Item A: Eugene Water & Electric Board Sale of Water to Veneta

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Eugene Water & Electric Board Sale of Water to Veneta Meeting Date: November 10, 2010 Agenda Item Number: A Department: City Manager’s Office Staff Contact: Brenda Wilson www.eugene-or.gov Contact Telephone Number: 541-682-8441 ISSUE STATEMENT Eugene Water & Electric Board (EWEB) entered into a contract to sell water to the City of Veneta. EWEB filed a lawsuit asking the court to declare that EWEB has independent authority to enter into that contract without council approval. On October 27, 2010, the circuit court issued its decision finding that EWEB, rather than the City Council, has the authority to sell water to Veneta. The City of Veneta has asked that the council weigh in on whether the council supports the proposed sale of water to Veneta. BACKGROUND Late last year, EWEB informed the City Manager about EWEB’s interest to sell water to Veneta in order to certify part of EWEB’s third water right and to help ensure that the water in this water right would be available to Eugene residents in the future when needed. In mid-April, EWEB and the City of Veneta signed a water-sale contract. EWEB then submitted the contract to the Lane County Circuit Court for validation. On May 12, 2010, the council was presented with background information on the water sale and the court process. The council directed staff to schedule (1) a joint meeting with the EWEB Board of Directors before the council takes up this issue for decision; (2) a public forum, with EWEB’s involvement, in order to provide information to the public about the proposed sale of water; and (3) following that forum, a public hearing on EWEB’s proposed sale of water to Veneta. The joint meeting with EWEB was held on June 7, 2010; the public information forum was held on June 8, 2010; and the public hearing was held on June 14, 2010. On June 28, 2010, this issue was brought back to the council. While the City Manager stated he believed that perfection of the third water right is in the City’s interest, the City Manager recommended that the City intervene in the validation proceeding to resolve the issue of Charter authority. The council voted to postpone a decision on whether Council supports the proposed sale of water to Veneta until after the Charter authority question was resolved by the court. Accordingly, the City intervened in the validation proceeding and argued that the City Charter grants to the council, rather than EWEB, the authority to decide to sell water outside the City’s limits. On October 27, 2010, the circuit court decided that EWEB, rather than the City Council, has the authority to sell water to Veneta. No decision has been made yet on whether the City will appeal that decision. Z:\CMO\2010 Council Agendas\M101110\S101110A.doc