Board Members present: Susie Smith, Jeff Osanka, Mike Dyer, Sandra Bishop (via telephone from Portland, Oregon), and Dorothy Anderson.
Others present: Randy Berggren, General Manager; Cathy Bloom, Tom Buckhouse, Chuck Dalton, Mel Damewood, Terry Eberlein, John Mitchell, Mat Northway, Mark Oberle, Jim Origliosso, Dick Varner, Shirley West, Debra Wright, and Krista Hince of the EWEB staff; C. Daniel Lindstrom, Minutes Recorder; and Peter Bartel, member of the public.
President Smith called the regular meeting of the Eugene Water & Electric Board (EWEB) Board of Commissioners to order at 7:50 p.m.
AGENDA CHECK
President Smith determined that no commissioners present wished to alter the agenda of the meeting.
ITEMS FROM BOARD MEMBERS
Commissioner Anderson reported that she and Commissioner Osanka had represented EWEB at a luncheon held at Lane Community College.
APPROVAL OF MINUTES
President Smith requested that sentences 2 and 3 of paragraph 7 on page 2 of the minutes of the November 17, 1998, Work Session be changed, as follows:
She said she believed concerns of the Board addressed by the
memorandum were related to a subtle EWEB transition
to away from an
organization focused on committed to
long-term resource planning. She suggested the
shift changed a previous commitment to be engaged
in, toward an emphasis on power
marketing only as a way to manage power supplies needed by
customers and purchasing.
President Smith determined there was no objection to her request.
President Smith requested that sentence 1 of paragraph 8 on page 2 of the minutes of the November 17, 1998, Work Session be changed, as follows:
President Smith said she believed the shift to commitment to power
marketing had reduced EWEB's commitment to participation in
conservation 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.
President Smith determined there was no objection to her request.
President Smith requested that paragraph 1 on page 3 of the minutes of the November 17, 1998, Work Session be changed, as follows:
Mr. Berggren suggested requested
clarification as to whether the that commissioners
consider were suggesting
adding a .5 full-time equivalency (FTE) position to
energy resources planning efforts and he
suggested taking up the issue during the Board Retreat
planned for January 1999.
President Smith determined there was no objection to her request.
Vice President Osanka joined the meeting at 8 p.m.
President Smith requested that sentences 2 and 3 of paragraph 2 on page 3 of the minutes of the November 17, 1998, Work Session be changed, and that a sentence 4 be added, as follows:
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 to meet as a
customer desires
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.
President Smith determined there was no objection to her request.
President Smith requested that paragraph 8 on page 4 of the minutes of the November 17, 1998, Work Session be changed, as follows:
President Smith said that she would also like to receive quarterly
or semi-annual reports of capital improvement projects, including
their budgetary elements
status.
President Smith determined there was no objection to her request.
Commissioner Osanka observed that the record of Board discussion of over-budget expenses for capital projects on page 4 of the minutes of the November 17, 1998, Work Session should have included that the consideration had been stimulated by concern regarding cost overruns on the Midgely Building.
Commissioner Anderson observed that the title of the minutes of the November 17, 1998, Special Board Meeting erroneously identified its scheduled starting time as 5:30 p.m., not 7:30 p.m.
Commissioner Anderson requested that paragraph 5 on page 2 of the minutes of the November 17, 1998, Special Board Meeting be changed, as follows:
Commissioner Anderson Bishop
asked that consideration be given to returning to
previous practices which eliminated mailing bills in separate
envelopes to single addresses with two or more meters.
President Smith determined that there was no objection to the request of Commissioner Anderson.
Vice President Osanka requested that a second sentence be added to paragraph 5 on page 2 of the minutes of the November 17, 1998, Special Board Meeting, as follows:
Vice President Osanka stated that he agreed with the request of Commissioner Bishop.
President Smith determined that there was no objection to the request of Vice President Osanka.
Vice President Osanka stated that he did not believe paragraph 4 on page 5 of the minutes of the November 17, 1998, Special Board Meeting "caught the spirit" of the remarks of President Smith. He suggested that her remarks be inserted into the minutes in their entirety.
President Smith replied that she believed the paragraph accurately summarized her remarks.
Vice President Osanka said that the paragraph did not report that President Smith had expressed anger and that the minutes were an understated version of her criticism of employees for their audacity in expressing opposition to Board policy.
President Smith stated that she had not expressed criticism of employees for any audacious actions during the meeting in question, or had she intended to express any criticism of the concerns of Electric Crafts' employees related to compensation issues.
Vice President Osanka said that he believed a review of the audio tape recordings of the meeting would show that President Smith had expressed criticism of employees.
Commissioner Anderson moved, seconded by Commissioner Dyer, that the minutes of the November 17, 1998, Work Session and Special Board Meeting be approved, as amended.
Commissioner Bishop said that she appreciated the comments of Vice President Osanka and was also concerned that employees had distinguished differences between the value of job families.
Vice President Osanka stated that he did not believe the minutes of the Special Board Meeting accurately reflected the concern identified by Commissioner Bishop.
The motion to approve minutes was adopted, 3:2, with Commissioner Bishop and Vice President Osanka voting opposed.
RECOGNITION OF COMMISSIONER OSANKA
President Smith stated that EWEB wished to honor the four years of service of Vice President Osanka as a member of its Board of Commissioners. She presented him with a plaque which expressed appreciation for his hard work and service.
Commissioner Bishop stated that she had enjoyed the time she had served on the Board with Vice President Osanka. She said he appeared to have a thoughtful approach to utility issues, but stayed concerned about local community concerns and that, as a new Board member, she had learned from his contributions to the Board's deliberations.
Vice President Osanka replied that he had appreciated the service of Commissioner Bishop and stated that he had attempted to not include her in critical statements he had made about the Board.
Vice President Osanka requested that the following statement be included verbatim in the minutes of the meeting:
I've enjoyed my service on EWEB and . . . Perhaps that will come as a surprise to some people because when they tend to see me, they tend to see me in the dissent. But, in fact, I agree with far more of the decisions we make on the Board than I ever disagree with. Where I disagree is based on philosophical differences. I understand that many of the other Board members have differences in philosophy with my own. I respect their right to hold those and I hope they respect my right to hold those. I respect the intelligence of my fellow Commissioners. And while I will continue to disagree with the Board and General Manager on some of the issues I have previously disagreed with them on this year, I want to assure the public that I have the utmost confidence in EWEB as an institution. And the reason for that confidence is the people. The people, our employees, are EWEB. EWEB is almost 500 souls and those souls are strong. The people who are out in our community . . . our meter readers, our line workers . . . I knew I shouldn't start a list like this because I'm going to leave people out . . . so, I'll just . . . instead of enumerating people I will say, "all of the workers of EWEB . . ." I have been blessed to have met and known each and every one of them. And so I want to say that it is with a sad heart that I leave EWEB because I have been very much appreciative of my time here. And so I want you to know that my heart is with EWEB and my heart is with the people of EWEB and that will never change.
President Smith announced that there was a decorated cake in honor of the last meeting of Vice President. She invited him to cut the first piece of cake and to share the rest with the other members of the Board, staff, and public in attendance.
ITEMS FROM BOARD MEMBERS (CONTINUED)
Commissioner Bishop requested that the Board return to considering Items from Board Member on the Agenda.
Commissioner Bishop stated that she would participate in the public official's tour of the Hayden Bridge Water Filtration Plant on December 18, 1998. Vice President Osanka stated that he would also participate in the tour.
Commissioner Bishop reported that she had received a letter from Donna Corwin regarding the Universal Service Program under consideration. She said that she hoped it could be circulated among all members of the Board. President Smith stated that all members of the Board had received the same letter and that Commissioner Anderson would provide her copy to staff for consideration.
Vice President Osanka stated that he hoped the Board would discuss the role of EWEB in discussions regarding solar powered street lighting being encouraged by a member of the Eugene City Council.
Vice President Osanka reported that he would bring to the attention of the EWEB Year 2000 Coordinator concerns of a constituent regarding the effects of "brown outs" on electric motors used in her business. He said that he hoped mitigation for the problems could be developed and that he would share her ideas.
Vice President Osanka said that he was concerned about the cancellation of the December 15 meeting of the Board of Commissioners. He explained that his concern resulted from the General Manager having rescheduled discussion of his review and salary adjustment to 1999 because of the full agenda of meetings in December.
Commissioner Anderson observed that a reason the second meeting in December was canceled was that two members would be absent. Vice President Osanka replied that he did not believe the absence of two members required cancellation of a meeting, but would rather suggest that the date of a meeting be changed than it be canceled.
Vice President Osanka moved that the EWEB Board of Commissioners hold a second meeting during the month of December for the purpose of discussing the General Manager's review and salary increase.
Vice President Osanka said that the advantage of his motion was that the Board would have the opportunity to avail itself of his four years of service on the Board for which he had just been commended.
Commissioner Bishop seconded the motion to enable it to be discussed by the Board.
Commissioner Dyer said that he believed it was impractical to hold a second meeting in December because he would also be unavailable for most of the month. He added that he was not interested in meeting to discussing issues related to a review of the General Manager because of inaccuracies and misleading of false statements contained in a press release distributed by Vice President Osanka.
Vice President Osanka asked Commissioner Dyer to explain his statement. Commissioner Dyer replied that he did not believe suggesting that the Board had put a "spin" on rescheduling of the General Manager's salary review until 1999 was accurate. Vice President Osanka said that Commissioner Dyer's statement was a matter of interpretation.
Vice President Osanka said he objected to Commissioner Dyer's lack of proof that there were false statements in his press release.
President Smith said she objected to statements in the press release of Vice President Osanka characterizing actions of Mr. Berggren as "continued attempts to avoid criticism" and "game playing." She suggested that those and other accusations were unsubstantiated and should be countered with a press release from the Board correcting information contained in the press release of Vice President Osanka.
Vice President Osanka said that he always supported having the Board issue press releases because he believed it was an important way that the public was informed.
Commissioner Dyer suggested that the statement in the press release of Vice President Osanka that "dissent to the (General Manager's) compensation package grew" was accurate only in the mind of the Vice President. He said he had heard no other negative comments regarding the package.
Vice President Osanka said that comments on the back of EWEB bills from a number of customers were opposed to the compensation package and that there were other similarly negative comments which had not been forwarded to Commissioners.
Commissioner Dyer stated that he did not support the motion.
Commissioner Bishop asked for an explanation of the press release being discussed.
Commissioner Anderson stated that the release "blasted the General Manager" and had been released by Vice President Osanka that day.
President Smith read a copy of a document containing the press release from Vice President Osanka sent via electronic mail to Lance Robertson of The Register-Guard dated December 1, 1998, 12:12 p.m. She said copies were distributed to Commissioners at the beginning of the meeting.
The press release described an action of the Board to give what was characterized as a "huge 'Supplemental Retirement Plan'" to the General Manager and the dissent of Vice President Osanka. It stated that the General Manager had "unscheduled" the meeting to include his salary review until 1999 when Vice President Osanka would have left the Board and characterized the action as "stiffling of dissent." It announced that Vice President Osanka planned to "object to the GM's continued attempts to avoid criticism."
The press release quoted Vice President Osanka as saying, "The General Manager hopes, by such game playing, to get a 5-0 vote for his substantial salary increase next year . . . made retroactive to August 1998 . . . over and above his new compensation package . . ."
Commissioner Bishop said she apologized for being a reason that the December 15 meeting of the Board of Commissioners was canceled. She said there was no basis for a contention in the press release and that there was not more time available for an extra meeting in December. She said there was no possibility that she could attend such a meeting.
Commissioner Bishop said she was surprised at the perspective of the role of a Board member expressed in the press release prepared by Vice President Osanka. She said she believed there was distortion in the suggestion of the release that the General Manager acted precipitously to cancel meetings of the Board because the most recent cancellation had been made at the request of Board members.
Commissioner Bishop said that the suggestion of the press release that the Board had created a "spin" in issues related to scheduling of a meeting to review the General Manager's salary package was not accurate.
Vice President Osanka said that he did not believe Commissioner Bishop fully comprehended the press release because she did not have a printed copy available.
President Smith stated that the General Manager had not unilaterally canceled the second December meeting of the Board of Commissioners. She said Mr. Berggren had consulted with her and that she had authorized the cancellation. Commissioner Bishop stated that she had also encouraged cancellation of the meeting.
Vice President Osanka stated that the memorandum of Mr. Berggren announcing the cancellation of the second December meeting had not indicated he had consulted with any members of the Board. Commissioner Bishop replied that she believed Mr. Berggren was fulfilling the responsibilities of his job in the memorandum referred to by Vice President Osanka.
Vice President Osanka stated that a second meeting in December to discuss the compensation package of the General Manager could have the value of his participation during which he could give Commissioners the benefit of his four years of experience as a Commissioner. Commissioner Bishop asked Vice President Osanka to submit comments regarding the issue to the Board in writing.
Commissioner Anderson said that she disagreed with the suggestion of Commissioner Bishop to invite written comments from Vice President Osanka. She said she did not believe such comments would be valuable to the Board because of his long-held, irrational opposition to the General Manager. She said she would not respect any opinion of Vice President Osanka regarding General Manager Berggren.
Vice President Osanka stated that he believed the comments of Commissioner Anderson were irresponsible.
The motion to schedule a second meeting of the Board in the month of December was defeated, 4:1, with Vice President Osanka voting affirmatively.
President Smith stated that she believed Vice President Osanka had damaged EWEB through inaccurate statements contained in his press release. She noted that the news department of at least one local television station had interviewed Vice President Osanka regarding his press release during the break between the Board's Work Session and Regular Meeting and had not invited a response to his comments from any other Commissioner.
President Smith said that she wanted to authorize staff to prepare a press release to provide a different perspective than that presented in the press release of the Vice President. She suggested that the new release state:
President Smith asked if there was support for her proposal.
Commissioner Dyer moved, seconded by Commissioner Anderson, that the Board President prepare a press release in response to the press release of Vice President Osanka, as she had described.
Commissioner Bishop asked External Communications Coordinator John Mitchell if he had been informed of the press release of Vice President Osanka. Mr. Mitchell replied that he had only become aware of it when a television news camera crew had appeared at the Board meeting. He said he did not believe any representative of EWEB, other than Mr. Osanka, had made a statement regarding the press release.
Commissioner Bishop asked Mr. Mitchell if he believed it would be wise for the Board to issue a press release as proposed in the motion under consideration. Mr. Mitchell replied that, in his professional opinion, such a release would mistakenly prolong discussion of the issue. Commissioner Bishop said that she shared the perception of Mr. Mitchell and would not support the motion.
President Smith suggested that Commissioner Dyer might wish to withdraw his motion.
President Smith asked Mr. Mitchell what he thought would be the best way to convey to the press that the release of Vice President Osanka did not reflect the position of the Board of Commissioners. Mr. Mitchell suggested that the Board designate a spokesperson to whom media representatives would be directed for comment about the issue.
President Smith suggested that the motion under consideration be amended to provide that if she was contacted by representatives of the media for follow up on the issue she could stipulate that the proposals she had made for a press release had been agreed to by the Board.
Commissioner Bishop said that she would prefer that only the first two proposals of President Smith be portrayed as having the agreement of the Board because the third was unnecessarily redundant and convoluted.
Commissioner Dyer requested that his motion be withdrawn from consideration. Since there was no objection, President Smith granted the request.
Commissioner Anderson reported that she had been first informed of the press release when she was contacted by Lance Robertson of The Register-Guard regarding another matter. She said that his lack of attendance at the meeting indicated to her that he did not consider the issue to be of much interest.
Commissioner Bishop said that she felt comfortable designating President Smith as spokesperson for the Board in the matter of the press release of Vice President Osanka.
Mr. Mitchell asked and received assurance that it was appropriate for him to direct media inquiries regarding the press release to the President, in accord with Bylaws of the Board.
Vice President Osanka moved that the text of his press release be included in the minutes of the meeting.
President Smith determined that no Commissioner wished to second the motion of Vice President Osanka and ruled that it was not under consideration.
CORRESPONDENCE
General Manager Randy Berggren noted that a memorandum had been distributed with the agenda of the meeting from Environmental Manager Laurie Power dated November 23, 1998, reporting a staff recommendation to support a proposal regarding pesticide use and sales developed by the Northwest Coalition for Alternatives to Pesticides.
Commissioner Dyer said he was concerned that the proposal would require record keeping and reporting of legal sales of pesticides.
President Smith said that she felt some of the information described in the memorandum as being included in the proposal would be helpful.
Commissioner Bishop said that she would appreciate having further discussion of the proposal at a future meeting of the Board, especially as it related to issues under consideration in the 1999 session of the State Legislature. Mr. Berggren replied that EWEB's Legislative Consultant Jim Whitty was scheduled to make a report to the Board on January 5.
Mr. Berggren noted that a memorandum had been distributed with the agenda of the meeting from Public Affairs Manager Marty Douglass dated November 30, 1998, which provided a status report on the involvement of EWEB in the jurisdictional transfer of the Glenwood area from the City of Eugene to the City of Springfield.
Mr. Berggren noted that a memorandum had been distributed with the agenda of the meeting from Assistant Treasurer Cathy Bloom dated November 25, 1998, giving an update on the sale of bonds for the Wyoming Wind and Telecommunications projects. He said the sale had been favorable to EWEB.
Mr. Berggren noted that information had been distributed with the agenda of the meeting from Public Affairs Writer Manda Bednarczyk dated November 25, 1998, regarding a tour by local elected officials of EWEB's Hayden Bridge Water Filtration Plant on December 18.
Mr. Berggren noted that a memorandum and minutes from a Water Supply Plan Public Hearing had been distributed with the agenda of the meeting from Communications Specialist Cathy Hamilton dated November 18, 1998. He said the information would be helpful in the Board's consideration of the plan on January 5.
Mr. Berggren noted that an initial draft response to a November 13, 1998, letter from J. Rachel Shimshak, Director of the Renewable Northwest Project, received by the Board at the November 17 meeting had been distributed at the beginning of the meeting. He said he would appreciate feedback from Commissioners within a week.
Vice President Osanka said that he had been disappointed that the response had appeared to be justification for the position of EWEB because the purpose of the letter had been to encourage EWEB to reconsider its position. He said he believed a better response would be to list changes made because of the concerns of Renewable Northwest Project about EWEB wind power plans.
Mr. Berggren replied that EWEB had made no changes in its plans because of the letter and that the response was intended to state reasons for the different position and to show that the position of Renewable Northwest Project had been considered.
President Smith asked that discussion of issues raised by the letter of Renewable Northwest Project be included on the agenda of a January meeting of the Board.
Commissioner Bishop requested copies of material distributed at the meeting.
PUBLIC INPUT
President Smith determined that there was no one present wishing to address the Board.
1999 WORK PLAN AND BUDGET
Financial Services Supervisor Dick Varner presented a brief review of the 1999 Budget Proposal dated December 1, 1998, distributed with the agenda, as follows:
Electric Budget
Water Budget
Steam Budget
Payroll and Benefits Budget
PUBLIC HEARING ON 1999 BUDGET
President Smith opened the public hearing on the 1999 EWEB Budget, determined there was no one present wishing to testify, and closed the public hearing.
ADOPTION OF THE 1999 BUDGET AND WORK PLAN
Commissioner Dyer commended the staff on its ability to present a sixth consecutive budget without an Electric Utility rate increase. He said it would likely be a challenge to continue the record into the next year. He encouraged staff to continue development of creative measures to reduce costs, modify plans, and remain competitive.
Vice President Osanka thanked the staff for its good work. He said he agreed with Commissioner Dyer about the need to remain creative, but cautioned that it was also necessary for all planning to remain within legal limits. He said that if a rate increase had been proposed, he would have voted against the budget. He said he believed no rate increases should be approved without full public discussion.
Commissioner Anderson thanked the staff for keeping expenses as low as possible. She said she was concerned rate increases could not be avoided in the future. She said she wanted all large cost over runs to be presented to the Board. She suggested that it was time for Board members to participate in a basic review of all EWEB operations to prepare for future budget preparation.
Commissioner Bishop thanked the staff. She said she supported the review process suggested by Commissioner Anderson.
President Smith also thanked the staff for its work on the 1999 Budget and singled out Mr. Varner for commendation. She said that the staff had done everything requested by the Board, but that she continued to feel peripheral to the budget building process. She said she would like to have more connection to the operation of EWEB.
Vice President Osanka moved, seconded by Commissioner Dyer, that the 1999 Budget be approved as presented. The motion was adopted unanimously, 5:0.
EASEMENT ACROSS EWEB PROPERTY
Real Property Specialist Mark Oberle reviewed his memorandum distributed with the agenda dated November 20, 1998. He noted that an easement to U.S. West Communications on EWEB's Gilham Substation property had been requested. He said that there were no unresolved issues or conflicts regarding the request.
Vice President Osanka moved, seconded by Commissioner Dyer, that a 15 foot by 20 foot easement near the northwest corner of the EWEB Gilham Substation property be granted to U.S. West Communications for a consideration of $2,000. The motion was adopted unanimously, 5:0.
POWER MARKETING COMPENSATION PLAN
Accounting/Financial Analyst Terry Eberlein reviewed his memorandum and attached exhibits distributed with the agenda dated November 24, 1998, regarding power marketing performance levels and payout information for the third quarter of 1998. He discussed market purchases, market sales, client portfolio revenues, and contract dispatch data contained in the exhibits.
Commissioner Dyer asked for information regarding Threshold Target Maximums. He suggested that the threshold might be set inappropriately low.
Commissioner Anderson asked if the volatility of the price of power evident in mid-year had had effects on EWEB's power marketing activities. Mr. Eberlein said that EWEB was not forced to purchase high priced power at that time, but had been able to use its previously purchased contracts to acquire lower priced power which was sold at a profit.
President Smith asked if there would be a review of power management target goals as a result of the information becoming available. Risk Manager Debra Wright replied that it was unlikely changes would be made to power management performance level standards in the near future because data was available for only one year. She said that the 1999 Budget would have some effect on the thresholds of the standards.
Mr. Berggren stated that the Power Marketing Group had secured approximately $870,000 in savings for EWEB and that approximately $100,000 would be paid out in the 1998 compensation plan.
Vice President Osanka stated that he believed communications with Commissioners regarding EWEB matters which had not been submitted through the Office of the General Manager were part of the public record of Board meetings.
Commissioner Dyer said that he was unable to understand the significance of the comment of Vice President Osanka.
President Smith adjourned the meeting at 9:45 p.m.