause the City Council Special Meeting Minutes Page 4 of 13 October 11, 2010 water to become old and lose optimum quality. The water quality would deteriorate and distribution issues would occur when adding too much storage sitting for long periods in reservoirs. Mr. Holland added the cost of water storage was $2 to $4 per gallon depending upon the type and location of tanks. In addition, 10 million to 20 million gallons are needed to offset the peaks anticipated. When considering saving expansion costs, there already are incremental costs and the solution would not be to use smaller pipelines, intakes, or facilities and then add $20 million more for a reservoir. Councilor Hennagin understood that, but believed reinforced concrete would cost more per gallon to make than steel tanks. Councilor Moncrieff was concerned that the amount of water reported may not be enough for future use. Looking at a new water intake system, they were hoping it would service Lake Oswego for 50, 75, to 100 years, knowing population would be growing and the demand for water would increase; best conservation efforts are met with modest results. Without maximizing the water intake capacity now, they would be looking at forced conservation. She did not see any other alternative at this point when looking to the future besides going for the maximum intake capacity. As far as the Ozone treatment, she believed that since it eliminated carcinogens from the drinking water, it should be added. She did not see the Ozone treatment or anything in the report as extravagant; it was meeting the community's basic daily needs. Councilor Vizzini discussed how conservation played into the timing of the decision. Since 6 years was the benchmark for the first large risk of the capacity issue, how much could be done if an aggressive water management approach was taken during that time? He suggested that would be paid with the savings of deferring or reducing the size of the problem into the future. His motivation for another alternative was based on the cost of treating the Clackamas River water so it was potable with an amount of that ending up on someone's lawn. It would be better to use the untreated Clackamas River water for lawns, although that would mean a new infrastructure involving costs to gradually re -plumb on a per gallon bases. It might be advantageous for the City to launch a course of true sustainability that would use potable water only for human consumption, cooking, and showers. He suggested an option of systems, as property was developed, that harvested rainwater and recycled gray water to be used for all other uses where potable water was not needed. In addition, Tigard's use of an aquifer storage and recovery system could be factored as a water management strategy and as a partnership on the aquifer for a strategy on non -potable water uses in Lake Oswego. An alternative would be for Lake Oswego to establish its own aquifer storage, assuming the geology works. He believed the idea of trying to change the way they looked at infrastructure to avoid huge costs was not about regulations or mandatory changes, it was more about tailoring the uses of the water coming into a property; an integrative water management approach. During his work on a Portland project, a 10,000 -gallon cistern was needed to capture enough water in the spring for reuse as non -potable uses thru the summer from July to October. With the right technology, could the drought cycle be resolved without using potable water? He believed this could be accomplished, although at current rates it would not pay back the costs; he had not factored in a rate increase. He believed rather than building a big plan, Lake Oswego may want to consider an alternative that would rethink the use of potable water. He also shared the idea of considering increasing water storage in the lake to create a system that used the lake as an emergency back up. He clarified for Mr. Komarek that his suggestion was for incremental changes over time trying to built in reuse systems; Stafford's development policies was used as an example. Councilor Moncrieff stated that incentives for using cisterns and reuse of water within existing buildable areas would contribute to Lake Oswego's conservation. Mr. Komarek agreed this would help with the summer peak. However, regarding references to developing a huge system, most of what was being built would not be any larger for a 32 mgd or 38 mgd. The pipelines would work for the 32 mgd and the 38 mg, the water treatment plant would add on modular structures, and the intake would have a space available to accommodate going from 32 mgd to 38 mgd. A better conservation job was to defer that next increment of supply to City Council Special Meeting Minutes Page 5 of 13 October 11, 2010 several years out. The current systems are solid and in place to allow sharing water for whatever purpose was needed. The partnership with Tigard could be leveraged to increase the emergency or supplemental supply needs. The infrastructure in place offered Lake Oswego the options to keep the water supply for itself or share what was not needed. It would never be cheaper to build and Lake Oswego may not have access to it if they did not think about developing it beneficially whether Lake Oswego or others used it. Councilor Olson clarified she understood certain development needed to occu but she was just concerned about the added cost. She also clarified with Mr. Komarek that the life of the new systent would last 50 to 100 years. She suspected that in 50 years there would i;e new technology, which could make the planned system changes obsolete. She asked if any thought had been given to building a reservoir in Tigard, since 1 'h million gallons was proposed for Tigard from the Waluga Reservoir. Mr. Komarek stated building a reservoir in Tigard was considered and was an idea they had suggested. However, based on the evaluation it was more expensive, by several million, to build new reservoirs rather than Lake Oswego building its own reservoir on its own property. Plus, that would mean Lake Oswego would be buying in to reservoirs that were 40-60 years old. Mr. Holland added that part of the function of the reservoir was to provide water in the event of an emergency. The Waluga area had a current storage deficiency, if the storage were put a few miles away in the event of an emergency; a pipeline would have to be relied on between the storage and the location of need. The general engineering practice was to site the storage close to the need. Mr. Komarek added buying into the 60 -year old reservoirs would involve reservoirs not built to the same seismic codes that a newer reservoir would. Councilor Olson clarified she did not mean buying into a reservoir, but looking at the reservoir being placed at a new location in Tigard or even replacing the one on the 10th Street parcel. Mr. Komarek stated there were site restraints to consider and clarified for Councilor Olson that even though the tank on 10th Street was being removed, he did not believe there was enough room to put in a new tank for the size they needed. There was an option of replacing this tank with a newer, same size of tank. Mayor Hoffman clarified with Mr. Komarek that there would be improvement of the low water pressure issues around Waluga with the proposed system changes. Mr. Komarek added the strategy was to replace the existing 20 -ft tall reservoir with a taller, 40 -ft reservoir, which would provide improvement to the low-pressure areas. Mayor Hoffman believed the Waluga area had large lots with limited housing and subdivision burdens. Councilor Vizzini believed they were flag lots. Mayor Hoffman discussed that the current gallon per day was 16 mgd and that 8 mgd more was needed over the next 50 years. He clarified with Mr. Komarek that Rivergrove did have two wells as of today and Councilor Moncrieff added Rivergrove and Glen Morey were both on well systems that were tied to Lake Oswego. Mayor Hoffman stated over the next 50 years assumptions would need to include the development of the land between the city limits and the Urban Service Boundary, Foothills development, and part of Stafford that would be developed. He clarified with Ms. Duncan that the difference between peak hour and peak day could be as high as 20 mgd and Mr. Komarek noted for Mayor Hoffman if only 16 mgd were available during the peak time, the reservoir storage would be drawn down. Mr. Komarek verified for Mayor Hoffman that every reservoir had three components for storage: a peaking storage, fire flow storage, and emergency storage. The fire flow storage was set by the Fire Marshall, which reviewed the zone that was served by the reservoir to determine which structure had the highest fire flow demand based on size, material, construction, and sprinklers system. Using the fire code would determine volume, rate of flow, and duration. The emergency storage provided two average days volume for that demand; emergencies include pump failure, pipeline break, upset at water treatment plant, or contamination in the river. Each zone had two average days; if an average day were 6-8 gallons, there would be enough storage to last two days, which was the average for the summer peak. City Council Special Meeting Minutes Page 6 of 13 October 11, 2010 Mr. Komarek verified for Mayor Hoffman that climate changes had been considered as a factor for water system projects. Contact was made with a couple professors at Portland State to develop a hydrologic model of the basin to determine the potential effects of climate change. Mayor Hoffman asked if water restrictions would be enforced with a worst-case scenario, involving peak hours going up to 20 mgd or 28 mgd 10 years from now, with no changes made to the present system, and the pumps failed. Mr. Komarek stated there was a curtailment plan that offered several levels of response to a water shortage depending on the cause and the anticipated duration. Examples of events included pump failure, water contamination, or an earthquake with every event level having a corresponding response. Early response could be to implement Phase of the Curtailment Plan, which would be public education or requesting volunteering conservation. A more severe scenario would be failure of the raw water pipeline that would have time repair issues. If occurring during the summer, Lake Oswego would not have provider connections to buy enough capacity to meet even the average daily need. Including the West Linn provider connection in this scenario, assuming their pipeline had not failed, could provide Lake Oswego with 2 mgd, which was half of Lake Oswego's winter habits. The worst-case scenario would be an issue of an emergency order for water rationing allowing domestic use only, no lawn watering or car washing. Councilor Olson noted that would be if the decision were not to change anything with the current system. She believed no one was recommending that. Mayor Hoffman added he was asking if only the pumps were upgraded, how that would affect a worst-case scenario. Mr. Komarek stated it depended upon the direction Lake Oswego wanted to take, even if they wanted to go it alone, there would be significant immediate improvements needed to improve reliability, which are expensive and would buy time, but that would be a different approach. Councilor Jordan asked if geography was factored into fire suppression or was the use of helicopters and lake water being considered. Mr. Komarek clarified that would be part of the fire suppression component in the reservoir; typically, they do not assess urban wild land interface. Several years ago, new fire hydrants were installed to address that risk, however there was not an additional reservoir storage component for that specific factor_ Councilor Tierney reviewed the delta for the first scenario involving 38 mgd with Ozone, the increases by $30 million with $27 million falling to Lake Oswego, and then $3 million to Tigard for pipe changes. He asked what program changes would make up the $47 million. Mr. Komarek stated the major differences in program cost, hence the allocation, included the water plan, which is the largest, single expense in the program resulting in an increased allocation to Lake Oswego. Also included was additional storage volume at Waluga with the bulk of that storage being allocated to Lake Oswego, construction costs, contingencies, and allowance for mitigation; those four components add up to the $30 million. Councilor Vizzini noted Table 3 of the Memorandum helped him to the understand cost allocations and suggested it would help to have it updated to show the difference in scenarios and the allocation formula. Mr. Komarek added that there had been an adjustment to that table with the finished water pipeline allocation. Councilor Vizzini verified with Mr. Komarek that based on water demand, then Lake Oswego's share of cost would increase. In order to make a resilient and effective water treatment plan, the upsizing may add to the cost but certain development items would still occur at a cost to Lake Oswego. Mr. Komarek agreed that even with the increase from 16 mgd to 24 mgd and with the "going it alone" scenario, the electrical, chemical, etc. would occur anyway. Councilor Tierney confirmed with Mr. Komarek the project originally allocated 42 mgd for Lake Oswego and was based on very little happening to the water treatment plant even with it being 42 years old. He believed the Council had been sold a bill of goods, how the 42 mgd was possible with an old pump and electrical issues concerned him, since one of the reasons for the project moving forward was that the treatment plant was 42 years old and improvements were not anticipated. Councilor Olson added a new electrical system was needed 2 years ago. City Council Special Meeting Minutes Page 7 of 13 October 11, 2010 Mr. Komarek stated the fire consultant was asked to determine if a benefit existed for the two communities to partner. It had been shown that a partnership did make sense, even if they knew then what they know now. Councilor Tierney understood the benefits of having a partnership but was concerned on the allocation amounts between Tigard and Lake Oswego when the 42 mgd was based on Lake Oswego having an old water treatment plant. The allocations were now being split 50/50 between the two communities with Tigard paying more than what Lake Oswego was now paying. If it evolved into one treatment plant, and then starts with the total volume involving only Lake Oswego paying their fair share, no problem; however, he believed it was a faulty assumption that nothinrl needed to be done to the current water process at no cost. Mr. Holland stated that putting the numbers into context for Lake Oswego, the shift was a 3% change from 43 mgd to 46 mgd proposed in the program. The water plant cost increases for the program would be $18 million with Ozone with $12 million of that Ozone expense falling to Lake Oswego. Councilor Tierney asked for clarification on the planned allocation of 38 mgd with Ozone, Mr. Holland clarified for that it was final and added, the correct current allocation with Ozone for Lake Oswego would be 46.5 mgd, which was making everything ready for the eventual 38 mgd; the plant would be upsized to 32 mgd. Mr. Komarek clarified the figures in the report to the Council w --,-,!d be different as the report did not include the current pipeline allocations. Councilor Olson noted that the larger part of the allocation was driven by the cost of adding the Ozone. Mr. Holland stated that with a more in depth look that included the chemical storage building, electrical, administration and operations, the shift in allocations would have been clearer. The Carollo Report did not have an oversight that resulted in the 3% shift; most of the shift was due to adding the Ozone. Councilor Jordan added the Ozone was not just for the taste but was also being added for future regulation requirements. Mr. Holland agreed it was for taste, regulation, and improved health even though the current plant and conventional technology would comply with current regulations. There are events that Ozone would address. Mayor Hoffman reviewed Alternatives and Fiscal Impact of the Council's report provided by Mr. Komarek and stated they would continue as proposed unless Council had any other concerns. Alex McIntyre, City Manager reminded Council the project decision due date was December 7, 2010 and wanted to make sure Council had the necessary tools and understood the system, the components, and mechanics of the proposal. Staff would be available for Council briefings if needed; this being one of the biggest decisions Council would have to make. Councilor Jordan confirmed with Mr. McIntyre that part of the recommendation process would also involve rate structures. Councilor Hennagin stated he supported the water treatment plant having the capability to add Ozone but was not sure that adding Ozone needed to start immediately. He suggested possibly waiting 6 years from now depending upon what the water standards were. He asked if Ozone could be added when an incident occurred, unless it was a required standard by the State of Oregon. Ms. Duncan verified that adding Ozone could be postponed until needed, however the infrastructure would still be required and those costs would still have to be paid. She confirmed for Councilor Hennagin that the operation and maintenance would still be a little more but there would be savings. Mr. McIntyre clarified for Councilor Olson that Tigard's decision was scheduled to occur December 21, 2010 and would be based on what Lake Oswego would be proposing at their December 7, 2010 meeting; by restructuring or changing the program, the project would be set back several steps. Councilor Olson was concerned with Waluga Reservoir and the concerns expressed last week by the Waluga neighbors. She would like to have the time to resolve those issues, but it sounded to her it was already a done deal with less than two months for the final decision. Mr. McIntyre reviewed the timeline, noting a joint meeting with Tigard was scheduled on December 8, 2010 to identify those issues. In addition, Staff was working with Tigard to see if the quarry were a reasonable site for the next reservoir. Mr. Holland added any fine-tuning of Waluga City Council Special Meeting Minutes Page 8 of 13 October 11, 2010 that shifted the load capacity to 10th Street or to Tigard would be a small refinement in the scheme of the program; that shift could be made at any point, prior to construction. Councilor Vizzini was interested in seeing updated numbers as soon as they were available. He was also concerned with the timing of decision-making issues. If the fact was to have both communities make the same decisions in December, what they needed to make a decision on needed to be identified by November, which meant the discussion at the beginning of November had to be driving towards a conclusion and consensus that would occur before the December 7, 2010 meeting. It would be unrealistic for Tigard to follow their lead if they were still picking and choosing program components at the December 7 meeting; the meeting in November would set somewhat in stone what the Council would be deciding on in December. Mr. McIntyre stated it measures Council -to -Council trust; are they in agreement with the direction they were heading? He would be meeting with Tigard City Manager Craig Prosser on Wednesday to strategize and see if they are in agreement. Councilor Vizzini noted if there were a big difference of opinion at the joint meeting on December 8 with Tigard, then there a lot of work would be needed at the beginning of December. 3.2 Policy on Media Executive Session David Powell, City Attorney, presented background for the Policy on Media Executive Sessions stating there was public interest for Council meetings to be open to the public, which was established in public meeting law. The public meeting law also included public interest in having executive sessions where discussions, not final decisions, could occur in a closed session about certain items. Executive session examples included where Council may want to consult with legal counsel about litigations, real property and labor negotiation, or items exempt from disclosure in public records; there are certain parameters for what can and cannot be done during those sessions. All states allow executive sessions, with Oregon being unique by allowing news members to attend executive sessions; however, the governing body could require them not to disclose the information from the executive sessions. This unwritten policy was established in the early 1970s and at that time, the identity of the new media was known with no mechanism of disclosure enforcement; the requirement was on the honor system. The sources that had a stake in the cooperation to continue that unique access to closed sessions did not want to violate that; it would be recognized that Oregon's unique situation was unenforceable and perhaps legislature would change it. For the most part, it worked with occasional problems. With new media, the internet allows anyone to disseminate information to thousands or millions of people. This created problem for governments whereas before, defining news media in the statues was not required since those individuals were known; however, with the current news technology, enforcement would be required. The statute requires that a difference be made between the public and news media, which forces a decision. He reminded Council of an incident that occurred in 2008 where prior to an executive session about a real property transaction, a blogger with credentials that were not from an established news media source and who had not met State law requiring him to establish himself as an official representative of news media, tried to attend the executive session. It was brought up that Lake Oswego did not have policy that constituted what news media was. Since an ad hoc or arbitrary decision should not be made, this occurrence prompted enlisting the City Attorney to develop a policy for executive attendance. Lake Oswego's draft policy had similar content to the policy developed by the task force. The draft policy also included what percentage of content must be used and whether there were anonymous sources to get at the accountability issue. That caused local and statewide reaction from media and access groups that were curious about the policy. A lot of the reaction resulted from misunderstanding since groups outside Oregon did not know that Oregon allowed news media into executive sessions. Some thought that Lake Oswego was trying to define who the news media were and who was entitled to report. Some thought this presented First Amendment issues when it was in fact, whom do the legislature say could come into an executive session and be told not to report. An earlier Attorney General opinion concluded that City Council Special Meeting Minutes Page 9 of 13 October 11, 2010 First Amendment rights were not violated under Oregon law and most other State law because there was no media right to attend executive sessions. The negative reaction resulted in the formation of a group of media representatives and local governments that developed a task force to get the State of Oregon to recognize and develop some type of State policy to determine who falls under the statue to attend executive sessions. Lake Oswego's work group started with Mayor Judy Hammerstad and now includes Mayor Hoffman, Mr. McIntyre, Steven Lounsbury, Clackamas City Council; Bill Johnstone, President & CEO of Oregon Broadcasters; Dominic Monahan, Counsel for Oregon Association of Broadcasters; Laurie Hieb, Executive Di; ector of Oregon Newspapers Publishers Association; Bob Caldwell, Editorial Page Editor of The Oregonian, and Judson Randall, President of Open Oregon (media access group). This dedicated group created a policy of compromise, which he believed had value as it had the blessing of media sources as well as local government. This policy was modeled on Clackamas County's policy that was developed earlier involving groups regularly reported on government sessions. Clackamas County's policy did not cover accountability and institutionalization; these were items included in the policy developed by the work group. If Lake Oswego adopted the proposed work group's policy, it would look similar to the earlier Attorney General's opinion that recognized what State law meant by news media involving an institutionalized news source and secondly, a representative of a news source that ordinarily and regularly reported on the business of the City Council. The Attorney General suggestion was recently expanded to include a source that reports on information of the type considered by the City Council in the executive session, if it were City Council. The policy would allow flexibility by the City Council but it adopted certain principles that would be followed rather than a simply ad hoc or an arbitrary type of decision-making process. This flexibility was purposeful since media sources were evolving with new technologies making it impossible to come up with an exact mathematical definition of a news media source. Mr. Powell reviewed page 17 of the Council report, on adopting the proposed policy. City Council would name qualified organizations to attend executive sessions that automatically were eligible because they had shown appropriate credentials. For Lake Oswego, that would include the newspaper organizations, Lake Oswego Review and The Oregonian. Local broadcasting stations, KGW and KATU, two established news sources that meet qualifications, could be included although they seldom attend meetings. Continuing on page 18, media representatives stated the entities that qualified to attend executive sessions included, "A general or associate member newspaper of the Oregon Newspaper Publishers Association (ONPA), a broadcast member of the Oregon Association of Broadcasters or a member of the Associated Press." The general newspaper members of the ONPA were local and statewide papers. The complete list could be provided to Council if requested; each town's paper would be in that list. The associate member list was also available, those members were more specialist news sources and tended to be a part of local small papers; examples included Willamette Week and Catholic Sentinel, which may need consideration for an automatic inclusion as opposed to demonstrating that they regularly report on the Council's activities. Also on page 18, Subsection 2 stated that a newspaper that the City might use for publication of public notices and State law was included at the request of the Open Oregon representative who believed there might be many small community newspapers that did not qualify or that were not members of ONPA. Yet, if they were doing legal notices for the City and met certain publication minimums under State law they should be included. This would not be an issue for Lake Oswego as The Oregonian was used for public noticing. Subsection 3 is of most interest as entities that Council may not recognize may show up at a meeting where Council would decide if these entities met the qualifications as described under (a), "is organized and operated to regularly and continuously publish, broadcast, transmit via the Internet or otherwise disseminate news to the public." This means not just somebody forming a newspaper on their laptop. Secondly, Council would consider who are likely to be accountable and motivated to comply with the requirements and are they "structured to support the terms of ORS City Council Special Meeting Minutes Page 10 of 13 October 11, 2010 192.660(4). This subsection discusses the requirement of not reporting by news media because the task force was unable to reach a consensus on how to describe the obligation of media. If the media were not being required to report did that mean they had a legal obligation not to report? The task force understood what it meant to support and commit to the terms resulting in a compromise. Also the business entity had to be institutionalized per the footnote, "For the purposes of this policy, "institutionalized" means long-established or well-established." The City Council would have the flexibility in determining how the entity was committed to supporting the ORS terms. Examples available would include "the entity has multiple personnel with defined roles within its organizational structure;" "the names of news -reporting pt_�rsonnel, and responsible entity management personnel, together with addresses and contact telephone number are readily available;" and "the entity has an available process for correcting errors including violations of executive sessions statues, by a person with authority to take corrective measures." A single person with a laptop could try to attend an executive session and could be qualified by Council to attend, however they would have to convince Council they were supportive of and committed to complying with the requirements and that they were long-standing institutionalized. Since the Council had no enforcement authority, that single person would need to be able to provide an organization or editor contact for complaints of violation. Internet news organizations are growing and would eventually meet these criteria, as well as others that may provide the same level of accountability in institutionalization. The policy also covered time limits for when someone applies and how long the City Council would have to make a decision about it. On page 19, Subsection 3 provided how the Council identified a representative after establishing an entity qualified as a news media by requiring a press badge, issued identification, or a recent news article published by the recognized media organization, or a letter from the editor. On page 20, Subsection 3D, the Council would have the option to require a form be provided with a signature line certifying the attendee agreed to comply with ORS 192.600(4). Enforcement of any violations had not been determined, but this requirement underscores the obligation of the person coming into executive session not to do that. Finally, Subsection 5 stated that Council could exclude, "A representative of a news media organization that has a direct personal interest in the subject of the executive session that would frustrate the purpose of the executive session may be barred from attending." He believed this language was vague and was suggested as such by the representative from Open Oregon, rather than by the lawyers or government representatives; it would be "you know it when you see it" type situation with the person having direct interest in what was going on as grounds for exclusion. Mr. Powell concluded by stating some might question whether Lake Oswego really needs this type of policy; two years ago during the 2008 incident, Council may have wished they had it. That incident may not happen again and even having a policy in place did not guarantee it would pass mustard if there were a legal challenge. The policy was interpreting State statute and previous Attorney General opinions. If this type of policy did not cut it then local governments may have to go back and ask the legislature to have Oregon made like other states; there must be some way to define news media that State law does not provide. The proposed policy was a good faith way to do it that was blessed by media sources and he recommended that the Council consider adopting something like this policy. Councilor Tierney asked if the proposed policy could be adopted at this evening's meeting. Mr. Powell stated he would put the policy in a Lake Oswego format and present it at a regular meeting. He suggested Council might want to have a public hearing. He further clarified that although this type of policy was relatively new, his survey showed Medford, Roseburg, Wood Village, Grants Pass, and possibly other communities had adopted the policy. Portland's City Attorney office and Springfield were asking what Lake Oswego decided; Pendleton was considering it. The League of Oregon Cities had received inquires as to what other Cities were considering. There was a lot of interest in the policy when it first came out, but communities are waiting to see what happens from City Council Special Meeting Minutes Page 11 of 13 October 11, 2010 others. He may be able to get a better sense of how many communities are receiving it in time for the public hearing. Councilor Tierney asked why the legislature had not resolved the issue by defining it. Mr. Powell replied it was a good question, adding when the task force originally met, one option was to go to the legislature; however, the groups had different solution approaches. He could not speak for the media sources, but believed they could not do any better than what they already had at the legislature, thus they would not be interested in going. On the government side, it was a tall order to ask the legislature to throw media out of executive sessions. However, if the court stated these distinctions could not be made, and everyone with a laptop was news media and must be let in; it would mean the end of executive sessions or the legislature would have to do that. The task force could not come up with a concept to present to the legislature because their approaches were too different. Councilor Hennagin suggested the legislature could ask the broadcasters, publishers, and the League of Oregon Cities to work out a compromise outside the executive sessions, which the groups had done in the past. Councilor Jordan believed as media changes, individuals using a laptop are still going to be affiliated with the news representative that Council was discussing and those blogs are going to be a part of regular news stream. However, this was precipitated by issues on the coast where people were attending union negotiations advocated to bloggers that they should be allowed into executive sessions. It had been abused, not in Lake Oswego, but in other small communities and if it does not do any harm, she was okay with it; otherwise, she did not see why they needed it. Councilor Vizzini asked if Lake Oswego adopted the policy would a certified list of notification be placed in the newspaper requesting that news media sources be prequalified or would it be handled when an executive session was posted on the agenda when someone showed up at the door. Mr. Powell clarified that Council would want the regular sources to be prequalified, which would apply to persons that knew in advance they were going to attend. Prequalification would also help with individuals showing up at the door, due to timeline requirements. The Council would need a couple of weeks to verify credentials; someone could not show up as a complete news source with no credentials and expect to attend. The proposed policy allows summary determination; if someone showed up and qualification was determined, Council may let the entity in. Councilor Vizzini noted page 19 under Subsection 3A and 3B and asked what specific facts and time frame were established to identify that someone met the "regularly reports" criteria. He believed the next step was the specific information or evidence required for entities to meet the established tests and suggested having a form that needed to be completed ahead of time. Mr. Powell stated it could be that specific. The earlier Lake Oswego policy was more like that, but was met with opposition because people talked about nontraditional news sources and other ways they could qualify. The task force compromised to give the Council the objectives and tools for where they wanted to go and could meet it whichever way they wanted. He added someone could become established in a short time and had such indicia of reliability and accountability that the Council may want to let them in; it was not arbitrary for letting them in because Council would have that tool. The policy was meant to be flexible. Councilor Vizzini understood this was to protect against abuse. Mr. Powell clarified for Councilor Tierney that the task force did not consider as a solution just having an entity complete a form stating they would abide by the rules as there would be no enforcement. Mayor Hoffman noted the policy would be revisited during the Council's goal -setting session. He clarified that this policy was not on the agenda and at this time was difficult to fit it into future agendas, which were already full. Mr. Powell confirmed he would bring the proposed policy to Council when the agenda allowed it. Council did not believe a public hearing was required. City Council Special Meeting Minutes Page 12 of 13 October 11, 2010 3.3 Discussion on High Speed Rail Brant Williams, Director of Economic and Capital Development, provided a brief staff report covering the position that the Oregon Department of Transportation (ODOT) was taking regarding the high-speed rail. The plan was to move forward with the study even though ODOT had not heard back from the Federal Grant Railroad Administration whether the federal piece would be funded or not. The overall cost of the project was $10 million and ODOT was putting $5.8 million into the project. ODOT was interested in having Lake Oswego as a high-level stakeholder on the committee. The C4 letter Lake Oswego drafted referenced a decision-making committee and ODOT preferred to see it as an advisory committee. He believed Lake Oswego would need to have more conversations with ODOT as they move forward. He noted the project was very preliminary at this point. Councilor Jordan noted what was significant -was that many different options were at play; whether talking west from Beaverton, south to Salem, what happens on 1-205, or should the railroad be brought up through that corridor with airport connections instead of the narrowness of their scope. The fact that ODOT was considering other options was a big movement; however, it was important that Lake Oswego not have just an advisory role. She suggested since it was an election year and with Alice Norris running for House Representative, there may be help to move some sort of coalition of the cities involved along the route to put pressure through the legislature and Governor's office on ODOT to help expand their thinking. Councilor Olson noted the second bullet of the letter stated, "Counties that will likely be significantly impacted, such as Clackamas County, be included in the decision-making body" and asked why the language did not include counties and cities. Councilor Jordan clarified she had originally inserted cities, but when reading about the regional decision-making bodies put into effect in San Francisco, she understood that some sort of regional body with more authority than the ODOT planning group was needed to make decisions. That process itself would help inform who was on that body and how it was developed; the cities would be a part of it. They had discussed that urban cities have different needs than rural cities and that all are affected along the current rail system routes, so at least the differences between urban and rural cities needed to be recognized. It was not that the cities were being ignored; they just did not want it to sound like the group was becoming huge or indicate who would select what cities to be on the advisory board at this point. Mr. Williams believed the rail system went through or affected a large number cities, but he was not sure how many. Councilor Olson added that the tone of the letter with its numerous mentions of Clackamas County sounded oriented to the counties, although Lake Oswego was signing the letter. She would feel more comfortable if there was a stronger reference to the cities. Councilor Jordan clarified that cities were mentioned, which was why the Mayors were being asked to sign the letter since it was the authority of this larger body and the pressure on ODOT from that larger body than from one city might have. Councilor Jordan clarified for Councilor Olson that ODOT's $5.8 million for the study was from interest earned from the Connect Oregon Fund. 4. ADJOURNMENT Mayor Hoffman adjourned the meeting at 6:10 p.m. ctfully PROVED BY THE CITY COUNCIL: Robyn Christie Tebr4ary 11,120 City Recorder D. Hoffm6n; City Council Special Meeting Minutes Page 13 of 13 October 11, 2010