Mayor Severson called the regular meeting to order at 7:00 pm and declared a quorum present.  Present were Councilors Hardin, Misner, Harn, Springer, Myers, Calame and Harkenrider.  Councilor Davis was excused.  Staff members in attendance were City Manager Brookshier, City Attorney Luisi, Ray Jones, Clint Spencer, Ron Sivey, Jason Edmiston, Roy Bicknell, Bill Schmittle, Karen Primmer and Donna Moeller.  News media present were Neill Woelk and Holly Dillemuth of the Hermiston Herald, Anna Willard of the East Oregonian and Eric Olson of KOHU-KQFM.  The pledge of allegiance was given.

Minutes

Councilor Myers moved and Councilor Harn seconded that minutes of the November 14 regular meeting be approved for filing.  Motion carried unanimously.

Unscheduled Communications From the Audience

Anne Emmons, Chairman North Port Neighborhood Association, stated she was encouraged to learn that the City and council felt the formation of a neighborhood association had merit and asked if the council would be willing to take action at tonight's meeting.  City Manager Brookshier asked for volunteers from the council to work with Ms. Emmons to see if there is enough interest from citizens willing to form a neighborhood association.  Councilors Myers and Misner volunteered to serve on this committee.  Councilor Hardin moved and Councilor Misner seconded to approve the formation of a committee to review different neighborhood programs and to determine if there is enough interest from citizens willing to attend neighborhood association study meetings.  Motion carried unanimously.

Joe Thompson, 582 E. Main Street, again expressed concerns about his sky rocketing water/sewer bills, he made reference to the price comparison that will be discussed later in the agenda.  Mr. Thompson mentioned that City Manager Brookshier had stated staffing could be an issue with the neighborhood program, which comes down to money.  He asked why the concerns of the City over money are any less than that of private business owners.  Mr. Thompson stated his water bill had doubled over the past 24 months, so why is the council not stepping up to help lower the water rates for this community.  City Manager Brookshier stated over the last three years the rates have increased by exactly 27 percent; therefore, if Mr. Thompson's water bill has doubled then his water usage has to have increased.

John Kirwan, 664 E. Oregon Avenue, stated for the record that he was not against the Eastern Oregon Trade and Event Center development; however, with the City taking such a strong role in the development of this project, why is this the first night it's been on the agenda and discussed by the council.  He asked where prior discussions or presentations had taken place regarding the City's involvement in the project and in these discussions, what was talked about and where are the records of what was talked about.  Mr. Kirwan asked how much it was going to cost the City for maintenance costs to operate the facility.  He felt there needed to be more public feedback from the citizens before the City should take action.

Councilor Harkenrider asked Mr. Kirwan if he was able to get the railroad crossing on Gettman Road repaired.  Mr. Kirwan stated he had spoken with the superintendent for the Pacific Northwest Region who said one of the regional vice presidents will be here on Friday and Mr. Kirwan plans to visit with him about taking a look at that railroad crossing.

Attorney George Anderson, responded to Mr. Kirwan's questions by stating he needed to go back about 27 years when the discussions first began regarding moving the fairgrounds.  This issue was discussed with the City, County, School District and the Fair Board.  It was basically the same scenario, the fair would move up to the 75 acres owned by the City, the City would provide the water, sewer and access to the property, the school district would purchase the fair grounds in the middle of town.  Everyone was on board at that time; however, after further consideration the school board decided they didn't want the high school in the middle of town, they would rather locate it where Armand Larive is, so it didn't happen.  How this project came back around more recently, the fair board decided something had to be done with the present facility so a "steering committee" was formed.  The next important thing that happened was Kim Puzey and Ed Brookshier went to our State Representative Greg Smith, who went to the legislature and secured $7.1 million in Lottery funds allocated for this project.  The net dollars that will be coming to the City for this project is $6.4 million.  The Intergovernmental Agreement that is before the council tonight for discussion will not be voted on tonight, it's just up for review and public comment.  Mr. Anderson explained the council is only being asked tonight to approve an agreement with an engineering firm to start the planning process.  Mr. Anderson points out there is one major difference between the project 27 years ago and the current project, 27 years ago the County was going to own the 75 acres and it was just going to be a fair ground, even though the City was still going to donate the land and provide water and sewer, which was a very expensive proposition.  The City would have had no ownership interest.  Mr. Anderson concluded by stating this entire project is an incredible opportunity for the City, the County, the Hermiston School District and the Umatilla County Fair Board.  When the Eastern Oregon Trade and Event Center is complete it will be an asset for all of Umatilla County, as well as, all of Eastern Oregon.

Report/Citizen-at-Large - Community Accountability Board

Councilor Hardin stated the Community Accountability Board is a voluntary group of local community representatives who meet with juvenile offenders who have been referred for Diversion.  The Board is made up of five members, two members representing the Hermiston School District, two members representing the Hermiston City Council and one citizen-at-large member.  The Board meets with minor juvenile offenders and their parents to discuss the offense and the circumstances surrounding the offense; assigns consequences designed to hold the youth responsible for his/her actions and accountability to the community and the victim.  Mr. Hardin reported the Board sees about five cases each month and has had a very good success rate.  In the interest of having a full board as soon as possible, any one interested needs to apply at the Hermiston Police Department by December 30.

Minutes & Report

Councilor Myers moved and Councilor Harn seconded that the October manager's monthly report, minutes of the November 9 planning commission meeting and minutes of the November 21 public safety committee meeting be approved for filing.  Motion carried unanimously.

Approve/Adoption of Tax-Exempt Bond Post-Issuance Compliance Policy

City Manager Brookshier reported there is a new IRS "position" which recommends that "...issuers of tax-exempt bonds should establish written procedures to monitor the ongoing requirements related to tax-exemption".  The proposed policy would establish the City's intent to comply with the IRS guidelines.  It is the City's intent to make this a part of the annual independent audit process.  Councilor Springer moved and Councilor Myers seconded to approve adoption of the tax-exempt bond post-issuance compliance policy.  Motion carried unanimously.

Award Contract/Project Management & Design Services - EOTEC/Fishel C.M.

City Manager Brookshier recognized the committee members of the Eastern Oregon Trade and Event Center project that were present at the meeting:  Chet Prior, Buzz Brazeau, Dennis Doherty, Bob Severson, George Anderson, Kim Puzey and Steve Eldrige.  Those not present tonight were Dan Dorran, Vijay Patel and Dave Bothum. 

Mr. Brookshier reported earlier this summer the City, County, School District and Fair Board collectively felt that the committee was at a point where they needed project design and development expertise to accurately assess our collective ability to support County sale of the fairgrounds to the School District, the proceeds from which along with the City's grant and other funds would be sufficient to develop the project.  The committee subsequently agreed to seek professional project management and design services through a formal "Request for Qualifications" process.  Twelve groups responded to the RFQ.  The committee narrowed that group to five responders whom the committee interviewed.  Pursuant to that interview process, the committee is recommending that the City contract with Fishel C.M. for Project Management and Design Services for the EOTEC project.  Mr. Brookshier further noted on pages 2 and 3 of the proposed agreement with Fishel that there would be two phases to the agreement.  Tonight's council approval of the agreement will facilitate moving forward with "Phase One" work at a cost of $39,281.  The information received from the Phase One work will be used in making a "go - no go" decision on the project in the first few months of the new year.  This determination needs to be made now because the County must make a decision by early spring whether or not they will sell the fairgrounds to the School District.  The School District has a time table because of restrictions on the remainder of their bonds.  If the decision is to go forward, then the committee would move into Phase Two of the project.  Mr. Brookshier stated whether the project goes forward after Phase One or not, all costs are eligible for payment through the City's State lottery grant.  The City will have to "front" any expenses incurred before May of 2012, which is when the grant's lottery bonds will be sold by the State.  At that time the City would be reimbursed for the $39,281 and any other expenses incurred going forward.

City Manager Brookshier asked Chet Prior to speak to this project.

Chet Prior, Chairman of the EOTEC Committee, stated he had made many presentations to various groups around the City and County in the past year and if anyone felt left out of that process he apologized.  Mr. Prior stated he was strongly in favor of awarding this contract, the committee is looking at spending a serious amount of money and they need assistance in spending it wisely. 

Buss Brazeau reported by recognizing the grant funding, the funds from the sale of the fairgrounds, plus the in-kind contributions the committee has close to $18.5 million in actual accounted total funding.  The committee has another $20 million out in requests at this time from private investors.  Mr. Brazeau stated the professional design work Fishel's will provide will give the committee a better marketing package to approach future industrial investors going forward.  Mr. Brazeau added, if the EOTEC complex is fully developed it could be a huge economic boost to the region, adding many new jobs.

Joe Thompson asked Mr. Brazeau what the School District had planned for the additional fairground property and was it true there had been talk about needing a 500 student addition to the current high school and possibly building a second high school in the future.

Mr. Brazeau responded by saying the School District is currently busy attempting to complete the three new schools.  The School District had seen studies which say the five year projected growth in Hermiston will necessitate the need to enlarge the current high school.  When that need arises, the School Board and City of Hermiston will have to decide if they want two smaller high schools or one very large high school and the dollars associated with both options.

Commissioner Dennis Doherty stated that in his fifteen year tenure as a county commissioner, the County has tried five times to find a way to move the fairgrounds from it's present location.  The reality is the County has to spend money on the fairgrounds in it's current location to bring it up to code or face potential problems.  The Fair Board developed a Master Plan as to how the present fairgrounds could be reconfigured and part of that Master Plan included utilizing the ground that Weber Field is situated on, which is part of the 28 acre fairgrounds, which for a very long time has been used by the Hermiston Baseball Commission.  A group of citizens didn't like that idea and encouraged us to find another plan.  Another group of citizens, recognizing the School District in the foreseeable future will need to deal with an expansion issue, whether they expand the current high school or spend a lot more money to build a second high school, asked the County to put it's Master Plan on hold and take another serious look at relocating the fairgrounds.  At that point, the City stepped up and asked if the County would reconsider the proposal from 1983 and from that the current project idea has grown.  Mr. Doherty said the County had a deadline of May 1 to make a commitment to sell the fairgrounds to the School District because of their bond measure time frame.  Assuming the County sells this property, the School District has agreed to lease the current fairgrounds back to the County for five years, through the 2016 Fair.  This venture would be a City/County 50-50 owned and operated facility, formed under an Intergovernmental Agreement by statute, governed by a board that is charged with the duty to operate and manage the facility.  However, remember that duty will not kick in unless there is something to operate and manager, so the first two to five years it will be the job of this board to implement the construction plan that Dave Fishel will put together.  Mr. Doherty stressed, this is a good project!

Kim Puzey, encourages the council to approve award of the contract to Fishel C.M.  He felt they will be able to put together a much better 3-D presentation to use as a marketing tool  which will help promote this project to future corporate sponsors and increase funding opportunities.

Dave Fishel thanked the council and members of the committee for the opportunity to work on this worthwhile project.  He briefly reviewed the scope of work his firm will focus on in Phase One of the project.

Mr. Brookshier stated there is a "Draft" of the proposed Intergovernmental Agreement included in tonight's packet.  This agreement between the County and City will create the "Eastern Oregon Trade and Event Center Authority" and provide for "Equal Control and Ownership of (the) Authority and its Property by Umatilla County and the City of Hermiston".  It sets out the terms of the partnership between the City and County for operation of the EOTEC development, inclusive of the Fair and Rodeo, through the public EOTEC Authority.  The Intergovernmental Agreement is scheduled for your consideration at the December 12 Council meeting.  Mr. Brookshier asked Attorney George Anderson to further explain the agreement.

Attorney George Anderson stated this agreement between the City and the County will form an EOTEC Authority to acquire, construct, own, manage and operate real and personal property to be known as the Eastern Oregon Trade and Event Center.  The EOTEC Authority shall be governed by a seven person Board of Directors, half appointed by the City and half appointed by the County as required by Oregon Statute.  One director appointed will preferably be actively involved in the West Umatilla County Motel Owners Association and it is important to note that the motel association has agreed to a motel tax that will be dedicated to support this facility.  Mr. Anderson pointed out there is a section that gives justification for 50/50 equal control and ownership of authority by the City and the County.  When the citizens talk about the value of the fair property in the middle of Hermiston, there is one important factor to realize, the Hermiston School District owns a right of reversion to that property, or in other words, if the fair isn't held there then the School District gets the property.  Written within this agreement is an "exit ability"; whereas, if one of the party feels this isn't working, they can move for dissolution of the Authority and the sale of the property.  At this point, the City and County would be the sole bidders against each other in front of a referee and all of the assets and real property would be sold together as one unit.  Mr. Anderson stated this agreement  replaces the Memorandum of Understanding that was signed about a year ago by the various parties.  This agreement has a "trigger point" to set the whole process in motion and that is when Umatilla County sells the existing fairgrounds to the School District, the County is not obligated to sell, but if they do then these other things are binding.  If Umatilla County sells the existing fairgrounds to the School District for $3,000,000 they then pay the $3,000,000 to the EOTEC Authority, the City of Hermiston conveys the 75 acres of airport property to EOTEC Authority and provides water, sewer and access to the property, the EOTEC Authority shall work with the City of Hermiston to expend the State of Oregon Lottery funds (which are allocated to the City for construction of the EOTEC facilities), conveyance of five acres of property to Umatilla County to build an RV park (County believes they can secure State Licensing Funds to build an RV Park), construction of facilities suitable for the Umatilla County Fair and Farm City Pro Rodeo.  Mr. Anderson complimented City Manager Brookshier for his forethought in  suggesting this venture be a 50/50 split ownership between the City of Hermiston and Umatilla County, after some consideration, all parties felt this was a "FAIR" thing, so to speak!  Mr. Anderson stressed, this is one of the most significant things that will impact our town for the next fifty year.

Councilor Harkenrider moved and Councilor Myers seconded to approve selection of Fishel C.M. to provide Project Management and Design Services for the Eastern Oregon Trade and Event Center project.  Motion carried unanimously.

Award Contract/City of Hermiston Well No. 5 Improvement Project/Wellens Farwell, Inc.

City Manager Brookshier reported after Pioneer Seed located in the southern industrial commercial portion of Hermiston and now with the proposed EOTEC project in that area, it became necessary for the City to look at the water production capacity in that entire area.  Mr. Brookshier said that is where the City's commercial and industrial growth will be.  He stated Water Superintendent Bicknell suggested the City could adjust its two zones, that being the main service district (most of town) versus the high service district (area up the hill to the south) such that if the City could deliver more water into the main service district from another source, then the City could save water in the high service district that is presently having to come down the hill to supplement the main service district.  There was no questions in terms of cost and benefits that the best probable solution would be to increase the capacity from Well No. 5.  These improvements would boost the Well No. 5 production by 1,000 gallons per minute, which is significant. 

Al Shewey, Kennedy/Jenks Consultant, reported eleven responsive bids for construction were received for the Well No. 5 Improvements project.  There was one minor informality in the bid package with regards to Section 00420 the "Bidders Qualifications".  Wellens Farwall did not indicate they had successfully completed at least three projects for public agencies with contract amounts over $500,000.  However, Wellens Farwell supplied additional references via e-mail which indicate they do meet the minimum experience requirements.  Kennedy/Jenks has confirmed Wellens Farwell was the prime contractor on at least three of the referenced projects.  Therefore, Kennedy/Jenks views this as a minor informality that can be waived.  Mr. Shewey stated after reviewing the bids, looking at the experience of the contractors and verifying the numbers it was their recommendation that the City of Hermiston award the Well No. 5 Improvements Project, including the bid alternate for the magnetic flow meter, to the low bidder, Wellens Farwell, Inc. in the amount of $319,877.00.

Councilor Harkenrider moved and Councilor Misner seconded to award the contract for the Well No. 5 Improvements Project to Wellens Farwell, Inc.  Motion carried unanimously.

Report/Wastewater-Recycled Water Project Development Alternatives & Comparative Rates

Al Shewey, Kennedy/Jenks Consultant, reviewed the following six areas of consideration in making the Wastewater-Recycled Water Project Development membrane treatment and canal discharge choices:  1) Treatment Selection; 2) Discharge Alternatives Evaluation; 3) Single-Farm Issues; 4) Irrigation District Benefits; 5) Watershed Ground Zero; and 6) Ratepayer Impacts.  Mr. Shewey explained the current wastewater plant had been in continuous operation since 1979 and is getting very close to capacity.  The existing process is close to discharge violations and it is safe to say current Department of Environmental Quality (DEQ) regulations are the strictest in the United States.  Because of Hermiston's unique location to the Umatilla River Systems, there are very restrictive requirements for ammonia and temperatures in the river.  The discharge requirements are so high that Kennedy/Jenks has recommended that the City install a membrane system to accomplish that.  Unquestioned risk and reliability go hand and hand in this recommendation, the key to the membrane system is there will be a physical barrier between what comes into your treatment plant and what leaves your treatment facility.  The City needs a 50-year discharge solution, it's that difficult to permit and obtain a discharge solution in this area.  Discharge to the Umatilla River is hampered in summer, spring and fall by water temperature issues.  Mr. Shewey discussed the disadvantages to a single-farm discharge, which included capital costs, increased monitoring of the recycled water and the possible permit violations.  He then discussed the advantages to discharging the highly treated recycled water to an irrigation district, stating the reliability with additional acres and consumers, the cost savings and the low risk since the City's responsibility stops at the end of the pipe discharge.

Brad Bogus, Tetra Tech, elaborated on the advantages of delivering the City's recycled water to the irrigation district over the single-farm application.  He stated in checking the history of the irrigation district records, they turn the canal on April 1st every year and they turn the canal off about October 28th, which will get the City through the critical temperature periods in the Umatilla River when the flows are low and the temperature criteria are very restrictive.  Brad discussed what had been done out at the existing treatment plant that directly impact the ratepayers.  Existing low rates are a result of:  good management, reinvestment in the facility, controlling staffing costs and the 1998 plan to extend the life of the Wastewater Treatment Plant which included; enhanced primary and secondary clarification, a facultative sludge lagoon and a gravity belt thickener.  He used figures from a 2009 League of Oregon Cities Rate Study to compare residential utility rates, which indicated Hermiston's combined water/sewer rates are the lowest of the 18 similar sized cities in the comparison.  Mr. Bogus discussed the tentative schedule for construction of the new plant.  The permitting process with DEQ should be complete in March 2012, the permit with the Bureau of Reclamation will be completed this month.  The City has $21 million from the Clean Water State Revolving Fund low interest loans in hand at this point to finance the project, plus will qualify for an additional $2 million in February 2012 when some regulatory issues are resolved.  The City is planning to bid the project in March/April 2012, contract award in May 2012, notice to proceed in June 2012 with a projected construction completion date of December 2013 and on-line in January 2014.

City Manager Brookshier reported he asked John Heberling with D Hittle & Associates, engineer for Hermiston Energy Services, who has extensive experience not only with rate design for electric utilities but also water and sewer utilities, and the City's financial/bonding advisor, Jane Towery with Piper-Jaffrey, to prepare a detailed analysis of the City's anticipated debt service needs given current revenues and expenditures, assumed rates for inflation, increases in operational costs and customer growth, and then to project rate requirements to meet those needs.  John projected a rate increase need significantly less than what had been estimated.  Mr. Brookshier stated John's analysis showed a cumulative water and sewer rate increase need over the next ten years of 14%.  The first step of this increase will not be required until 2014 and can then be phased in over two or three years, this increase should cover the City for the next ten years.

Council Comments

Councilor Hardin reported he is Chairman of the solid waste committee and announced there will be no increase in the solid waste rates for the next year... wants to clarify an issue that was reported recently in the paper regarding the cross walks on 17th Street and West Highland by the Hermiston Christian School, these were installed by the County not the City and the school had no control where the cross walks were placed... thanked the audience for their patience and input tonight... Councilor Myers was impressed with the Lighted Parade and thanked the council for riding in the parade, she also thought the Festival of Lights at the fairgrounds is wonderful again this year... Councilor Misner asked about the status of the Green house out on the treatment plant property.  Assistant City Manager Jones said there had been no response to the ad to remove the house... Councilor Hardin reminded everyone about the three vacancies on the Budget Committee.

City Manager Comments

City Manager Brookshier reminded the council of the December 7, City Council & Planning Commission Joint Work session at 7:00 pm., also, on December 8 the reception for the five finalists for the Park and Recreation Director position at the Conference Center.  The next Public Safety Committee meeting will be held on Tuesday, December 13.  There will be a retirement party for Darrell Schiffner at City Hall this Wednesday, November 30 from noon until 2:00 pm.

There was no other business, and the meeting was adjourned at 9:30 pm.

SIGNED:
/s/ Bob Severson
MAYOR

ATTEST:
/s/ Robert D. Irby
CITY RECORDER