Board Members present: Mike Dyer, Dorothy Anderson, and Peter Bartel. President Smith and Commissioner Bishop were absent and excused.
Others present: Randy Berggren, Terry Bequette, Cathy Bloom, Deborrah Brewer, Tom Buckhouse, Garilyn Crowley, Mel Damewood, Marty Douglass, Cathy Hamilton, Dick Helgeson, Roseanna McArthur, Kris Middlewood, John Mitchell, Mat Northway, Jim Origliosso, Dick Varner, John Yanov, and Krista Hince of the EWEB staff; Roxie Cuellar, Homebuilders Association; and Daniel Lindstrom, Minutes Recorder.
Vice President Dyer called the Eugene Water & Electric Board (EWEB) Work Session to order at 5:35 p.m.
BUDGET ASSUMPTIONS
General Manager Randy Berggren stated that the purpose of including discussion of Year 2000 Budget Assumptions in the Work Session was to ensure that there would be "no surprises" when the budget was presented to the Board in September 1999.
Fiscal Services Supervisor Dick Varner stated that his presentation would be based on strategic direction and financial alternatives work of Commissioners and the Executive Management Team. He said that staff had translated the work into assumptions, constraints, and targets for the Year 2000 Budget and that he hoped Commissioners would be in general agreement with them.
Mr. Varner presented assumptions being made for the 2000 Budget, as follows:
Sales and Revenue
Power Supply
Compensation and Benefits
Capital Funding
Other Items
SYSTEMS DEVELOPMENT CHARGE
Senior Rates/Financial Analyst John Yanov stated that his presentation would reacquaint Commissioners with the methodology used in developing the EWEB Water Systems Development Charge (SDC) and indicate the preliminary estimate of proposed changes to be recommended.
Mr. Yanov said the SDC is a fee levied on new development to cover the costs of infrastructure development needed because of growth. He explained that its revenue provided reserves funding expansion and improvement of the water system. He said EWEB first implemented the Water SDC in 1997, creating a standard residential meter charge of $1,701 per installation. He said the proposal for changing the SDC would use the same methodology, but include the major capital investments of the Water Supply Plan and account for growth in water demand. He said public hearings on the proposed SDC change were scheduled for September 7 and October 5, 1999.
Commissioner Bartel said he did not believe September 7 was an appropriate time for a public hearing because many citizens would not have returned from vacations and the University of Oregon would not yet be in session.
Commissioner Bartel suggested that EWEB form a SDC technical advisory committee similar to those of the City of Eugene, perhaps utilizing the same individuals. Mr. Berggren replied that the public hearing process had been based on previous discussions with the Board. He said that a more extensive public involvement process had been utilized when the SDC was initiated in 1997 and that the Homebuilders Association had indicated that the process was not needed for the proposed revision.
Eugene Homebuilders Association Executive Director Roxie Cuellar stated that her organization had only asked that some sort of accommodation be made in the SDC for "low-end" housing which had been included in the proposal to be presented at the public hearings.
Mr. Berggren said delaying the scheduled public hearings could lead to later implementation of the increases. Mr. Varner said such a delay would not have direct budget impacts, but could affect bond rates which would be charged. He suggested that, if EWEB staff were to continue to work on SDC rate changes into 2000, consultants might be needed to accomplish the needed rate change work.
Water Division Director Dick Helgeson stated that it would be important to provide for full public involvement in the process of changing the SDC, but that delaying their implementation until the construction season should be avoided.
Mr. Yanov suggested that the effect of SDC changes on rate changes proposed to take place in April should also be considered.
Commissioner Anderson said she recalled that the most discussion during the previous SDC public process had been about the methodology to be used. She pointed out that the methodology would not be changed in the proposal to be made.
Mr. Yanov reviewed the involvement of consultants in EWEB's SDC methodology and model. He said the Capital Improvement Plan called for major projects between 2000 and 2010 to meet anticipated growth in load projections - a major transmission line to west Eugene, a large reservoir at the Hayden Bridge Filtration Plant, a 12 million gallon per day addition to the plant, and a five million gallon per day back up deep well capacity development.
Mr. Yanov stated that preliminary results from a SDC study showed that an increase of 13 percent would be required. He said a survey of Oregon cities had shown that such an increase would not change the relative position of EWEB in its SDC fee.
Mr. Yanov reviewed other SDC policy questions which could be considered by the Board, as follows:
Commissioner Bartel asked if there were time constraints for adopting proposed SDC changes. Mr. Berggren replied that it would be possible to extend the schedule by one month to determine if additional input from stakeholders would be necessary. Mr. Varner suggested that the public hearing scheduled for September 7 be held and that if schedule changes were determined to be warranted, they be made at that time. Mr. Helgeson suggested that a workshop on the SDC methodology held before the public hearing could prove helpful.
Commissioner Bartel said he believed it would be important to clearly communicate about the SDC in place and propose changes in a "user friendly" fashion within available time constraints.
Commissioner Anderson suggested that it would be helpful to determine the level of concern among those most affected by the proposed changes before altering the adoption schedule.
Commissioner Bartel said he believed it was most important to discover how the proposed changes affected the cost of less expensive homes.
Commissioner Anderson suggested that participants in City of Eugene SDC advisory groups be contacted about EWEB proposals. Mr. Yanov reported that he had been a consultant with the committees involved and would be making presentations to them regarding proposed changes to the EWEB SDC.
Vice President Dyer said he wanted to be assured that all interested parties were engaged in meaningful dialog regarding the proposed SDC changes.
UNIFORM REVENUE BOND ACT WATER BOND RESOLUTION
Mr. Yanov said his presentation would provide background on a Uniform Revenue Bond Act (URBA) Water Bond Resolution to be considered by the Board on September 7. He reviewed his memorandum dated July 14 distributed with the agenda of the meeting and noted that projects involving $36 million in capital expenditures were described in an attachment to it. He explained the process and schedule for implementing URBA bond authorization and stated that a draft resolution enabling the it was attached to the memorandum. He said the resolution had been reviewed by Bond counsel and was similar to a resolution enabling Telecom bonds which was approved by the Board in November 1997.
Commissioner Bartel asked if the list of capital projects was part of the resolution to be adopted. Mr. Varner replied that it was not, but that it illustrated how the needed bonding authority was calculated.
The Work Session adjourned at 7:20 p.m.
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Assistant Secretary President