Board Members present: Mike Dyer, Dorothy Anderson, and Peter Bartel. President Smith and Commissioner Bishop were absent and excused.
Other present: Roseanna McArthur, Ken Beeson, Terry Bequette, Deborrah Brewer, Tom Buckhouse, Chuck Dalton, Sandra DeLuna, Kevin Fahey, John Femal, Kathy Grey, Jim Origliosso, Dick Varner, Debra Wright, and Krista Hince of the EWEB staff; John Bowman, member of the public; and Daniel Lindstrom, Minutes Recorder.
Vice President Dyer called the Regular Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:30 p.m. He determined that there were no requests to alter the published agenda.
CONSENT CALENDAR
Vice President Dyer noted that the items presented for approval on the Consent Calendar included the following:
Commissioner Bartel requested that the Purchasing, Accounts Payable and Inventory (PAPI) be removed from the Consent Calendar (number 5 of the Consent Calendar).
Vice President Dyer requested that approval of the Customer Account Management System Upgrade Budget Amendment be removed from the Consent Calendar (Number 6 of the Consent Calendar).
Commissioner Anderson moved, seconded by Commissioner Dyer, that the August 3, 1999, Consent Calendar be approved, not including the items requested to be removed. The motion was approved unanimously, 3:0.
ITEMS FROM BOARD MEMBERS
Vice President Dyer determined that Commissioners had no items to share.
CORRESPONDENCE
Director of Corporate Services Roseanna McArthur reported that approximately 450 persons had attended the EWEB Annual Picnic. She expressed appreciation to Commissioner Bartel for his participation as well.
Ms. McArthur reported that information had been received confirming the retirement of Jack Robertson, Deputy Administrator of the Bonneville Power Administration.
Ms. McArthur reviewed items to be included on the agenda of the August 17 Work Session and Special Board Meeting. Vice President Dyer asked if it would be possible to cancel the meeting because there were so few matters to be considered. Ms. McArthur said she would investigate the possibility.
PUBLIC INPUT
Vice President Dyer determined there was no one present wishing to address the Board.
EDUCATION GRANTS PROGRAM
Community Education Coordinator John Femal stated that the Board was being asked to approve a Five-Year Plan for the EWEB Education Grants Program and to authorize the General Manager to enter into Inter-Governmental Agreements with school districts for its implementation.
Mr. Femal reviewed new elements in the program as it was presented to the Board on April 20, as follows:
Mr. Femal reported that, on the recommendation of the Board, contracts for the current program had been extended for one-year. He said that because of a desire to soften the financial impacts to the Springfield and McKenzie school districts, a new distribution methodology was created, providing for $20,000 base funding of each district to coordinate grant supported projects. He reviewed recommended program allocations (which include base funding), as follows:
Existing New Change
Mr. Femal stated that he had met with representatives of the school districts and had received a favorable response to the proposed changes. He said the Springfield School District had not been pleased with the proposed reduction in its allocation, but had stated that it could continue with its current programs with the proposed allocation.
Ms. McArthur asked how implementing the Financial Strategy under consideration which would reduce the budget of the Education Grant Program by ten percent would impact it. Mr. Femal replied that the contracts with school districts would be for five-years and that any funding reduction for the program would need to be made in the allocations to the Partners in Education and Multi-District funds.
Commissioner Bartel asked how evaluation was performed for programs supported by the Education Grant Program. Mr. Femal replied that school district program proposals and reports were evaluated by an EWEB management team.
Vice President Dyer asked if contracts established with school districts allowed changes in allocations. Mr. Femal replied that such an option was available, but that it would likely be only invoked if no other action was possible.
Commissioner Anderson moved, seconded by Commissioner Bartel, that the proposed Education Grant Program Five-Year Plan be approved and that the General Manager be authorized to enter into five-year Inter-Governmental Agreements with school districts to implement the plan, with the understanding that Financial Strategies to be adopted by the Board could affect allocations made through the program.
The motion was adopted unanimously, 3:0.
CONTRIBUTIONS-IN-LIEU-OF-TAXES
Fiscal Services Supervisor Dick Varner referred to the July 28 memorandum of Steam Division Director Dick Helgeson distributed with the agenda of the meeting. He said staff recommended that the Board approve a new EWEB Contribution-In-Lieu-of-Taxes (CILT) rate to the City of Eugene of four percent of gross steam sales revenues after July 31, 1999, and to authorize the General Manager to sign a Memorandum of Understanding with the City to that effect.
Mr. Varner reported that the Eugene City Council had agreed to the proposal. He said that it put the utility on equal footing with the gas company, its closest competitor for heating services in the downtown area.
Commissioner Bartel moved, seconded by Commissioner Anderson to approve the recommendation of staff regarding the steam CILT rate and to authorize the General Manager to sign a Memorandum of Understanding to that effect. The motion was adopted unanimously, 3:0.
ITEMS REMOVED FROM CONSENT CALENDAR
Approval of Minutes (No. 2)
Commissioner Bartel requested that sentence four of paragraph five on page four of the minutes of the Postponed Regular Board Meeting of July 20 be changed, as follows:
Facilities Services Director Tom Buckhouse added that one
potential renter of the Midgley's Building would not have been able
to carry out its business in the location, but that all
current renters were providing the highest and best income
possible meet the zoning requirements, but that
the company with whom arrangements were currently being negotiated
did.
Vice President Dyer determined there was no objection to the request of Commissioner Bartel and stated that the minutes, as previously approved, were amended.
Purchasing, Accounts Payable and Inventory Computer System Conversion (No. 5)
Mr. Buckhouse explained that the planned vendor integration of inventory, purchasing, and accounts payable computer system had been unsuccessful. He said time did not allow continuation of the attempt since the mainframe on which the current system operated would no longer be in operation in the year 2000. He said it had been determined that the best solution available was to purchase a third party supplies inventory module which was functionally proven. While this would provide an integrated system, it would not be as functional as had been hoped. He said the request was to use unbudgeted capital improvement reserves previously set aside for Year 2000 contingencies and unbudgeted capital improvement reserves for the purchase and to provide independent contractor support.
Commissioner Bartel asked when the originally planned integrated system would be available. Mr. Buckhouse replied that the manufacturer had indicated re-design of the system would make such integration possible. Information Services Manager Terry Bequette stated that the manufacturer had recommended that EWEB purchase a software program to meet its needs which was not yet in production.
Commissioner Bartel said he was disturbed that staff had miscalculated the needs of EWEB, creating an unbudgeted expenditure of nearly $400,000. He suggested that the expenditure might affect rates to be set in the future.
Commissioner Anderson stated that she agreed with Commissioner Bartel. She asked if there was confidence that the proposed solution would work. Mr. Buckhouse stated that the system proposed for purchase was currently operating at other utilities.
Vice President Dyer asked if EWEB had any recourse to recover its investment in the inadequate software package. Mr. Buckhouse replied that EWEB's out-of-pocket expenditures for the package was approximately $90,000 and that the balance of the expenditures was the cost of EWEB labor. He said an attempt would be made to secure a refund, but that the likelihood of doing so was minimal. He said that if the proposed solution was not approved, EWEB would not be able to purchase anything, pay for anything, or keep track of any materials.
Commissioner Bartel said he believed the cost of the software package was high, in comparison to the volume of purchases EWEB made. Treasurer Jim Origliosso replied that EWEB's annual purchases totaled approximately $20 million.
Vice President Dyer determined there was consensus to discuss the budget amendment removed from the Consent Calendar before taking action on the computer system conversion request.
Customer Account Management System Upgrade (No. 6)
Mr. Origliosso explained that the scope of upgrading the Customer Account Management System had increased because no upgraded system versions were able to accept data from previous versions. He said most of the additional work to transfer data was completed with independent contractors because it was necessary to make the system Year 2000 compliant.
Vice President Dyer asked if the system would be stable when installation of the current upgrade version was completed. Mr. Origliosso replied that it was unlikely that EWEB would require features to be provided in newer versions of the product. He said that, without the Year 2000 issue, installation of the current version would not have been urgent enough to request a budget amendment. He said the source of the funds to be spent was unbudgeted capital improvement reserves previously set aside from accumulated assets of the Electric Division for Year 2000 contingencies, and unbudgeted capital improvement reserves of the Water Divison.
Commissioner Anderson moved, seconded by Commissioner Dyer, that the PAPI Computer System Conversion purchase and Customer Account Management System Upgrade Budget Amendment removed from the Consent Calendar be approved. The motion was adopted unanimously, 3:0.
Commissioner Bartel noted that he had received the EWEB Pocket Compendium of Facts & Figures and expressed appreciation for its value.
The Regular Meeting adjourned at 8:25 p.m.
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Assistant Secretary President