CC Minutes - 11/10/10 Work Session

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Veneta City Administrator Ric Ingham said the water contract between EWEB and the City of Veneta was time - sensitive because of its tie to a State Rural Development grant and loan package with a 2015 expiration date. Preliminary engineering indicated the project could take up to four years to build, although he hoped it could be done sooner so Veneta could take advantage of lower costs. Mr. Ingham emphasized the positive economic impact that pipeline construction would have on Lane County. Mr. Ingham said Veneta was a young community that was still developing much of its major infrastruc- ture. The city had incorporated because of water quality issues. Veneta did not have access to good aquifers or to surface water sources as most communities did. However, Veneta was mandated by Goal 14 to have a 20 -year supply of drinking water as well as the supporting infrastructure to meet the needs of its projected population. Mr. Ingham said that water would not drive Veneta's growth rate one way or another. Mr. Ingham noted the many studies that had occurred to identify a water source for Veneta, and said the studies pointed to the pipeline project as the preferred alternative. Veneta Community Services Director Brian Issa, Project Lead, distributed and reviewed copies of a PowerPoint presentation entitled A Comparison of Water Source Development Scenarios for the City of Veneta. The presentation summarized Veneta's water situation and included information on demand projections, existing supply, options for long -range alternatives, the costs of supply development scenarios, and rate comparisons and projected systems development charge (SDC) increases. Mayor Piercy solicited council comments and questions. Responding to a question from Mr. Clark, Mr. Ingham indicated that Veneta had employed Rural Development financing in 1998 to expand its wastewater plant, and all improvements to the water system made in the last 20 years were funded by urban renewal. Mr. Ingham did not anticipate the City's bond rating would be impacted by the water situation. Ms. Ortiz asked what amount of water Veneta needed. Mr. Issa said the project had been sized to accommodate 3 to 5 million gallons daily. Ms. Ortiz suggested Veneta's SDCs would be so high people would be discouraged from building. Mr. Ingham emphasized Veneta's efforts to foster the creation of local jobs for Veneta residents and said his concern was how the SDCs would impacts the community's business development goals. Mr. Poling believed that Veneta had thoroughly documented its water need and questioned what other options Veneta had given the restrictions placed on other potential sources by the Oregon Department of Water Resources. He hoped at minimum to move the item on to the public hearing phase for the sake of regional collaboration and partnership. Mr. Poling asked what Veneta would do if it was unable to secure water from EWEB. Mr. Ingram said Veneta would continue to seek an alternative source, which would likely involve efforts to draw water from the Fern Ridge Reservoir. However, there were obstacles created by the need for Congressional approval, water filtration requirements, and the potential impact of drought years on the reservoir's water levels. He emphasized that Veneta had sufficient water to meet average demand for 20 years but would be challenged to provide water for peak demand within the next few years. Mr. Pryor spoke to the pros and cons of the proposed water contract. Speaking to the question of whether the sale hurt Eugene's water supply, he pointed out that the contract helped to perfect EWEB's water right MINUTES— Eugene City Council November 10, 2010 Page 2 Work Session