REGULAR BOARD MEETING
FEBRUARY 14, 2006, 10:00 A.M.
TUMALO IRRIGATION DISTRICT
64697 COOK AVENUE
BEND, OREGON 97701
BOARD: Bob Morrow, Steve Putnam, Patricia Gainsforth
STAFF: Elmer McDaniels, Ken Rieck, Shelby Smith, Jan Wickham
ATTORNEY: Bill Hopp
ENGINEER: Kevin Crew
GUESTS: Russ Westphal, Ron Miller, Ralph McNulty, Robert Gordon, Greg Mohnen, Rick Silver,
Wayne Bodwin, Robert Pederson, Gretchen Pederson, Nunzie Gould, Gretchen Valido,
Julie Radcliffe, Wally Zimmerman, Lewis Bennett, Mary Lou Bennett, Dave Wachs,
Sergio Perticucci, Gary Armstrong, Douglas Stout, Catherine Stout, Bruce Moon,
Chuck Martin, Tim Anderson, Gary Moss, John Von Hurst
Vice-Chairman Morrow called the meeting to order at 10:00 A.M. and appointed Shelby Smith scribe.
APPROVAL OF MINUTES
Director Putnam made a motion to approve the minutes of the January 10, 2006 Annual/Regular Board Meeting and January 10, 2006 Executive Board Meeting, seconded by Director Gainsforth, motion carried unanimously.
APPROVAL OF VOUCHER LIST
Director Putnam made a motion to approve the February 2006 Voucher List, seconded by Director Gainsforth, motion carried unanimously.
DESTINATION RESORT – KARIN O’BANION & OTHERS
Attorney Hopp said the County Commissioners are considering three options: (1) doing nothing, (2) developing a process by which lands could be identified as destination resorts, or (3) remapping the County to pinpoint destinations resorts. At this time there is no process in place to develop land for a destination resort unless it is already mapped.
Karin O’Banion was unable to attend.
Susanna Harrison asked what the District’s long-term plan is for the District-owned lands, particularly the 540 acres being considered for a destination resort? Manager McDaniels said that the County Commissioners are possibly going to remap some lands in Deschutes County to include destination resorts. With that in mind, we had the District’s land use attorney write to the County Commissioners, requesting that 540 acres of District land be considered in the remapping process, if such remapping does occur. If and when the remapping does occur, there is a long list of criteria that has to be met to rezone the land, which could take several years. In addition, Cascade Pumice still has a lease on that land, and the District can’t do anything with the land until that lease expires. Cascade Pumice will have to reclaim the land, and get it approved by the Department of Geology and Mining Industries (DOGAMI). Mrs. Harrison said she asked Dugan Pearsall, Manager of Cascade Pumice, when they plan to be done, and he said possibly by September 2006.
-2- Minutes of Regular Board Meeting, February 14, 2006
Manager McDaniels said he thought the lease will expire this fall, and Cascade Pumice has said they may possibly want to renew the lease for another five years.
Ralph McNulty asked what is the long-range proposal for lot size in that area? Manager McDaniels said we have not done anything to determine that yet, but the Board has a responsibility to fulfill its fiduciary responsibility to the water users by maximizing the value of the land. Mr. McNulty said he hopes we get enough out of the land so that we don’t have to go the Federal Government for a grant, because he is concerned about giving more water back to the stream. For that reason, he is not opposed to a destination resort, he just has questions about splitting the property into one-acre lots, thereby increasing traffic down Tumalo Reservoir Rd., and making access more difficult across Highway 20.
Wayne Bodwin said if Cascade Pumice renews its lease for five years, the District can’t do anything with the land, maybe it is time to get a letter from Cascade Pumice, stating their intention as to whether they plan to renew the lease or not. Vice-Chairman Morrow explained that about 20% of the District’s operating revenue has come from pumice royalties, which is why the rates have not been raised significantly for several years. But now, with the pumice royalties disappearing, the Board is looking for ways to cover the deficit.
Rick Silver asked if Cascade Pumice does renew the lease, is there a minimum floor of revenue the District receives, regardless of how much Cascade Pumice takes out? Manager McDaniels said that would have to be negotiated in the renewal. Mr. Silver asked how much is left to mine? Vice-Chairman Morrow said Cascade Pumice has said, as they have to go deeper, it is not cost effective to mine what is left.
Robert Gordon asked if there is a water right on that property. Assistant-Manager Rieck said there is an industrial right that covers the whole area, but there is not an irrigation right. However, irrigation water could be transferred to the property.
Gary Armstrong asked why the District is considering this land for a destination resort, when we have so much land? Assistant-Manager Rieck said we only have about 800 acres of marketable land, including these 540 acres. Mr. Armstrong asked if the District has considered other options? Manager McDaniels said we have not, because of the lease. Mr. Armstrong asked if the District can pursue a zone change if the lease is renewed, or must it stay in a mining zone until the lease expires? Attorney Hopp said it must stay a mining zone as long as the lease is in effect.
Nunzie Gould said she is unclear about the terms of the pumice lease. She asked what the exercise date for renewal is? Manager McDaniels said he thought it was six months prior to the end of the lease. She asked if this was the last five-year option, or do they have additional five-year options. Manager McDaniels said that is a possibility. Director Putnam said the terms of the renewal would have to be negotiated by the Board, and that they would not let the lease be renewed without acceptable revenues. Ms. Gould asked if the Board feels that the dispersal of lands is a Board decision, and should not be put out to a vote by the water users? Director Putnam said that the lands that have been sold in the past have been done by Board approval.
-3- Minutes of Regular Board Meeting, February 14, 2006
Chuck Martin asked if this property extends over Highway 20? Manager McDaniels said this particular 540 acre lot does not extend over Highway 20, but adjoining lands do. Mr. Martin asked if there would be access off of Highway 20 if a destination resort is developed? Manager McDaniels said that would be a decision by the Oregon Department of Transportation (ODOT). ODOT has told us there would be no access off of Highway 20. Mr. Martin asked what the costs would be to get this property rezoned, and where does that money come from? Manager McDaniels said it would be expensive, and the expense for the lands that have been rezoned has come from the sale of the land. Mr. Martin asked who has to reclaim the land, and what does that entail? Manager McDaniels said Cascade Pumice has to fill in the hole, landscape, and reseed the land, and it has to be approved by the State, which could take a year or more. Mr. Martin asked who would reclaim the land if Cascade Pumice went bankrupt? Attorney Hopp said the District would.
Doug Stout said his last bill from the District went up about 20%, and according to the newsletter, it was based on the loss of the Cascade Pumice lease. Now we are saying it might be renewed. If the lease is renewed, would his bill be adjusted accordingly? Assistant Manager Rieck said no, because the pumice revenues for 2006 will probably not reach $75,000.
John Von Hurst asked if a destination resort would put pressure on the water system, and wouldn’t the owner of the resort look to the District for water rights? Manager McDaniels said the District has no water rights to sell, that water users could sell their water rights to the resort, but he would hate to see that happen. He said whoever bought the property would have to deal with that issue.
Robert Pederson said he thought a destination resort seemed like a more radical option for generating revenue, and asked how that compares to selling the land in 20-acre parcels? Manager McDaniels said we don’t know the answer to that question at this point. Director Putnam said he hates to see the District liquidate more property for the sake of cash. He would like to see some sort of long-term leasing as an alternative to selling the property outright. He said that the rapid growth in Central Oregon is not going to stop, and he understands that the water users cannot afford to pay higher and higher rates for their water, so some kind of long-term solution needs to be found.
Gretchen Valido said many of her neighbors want the Board to know that they do not believe a destination resort is compatible with the life style they have chosen to live in Tumalo, bringing lights, noise, traffic, pollution, and dense population to an area they want keep beautiful.
Nunzie Gould said it has recently been approved to increase the number of homes in destination resorts by 25%. She believes the next wave of destination resorts will be more densely developed, in essence more rural subdivisions than there have been. She said there have only been two that have been developed under the Goal 8 Phase, Eagle Crest and Pronghorn. Black Butte and Sunriver were developed under different code requirements. She believes that the legislation is now at the DLCD approval stage to increase to 2-1/2 homes per rental compared to 2 homes per rental. She said she moved to Tumalo for the rural lifestyle, not to live next to a destination resort. She said the effects of a destination resort, even for residents who do not live adjacent to the resort, include more population in the schools, higher speeds on the roads, less delivery time for emergency personnel, more danger at intersections. She said destination resorts are suppose to provide on site housing for their employees, which they are not doing, which causes resort employees to travel longer distances to reach
-4- Minutes of Regular Board Meeting, February 14, 2006
work. She encouraged the Board to negotiate for more revenue if Cascade Pumice decides to renew the lease, and to consider long-term leasing of the land, rather than selling it outright.
CRESCENT LAKE WATER REPORT
Manager McDaniels said that Crescent Lake has 22,909 acre-feet, 26% full.
TUMALO FEED CANAL FISH SCREEN
Assistant-Manager Rieck showed slides of the project, which is running a little behind schedule due to inclement weather, but will still be completed by the 2006 irrigation season.
VERIZON WIRELESS
Moved to Executive Session.
WASHINGTON DC TRIP – TUMALO FEED CANAL PIPING PROJECT
Attorney Hopp said he, Manager McDaniels, and Kevin Crew met with the Senate and House Majority and Minority staff people, and the resource people from Senators Wyden and Smith and Representative Walden’s offices. The Senate Minority staff person had a concern and has asked that Mr. Crew prepare a paper, identifying the Federal Nexus, i.e., why should the Federal Government fund our project, what is the Federal interest, and why shouldn’t this be a State issue? There are primarily two issues that cause the Federal Nexus: (1) by putting a large quantity of cold water instream, it will assist in the recovery of the anadromous fish that are getting up over Pelton Dam. Anadromous fish are a Federal issue. (2) North Unit Irrigation District (NUID) is a Federal project, we are not. NUID is going to be impacted by ESA and other species issues, because the Federal Government is much more susceptible to being impacted by the ESA issues. Therefore, by putting cold water instream, we are taking the burden off NUID, so that there won’t be a crisis like there is in the Klamath Basin. Once that is done, we will work on having the bill amended. We are anticipating getting 50% of the $14 million, not 100%. Therefore, Attorney Hopp, Kevin Crew, and Manager McDaniels met with Todd Heisler with Deschutes River Conservancy (DRC), who said the District scores very high on their list of projects, because our project is ready to go. The only area we do not score high on is the cost of the water (the quantity of water versus the unit cost).
MEETING WITH PORTLAND GENERAL ELECTRIC – TUMALO FEED CANAL PIPING PROJECT
Manager McDaniels, Attorney Hopp, and Kevin Crew met with Julie Keil and Scott Yates, who said this is a good project, and asked for more information. Attorney Hopp is setting up meetings with the Confederated Tribes and Eagle Crest.
The State has a goal of 250 cfs instream rights in the Middle Deschutes. Based on the total irrigated acreage from North Unit ID, Swalley ID, Arnold ID, Central Oregon ID, and Tumalo ID, our portion of the 250 cfs would be approximately 17 cfs.. Attorney Hopp said if we put 20 cfs from this project instream, added to the 5.8 cfs from the Bend Feed Canal Piping Project, we will have exceeded our portion. We will also have reestablished Tumalo Creek as a fishery.
-5- Minutes of Regular Board Meeting, February 14, 2006
We are then looking at the pipe from the Tumalo Feed pipe on down, the maximum diameter will be 48”, which the Tumalo crew can do themselves. That will be another $14 million project, $7 million out of pocket for materials, and in-house labor as matching funds.
Director Gainsforth said that Bonneville Power Administration money coming through the Power Conservation & Planning Council is being sent back down to the Deschutes Coordinating Group and other Basin groups to prioritize, and can now be moved above the dam.
MEETING WITH BILL McDONALD, REGIONAL DIRECTOR, BUREAU OF RECLAMATION – TUMALO FEED CANAL PIPING PROJECT
Manager McDaniels and Attorney Hopp met with Mr. McDonald in Portland, who said the Tumalo Feed Canal Piping Project is a very good project; however, he probably could not support it, because of their budget constraints, but he would not oppose it. He said if we dropped our funding to 50%, and provided the paper on the Federal Nexus, the BOR would not endorse the project, because we are not a BOR project, but their testimony would be that they would take no stand on the bill, which would be a neutral position, which would be good for the District.
WATER TRANSFERS
Koester to Lilley – 3.00 acres
Heaton/Sands to Self – 0.30 acres
Ausland/Smith to Campbell – 0.60 acres
Director Putnam made a motion to approve these water transfers, seconded by Director Gainsforth, motion carried unanimously.
NEXT MEETING DATE
The next Regular Board Meeting will be Tuesday, March 14, 2006, at 10:00 A.M., at the District Office.
ADJOURNMENT
Director Putnam made a motion that the Regular Board Meeting be adjourned at 11:20 A.M., seconded by Director Gainsforth, motion carried unanimously.