Board Members present: Susie Smith, Mike Dyer, Sandra Bishop, Dorothy Anderson, and Peter Bartel.
Others present: Randy Berggren, Ken Beeson, Terry Bequette, Cathy Bloom, Marty Douglass, Dale Kessinger, Garry Kunkel, Mike Logan, Roseanna McArthur, Mat Northway, Jim Origliosso, Laurie Power, Matt Sprecher, Dick Varner, Pat Ventura, John Yanov, and Krista Hince of the EWEB staff; President Smith called the Regular Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:40 p.m.
President Smith noted that the agenda included items anticipated to last approximately three hours. She determined there was consensus to postpone consideration of the Water Supply Plan Finance agenda item until the next meeting.
President Smith determined there was consensus to move the Public Input item to be first on the agenda, as a courtesy to the person who had requested to speak.
Susan Klein, 476 East 53rd Avenue, Eugene, stated that she rented a facility located at 1395 Cross Street, Eugene, for a small art business. She said she believed the cost of EWEB utility service for the facility was unacceptably expensive, considering her limited use of it. She said a major reason for the high cost was the monthly Demand Meter charge. She said she did not believe requiring the charge was fair and that she was supported in her position by her landlord. She compared her cost for utilities with those she had been charged in Berkeley, California, and with those paid by acquaintances in Eugene. She suggested the Demand Meter charge was bogus and requested that the Board take action to provide relief.
Commissioner Anderson recalled that the Board had previously considered a request for similar relief, and that it had been agreed that there would be no charge for the first ten kilowatt-hours of Demand Meter power usage by small businesses.
General Manager Randy Berggren said that the 1992 decision referred to by Commissioner Anderson was to have been implemented in connection with rate increase decisions. He reminded the Board that there had been no Electric Utility rate increases since 1993.
Senior Financial/Rates Analyst Dale Kessinger stated that a study of EWEB rates had begun in 1998 and that the first decision made as a result of it was to "unbundle" transmission and power charges. He said that additional proposals would be made, including the subdivision of the General Service Class to address perceived inequities such as those identified by Ms. Klein. He said action would likely be proposed to the Board after the annual budget process had been completed.
Commissioner Bartel asked how many EWEB customers shared the customer classification of Ms. Klein. Senior Rates/Financial Analyst John Yanov reported that there were several thousand small business customers with a Demand Meter charge.
Vice President Dyer said he recalled dealing with the exemption of certain small businesses from of the first ten kilowatt hours of the Demand Meter usage charge. He said he felt five-years was too long to have implemented the decision. He noted that Ms. Klein was paying 11¢/kilowatt hour of electricity.
Electric Division Director Garry Kunkel pointed out that any decision to provide rate relief to Ms. Klein would also need to apply to other customers in similar situations. He said it had been decided to tie such relief to rate increases to avoid shifting of rates from one customer class to another.
President Smith said that she agreed with Vice President Dyer and believed it was time to request acceleration of the process to exempt certain small businesses from charges for the first ten kilowatt hours of Demand Meter usage.
Ms. Klein said she appreciated the sensitivity of the Board to her plight and asked how long it would take for the change to occur. Commissioner Anderson replied by explaining that a study of the implications would need to be made, proposals developed, public hearings held, and Board action be taken to change rates.
Mr. Berggren said staff would attempt to provide a plan for considering the change at the next Board meeting.
Vice President Dyer asked what the overall impact of the change being considered would be on rates. Mr. Yanov replied that the change would likely reduce monthly revenue by $90,000.
Ms. Klein suggested that the Board had the power to immediately remove the requirement for a Demand Meter on her utility meter. Commissioner Bishop replied that the suggestion might be true, but that the Board was sensitive to the need to not micro-manage the work of EWEB and to allow staff to fulfill its responsibilities.
Vice President Dyer said he agreed with Commissioner Bishop and stated that fairness required that any action taken in response to the request of Ms. Kline also be applied to all in the same customer class.
President Smith requested that staff provide a proposed action plan for the Board to consider changing requirements for Demand Meter charges for small business customer classes at the next meeting.
President Smith requested that sentence 2 of paragraph 1 on page 5 of the minutes of the March 9 Work Session be changed, as follows:
Commissioner Bishop said she agreed and suggested that it would be
a challenge to determined determine what
information about EWEB operations would be of strategic importance
for the Board.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
President Smith requested that sentence 1 of paragraph 3 on page 7 of the minutes of the March 9 Work Session be changed, as follows:
President Smith said that she was concerned abpit
about the impression she had received at the February
Planning Session that staff considered themselves experts in utility
concerns and that the only role of the Board was to provide
big-picture policies.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
Commissioner Bishop requested that sentence 1 of paragraph 6 on page 6 of the minutes of the March 9 Work Session be amended, as follows:
Mr. Helgeson said that it would be helpful to staff
if the Board could identify boundaries beyond which it
should not go in developing proposals.
President Smith determined that there was no objection to the request of Commissioner Bishop and stated that the minutes were amended.
Vice President Dyer moved, seconded by Commissioner Bartel, to approve the minutes of the April 9, 1999, Work Session, as amended. The motion was adopted unanimously, 5:0.
President Smith requested that sentence 1 of paragraph 1 on page 6 of the minutes of the March 16 Work Session be changed, as follows:
President Smith began feedback regarding the
project. suggested that staff record the learnings and
action items on "flip charts" and that Commissioners frame their
feedback in those terms as a constructive means to move forward. She
determined that there was consensus to approve her suggestion.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
President Smith requested that sentence 5 of paragraph 1 on page 6 of the minutes of the March 16 Work Session be changed, as follows:
She said that if EWEB was it in the business of reconstruction, it would have realized the potential problems associated with reconstruction of the Midgley Building.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
President Smith requested that sentence 1 of bullet 1 of paragraph 3 on page 6 of the minutes of the March 16 Work Session be changed, as follows:
There is a role for the Board of Commissioners to
plan play in dealing with the use of EWEB
space.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
Commissioner Bartel requested that paragraph 5 on page 7 of the minutes of the March 16 Work Session be changed, as follows:
Commissioner Bartel said that he did not believe the
project issue was completed because
constituent interest suggested that the Board should be pro-active in
resolving remaining issues.
President Smith determined that there was no objection to the request of Commissioner Bartel and stated that the minutes were amended.
President Smith suggested that sentence 3 of paragraph 4 on page 7 of the minutes of the March 16 Work Session be changed, as follows:
He said he believed Board input should have been incorporated
because he believe cost overruns contracts of
more than $100,000 should require Board consent.
President Smith determined that there was no objection to her request and stated that the minutes were amended.
Vice President Dyer requested that sentence 2 of paragraph 1 on page 7 of the minutes of the March 16 Work Session be changed, as follows:
He said he believed a professional audit
appraisal of its value should be secured.
President Smith determined that there was no objection to the request of Vice President Dyer and stated that the minutes were amended.
Vice President Dyer moved, seconded by Commissioner Anderson, to approve the minutes of the April 16, 1999, Work Session, as amended. The motion was adopted unanimously, 4:0:1, with Commissioner Bishop abstaining from voting.
Mr. Berggren announced that Board Retreats had been scheduled for April 23-24 and June 18-19. He said a third retreat would be scheduled in July or August.
Mr. Berggren referred to a document entitled "Proposed Amendments to Senate Bill 1149" distributed at the beginning of the meeting. He said a vote on the bill was scheduled in the State Senate on April 8, but that it was possible there was not enough support of members to move it out of committee.
Mr. Bartel asked if alternative legislation would be proposed if Senate Bill 1149 was defeated. Senior Financial/Rates Analyst Dale Kessinger replied that it was unlikely another bill would be proposed in the Senate, but that similar legislation was being developed in the House of Representatives. He said action in that branch of the Legislature was likely if the Senate bill was defeated.
Mr. Berggren said that building on previous discussions of the Board, Legislative Representative Libby Henry was actively supporting acceptable provisions of Senate Bill 1149 and would continue to do so in any House reincarnation of it.
Mr. Berggren noted that a memorandum dated March 29 from Year 2000 Project Manager Kevin Fahey had been distributed with the agenda of the meeting. He said it was another in the series of status reports provided to the Board.
Environmental Manager Laurie Power referred to her memorandum dated March 31 regarding House Bill 3135, The Oregon Environmental Stewardship Plan, distributed with the agenda of the meeting. She reviewed information about the bill contained in the memorandum and emphasized the value of having the Board endorse it with a letter similar to the draft attached to her memorandum.
Commissioner Bishop asked if an emergency class was included in the proposed legislation. She also asked what was the anticipated cost associated with enacting the bill and if a source of revenue for it had been established. Ms. Power replied that an emergency clause was included in the bill; but that costs associated with it, or a source of revenue, had not yet been determined.
Commissioner Bishop said she was hesitant to approve EWEB support for any proposal which might give the impression that the Board was not aware of the "scramble for funds" going on in the State Legislature. She suggested that the draft letter of endorsement be re-written to express support for the concept of the bill, but encourage that revenue to support the committee not be taken from the State's General Fund. She suggested that grant funding of the bill might be possible.
Vice President Dyer said he was concerned that supporting "long-term sustainable growth," as described in the memorandum of Ms. Power, could be misinterpreted as opposition to development. He said he could not support any legislation which discouraged development. Ms. Power replied that the purpose of the bill was to seek ways to balance economic vitality and environmental protection.
Vice President Dyer moved, seconded by Ms. Anderson, that the President be authorized to communicate to appropriate persons that EWEB supported the concept of House Bill 3135 and that it believed revenue to support its enactment should be sought from non-governmental sources. The motion was adopted unanimously, 5:0.
Mr. Berggren noted that the April 20 Board Work Session would provide a 1999 Legislative Session status report. He said the agenda of the Special Meeting would include receiving audited 1998 year-end financial reports, an update on the Endangered Species listing, a presentation and discussion of financing the Water Supply Plan, and discussion the General Manager's goals statement.
Commissioner Bishop apologized for having missed the March 16 Board Work Session. She said she had studied notes and minutes of the meeting, discussed their importance with staff, toured the Midgley's Building, and believed she had caught up in her understanding of the issues considered.
Commissioner Bishop said she did not believe altering the order of the agenda to allow Public Input to be considered first was a helpful practice. She suggested that doing so limited the ability of those who testified to fully understand the nature of business undertaken by the Board.
Commissioner Bartel said he believed the proposal to alter the order of the agenda earlier in the meeting had been appropriate because of the presence of what appeared to be a number of the members of the family of the person who had asked to testify. He said he had interpreted the suggestion to be an attempt to be polite to those involved.
President Smith said she had made the proposal to alter the order of the agenda on the suggestion of staff, but had been willing to keep the Public Input item in its assigned order.
Commissioner Bartel described the annual "Do Da" of the Oregon League of Conservation Voters to be held at 6:00 p.m. in Portland on April 16. He invited other Commissioners to accompany him to the event.
President Smith reported that she had not been able to respond to a telephone message from a constituent, David Coen. Commissioner Anderson reported that she had also received a call from Mr. Coen and that he was protesting the EWEB basic charge. President Smith said she would return the call.
Mr. Berggren referred to a letter from James McCoy, Housing Authority and Community Services Agency (HACSA) Development Director, dated March 30, distributed with the agenda of the meeting. He asked if there was a representative of the Board willing to attend the dedication of the HACSA Jacob's Lane Affordable Housing Development. President Smith stated that she would attend the event and represent EWEB.
Mr. Kessinger stated that the Board was asked to approve the unbundling of EWEB's Residential and General Service rates and to approve proposed Windpower rates. He referred to his memorandum dated April 1 distributed with the agenda of the meeting. He noted that attachments to the memorandum included a "bill stuffer" and several documents which contained background material for the proposals.
Mr. Kessinger reminded Commissioners of their previous considerations of both unbundling rates and Windpower rates. He presented a brief review of the purpose, advantages, and complications of unbundling. He announced that Windpower Implementation Day was scheduled for April 22, Earth Day 1999 (Earth Day).
Commissioner Bartel said that he appreciated the use of Earth Day to begin recruitment of Windpower users. He said he also appreciated the brochure describing unbundling and EWEB's new bill format. He suggested that "Total Current Charges" on bills be changed to "Total EWEB Charges," allowing it to be differentiated from fees and charges of the City of Eugene, avoid redundancy, and more clearly identify utility charges.
Vice President Dyer moved, seconded by Mr. Bartel, that the EWEB Board of Commissioners approve the unbundling of Residential and General Service rates, and that the proposed Windpower rates be approved. The motion was adopted unanimously, 5:0.
Energy Resource Project Manager Ken Beeson referred to his memorandum dated April 1 distributed with the agenda of the meeting. He said it provided status reports in the Telecommunications Project.
Mr. Beeson reviewed the status of the Telecommunications Project -- the bid, construction, testing and completion schedules; fiber installation and electronics issues; substructure and its effect on trees; and cost reports. He described route revisions made to the original project plan; and concerns related to leasing Telecommunications Project fiber by agencies and content providers.
Commissioner Bishop said she was concerned that construction related to the Telecommunications Project could encounter difficulties EWEB was not prepared to solve. She suggested that cost over-runs could become significant. Mr. Berggren said that concerns such as those expressed by Commissioner Bishop had led to establishing a contract with MFS Network Technologies to act as construction manager for the project. He said the firm would manage bidding processes, and oversee installation of fiber, electronic equipment, and other required material.
Commissioner Bartel expressed a concern about the lack of a Contingency Fund for the Telecommunications Project. Mr. Beeson replied that provision for contingencies were included throughout the project, but that there was no single budget line covering it. Mr. Berggren said it was normally better management practice to plan for contingencies in the details of a project.
Mr. Beeson said that staff was not fully ready to bring policy, procedures, and guideline proposals for leasing dark fiber to the Board at this time. He said there was high interest expressed by potential leasers of the fiber. He said outside expertise was being arranged to help in further development of the lease rates and policies.
President Smith asked if the federal Telecommunications Act of 1996 required EWEB to provide equal access to the fiber optic system by public and/or private users. Mr. Beeson said EWEB was operating on the assumption that its responsibility was to make the system available, not guarantee equal access. He said the legality of the assumption would be reviewed in detail by counsel.
Commissioner Bartel asked if there had been resistence to the probable high cost of using the system. Mr. Beeson replied that most potential customers had no similar service with which to compare rates.
Vice President Dyer said that he wanted all users of the EWEB Telecommunications Project to have rates based on cost factors only and to not give consideration to their public or private agency status.
Mr. Berggren stated that the memorandum from Facilities Director Tom Buckhouse and Treasurer Jim Origliosso distributed with the agenda of the meeting contained a revision to the draft Work in Progress Policy discussed by the Board at the Work Session held on March 16. He said consideration of the policy would be postponed to allow time for discussion of a proposed action plan prepared by staff to address issues and desired outcomes identified at the Work Session.
Mr. Buckhouse distributed copies of a memorandum dated April 6, regarding follow up to the Midgley Review held on March 16. He noted that items attached to the memorandum included a requested breakdown of approximate square footage for each designated area in the Midgley Building; transcripts of Board feedback captured on flip charts at the Work Session; and a document entitled "Midgley Follow Up" which included issues raised by the Board, proposed actions in response to the issues, timing of actions, and desired outcomes of the proposed actions.
Mr. Buckhouse reviewed proposed actions and desired outcomes for Board issues raised at the March 16 Work Session, as follows:
Mr. Buckhouse said staff would inform the Board when changes were to be made in space utilization at budget time and during project planning.
President Smith said the proposed action met her expectations. She asked how such actions would be codified. Mr. Berggren replied that he envisioned establishing the proposed action as administrative policy.
Commissioner Bartel said he believed the main "driver" of the policy should be a dollar threshold.
Mr. Buckhouse said staff would review and summarize existing procurement policies established by the Board and identify and review proposed changes, beginning at the May 18 Board meeting.
Mr. Buckhouse commented on how staff would develop reporting procedures with appropriate review points and budgets, beginning April 6.
Mr. Origliosso said staff would review and summarize existing budget management policies, and review proposed changes with the Board, beginning May 18.
Vice President Dyer stated that regardless of what was done with the Midgley Building, he believed there was a need to determine how to get adequate return from EWEB's investment in it.
Commissioner Anderson suggested that the issue would be better stated "The Board needs a better handle on the Budget."
President Smith asked if there would be a cost savings or other benefit to postponing getting an appraisal of the Midgley Building until the development of the EWEB Building Master Plan. Commissioner Bartel replied that he believed an appraisal should be made before development of the plan. He suggested use of the firm of John Brown as appraiser.
President Smith suggested that relocation of the EWEB Employee's Workout Room be considered as part of the investigation of how to make the building more profitable.
Commissioner Bartel said he hoped that consideration of how to make the building more profitable was not folded into a larger master site plan study because he wanted closure on issues related to it.
Vice President Dyer said that he agreed with Commissioner Bartel because the $2 million EWEB investment needed to be either "unloaded" or redesigned to maximize its return.
Commissioner Bishop said she believed one value of the remodeling project had been to respond to the local community. She suggested that the good will it created should be considered with other intangibles in calculating its value. Vice President Dyer said that he did not believe good will was created by cost over-runs which prevented development of an EWEB low-income assistance program.
Commissioner Anderson suggested that an additional Board issue raised at the March 16 Work Session not included in the document under consideration was that lessons learned in the remodeling process be "passed on." She said staff should have learned that it should not go forward with such projects without communicating problems and progress with the Board and the Board should have learned that it should ask questions about such projects.
President Smith said that she appreciated the responsiveness of staff regarding Board concerns about the Midgley Building. She said she believed communication with the media regarding resolution of issues raised by the Board would be appropriate. Vice President Dyer responded that he did not believe it would be wise to re-surface the issues with the public. Public Affairs Manager Marty Douglass suggested that a letter of information to the editor of The Register- Guard might be the most prudent action. President Smith said she left any such communication to the best judgement of staff.
The meeting adjourned at 10:10 p.m.