Sherwood Schools Water Billing

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Claim: Sherwood School District has not paid their water bill due to an error in “bureaucratic activity and billing”. Furthermore, the City should not be subsidizing the School Districts water because the city and the School District are separate entities with separate funding and budgets. The CIty should demand thaT the School should be billed for the amounts not billed.


Summary of Claim:

A citizen, speaking during “Public Comment” at the October 17, 2017, Council Meeting, claimed that the city of Sherwood, through a “bureaucratic activity & mistake” failed to bill the School District for water after the city made the switch from wells to the Wilsonville water treatment facility for its water.  He also stated that the city is not responsible for “supplementing the School District Budget” and that the Former Mayor had brought this mistake to the attention of the public and corrected it by charging the School District for water starting in 2015.

Discussion:

The claim is fundamentally flawed on the facts and its failure to provide adequate context.

Sherwood School District has always paid for water used in its buildings. This Water is billed based on consumption just like any other water user in the City.

 The controlling agreement for irrigating the outdoor recreation sports facilities is governed by the “Inter-Governmental Agreement between the City of Sherwood, Oregon, and the Sherwood School District 88J” dated June 9th, 2010, otherwise known as an "IGA."

It is essential to understand that the IGA allows the City of Sherwood to use School District-owned outdoor/indoor recreation and sports facilities. In exchange, the City agreed to maintain the outdoor recreation and sports fields and provide centralized scheduling of all sports facilities. The School District agreed to pay the City a maintenance fee to cover a portion of the costs incurred by the City.

In short, this agreement allows both the City and the School District to use the fields, consolidates all scheduling to a single service and split costs equitably.

For context, it should be pointed out that there is a long history of not charging the School District to irrigate the fields in exchange for the use of the fields as documented in historical IGAs. These agreements have evolved since 5/11/2000.

The 5/11/2000 IGA explicitly states that the City will provide water for free in exchange for the City's use the sports facilities (indoor and outdoor). Additionally, the City collects usage fees to defray water and maintenance costs. At that time, the City was on well water and did not pay to purchase water like it does today.
On 7/30/2005 the IGA was amended to add water costs to the fixed maintenance fees the school district pays to the City.
On 06/09/2010 the IGA was changed into its current form. In anticipation of the higher costs, water being one of them. A new cost-sharing program was implemented between the City and the School District, to more accurately split costs, given both entities use the facilities. The new formula works in the following way:
The City determines its actual costs to maintain and irrigate the outdoor recreation facilities (Gross Costs). The revenue the City receives for the use of the facilities is deducted from the Gross Costs to determine the Net Costs. The City and the School District split the Net Costs 50/50.

The current agreement ensured that as costs change over time, the City and the School District would absorb or benefit from these changes in an equitable way.

In 2015 the School District, under pressure from the former Mayor, was asked to start paying 100% of the water bill instead of 50% as required in the current IGA. The IGA was not amended to reflect this change. Since the current IGA only requires that the City pays 50% of the water bill, the School District could request to be reimbursed for the overcharge for the last 12 months.

Sherwood Ordinance 13.10.05 Section A, Paragraph 1: Overcharge Adjustment. When the City determines a customer has been over-charged for services, the City will apply a credit to the account based on the date the error first occurred or the date the customer became responsible for the bill or a period not to exceed one (1) year whichever is less.

The citizen claimed that the City needs to charge the School District for the alleged failure of the City to bill them for water. Sherwood City Ordnance (13.10.05) prevents the City from collecting any “Undercharge Adjustments” that are more than a year old. Even if the allegation was true, there is no legal mechanism for the City to collect the “Undercharge Adjustments" since they would be more than one year old.

Sherwood Ordinance 13.10.05 Section A, Paragraph 2: Undercharge Adjustment. When the City determines a customer has been under-charged for services, the City will bill the customer based on the date the error first occurred, the date the customer became responsible for the account or a period not to exceed one (1) year, whichever is less. If the date cannot be easily determined, the City will estimate the bill for a period not to exceed one (1) year. Customers receiving a billing adjustment will be offered the chance to make arrangements for payment.

Summary of the facts:

The claim that the School District did not pay for water after the switch from Well water to Wilsonville water is demonstrably false. In fact, School District is now paying more than its fair share as agreed to in the current IGA.

The demand that the citizen made for the City to charge the school for the alleged failure to bill the School District for water is not viable given the prohibition on Undercharge Adjustments that are more than 1 year old. 

The citizen's statement failed to accurately characterize the relationship between the City and the School District for the shared use of the indoor and outdoor recreation and sports facilities and the value the City and the community receive for the use of the facilities.

The citizen's assertion that School District can afford water because it passed a 247M bond is incorrect. The School District bond is for capital improvements/construction and cannot be used for operational costs, under state law.  Water is an operational cost. Funding for operational expenditures come from the state on a $$/Per student basis.

Conclusion:

The relationship between the School District and the City is stellar.  The efforts of staff to anticipate the rising costs of water and amend the IGA accordingly was proactive, reasonable and shows fiscal responsibility.

The Partnership between the City and the School District when first implemented was considered a ground-breaking model and has since been used by many cities.

This partnership has saved the City and the taxpayers significantly. By sharing facilities, the City avoided the expense of acquiring property and building separate facilities.

Centralizing the management of all City-owned and School District-owned recreation and sports facility has proved to be an outstanding service to the community. It has simplified public scheduling and improved utilization.

Inter-governmental collaboration is what we should always expect as citizens.  This type of cooperation reduces duplication of services and in the end lowers costs across the board for the taxpayer. The City and the School District have done a great job implementing and maintaining this partnership over time.