Board Members present: Susie Smith, Jeff Osanka, Mike Dyer, Sandra Bishop, and Dorothy Anderson.

Others present: Randy Berggren, General Manager; C. J. Barnes, Nancy Bednarczyk, Ken Beeson, Cathy Bloom, Tom Buckhouse, Garilyn Crowley, Nancy Cook, Chuck Dalton, Marty Douglass, Marv Durham, Bob Hardin, Dick Helgeson, Peggy Hofferber, Garry Kunkel, Frank LaRoache, Roseanna McArthur, Jean Meyers, Sam Mosely, Iona Mosely, Jim Origliosso, Rick Piper, Scott Van Fossen, Dick Varner, Tom West, Debbie Wilson, Debra Wright, and Krista Hince of the EWEB staff; members of the public; and C. Daniel Lindstrom, Minutes Recorder.

President Smith called the Work Session to order at 5:50 p.m.

General Manager Randy Berggren reviewed the agenda of the Work Session.

1999 BUDGET AND WORK PLAN

Mr. Berggren discussed 1999 Budget information regarding the General Manager's Division contained in a summary distributed with the agenda of the meeting. He noted there was a reduction of 6.3% in its proposed expenditures for 1999, which included $219,265 for labor and $86,620 for other expenses. He explained that a 55.2% decrease in the General Manager's Division for the Community Relations budget was caused by the relocation of the Child Development Center to the Human Resources Department. He said other proposed community relations expenditures included $10,000 for various Board donations and memberships in the Eugene Chamber of Commerce, Lane Council of Governments (L-COG), Eugene City Club, and League of Oregon Cities.

Vice President Osanka asked if replacement costs for building and equipment used by the Child Development Center were included in the 1999 Budget. Mr. Berggren replied that such costs were not included.

Fiscal Services Supervisor Dick Varner reviewed a document entitled "1999 Budget Proposal--November 17, 1998" distributed with the agenda of the meeting

Mr. Varner stated that 1999 was the sixth consecutive year that no rate increase was planned for the Electric Utility, the eighth year without an increase for other than a Bonneville pass through.

Mr. Varner displayed a chart and explained that 77.6% ($104,154,000) of anticipated Electric Utility revenue would be derived from rates, 7.1% ($9,528,000) from bond sales, 2.8% ($3,834,000) from reserves, 4.4% ($6,028,000) from purchased power sales, 2.6% ($3,562,000) from interest, and 5.1% from miscellaneous sources.

Mr. Varner stated that 1999 Electric Utility expenditures were budgeted to be 20% lower than in 1998 because the Foote Creek Rim project would be paid from current year funds. He displayed a chart and explained that 40% of anticipated expenditures would be for power production, wheeling, transmission, and distribution. He said 21% of expenses were related to labor, 5% were contributions in lieu of taxes (CILT), and that other expenses included debt service, and operations and maintenance.

Mr. Varner stated that both the operating and capital budgets of the Water Utility were geared toward implementation of the Integrated Water Supply Plan. He said its budgeted revenues and expenditures were balanced without a rate increase, following the established pattern of seeking increases in even numbered years only. He said budgeted expenditures were virtually the same as in 1998, with the exception of a 40% increase in planned water conservation expenses, and a 5% increase in customer accounting costs.

Mr. Varner stated that expenditures for the Steam Utility were planned to be $23,000 lower than in 1998. He said that natural gas fuel prices were expected to increase in 1999, that the standby steam generation credit would be eliminated, that a reduction in staffing was planned, and that CILT payments would be adjusted downward at mid-year. He noted that no base steam rate increase had been made since 1990.

President Smith invited commissioners to discuss the proposed budget.

President Smith referred to a memorandum from Scott Spettel dated November 10, 1998, regarding staffing in the Power Management and Resource Planning areas distributed with the agenda of the meeting. She said she believed concerns of the Board addressed by the memorandum were related to a subtle EWEB transition away from an organization committed to long-term planning toward an emphasis on power marketing and purchasing.

President Smith said she believed the shift to commitment to power marketing had reduced EWEB's commitment to participation in the efforts of organizations such as the Northwest Energy Coalition, Solar Energy Association, and in maintaining a cutting edge of information on alternative resources through such organizations as the Rocky Mountain Institute and the Natural Resources Defense Council. She contended that one employee, Jim Maloney, was not enough EWEB resource committed to energy resource planning efforts.

Mr. Berggren requested clarification as to whether the Commissioners were suggesting adding a .5 full-time equivalency (FTE) position to energy resources planning and he suggested taking up the issue during the Board Retreat planned for January 1999.

President Smith said she hoped a balance could be restored in EWEB activities. She said she did not believe current EWEB structures fostered effective participation and leadership in environmentally friendly efforts associated with power generation. She suggested that conservation and renewable energy sources were being provided as a customer service, but that a commitment to conservation as "the right thing to do" was no longer a driving force in the organization. She also referred to the suggestion in the memorandum from staff regarding the future completion of the Interim Electric Resource Plan (IERP) as a driver of staff efforts, stating that she felt the Board's operating principles already gave staff sufficient guidance on this matter.

General Manager Randy Berggren suggested that commodity sales efforts of EWEB had been necessary to operate in the current power situation. He said commitment to conservation could be incorporated into the Integrated Energy Resource Plan.

Commissioner Dyer joined the meeting at 6:20 p.m.

Vice President Osanka said that he did not believe it was necessary to create a new policy supporting conservation and renewable energy resources because such a policy already existed. He asked if President Smith felt the change to a resource planning focus could be attributed to recent staff reductions and resignations.

President Smith said that it was her impression that the change was more of a long-range trend than an abrupt change. She said concerns expressed about EWEB participation in the Wyoming wind project contained in a letter from J. Rachel Shimshak, Director of the Renewable Northwest Project, dated November 13, 1998, distributed with the agenda were similar to those she was raising.

Mr. Berggren asked if President Smith believed discussion of the issues she raised should be considered at the January Board Retreat. President Smith said she believed giving consideration to ways such a trend could be countered would be positive at either the retreat or a regular meeting.

Vice President Osanka said he hoped commissioner discussion regarding the issues would include more than how to increase the number of staff FTE assigned to conservation and renewable energy resources.

President Smith said she agreed that implications of the issue included more than the number of staff assigned to the area. She suggested that the General Manager could better identify ways that the organization could meet the challenge of dealing with it.

Commissioner Bishop said that she lacked a long-term personal perspective on the issue, but that it was her impression from community comments and staff reports that changes had taken place. She said she agreed with President Smith that additional information was needed. She said she had interest in renewable energy resources and could become more involved in such issues as a member of the commission.

Vice President Osanka said that if it was determined that changes in commitment had taken place, the Board should seek to reverse them. Commissioner Bishop added that she believed the policy of commitment to conservation and renewable energy already existed and that a return to it was all that was needed. Vice President Osanka replied that he agreed, but that he still believed a statement by the board would be helpful.

President Smith said that a second concern she had related board monitoring of capital improvements. She said she would like to discuss development of a process whereby board re-evaluation and approval would be required for capital projects which go "over budget."

Vice President Osanka said he agreed with the suggestion of President Smith.

Commissioner Dyer said he also supported the suggestion of President Smith. He said he believed the board should be more aware and responsible for such situations and that he felt a policy should be established to require board approval for continuation of projects going over approved budgets.

Commissioner Anderson said that she also supported the suggestion of President Smith.

Mr. Berggren suggested that the proposal of President Smith could be developed in conjunction with board consideration of the five-year Capital Improvement Plan. He also suggested that a "trigger" mechanism involving costs and budget authorization be created which would require board authorization for continuation of a capital project.

President Smith said that she would also like to receive quarterly or semi-annual reports of capital improvement projects, including their budgetary status.

President Smith determined there was consensus to further pursue her suggestions.

President Smith determined that commissioners had no further questions or concerns regarding the 1999 Budget and Work Plan.

UNIVERSAL SERVICE PROGRAM PROPOSAL

Customer Relations Manager Chuck Dalton referred to his memoranda dated October 15 and July 23, 1998, and Universal Service Program Project Plan distributed with the agenda of the meeting. He said the proposed plan was a unique approach to providing utility service to low-income customers, especially those who have experienced credit difficulties. He reviewed the goal of the plan, as follows:

. . . to offer a program which allows all utility customers access to basic services regardless of their income as long as they are making a good faith effort to be self-sufficiency. The program should be at least as cost effective as current procedures and capable of being duplicated in other utilities in the region.

Mr. Dalton introduced representatives of community service agencies present at the meeting who had cooperated in development of the program plan.

Mr. Dalton said the rationale for the proposed plan was that collection costs for delinquent accounts of low income customers was approximately equal to that which was collected. He suggested that the proposed program would reduce such expenses and increase EWEB revenue.

Mr. Dalton said that an issue which needed to be confronted in the proposed plan was how to separate "customers who can't pay" from "customers who won't pay" utility bills. He said he believed the proposal included provisions which would identify needy and worthy customers.

Mr. Dalton reviewed public purpose programs of other public utilities and noted that EWEB was "near the bottom" of those having such a program in the Northwest.

Mr. Dalton emphasized that tools for measuring the success of the program were built into the plan.

Mr. Dalton reviewed descriptions of program elements and their cost estimates included in his October 15 memorandum, as follows:

Element	Cost	Comment
Family Self Sufficiency Program	$150,000	Three year cost
EWEB Staff Support	$50,000	Annual cost
Arrearage Forgiveness	$100,000	Three year cost
REACH 2000	$150,000	Three year cost
Utility Scholarships	$170,000	Three year cost
Information and Referral System	$5,000	One time cost
Information Services support	$100,000	One time cost
Project Team Time	$75,000	Startup cost
Total:	$800,000

Mr. Dalton reviewed a flow chart entitled "Universal Service Plan" attached to his October 15 memorandum. He noted that customers who "can't pay" utility bills would be evaluated and referred to the program by EWEB staff, that the customer education element of the plan would be the major stage for identifying appropriate participants in the program, that community programs included provided case management services, and that a Clark County program on which the Annual Arrearage Forgiveness element of the plan was based had experienced it to be cost effective in comparison to aggressive collection efforts.

Mr. Dalton introduced Lisa Stewart who made a presentation on the Information and Referral Data System element of the proposed plan.

Ms. Stewart stated that she represented The Lane Assistance Network. She described and provided projection illustrations of the data referral system being created to provide detailed information regarding assistance programs in Lane County. She noted that community service agencies and individuals could access the system through the Internet, that the information it contained was to be continually updated, that it had sophisticated search functions, and that anonymous eligibility forms would be provided. She reviewed various existing and under development pages of the World Wide Web site. She said that $10,000 in addition to the $5,000 request included in the program being proposed by Mr. Dalton would allow her to provide updated computer hardware to participating service agencies.

President Smith stated that she appreciated the proposed Universal Service Program. She asked if a previously received request for $475,000 from Networking for Youth had been considered for incorporation into the program. Mr. Dalton said that he had not discussed the request with the organization and waited for direction regarding it from the board.

President Smith asked if any assumptions for continued EWEB funding of community service agencies were made in development of the program. Mr. Dalton replied that no such assumptions had been made.

Commissioner Bishop stated that she believed the proposed program was socially responsible. She said she also supported it because it could be less expensive than previous attempts to collect on delinquent accounts of persons unable to pay utility bills. She said she preferred to not tie consideration of the program with issues related to EWEB accumulated assets.

Commissioner Dyer asked if there were other utilities with similar public benefit programs. Mr. Dalton replied that the public utility of Clark County had such a program and that the states of Ohio, Pennsylvania, and New York mandated that utilities have such programs.

Commissioner Dyer asked if the effectiveness of the Clark County program described by Mr. Dalton referred only to its Arrearage Forgiveness program. Mr. Dalton replied that the report he had shared referred to its entire public benefit program.

Commissioner Dyer asked if the portion of EWEB's delinquent bill collection costs resulting from University of Oregon students leaving the area it could be calculated. Mr. Dalton replied that EWEB had approximately 3,000 to 4,000 chronic collection problems and that the vast majority of them did not involve university students.

Vice President Osanka asked if it was possible to determine from the experience of other similar programs whether they generated increased use of the services of assistance programs. Mr. Dalton replied that he had discovered that other utilities had experienced such increases.

Vice President Osanka asked if it was possible that demographic groups such as those opposed to accepting government assistance could be eliminated from benefitting from the proposed program. Mr. Dalton replied that he believed persons such as those suggested by Vice President Osanka eventually became "bad credit customers" and would be identified for inclusion in the program. He suggested that senior citizens could be reluctant to participate in programs which might be seen as "charity" and that such hesitancy was often dealt with in publicizing and providing for program intake in senior citizen programs and centers.

Mr. Berggren stated that the discussion by commissioners would result in further consideration of the Universal Service Program proposal on December 15.

President Smith stated that she would not be present at the December 15 meeting and wanted to express her full support for the proposed program. She said she hoped it would be possible to budget expenditure of all unneeded accumulated reserves.

Commissioner Bishop said she would be absent from the December 1 meeting and hoped consideration of the program would not be rescheduled to that time. She stated that she also supported the program and considered that it should be a top EWEB priority.

President Smith adjourned the Work Session at 7:40 p.m.