HomeMy WebLinkAboutItem A: Eugene Water & Electric Board Sale of Water to Veneta
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UGENE ITY OUNCIL
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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.
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RELATED CITY POLICIES
There are no specific City policies to be considered by the City Council at this meeting; it is a
status update and informational meeting.
COUNCIL OPTIONS
No formal action is requested at this meeting. This meeting is for discussion purposes only.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends that a public hearing be scheduled for the City Council regarding
the sale of water to Veneta. Subsequent to that public hearing, another work session will be
scheduled to consider a resolution for support of the sale of water to Veneta.
SUGGESTED MOTION
No motion is required.
ATTACHMENTS
A.Veneta-EWEB Pipeline Project Status
B.Veneta/EWEB Pipeline Project Overview dated April 5, 2010
FOR MORE INFORMATION
Staff Contact: Brenda Wilson
Telephone: 682-8441
Staff E-Mail: brenda.s.wilson@ci.eugene.or.us
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ATTACHMENT A
City of Veneta
Veneta-EWEB Pipeline Project Status
October 29, 2010
This memo provides an update on the Veneta-EWEB water pipeline project and builds
upon the information presented in our letter submitted in January of 2010. Since that
time, the following events have highlighted the timeliness and need for completion of this
project.
Groundwater Source Investigation/Water Resource Dept. Limitations
In June of 2010, GSI Water Solutions Incorporated completed an evaluation of
Veneta’s well field, including potential sites for additional exploration and development.
Their evaluation included modeling of the location and thickness of water bearing strata
in and around the Veneta UGB in an effort to predict where the City would be most likely
to find water of sufficient quantity and quality to serve as additional potable supply.
The result of this study are summarized most graphically in Figure 5 of that
report. These results show a higher potential for water bearing geology in the far eastern
portion of the UGB and extending to the east and northeast outside of the UGB. These
areas are in relatively close proximity to our most productive well (well 9), and existing
transmission and treatment facilities.
Concurrent with this study, the City had applied for a water use permit from the
Department of Water Resources for our newest well (well 12) located at the public works
yard on Broadway Avenue. On January 8, 2010, the City received the Department’s
preliminary analysis and response, reprinted in relevant part below:
This determination severely limits the usefulness of this well by essentially precluding
withdrawals during the summer months when irrigation is at its peak and water is most
needed. We were also informed that these restrictions would apply to any well within one
mile of the Long Tom River or Fern Ridge Reservoir.
This determination essentially pushes the City out of areas where new well
development is most likely to be productive, and into areas south and southeast of the
UGB where groundwater quantity and quality are known to be limited. Well projections
based on this scenario result in more wells with smaller yields, and larger transmission
and treatment costs.
Preliminary Water Rate Analysis
The City contracted with FCS Group to analyze the rate/SDC impacts of the
Department’s determination on our existing CIP, along with the impacts of abandoning
future groundwater development in favor of building the pipeline. These preliminary
results show that elimination of the most productive areas from our groundwater
development plans drastically increased the cost of development, transmission and
treatment of future wells due to lower yields (more wells required to meet the same
demand) and increased piping and treatment costs. The overall result of the GSI report,
WRD determination, and financial analysis has increased the City’s desire to construct
the pipeline as our best, and perhaps only, viable long-term water supply option.
USDA Grant/Loan Approval
On August 10, 2010, the City received notification from USDA that our application for
funding was approved. The funds are a combination of $13,033,000 in loans and
$2,649,000 in grants. These funds must be expended by August 2015, a five(5) year time
limitation.
ATTACHMENT B
Veneta/EWEB Pipeline
Project Overview
April 5, 2010
The City and EWEB have been in talks over the last two years regarding the potential for
EWEB to supply water to Veneta in an arrangement similar to EWEB’s existing
wholesale contracts with various water districts. In February 2008, EWEB produced a
report entitled A Concept of Regionalization: Water Sales to the City of Veneta, which
explored, in some detail, the logistics of building a 24” diameter pipeline from the current
western terminus of EWEB’s system at Terry Street, to the Veneta water treatment
facility on East Broadway.
This work was conducted concurrent with the City’s update of its Water Master Plan
which was adopted in May 2009. This plan examined several potential water sources for
the City, including continued groundwater exploration. This study concluded that
groundwater development alone was not likely sufficient to meet the City’s long term
needs for a population of almost 10,000 residents in 2030. Unlike communities along the
Willamette River, Veneta is located at the foot of the coast range, an area composed
largely of fractured silt and sandstones, rather than layers of alluvial material which
readily and reliably transmit large volumes of high quality groundwater. These siltstones,
known as the Tyee formation, are extremely difficult to extract water from. Mineral
deposits vary greatly from place to place and drastically affect water quality, and it’s very
difficult to predict the location of productive well sites due to the fractured nature of the
rock. This all adds up to a water exploration program that is both extremely expensive in
terms of exploration and development and unpredictable as to quality and quantity. Even
though the City has developed three new wells and a satellite treatment facility since
2005, there have been instances in recent years where peak demand has outstripped
production. Fire capacity and redundancy for emergency purposes has been less than
desirable, a situation that greatly concerns City staff and elected officials if our
community is to return to the level of self-sufficiency we experienced in the early 80s and
90s.
All indications are that the highest potential for productive wells lies east of the Veneta
UGB. Expansion of well fields into this area may present additional problems related to
potential impacts on both surface waters such as Coyote Creek, and on existing
residential and agricultural wells. Water right restrictions on local surface waters,
including the federal storage at Fern Ridge Reservoir, make use of that water unlikely at
best, and other options such as new impoundments have political and environmental costs
that are simply too high to consider.
The City essentially has two options; continue developing groundwater sources within
and adjacent to the UGB as our sole supply, or connect to EWEB to supply the majority
of our demand. Both the City and EWEB feel that it is important to retain our existing
system to provide redundancy in case of emergency, and depending on the structure of
relationship, to supply peak demand as well. Veneta’s projected peak month demand in
2030 is around 2.7 million gallons per day (mgd). This 2030 peak demand represents less
than 4% of EWEB’s current 80.5 mgd. capacity. The pipeline is being designed to pump
up to four mgd. Initial service levels would have the pipeline supplying 150 million
gallons per year to Veneta.
Late in 2009, USDA-Rural Development (RD) representatives contacted the City,
relaying the fact that significant funding, both in the form of grants and loans, have
become available through the American Recovery and Reinvestment Act (ARRA), and
that RD was looking for large infrastructure projects to disperse the funds as quickly as
possible. They were very interested in the pipeline project in particular, and encouraged
the City to submit a Preliminary Engineering Report (PER) by early February 2010. The
City has contracted with Murray, Smith and Associates to compete the PER which
includes very detailed engineering, environmental, and cost analysis of the proposed
pipeline and potential alternatives. The PER and related reports were completed and
submitted by the February 1, 2010 deadline. If awarded, the City will be working through
various aspects of the project including purchase contracts, rate studies, and full
construction design through the fall of 2010.
We believe that partnership with EWEB represents the best route to achieving water
security at the lowest cost for the City over the long term. DLCD and Lane County have
voiced no opposition to the project and this partnership provides a regional solution to a
regional problem that will benefit both EWEB and the City of Veneta for years to come.
It should be noted that this proposed partnership is not expected to alter the City’s
UGB or growth rate as described in the recently adopted 2030 Coordinated Population
Projection, nor is it expected to result in significant changes to the City’s adopted
Comprehensive Plan beyond those necessary to incorporate the pipeline into the Utilities
Element and Public Facilities Plan. Our long range vision remains the same, to provide a
secure supply of water to our residents and businesses at the lowest possible cost.
Summary Points
10 mile pipeline from EWEB facility at Terry Street to Veneta Water
Treatment Plant on E. Broadway
Project is the culmination of two years of discussions with EWEB
Hydrological and geological conditions limit groundwater availability for
Veneta. Access to Federal storage reservoirs requires years of Federal action
ARRA funds present a unique opportunity to obtain grants, drastically
lowering the cost of the project
Project will not increase growth, but will provide water security for years to
come