Item 3: Resolution 5022 Concerning the Sale of Water to the City of Veneta

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: Resolution 5022 Concerning the Sale of Water to the City of Veneta Meeting Date: January 24, 2011 Agenda Item Number: 3 Department: City Manager’s Office Staff Contact: Brenda Wilson www.eugene-or.gov Contact Telephone Number: 541-682-8441 ISSUE STATEMENT This item is for the City Council to take action on a resolution in support of the sale of surplus water to Veneta. The resolution is included as Attachment A. BACKGROUND Eugene Water & Electric Board (EWEB) entered into a contract with the City of Veneta (Veneta) to sell up to four million gallons of water per day (mgd). 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 Eugene has appealed that decision. The City of Veneta has asked that the council weigh in on whether the council supports the proposed sale of surplus water to Veneta so that Veneta can have more certainty before moving forward with the project. In order to take full advantage of its federal funding package, as well as the favorable construction market, Veneta would like to commence planning, design and construction of the pipeline as soon as reasonably possible. Although the contract entered into between EWEB and Veneta provides for the purchase of up to four mgd, Veneta has indicated that moving forward with the project would be fiscally responsible as long as it had support for at least three mgd. After listening to comments and concerns, the proposed resolution contains the following main conditions: 1.The City Council approves EWEB’s sale of water to Veneta of up to three mgd; 2.The City Council must approve any connection to the pipeline constructed by Veneta to provide water to property located outside Veneta’s urban growth boundary; and 3.In the event EWEB sells water on a wholesale basis to another municipality or water provider, and that sale involves the payment to the City of Eugene of some type of franchise fee, Veneta shall pay a fee to the City of Eugene at the same rate. If the City Council adopts the proposed resolution, these conditions will be reflected in an Intergovernmental Agreement (IGA) between the City of Veneta and the City of Eugene. The IGA may also provide that the IGA terminates in the event that the final appellate court decision concludes that EWEB, rather than the City Council, has the authority to approve the sale of water to Veneta. \\Cesrv500\cc support\CMO\2011 Council Agendas\M110124\S1101243.doc