Board Members present: Susie Smith, Mike Dyer, Sandra Bishop, Dorothy Anderson, and Peter Bartel.
Others present: Cathy Bloom, Deborrah Brewer, Marty Douglass, Cathy Hamilton, Dick Helgeson, Jerry Hohman, Garry Kunkel, Debbie Lawder, Mike Logan, Roseanna McArthur, John Mitchell, Mat Northway, Jim Origliosso, Dick Varner, and Krista Hince of the EWEB staff; and Daniel Lindstrom, Minutes Recorder.
President Susie Smith called the Special Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:40.
AGENDA APPROVAL
President Smith noted that Electric Division Director Garry Kunkel would substitute for General Manager Randy Berggren during the meeting and that Assistant Treasurer Cathy Bloom would substitute for Energy Resources Manager Ken Beeson to present the 2000 Trojan Budget agenda item.
Commissioner Bishop requested that action not be taken on Financial Policies during the meeting. She said she had questions about the policies and did not believe the time scheduled for their consideration was adequate for the Board to agree upon their adoption. President Smith determined there was consensus to not take final action on Financial Policies during the meeting.
CONSENT CALENDAR
President Smith noted that items presented for approval on the Consent Calendar included the following:
Vice President Dyer moved, seconded by Commissioner Bishop that the Consent Calendar for November 16, 1999, be approved.
Commissioner Bartel requested that Y2K Budget Amendments be removed from the Consent Calendar for consideration at a later time during the meeting.
The motion to approve the Consent Calendar was approved unanimously, 5:0.
CORRESPONDENCE
Mr. Kunkel referred to a memorandum from Commercial/Industrial Programs Program Manager Mike Logan dated November 4 regarding PowerLine Internet Meter Data Service distributed with the agenda of the meeting. He reviewed marketing and pricing strategies developed for the program.
President Smith requested information regarding the status of a claim for damages made by Track Town Pizza against EWEB discussed in correspondence dated May 24, July 13, and October 18 distributed with the agenda of the meeting. Treasurer Jim Origliosso stated that EWEB representatives had worked extensively with the party filing the claim and had reached the conclusion that contented issues were based on a disagreement between former partners in the business enterprise. Mr. Kunkel added that no new information had come to light since the correspondence was distributed.
Vice President Dyer requested that additional relevant information regarding the claim be distributed to members of the Board. Mr. Kunkel said that he would fulfill the request.
President Smith expressed appreciation for the newest solicitation brochure for customer subscription of WindPower.
Mr. Kunkel reviewed the agenda of the November 23 Work Session and December 7 Executive Session and Regular Board Meeting.
PUBLIC INPUT
President Smith determined that there was no one present wishing to address the Board.
2000 BUDGET
Fiscal Services Supervisor Dick Varner reviewed financial projections made in Spring 1999, as follows:
Mr. Varner reviewed financial strategies evaluated and implemented, seeking to reduce projected rate increases, as follows:
Commissioner Anderson said she was prepared to support a seven percent increase in Electric rates, but was concerned that a Water rate increase at the same time would prove to be too burdensome for low-income rate payers. Mr. Varner replied that it might be possible to plan water rate increases on a schedule which did not coincide with increases of Electric, but that doing so would not be possible in 2000.
Commissioner Bishop stated that she did not believe the Board had agreed to implement all of the financial strategies discussed by Mr. Varner. Mr. Varner replied that all of the strategies he had reviewed had been considered, but that some had not been fully implemented, others were being postponed, and still others were being rejected.
Commissioner Bishop said she would appreciate a clear statement of which financial strategies had been approved and those which had only been discussed. Mr. Varner replied that some strategies which had not been implemented for the 2000 Budget continued to be under consideration for the 2001 and/or 2002 budgets.
President Smith said she agreed that it would be helpful to summarize which financial strategies the Board had agreed to implement, which had been rejected, and which continued to be under consideration. Mr. Varner replied that he would provide such a summary to Commissioners before the December 7 meeting when approval of the Budget was on the agenda.
President Smith said she had no doubt that rate increases were necessary because of the length of time since any and been instituted.
Vice President Dyer said he did not believe he would be able to be present at the December 7 Board Meeting, but that he would not support adoption of the Budget with the proposed rate increases because he believed it was possible to create a balanced budget without them by eliminating the expenditure included for a Land Trust and by fully implementing work force reductions considered.
Commissioner Bartel said he would reserve his comments regarding the Budget until a later time, but that he hoped the effects of work force reductions would be fully explained to the Board. He said he did not believe it was possible to adequately operate the utility with a reduced work force.
Director of Corporate Services Roseanna McArthur stated that results of the Early Departure Initiative (EDI) program had not been fully evaluated or reported at the previous meeting of the Board, but that a full analysis had been completed. She said nine requests to participate in the program were being investigated and that employees had 52 days to affirm the proposed acceptance of their applications. She stated that when the process was completed, a full report would be made to the Board.
President Smith requested that a summary of the applications be provided to the Board. Ms.McArthur replied that it would be possible to report on potential shifting of work responsibilities if the acceptance of early departure applications were fully affirmed by employees.
Commissioner Bishop said she was concerned that approval of the proposed 2000 Budget would preclude not approving rate increase proposals to be considered in the spring. She said she supported rate increases and complimented staff on its excellent job of preparing a balanced budget. Mr. Kunkel stated that approval of the budget would only be of the required revenue request, not rate increases to be proposed to achieve the requirement.
Commissioner Bishop stated that she was also concerned that re-structuring of employee benefits as proposed in some financial strategies would improperly affect employee contracts. Mr. Varner replied that employees were strongly involved in all considerations of such strategies.
PUBLIC HEARING ON 2000 BUDGET
President Smith opened the public hearing on the 2000 EWEB Budget. She determined there was no one present wishing to present testimony. She closed the public hearing.
2000 TROJAN BUDGET
Ms. Bloom referred to a memorandum and attachments from Ken Beeson regarding the 2000 Trojan Operating Budget distributed with the agenda of the meeting. She noted that the approval of the budget was an annual request of the Board. She reviewed information contained in the memorandum and attachments.
Vice President Dyer moved, seconded by Commissioner Anderson, that EWEB's share of the 2000 Annual Operating Budget for Trojan of $35.4 million be approved; and that net billings of $19.7 million, including 1999 cash carryover of $14.0 million, reserve fund transfers of $2.2 million, and interest earnings of $1.0 million be approved. The motion was approved unanimously, 5:0.
MASTER PLAN SITE REVIEW
Intergovernmental Affairs Coordinator Deborrah Brewer referred to her memorandum regarding the EWEB Headquarters Master Plan Site Review dated November 11 distributed with the agenda of the meeting. She said the agenda item was intended to provide an update and seek Board feedback on the project. She reviewed a revised document entitled "EWEB Site Master Plan Review 1999" attached to the memorandum, discussing project plan stages, as follows:
Ms. Brewer reviewed findings related to the Overall Business Assumption for the Headquarters Site Review, as follows"
There will be no major increases in employees and/or space needs over the next ten years if EWEB remains in its current business lines.
Commissioner Anderson asked if ten years were an adequately long period of time to base conclusions in the site review. Ms. Brewer replied that to estimate needs for a longer period of time had proven to be too difficult because of rapid changes occurring in utility business operations. She reviewed a summary of the results of an employee survey regarding long-term site requirements attached to her memorandum. She reviewed local governmental planning documents which affected the EWEB headquarters Site Master Plan, as follows:
Commissioner Anderson pointed out that Environmental Species Act listing implications would also impact the Headquarters Site Master Plan.
Commissioner Bartel pointed out that changes taking place in City of Eugene Building and Land Use Codes would also require new compliance in site plans. Commissioner Bishop said she believed existing sites would not be affected by ordinance changes.
Environmental Specialist Debbie Lawder presented a Headquarters Site Plan map and identified potential issues related to development of a new plan - constraints of existing utility lines, historic significance of the Steam plant, ingress/egress difficulties and internal property maneuvering problems, coal gasification plant constraints, other possible areas of subsurface contamination, Willamette Substation upgrade requirements, railroad tracks, and Ferry Street Bridget on-ramp difficulties.
Ms. Brewer reviewed objectives to be used in criteria for evaluation of various options for the EWEB Headquarters Site attached to her memoranda, as follows:
Ms. Brewer stated that staff involved in the Master Site Plan had concluded that a third-party evaluator of the work of the planning would be required and described such a consultant as needing to have had site design, facility assessment, and utility experience. She said the consultant would study the Master Site Plan to identify a desirable "footprint" for EWEB Headquarters facilities, analyze conceptual options according to criteria, and address issues and potential conflicts in its utilization. She said the consultant would not be asked to provide construction plans or cost estimates. She reported that the WGBS engineering firm which had created the original EWEB site plan had been chosen as the consultant and would begin work on January 1. She said no estimate of the cost for the work was available, but that $30,000 was included in the budget of the project for such work.
President Smith said that she was concerned that choosing previously utilized consultants for the consultant work would not produce thinking "outside the box." She pointed out that new constraints such as storm water requirements and bio-engineering criteria might not be included in the work.
Ms. Brewer stated that she would add the concerns of President Smith to those to be discussed with the chosen firm. President Smith suggested that some work elements could be sub-contracted to firms experienced with current requirements. Ms. Brewer replied that staff was balancing cost, schedule, and quality of work in preparing consultant work description.
Commissioner Bishop asked for information regarding when EWEB was required to use competitive bidding in awarding contracts such as was being prepared for the Headquarters Site consultant. Ms. Brewer replied that a specific cost level did not determine such a requirement in specific situations such as required by consultant work because it was considered a personal services contract.
Commissioner Bartel suggested that there were advantages and disadvantages to engaging a contractor previously used to serve as consultant for the Master Site Review project.
FINANCIAL POLICIES
Commissioner Bishop referred to a revised version of EWEB Financial Policies attached to a memorandum from Mr. Origliosso dated November 11 distributed with the agenda of the meeting. She said she had difficulty isolating the policy statements from discussion of them in the document distributed and preferred that they be presented separately. She said she did not feel comfortable rushing through consideration of the policies and wanted to carefully consider them before giving Board approval. She said she was also concerned that the policies were overly flexible and that in several cases information added to the latest revision seemed to alter their original intent.
President Smith stated that she believed differentiating the policy statements from discussion of them by use of a boldface font was clear. Commissioner Bishop replied that it appeared discussion of the policies did not fully agree with the policy statements.
Mr. Origliosso replied that changes in policy discussion were attempts to incorporate previously provided Board feedback. Commissioner Bishop said that she preferred to separate policy statements from discussion of them. Vice President Dyer said that he agreed with Commissioner Bishop.
President Smith asked that consideration of Financial Policies be re-scheduled on the agenda of a future meeting of the Board.
ITEMS REMOVED FROM CONSENT CALENDAR
Commissioner Bartel asked that Y2K Budget Amendments proposed for adoption be explained.
Mr. Origliosso stated that the 1999 Budget included $1 million for Year 2000 project activities. He said regular projections of such expenses at $2 million had been made to the Board, but that formal action to budget for them had never been taken. He explained that accumulated assets had been used for purchase of the Banner System and upgrading of the Purchasing, Accounts Payable and Inventory (PAPI) computer systems, even though the changes were Year 2000 project related. He said the current budget amendment request was for $637,800 and that the balance of Year 2000 expenses would be covered by unrelated favorable cost variances.
Vice President Dyer moved, seconded by Commissioner Anderson, that the Year 2000 Budget Amendment of $637,800 be approved. The motion was approved unanimously, 5:0.
Vice President Dyer asked if it would be necessary to hold a meeting of EWEB on December 21, 1999. President Smith replied that she believed it would be important to keep the date reserved for a Board meeting, in case the 2000 Budget was not adopted at the December 7 meeting.
The meeting adjourned at 10:05 p.m.
_____________________________________ ______________________________________
Assistant Secretary President