REPORT TO THE CITY COUNCIL FROM THE CITY MANAGER

REPORT TO THE CITY COUNCIL FROM THE CITY MANAGER May 16, 2016 Subject: Request to Extend Water Service Outside the Sheridan Urban Growth Boundary Gary and Donna Baune. Purpose. To present information on a request to extend water services to one property outside the Urban Growth Boundary and obtain a decision on how to proceed. Background. Gary and Donna Baune submitted a request for a line extension to their property at 1429 NE Center Street, (5, 6, 26CA, Tax Lot 101), which is a parcel of 2.08 acres that is outside the UGB. It is zoned Low Density Residential 6,750. Providing water outside the City limits was envisioned as providing water from a City water main via gravity feed through a long service lead to a single property. There is mention of supplemental pumps and storage devices for use in case of emergencies (SMC 13.04.430M), although it infers that these devices would be under control of the City water services. The concern with supplemental pumps and storage devices is maintaining adequate and lawful pressure to the outside line. A safety concern about the health effects of stored water is not written in our Code, but it is an operational concern of the water system. There is currently a privately owned and maintained pump station on Center Street (see attachment 5 - schematic diagram). It currently provides water to three homes. Discussion. The staff originally thought the line would be added to the existing private pump. The simplified schematic (attachment 5) and information submitted by Cascade Water Systems Corp on April 19, 2016 (attachment 1) indicates that a separate pump would be installed. The letter also notes that the water would be pumped to a cistern (or storage tank) (attachment 3). The report speaks to the time frame that water would be taken from the City system to the storage tank. This infers that the City system cannot support a new user through the existing private pump. Page 1 of 15

The location of the new pump/meter (attachment 5) infers that the 1429 NE Center Street would have priority of water delivery over the existing pump station and might make it difficult to determine who is responsible for lost water. Municipal Code Section 13.04.430, [Water] Services outside City Limits is the staff s guidance. A copy of the Section has been annotated (attachment 6) by the City staff. Mr. and Mrs. Baune submitted a Request to Extend Water Services Outside the Sheridan Urban Growth Boundary. There are 10 criteria listed on that form. They are the same as Section 13.04.430 Q. The Code states that water service connections beyond the City limits will be granted only when the 10 listed criteria are met to the sole satisfaction of the City Council. There are some conditions that are not met that are primarily a legal or property requirement or more detailed engineering information is necessary. The table below contains the written comments, or answers, submitted by the applicants about the 10 criteria along with comments from the City Manager and staff. Review Criteria on the Request to Extend Water Services Outside the Sheridan Urban Growth Boundary. Answers from Mr. & Mrs. Baune. 1 The service interest is in the best interest of the city. Answer. By allowing additional water services, the City will obtain additional revenue. 2. The service connection will not result in a substantially greater density or intensity of use than has been existing on the proposed site. Answer. The area is single family residences on properties ranging from 1-3 acres, the density will not change. 3. The property owner signs a petition requesting annexation or waiving objection to any future annexation of the property to the city, binding upon heirs/assigns, or successors City Manager Comments. The proposed engineering infers this is to supplement the existing well(s). This will not increase our service fees except in dry summers or drought conditions. The existing tax lot can be subdivided. The parcel contains 90,856 square feet. The minimum size for a lot is 6,750. It is highly unlikely the maximum number of houses could be built because of the area needed for sewer drain fields. We do not see this as feasible given the rules and recent LUBA actions on land use and the UGB. Page 2 of 15

in interest, and this document is recorded against the property. Answer. The property owner will sign petition. 4. The service shall be exclusive to one use and may not be utilized to serve another residence, business or firm. At the time that the service agreement is executed, the use will be enumerated and limited thereby, except for accessory uses and structures. Answer. The service will not be used by other residences. 5. The service connection will continue only so long or at such times as it can be maintained without jeopardizing the supply to the city. Answer. The service will be supplied by a private system, which is connected to the City mainline. No additional maintenance will be required by the City. 6. The service connection and all costs associated with extending the service to the property shall be born (sic) by the recipient. All such extensions shall be built and maintained to city public works standards at the recipient's expense. Answer. The property owner will be responsible for service installation and maintenance. 7. The service connection shall meet all Yamhill County building and zoning requirements. Answer. The property owner agrees. 8. For water services within the urban growth boundary: the service connection replaces an existing water supply that does not meet Oregon Health Division Safe Drinking Water Standards. 9. For water services outside the urban growth boundary: the service connection replaces an existing water supply which constitutes a health hazard. In situations where circumstances make the cost of an alternative water source prohibitive, It seems that, at this time, we cannot annex this land into the City without a great deal of cost and work. Regardless, the document should be recorded against the property. The parcel is large enough to be split. It is county zoned land and we may not be consulted on proposed new dwellings. We should consider adding a deed restriction for City water service. Is it realistic to expect to terminate service during a drought or other natural disaster? We have not discussed the installation and inspection of the work. Not applicable to this request. The proposed plan asks for water to supplement the existing well and not as a replacement. Page 3 of 15

additional service may be granted to existing dwellings along the mainline extension. Answer. The property is outside the Urban Growth Boundary. The existing water supply has dwindled to the point it is very difficult to maintain a residence. 10. The applicant made and documented reasonable efforts to obtain an alternative source of potable domestic water, and failed to secure such water supplies despite such best efforts. Answer. After using the initial well for a period of time, it became unusable due to excessive mineral content. The second well water was of higher quality, but the quantity has become an issue. There is no proof submitted that the water supply does not meet Oregon Health Division Safe Drinking Water Standards. There are no indications about the cost of an alternative water source. This property is not along a mainline extension. No documentation. Answer notes the second well provided safe drinking water and the owners identified the problem as the quantity of water provided. Based upon the answers to these questions and some information from the rest of the Municipal Code, the City Council needs to decide if the provision of water service is in the best interest of the City. The ten criteria were developed by the City Council and can be changed or amended by the City Council. Question 3 (SMC 13.04.420 Q3). The property owner will sign a petition to be annexed or waive objections to future annexations which will be binding on all future owners. Since the property is outside the UGB, it is unlikely the property can be easily or inexpensively added to the UGB. Question 4 (SMC 13.04.420 Q4). The parcel is large enough to be subdivided. We should consider adding a deed restriction about dividing the parcel if City water service is authorized. Question 9 (SMC 13.04.420 Q9). a. City water service connection replaces an existing water supply which constitutes a health hazard. The request and proposal ask for water to augment the existing water supply. There is no documentation that a health hazard exists. Page 4 of 15

b. Is the cost of an alternative water source prohibitive to grant water service to existing dwellings along a mainline extension? There are no indications about the cost. There are no water mains alongside the property. Question 10 (SMC 13.04.420 Q10). There is no documentation that they have made an effort to find an alternative source of potable water. The second well provided safe drinking water and the petitioners identified the problem as quantity of water. SMC 13.04.420 E. The plot or map and the schematic diagrams provided are either incomplete or not detailed enough to make engineering decisions or right-of-way determinations. This can be remedied. The City application requires a copy of a latest deed, sales contract or a title report indicating property ownership. This has not been received but can be remedied. OPTIONS. There are three options available to the City Council. 1. Determine this request is not in the best interest of the City and deny the application for water services outside the City. 2. Make a provisional approval based upon the assumption that all engineering and legal situations can be resolved. 3. Make no decision but allow the staff and applicants to continue to gather information and solutions to the engineering and legal situations. Discussion of the Options. Option 1. The determination if this request is not in the best interest of the City rests solely with the City Council. A strong indicator for this is Question 9, where the applicants are not replacing a health hazard but supplementing a well which provides safe drinking water. There is no health hazard established. Option 2. This will allow the staff and applicant to continue to work on getting city services to the property. The work will take time and money on both parties without a guarantee that water will be provided. Inclusion of deed restrictions as required in Questions 3 or 4 could be considered a taking of property rights. Establishing the relationship between this property and others receiving water Page 5 of 15

services and establishing the use of any rights-of-way is often a slow and timeconsuming process. Options 3 has the negatives of Option 2 along with additional uncertainty of the final decision since it does not indicate the City Council s tentative decision. Recommendation. Based upon the above, recommend that the City Council determine that the Request to Provide City Water Services to the property outside the Urban Growth Boundary at 1429 NE Center Street is not in the best interests of the City. Francis D. Sheridan City Manager Attachments: 1. Letter: To Whom It May Concern from Cascade Water Systems Corp. undated, received by City on April 19, 2016 (1 page). 2. Letter from Kathy Aaron to City of Sheridan, dated March 29, 2016, concerning use of existing private water line on Center Street (1 page). 3. Schematic diagram showing a proposed set-up to receive and store city water, unknown author, received April 19, 2016 (1 page). 4. Aerial photo, NE Center Street, received April 19, 2016 (1 page). 5. Schematic diagram showing a proposed set-up to receive and pump City water, unknown author, received April 19, 2016 (1 page). 6. Annotated Sheridan Municipal Code Section 13.04.430 (3 pages). References: 1. Report to the City Council from the City Manager, October 5, 2015, subject: Requests to Extend Water Services outside the City Limits. 2. Sheridan Municipal Code Section 13.04.430 [Water} Service outside city limits. Page 6 of 15

Page 7 of 15

Page 8 of 15

Page 9 of 15

Page 10 of 15

Page 11 of 15

13.04.430 - Service outside city limits. A. Water service to customers outside the city limits shall at all times be subject to the prior and superior rights of customers inside the city limits. B. Applicants for water service outside the city boundaries shall execute a form containing the following agreement: Application is hereby made for water service at premises known as ;#rule;, outside the city of Sheridan, Oregon. It is understood and agreed that if this service is allowed, the undersigned owner or occupant of the premises referred to herein shall pay the rate prescribed by the city of Sheridan from time to time for service at that location; that this service shall be a special contract service and not provided by the city as a common utility service; that the quantity of water supplied by the service may be reduced, or the service entirely discontinued, at any time when the city council of said city finds such action necessary in order to provide sufficient service to the inhabitants within the limits of said city, inasmuch as water service beyond the city limits is a service of surplus water and not needed within the city; that at least 30 days' written notice shall be given by the city before such discontinuance may be put into effect; that notice delivered at the premises or at the last known address of the owner or applicant shall be sufficient; provided, however, the city council may declare an emergency exists and the water may be shut off without said notice. That the undersigned owner may discontinue service without advance notice of more than one day, but shall be responsible for all water served to the premises by the city until such notice in writing is given of such discontinuance C. Rates for purchase of water by customers outside the city shall be established by the city council based on but not limited to the following considerations: Rates are set by ordinance. The three factors are taken into consideration. Page 12 of 15

1. The cost of operation and maintenance of the affected capital improvements, prorated on demand estimated by the city; 2. The depreciated value of affected capital improvements; and 3. A rate of return on the investment for capital improvements serving the area(s) outside the city, which rate shall not be less than ten (10) percent. D. Provision of services of the city water system shall be further governed by applicable policies, as duly adopted or amended, contained in the city of Sheridan comprehensive land use plan and city ordinances which implement the plan. E. The owner of the tract of land outside the city shall make written application on approved forms to the city council of Sheridan for new water service and submit as a part of such application a plot or map of the area and improvements proposed to be served. F. Water service, if approved, will be only to an agreed upon area and residence, designated on the plot or map submitted to the council. Service to an unapproved residence or area would be cause for the city council to give notice of disconnection or discontinuance and effect termination of service. G. The area to be served will agree to annexation to the city at the option of the city under then existing laws pertaining to annexation in the state of Oregon. H. The water service may be discontinued to any customer under this policy in accordance with the city policies concerning the sale of surplus water. I. The owner shall be responsible for the construction and maintenance of his/her/its' own service line to the water transmission line, all at his/her/its' sole cost and expense, and he shall pay all applicable system development, hookup, inspection and meter fees and charges. J. Construction and installation of such service line must have prior written approval by the city council of the city of Sheridan, Oregon. K. The owner shall enter into a written contract for the purchase of outside water on the contract form and subject to terms and conditions approved by the city council. L. In connection with normal operations or emergency situations on the transmission line, the A written submission has been received. The plot or map is incomplete as is the schematic proposals. See comments on submission. See comments on submission. See comments on submission. Page 13 of 15

city shall reserve the right to suspend service for repairs, maintenance, or reconstruction. M. Due to changes or increase in the city's demand for water through said transmission mainline, the city council shall make no guarantee as to a sustained water pressure in said mainline. The outside user shall be responsible for installation of supplemental pumps or storage necessary to maintain adequate and lawful pressure to the outside water user. N. Although the city's water supply is and will be, for the foreseeable future, chlorine-treated at the city's water treatment plant, in the event the city's treatment facilities are moved to a location at or near the city of Sheridan, Oregon, then it will become necessary for the owner to treat the water he receives from the city's transmission line, and the city will give the owner one year's written notice of the change of location of its treatment facility. O. The applicant's approval is valid for service to one residence, or specified improvements only. P. City water service district boundaries are the corporate limits of the city. Q. Water service connections beyond the service district boundaries will be granted only when the following criteria are met to the sole satisfaction of the city council: 1. The service interest is in the best interest of the city. 2. The service connection will not result in a substantially greater density or intensity of use than has been existing on the proposed site. 3. The property owner signs a petition requesting annexation or waiving objection to any future annexation of the property to the city, binding upon heirs/assigns, or successors in interest, and this document is recorded against the property. 4. The service shall be exclusive to one use and may not be utilized to serve another residence, business or firm. At the time that the service agreement is executed, the use will be enumerated and limited thereby, except for accessory uses and structures. 5. The service connection will continue only so long or at such times as it can be maintained without jeopardizing the supply to the city. 6. The service connection and all costs associated with extending the service to the property shall be borne by the recipient. All such extensions See comments on submission. See comments on submission. Subparagraph Q is substantially the written submission. Page 14 of 15

shall be built and maintained to city public works standards at the recipient's expense. 7. The service connection shall meet all Yamhill County building and zoning requirements. 8. For water services within the urban growth boundary: the service connection replaces an existing water supply that does not meet Oregon Health Division Safe Drinking Water Standards. 9. For water services outside the urban growth boundary: the service connection replaces an existing water supply which constitutes a health hazard. In situations where circumstances make the cost of an alternative water source prohibitive, additional service may be granted to existing dwellings along the mainline extension. 10. The applicant made and documented reasonable efforts to obtain an alternative source of potable domestic water, and failed to secure such water supplies despite such best efforts. R. Notwithstanding the foregoing criteria, the city reserves the right to grant access to city water service to properties located outside the city municipal boundaries in exchange for easement or other property rights beneficial to the city. NA (Ord. 02-9 1, 2002; Ord. 86-1 Art. 5 1 4, 1986) (Ord. No. 2012-02, 1, 3-19-2012) Page 15 of 15