001Okay. Okay. We're officially calling this meeting to order. I'd like a motion to approve the agenda. >> I'll make a motion to approve the agenda. This is Mie Rosen Garden. >> Hi, Mie. Thank you. Do I have a second? >> Second, Derek Regolski. >> Okay. And Derek seconded. Okay. Is there um any objection to approving the agenda for the evening? Hearing none, the agenda is approved. The only item we have for this evening is uh county commissioner who is here to explain county's plans for transferring ownership of their liquid natural gas pipeline to Northwest NA National uh Natural and he is seeking our um endorsement of that project. And so, uh, he's going to explain to us why. >> Well, first I want to say how much how complimented I am. I I don't think
002a school board has ever met at my request. Um, so, but I I really appreciate uh your taking >> and across the aisle. Here we are. >> Okay. So, uh, a little history about the pipeline. Um, at one, this is before my time, but the county commissioners must have decided that a pipeline would be good for the local economy. and the voters of the county agreed and voted to uh sell bonds that would fund the construction of a pipeline from the Roseberg area to Cous County. uh at the western terminal that Northwest Nashville was uh came into play and and they would receive the gas from the pipeline and then put in the the distribution system to to deliver the gas to to the to the customers. Um the pipeline has been both a blessing
003and a curse. uh I think our people were right that it would be good for uh economic development. If you look at the major users of the well first not the non- major there there are 1900 households in the county that have signed up for um for the use of gas. Uh major employers include uh Roseberg Forest Products, Southport Lumber Company, uh the crearyy in Middle Point, which when I got looking into it, pretty amazing little thing down there. They get most of the milk from here and from far away as Northern California, and they deliver milk all the way, some at least all the way to New Hampshire. So, they're bringing in money from all over the country. Um and then you have Bay Area Hospital and and uh and your your schools. Uh
004those are the the major users. Both cities uh Cous Bay and North Ben have uh submitted letters of support. Uh so the problem has been that although our normal revenue our revenues in the pipeline keep up with the daytoday yeartoyear expenses of maintaining it taking care of normal maintenance requirements. Uh the the pipeline was built over a route that's prone a mountainous mountainous route uh prone to landslides and along the Kokil River uh which is um prone to sloughing in or and um so part of the pipeline one of our most crucial problem areas is is the bank of the river here between Kil and Myrtle Point where a railroad ran for decades and it was just fine. Rivers do funny things. In recent years, it's decided that it doesn't like to be quite where
005it is and wanted some of the land. And that's where the pipeline was. And that's not a good deal. And um we we reinforced that. We spent a lot of money, been $6 million in recent years, uh, shoring up the river bank and and and u uh digging out slides that tended to break the pipeline in half uh in the mountains east of here. And we're left now with estimated uh damages that need to be fixed of 10 to 12 million. and we have $2 million in our account in in the pipeline account. Um, Northwest Natural of course gets more revenue from the pipeline than we do. We just get paid for transmitting the gas from Roseberg to Cuth County. They get paid for distributing the gas to all of the users. Uh, so they're
006getting more money out of the pipeline than we do have. And then they put they would be be able to put the pipeline into their pipeline system which is is huge. And so they it's be these repairs wouldn't be as big a deal for them as it is for us. So the quandry we find ourselves in is that we can't afford to maintain the pipeline uh even to fix up some of the problems that it now has. And yet gas delivery is very very important not only to our households, a good number of our households but also to a good number of our employers, our major employers and I think uh without the pipeline it would it would be a horrible quandry for the county. We have looked and looked and looked for other sources
007of revenue. Uh we we've uh tried to get federal G grants uh haven't found a state state grant that would would be able to deal with it and we really don't qualify for any. So um Northwest Natural is embracing uh the the purchase of this. They would like to do it. Um, however, they can't make this decision on their own. It requires a a support of the PUC and that in turn requires support from users and citizens of Kous County. So, that's what we're asking for. Uh, and I hope that you can can do it. I they viewed this as an uh an important uh not business but enterprise to to uh to write a letter of support. >> Thank you very much. Does anybody have any questions? >> I I just have a quick
008comment. Commissioner, uh um how many other you said that the city of KS Bay, City North Bend have both wrote letters of support. Um I believe I I received one today from the Bay Area Chamber of Commerce as a Barrier Chamber of Commerce member. Can you uh uh elaborate on any other additional >> Absolutely. Uh South Coast Development Council has agreed to to do this. U Caddy Mchuan is doing it on behalf of the Kuspay pool because they use natural gas for to heat the water. Um, the community, Myrtle Point is sending a letter. Uh, Southport Lumber Company is sending a letter. Roseberg Forest Products is sending a letter. Uh, both cities are sending a letter. I understand. I haven't seen who Space I've seen Northbends. Um, I think I'm missing someone. Let me take
009a quick look to see if I can It's on a different page. Uh oh. Uh GMA Garnett, are you familiar with them? They a relatively new business in town. Uh so we've got we've got I think we have the support we needed. But one of the specific requests was to to kind of broad it out over different areas. Don't make it all business. Make it hospitals. Make it schools. Let us know how important it is to the broader population of of Cous County. Kevin, did you have any questions? >> Yeah, I had two. Um, can you guys hear me? >> Yep. Perfectly. >> Uh, the first question is, uh, does the school district collect any tax or anything off of this pipeline? And then the second one is, is Northwest Natural buying this or is
010this supposed to be free? uh they're buying it. But I'll I'll tell I'll tell you exactly what it is. And and I I I will also tell you uh before I tell you what what it is. It's probably the best deal the county has made, Kevin. >> Good. >> Right now, you are not getting any taxes off the pipeline, just like you don't get any taxes off of the county or any building that we own. So, I don't think you are would be my guess. Uh, and I assume that you will once it becomes privately held. Um, we are selling it to the to Northwest National for $1 and we are contributing to them the $2 million that we still have in the pipeline fund. And I think it was necessary to do that to
011get this approved by the PUC. Uh because what they look after is or what they are concerned about is um Northwest Natural taking on anything that would cause other users in the state of Oregon to have to have their rates increased. And although when you spread this over their entire system it's minuscule medic min medic min medic min medic min medic min medic min mediciscal is very small I'm sure the math would be that this will adversely impact uh other users the rates of that other users pay >> Kevin >> that's the answer if you have other questions about that I'd be happy to try to answer that >> no I appreciate Uh, thanks Francon. The I guess my third question would be the railroad used to be really active and it sold and it's
012pretty stalled out. Is is there some kind of guarantee that they have to keep pumping gas and that they're not going to stall out here in five or 10 years? >> That say that again. Who Who are you talking about? So the question was are they going to be able to are they going to keep pumping fuel or there some kind of guarantee that >> they Northwest Nashville? >> Yeah. Uh I thought you said the railroad that was assuming I may have misunderstood. Uh, no, we don't have a guarantee, but they would not be stepping up and taking on this commitment in my view were were they not uh optimistic about the future of the Bay Area. >> Okay. Thank you. I'm not sure anyway that you just go about that they could uh go
013go about discontinuing the service in area that I doubt you would allow that but I don't I really don't know the answer to that question I guess >> maybe you have a question >> uh I do I might have too and this might be a question for Gary or David or Addie I'm wondering um when's the last time the Kuspay school district wrote a letter of support for something like this or >> Yeah. or wrote a letter of support. >> I David, you could probably answer this and and Addie better than me, but I believe we did this last year, the year before for the city and uh uh Yeah, David, take it from here. I know we talked about it. >> Yes, it was it was either last year or the year prior. the
014um uh Nicole Rutherford, the city manager, approached us about signing a letter of support or drafting letter of support for it's MUPTE, but it had to do with multi-use property tax exemption. Oh, I think I even got the accurate name right. Um so the developers could come in and build property and and not get taxes from that for a number of years. I believe 10 years, but after which it would revert back to the normal tax rate uh to try to spur development in the area. Um so the way the the board kind of viewed that one was we're getting zero taxes from the empty lots now, but we would rather postpone 10 years and have more housing in the area and those kind of remedy those problems and then for a future uh tax.
015Um, so that was one that we had done in the past along with um I know there's been a variety of others, but that one seems to stick in my mind as the most comparable to this situation. >> And has writing a letter of support for something like this ever had any unintended consequences for our superintendent or school board or the school district? >> Not since I've been here. So for almost five years. Well, that's not quite true. Which before I answer, Mie, I need to ask Commissioner Sweet. Is there any opposition to this project? >> I've had no lo local opposition whatsoever. Uh, of course, I don't receive any opposition that the PUC might get. and they they have a uh a group called the Consumers Utility Board and it is their job whether
016it's the one they've taken on or one that is dictated to happen but to after uh rates and make sure that that Northwest Natural is not taking on a project making an investment that will cause their rates till all other customers have to be increased and uh >> but there's been no public >> local opposition to the project. >> I have not heard of any local opposition. >> Thank you. I would guess you might find some people who are just absolutely against fossil fuels any any form any use that would not would would in essence be willing to sacrifice the well-being of a lot of families and a lot of institutions both private and public to have that happen. I would hope that wouldn't be the case but I'm >> but none of them have
017spoken up publicly. No, they have not, Abby. >> Okay, maybe I'm going to answer this question then. Um, there was one incident where a former superintendent unwittingly, I believe, made comments about a project, the port project, and the reaction was pretty swift as to not believing that the school district should venture into that one. So that's why I asked if there's any public opposition just so that we're not waiting into some quagmire. >> Derek, I see you have your hand up. >> Hi, Commissioner Sweet. Uh Derek Regolski, um thank you for coming to present this uh to us. I um I think I'm going to ask a couple of tough questions that I hope are not I'm not trying to be combative. I just really want to understand before lending my public support. Um, so
018the the Kous County, the voters passed a bond where we spent a bunch of money, I don't know, however many millions of dollars to build a pipeline. >> 54. >> And now we're $54 million to build a pipeline. And now in order to offload the pipeline, we have to give a company $2 million. >> Well, not all of that.$2 2 million came from the county. Uh >> fair enough. But but but this it's it's not as though we're recouping any of the the taxpayer money that was spent to build the pipeline. It's we we've built a we've built something that is failing and we have to offload it at a at a we actually have to pay the company to offload it. >> Our kind of where we stand. >> Our option is just find
019someplace to find another 10 or 12 million that we don't have to fix it up. So, >> right. >> Really? >> Okay. >> It sounds like a It sounds like a a bad situation. You're between a rock and a hard place. >> Yeah. Thank you, Drake. That's a good way of putting it. >> Yeah. >> Um well, or a a a river and a landslide, I guess, is the is maybe more apt. Um, so, um, I guess my other, uh, question is, are you aware of any potential, uh, conflicts of interests or other, um, things that could drive this decision into Northwest N, you know, um, I assume Northwest Natural has a something of a monopoly. There's not another company that this could be sold to or given to, but, usually in these types of
020things, there's a there's bidding or there's we we we try to get multiple opinions. Is it are we stuck with Northwest Natural or is there >> other options? >> They own the distribution facility, Derek, or you know, uh all those pipelines. So, you know, they they've been a real good citizen here and came in and and they they knew or they would have built the whole thing. So they knew it would be margins would be narrow and yet they've been here and they've stayed here and they've been good citizens and here they are stepping up to uh uh pay more or take on a bigger responsibility and and they will pay they they'll have to pay in the next year or two uh another 8 to10 million to to do the repairs that are necessary
021these last few winters with all the water and have been devast devastating. >> But uh but we as a county are in a position where we have no we have no leverage if they decide to shut that. We're going to give them $2 million. They're going to take ownership of the pipeline and we're going to rely on their good citizenship to keep gas flowing. >> You didn't complete your you didn't tell the whole story. They're we're giving them $2 million that we have and we have it dedicated already to maintenance. So, they're going to take that and they are going to spend another 10 to 12 million in the next year or two to fix the pip. >> But is that is that is that part of our agreement with them? >> Like is that
022part of the deal? I know. I >> You mean is it part of the agreement that they won't just buy the property and then not develop it any further? >> Yeah. I'm ask Yeah. Yes. I'm I'm asking it. Um one, but I mean buy is a strong word, right? They're getting $2 million for this. So >> is there use the use the phrase they're taking over ownership of of of >> Okay, there that's that's a better phrase. Yeah. They're taking over ownership. Do we have as a county have a guarantee that they are going to follow through and put the 8 to10 million in to have a uh have the pipeline improved? >> They have to to get approval. I mean that is the approval will be conditioned on that. >> The approval from the
023>> PUC. Yes. >> Okay. But that's not something that we as a county or have to have in the agreement. Um, you know, I we don't have the agreement in place yet. Uh, it it's being worked on and getting this uh the PUC permit done is paramount to getting getting that done. Yeah, I think you bring up a good point. Um, I I just don't see that happening. Uh, but I I do think Derek, that's a good point. I appreciate >> Yeah. just I I think you know in my in my uh in my professional life um uh contracts are there to protect us when things don't go as we planned or when the people we trust have other obligations that pull them in different directions. You know, I I just uh a a transfer
024or a a change of ownership of a public asset. Um, we should get as we as the public should get as much out of that transfer as we can negotiate. And it sounds like we don't have much leverage. We have a broken, you know, a broken pipeline that needs lots of money. We don't have >> ownership of a liability is different than of an asset. >> Correct. Yeah. >> Yeah. Correct. Um but you know it uh it's also um you know to build a brand new one would would cost uh you know maybe a hundred million or some some enormous amount of money at this point uh beyond what beyond what it you knowif if it was 20 if it was $54 million 20 years ago a brand new pipeline would cost a whole heck
025of a lot more. So it it still is an asset even if it has major liabilities. Uh it's kind of like our school district buildings that are very very old. They are major liabilities but they're also an asset. >> But thank you for answering my questions. I really appreciate it. >> Uhu. >> Okay. Maybe I cut you off before. Did you have anything else to ask? I'm sorry. No, that I just wanted to hear about sort of precedent setting from the school board's perspective. So, thank you. >> Okay. Thank you, Kim. I know you were late to the game, but do you have any questions? >> Call you right back. >> Um, hi. Yeah. Um, sorry, for some reason I thought it was at 5:30. I got it in my head that this was 5:30.
026I guess that's normally the time that we meet, so I apologize for being late. I just this is something extremely new for us. Um I don't know what role we have here. I mean it sounds to me like you know Commissioner Suite and the other commissioners need to do what they need to do and that we're being asked to write a letter in support of what they're doing because maybe that's what it looks like that they they need is from some of the community partners u these letters. I just I just don't recall us having I don't know. It just doesn't seem the place of the school board. But I don't know what we have to >> Kim David did point out at least one incident a couple of years ago where the board had
027written a letter of support um on the request of Nicole Rutherford when she asked us to uh support the city's actions with regard to housing. Wasn't that it David? >> Yes. the MUPTE application, the multi-use property tax exemption to allow developers a tax exemption um for building new units uh particularly multi- housing units. >> Was that for the was that in Empire? >> I believe it was for all of KPro the board. So, was that something because how long has she been how long has she has it been since she's taken over? Was that during my tenure? >> Yes, that was either last year or the year prior. >> Okay. So, that would have been Addie or that wrote that letter. >> I believe it was Addie if I remember correctly. >> And it was
028just last year. >> Yes. and and Nicole Rutherford uh came and we had uh a meeting and she kind of presented it to the board as well. >> I want I want to say we were in Heritage Hall uh for that meeting. >> I I remember the meeting. I just don't remember us writing a letter, but >> and and that one was actually conditional on um because we're one of the the largest taxing entities in the district. They >> they really needed our support or they it wouldn't have gone through. >> I remember us voting on it. I didn't remember the letter in remember us voting on it and obviously we had lots of questions because in so many years I thought David and Adrian were on the board at that point too. So if
029I remember right but um I just it it impacted the school district. monies in the future did. And so we had a lot of questions for her and I remember she came once and then we had questions and then she came back and that had happened. I So I'm just trying to figure out where this where we lie in this. Is this future funding we're not going to be getting like in the Nicole Rutherford case? Well, I think actually uh Commissioner Suite touched on something I I hadn't thought of um in that currently we we don't receive any revenue from the tax or the gas pipeline because it's owned by the county. When it switches to private industry, that may change uh because we we don't collect taxes on county assets, >> right? when it's
030a private asset there there may be and I don't I don't know that for sure but it seemed to be the implication that when it's a private asset that tax exemption >> collected >> you are receiving and I'm the county is receiving property tax payments from Northwest Natural Gas this will add to what they are paying taxes on >> okay so they're already paying taxes on that. So my question would be >> taxes and what they have, but this would add to what they have. >> So what other letters have you received if that if that's not been talked about? I don't want to go through things you guys have already talked about since I was late. That's on me. Um, >> pretty much all of the other major >> like North school district, Coke
031School District, Myrtle Point school, every school in the county I'm assuming is >> No, actually, Kim, the PUC suggested that we pick kind of the major entity of of all the various things that happen to keep the county going, schools being one of them. They said it would be good to get Kuspay School District. They didn't >> they said it would be good to get Bay Area Hospital. They didn't ask for Coke Hospital. Um they just wanted a broad representation. They said try to find someone that is agriculturally oriented. That would be the crearyy in in Myrtle Point. >> Find a a couple wood products industry people. That's huge in our area. That's brick forest products and Southport Lumber Company. >> Another major industry you have there. Well, it's GMA Garnett. Uh so they've uh
032then what about um cities and schools that represent a lot of people. Uh so that that's kind of where we are. They don't want they don't need it from everyone. They just want to know that various economic sectors are using the facilities and and support natural gas. The downside I I I think is something we have to consider too. Um you know forest products just ended up putting in a $50 million dryer that's dependent on natural gas. a few years before that they made a bigger investment than that because they this plant that is a good plant and they they want to keep it up to date but it requires natural gas. Southport thing they like to dry as much of their lumber as they can to reduce their shipping costs >> and and currently
033uh >> would be disastrous to them. And currently we have uh um all of our kitchens run on natural gas in our schools and some of our boilers run on run on natural gas. >> Okay. Are there any other questions for Commissioner Sweet? >> Thank you very much for coming to make a presentation on this. it does explain better what you're asking for and why you are asking for it, which is what a lot of us were questioning. Um, since this really is one of the first times the county has ever reached out to the school district and we hope it continues. So, >> well, thank you. I'm honored that you would come together tonight. I think this is really important. I I so appreciate what you're doing. >> Okay. Well, we're going to move
034into our next part, which is to discuss what we just heard. You're welcome to stay, but you do not have to. >> I'd like to if I could. >> You're welcome to >> in case other questions come up. >> Okay. Discussion. >> I I'm hearing no discussion. I uh this is Derek Broski. I would just say um that it it seems like the you know commissioner and the county are making the only choice they can and they have broad business support. Um, I think this can positively impact the district in terms of majure u maintaining uh natural gas supply and also potentially increasing the amount of uh sort of taxable land that we have access to. I I it's you know not my role but I kind of wish the county could get a better
035deal for uh this uh asset or liability, however you want to look at it. um since the taxpayers poured that much money into something that's now being transferred to a private company. But that's not my role as a schoolboard member. >> I can answer that question if you don't mind my interrupting here and we asked that and specifically because we we take it very seriously giving you know any money away. Uh but it's money that would be spent anyway in the pipeline. it wouldn't fix the problem that the problem but it also uh it came back to us that this would be very important to the PUC uh to PUC's granting permission that we dedicate whatever we can to the pipeline to hold down the cost uh to other customers on the system >> is
036this being supported by all all Commissioners. >> Yes. >> Okay. Are there any other questions or further discussion? Then can I have a motion, please, to either um support the request that we provide a letter uh in support of this transfer or that we don't? Do we need further discussion? I can uh provide a motion that we uh draft a letter of support for the county's project to transfer the ownership of the pipeline to uh Northwest Natural. >> Thank you, Darren. >> I'll second this is Mie. >> Okay. And and it's been seconded by Mie. Okay. Is there any further discussion? Kevin. >> No. >> Oh, okay. I just saw your thing go on. Um, okay. Then we're going to take a vote. Um, Derek >> I >> Mie >> I >> Kevin >> I
037>> Kim >> I >> and the chair votes I. So we will be providing a letter um of support I guess directly to the PUC. Is that correct? We we write it directly to the PU. >> Yes, you do. And perfect. >> Thank you very much for supporting this. And I I do believe that Gary has the PUC's address and it's important to put on uh on the letter the the docket that >> I've got that we have that one >> you're talking about. >> Thank you very much. All I have to sign off to get to another meeting. >> Thank Thank you, Dr. Commissioner. Sweet. Thank you. And uh um Addie, I'll I'll communicate with you tomorrow, Addie, on on the letter and make sure that we're we're good to go. >> Perfect. Thank
038you, everyone. Okay. Thank you, Commissioner. >> Come back. You're always welcome. >> I will. All I need is more meetings. >> Yeah. >> Addie, you need to adjourn us. >> Fine. Okay. >> Before we've all left, I want to adjourn this meeting officially. It's 5:51. Thank you very much. Bye. Bye. >> Bye, everyone. >> Thank you guys. Have a great night.