TO: Diane Gould

FR: Steve McCoid

RE: Response in matter of case 16141

Dear Ms. Gould,

I am writing in response to the complaint filed by Maryann Beirne regarding the
irrigator class water rates being reviewed by the City of Salems Water/Wastewater
Task force. I certainly do not agree that my actions were in any manner aimed at
obtaining financial gain or avoidance of financial detriment for myself. I will
provide the sequence of events leading to the meeting with Public Works Director
Peter Fernandez on July 14.
The entire issue of water rates as they applied to Creekside Golf Course came to
my attention in February, 2016 when a number of members and Creekside
residents asked me how they should go about attempting to get these rates lowered.
I told them I would look into the process and get back to them. I spoke with Peter
Fernandez the next time I saw him about the issue and he informed me that he was
aware of the issue and had already informed Creeksides owner and former
General Manager that he would consider the issue at the next Cost of Service
Analysis study, which is done every two years and was to begin in July, 2016. I
subsequently did some research on the process in an effort to better understand it
and what was to occur to enable me to better inform and represent my constituents
interests in the matter. This resulted in more questions for Mr. Fernandez, who then
informed me that the city used a rate consultant to develop proposed rates and she
was better suited to answering those questions regarding pricing philosophies, how
you arrived at a rate, how the rates were actually calculated, what made a
difference in the pricing between the various classes etc. Peter told me that he
would make sure I was able to meet with the rate consultant when she was next in
Salem to get these questions answered. That meeting was held on July 14 prior to
the first meeting of the Water/Wastewater Task Force, which consists of twelve
people.
I entered the meeting to get answers to the questions that I had and to gain an
understanding of what was possible and likely to occur to enable me to provide an
educated response to the constituents asking questions and requesting advice on

how to proceed in their efforts to obtain lower rates for the golf course, which is in
danger of closing.
During the meeting the four proposals that staff had developed to discuss with the
task force were also reviewed for my edification as I had not seen them prior to the
meeting. None of the proposals has been recommended by the city staff, which was
a bit unusual but not unheard of. That was due to the requests being made by
Creeksides owner and it members, which really asked for preferential treatment to
lower their water rates only and not the rest of the irrigator class rates. That clearly
was not an option that would pass or that I would support in terms of fairness,
adhering to the philosophy used by the consultant and staff in developing rates, and
in terms of public acceptance. Further discussion on why the irrigator class rates
were so much higher than other rates was held. After hearing the reasons for this
higher rate, I pointed out that in my understanding of their philosophy of
developing the current irrigator rate that the key reason (large usage of water
during peak summer months resulting in having to build the system to meet those
needs for a short three-month period) was no longer valid. That was because the
actual water used had declined from a peak in the late 1990s of over 60 million
gallons per day to the current use of 40 million gallons a day or a drop of 33%.
That being the case, the reason for the high charges wasnt valid and it should be
considered to lower the rate since this was a cost of service analysis. The
consultant, Mr. Fernandez and his on staff rate person Alicia all agreed and said
this was appropriate and that they would introduce that idea to the staff and make it
the staffs recommendation. Mr. Fernandez asked if I minded if he attributed the
idea to me and I said that was fine with me. I felt then, and still do, that this was
normal activity for a councilman.
The meeting ended there and I have not been a part of the process since that point.
I have not attended a meeting of the task force nor spoken with anyone on the task
force about the issue except for Councilor Bennett, who had concerns about the
potential of added flooding downstream from the Battlecreek basin affecting his
ward in downtown Salem and wanted to understand the issues more clearly. I have
not promoted acceptance of the proposal with any member of the task force or the
city council. I have had no vote on the matter up to this point and will recuse
myself from voting or speaking to the issue if or when it reaches the city council. I
feel I was doing my duty as a counselor representing Ward 4, where the Creekside
neighborhood is located, by learning what the process was, understanding rate
setting philosophy and providing that information to my constituents. I was doing

my job and gaining any financial gain was never even a consideration or thought to
me. If a counselor has to consider his/her personal financial issues to the degree
that Ms. Beirne has suggested in this complaint it would be very difficult for them
to vote or participate in discussion on any increase or decrease in public fees,
planning commission decisions, bond levies, capital expenditures or budgets
without opening themselves up to this same complaint. I simple explored the
process, heard the logic for the rates, pointed out an anomaly in that logic and had
the staff hear that, agree with it and take action on it. I set no rate, had no vote and
took no action to influence the task force. Finally, I did not bring a preconceived
plan to the meeting as Ms. Beirne stated in her complaint. That plan came about
as a result of a free-flowing dialog with staff as outlined above.
Thanks for considering my response and providing me the opportunity to tell my
side of the story. Please feel free to contact me if any part of this is unclear or
raises other questions you need answered.
My cell phone number is 503-899-7096 if you need to contact me.

Sincerely,

Steve McCoid