Board Members present: Susie Smith, Mike Dyer, Sandra Bishop, Dorothy Anderson, and Peter Bartel.
Others present: Randy Berggren; Gale Banry, Terry Bequette, Cathy Bloom, Deborah Brewer, Tom Buckhouse, Mel Damewood, Sandy DeLuna, Marty Douglass, Tim Downey, Dick Helgeson, Everett Jordan, Dale Kessinger, Garry Kunkel, Kris Middlewood, Mat Northway, Jim Origliosso, Lorri Asher, Laurie Power, Dick Varner, Debra Wright, John Yanov, and Krista Hince of the EWEB staff; Don Doerr, Representing Price Waterhouse Coopers, LLP, and Daniel Lindstrom, Minutes Recorder.
In the absence of President Smith, Vice President Dyer called the Special Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:50 p.m.
General Manager Randy Berggren pointed out that Agenda Item 10, General Manager's Goals Confirmation, would not need to be considered during the meeting since a consensus had been reached during the Work Session that formal confirmation was not required.
Commissioner Anderson noted that the Northwest Energy Coalition had joined other environmental organizations in sending a letter regarding the Centralia Power Plant, encouraging any purchaser of the facility to convert its coal burning generation process to a more environmentally sensitive methodology, such as natural gas. She said a Washington State Legislator had raised objections to the letter and had indicated he would express the opposition to all members of the coalition.
Commissioner Bartel reported that he had attended a meeting of the North Downtown Scoping Committee of the City of Eugene, a planning group considering the use of a federal grant to rehabilitate the Eugene Train Station. He said a new federal courthouse would also be located in the area being studied. He said discussion of EWEB had taken place regarding the positive value of creating a direct connection with the Willamette River through its property. He said he had found the conversation interesting.
Commissioner Anderson stated that similar discussions had taken place in the group which had prepared recommendations regarding the Ferry Street bridge. She suggested that the feasibility of such a connection through EWEB property be considered during the preparation of a Master Site Plan.
Vice President Dyer invited consideration of the minutes of the March 16 and April 6 Special Board Meetings distributed with the agenda of the meeting.
Commissioner Anderson moved, seconded by Commissioner Bartel that the minutes of the March 16, 1999, Special Board Meeting be approved as submitted. The motion was adopted, 3:0:1, with Commissioner Bishop abstaining from voting.
Commissioner Bishop moved, seconded by Commissioner Anderson, that the minutes of the April 6, 1999, Special Board Meeting be approved as submitted. The motion was adopted unanimously, 4:0.
General Manger Randy Berggren referred to his memorandum regarding a presentation for utility managers and Board members about the formation of an intergovernmental organization to consolidate wholesale power trading capacity for members of the Oregon Utility Resource Coordination Association (OURCA). He said the meeting would take place at EWEB at 1:00 p.m. on April 23.
Mr. Berggren reminded Commissioners of the Board Retreat scheduled for April 23-24 in the EWEB Board Roam. He noted that the Friday session would include a tour of the Headquarters Building.
Mr. Berggren reported that the Grand Reopening of the Energy Outlet had been celebrated on April 17 and that approximately 250 persons had been present.
Mr. Berggren referred to a memorandum from Facilities Director Tom Buckhouse distributed with the agenda of the meeting. He noted that it contained information about unexpected and unbudgeted repair of the Plaza Fountain and the need to remove floor tile containing asbestos from the mezzanine level of the warehouse.
Mr. Berggren referred to a memorandum from Accounting/Financial Analyst Garilyn Crowley and Financial Services Supervisor Dick Varner distributed with the agenda of the meeting. He noted that it reported a new direct overhead charge reducing distribution of Operating and Maintenance expenses, modestly increasing capital costs for the Electric and Water Utilities, and increasing income from work for developers and other billable activities.
Mr. Berggren referred to a memorandum from Community Education Coordinator John Femal distributed with the agenda of the meeting. He noted that a brochure was attached which described "Honoring Our River" and explained that the project was sponsored by EWEB as an incentive for area teachers to get students to submit literary works about the relationship of people and the Willamette River watershed. He said an anthology of works chosen from those submitted would be published by the Willamette Restoration Initiative.
Mr. Berggren referred to a tentative agenda of Board meetings distributed earlier to Commissioners. He noted that there were only three hours of unassigned meeting times through the remainder of the year. He reported that he was seeking to build a subject index of Board meeting topics which he would share when it was completed.
Mr. Berggren reported that he had met with Steve Loveland of the Springfield Utility Board (SUB) to hold a preliminary discussion regarding the transfer of utility service for the Glenwood area to SUB. He stated that EWEB goals in the transfer were to recover EWEB's investments, protect the through facilities which would need to remain in the area, and the need for a calendar of when transfer of the service would be completed. He said SUB goals were somewhat different and that extensive negotiations would be required to complete arrangements for the transfer.
Mr. Berggren commented on the recently announced Weyerhauser Corporation divestment of a portion of its business at its plant in Springfield. He said the action raised questions about whether EWEB would continue to provide utility service to the plant. He said SUB would likely seek to serve the owner of the newly established independent business. He said issues related to stranded investments and whether service to the plant would be considered to be outside EWEB territory would need to be resolved.
Vice President Dyer determined there was no one present wishing to address the Board.
Price Waterhouse Coopers representative Don Doerr referred to the Report of Independent Accountants included in the document distributed with the agenda of the meeting entitled "Eugene Water & Electric Board -- Annual Report for the year ended December 31, 1998." He said the report stated that EWEB financial statements and data examined were "free of material misstatement." He noted that the cumulative effect of a change in accounting methods was appropriately noted in the statements; that a required Year 2000 disclosure statement was included; and that statements about internal control, noncompliance, and other disclosure were attached.
Mr. Doerr referred to a document entitled "Eugene Water & Electric Board -- Report to Management" which accompanied the audit report. He said the report contained observations about EWEB financial statement concerns and responses prepared by EWEB management, as follows:
Mr. Doerr said that there was nothing unusual in the comments or responses of management.
President Smith joined the meeting at 8:10 p.m.
Vice President Dyer asked if Price Waterhouse Coopers had included testing of EWEB bond covenants in the audit. Mr. Doerr replied that the audit had included review of material related to the bond covenants submitted by EWEB.
Vice President Dyer asked for an evaluation of staff responses to concerns raised in the Report to Management. Mr. Doerr replied that the responses recognized the issues, recognized priorities to be applied to them, and reported that plans to deal with them were in place. He said all items were properly addressed.
Mr. Doerr expressed appreciation for support given to the audit process by EWEB staff.
Commissioner Bartel asked why concerns related to EWEB's Public Employees Retirement System (PERS) rate had not been fully addressed in the audit report. Mr. Doerr replied that the issue was an emerging one at the end of 1998 and that it had been identified on page 24 of the report as one which the Board was evaluating. He said such identification fulfilled disclosure requirements.
Commissioner Bartel asked for an explanation of the alternate methods of paying for post retirement medical benefits identified in the report. Mr. Doerr replied that payments for such obligations could be accrued or use the "pay-as-you-go" methodology adopted by EWEB described in the report. Mr. Origliosso added that he had discussed the alternatives with the Board during the summer of 1998. He said the method chosen by EWEB was only available to government agencies and explained how the issues involved were being addressed.
Vice President Dyer determined there were no other Board concerns and expressed appreciation for the report of the audit.
Environmental Manager Laurie Power referred to a corrected version of her April 14 briefing statement on Endangered Species Act fish listings for the McKenzie distributed before the meeting. She said no Board action was being requested, but that staff would appreciate feedback regarding how EWEB was addressing the potential implications of the listings.
Ms. Power reviewed the Endangered Species Act (ESA) as outlined in her briefing statement. She said the federal legislation adopted in 1973 and amended in 1982 was designed to protect wildlife and their habitats. She explained protected categories, prohibited actions, and Habitat Conservation Plans created by the act. She described the presence of fish species listed under the act in the northwest of concern to EWEB.
Ms. Power discussed potential impacts of the Endangered Species Act listings on EWEB facilities and operations at its Leaburg-Walterville, Carmen, and Stone Creek hydroelectric projects. She reviewed options for complying with the act explained in her briefing statement. She described local and regional fish recovery planning and opportunities for participating in the efforts.
Ms. Power described actions taken by EWEB to seek designation as the Federal Energy Regulatory Commission (FERC) non-federal representative in consultations related to the effects of its hydroelectric projects on listed species. She explained consultation processes and their potential outcome.
Ms. Power described the Willamette Restoration Initiative and the role played by Mr. Berggren since his appointment to its Board of Directors and Strategy Committee. She also described participation of EWEB staff in the Upper Willamette Bull Trout Working Group, the McKenzie Watershed Council's Spring Chinook Working Group, and the Metro Environmental Species Act Coordinating Team.
Ms. Power determined there was Board support for EWEB efforts to comply with Endangered Species Act fish listings.
Commissioner Bishop requested that Board approval be secured before any EWEB legal resources were dedicated to support the Metro Environmental Species Act Coordinating Committee. Ms. Power replied that use of such resources was unlikely. President Smith suggested that the charter of the Metro Team be provided to Commissioners.
Commissioner Bartel said he was concerned about how costs related to the Endangered Species Act were budgeted by EWEB. Mr. Berggren replied that most of such expenses were staff- related and were allocated from the Environmental Management Department. Mr. Origliosso added that when budgets were developed, the expenses would likely be charged against re-licensing costs for hydroelectric projects.
Vice President Dyer thanked Ms. Power for her report.
Senior Rates/Financial Analyst John Yanov reviewed public involvement in development of the Water Supply Plan approved by the Board in January 1999. He noted that major capital projects were identified in the plan to increase the capacity of the existing system, as follows:
|
•Transmission Line (EWEB headquarters to West Eugene) |
1999-2001 |
|
•Hayden Bridge Reservoir |
2000-2002 |
|
•Hayden Bridge Plant Addition |
1999-2003 |
|
•Deep Wells |
2003-2007 |
Mr. Yanov described the use of System Development Charges (SDC) and rate revenue to pay for the projects. He said it was forecast that bonded debt would be needed to fund the projects on the schedule proposed because of the lagging receipt and uncertainty of SDC. He reviewed decisions related to bond financing of the Water Supply Plan to be made by the Board, as follows:
Mr. Yanov said staff recommended that bonding authorization be sought to cover the full anticipated cost of implementing the Water Supply Plan. He said staff also recommended that it would be prudent to seek authorization for bonds in fall 1999. He stated that staff would seek formal Board decisions on the issues in July or August.
President Smith suggested using the URBA process for the total amount minus the deep well aquifers. She said postponing bond authorization for development of deep wells would not affect to implement the remainder of the plan.
Commissioners discussed the relative merits of methods for authorizing the issuing of bonds and appeared to favor use of procedures authorized by URBA.
Vice President Dyer determined there was consensus to postpone consideration of the General Service Rates agenda item until a later meeting.
The meeting adjourned at 9:50 p.m.