Board Members present: Susie Smith, Mike Dyer, Sandra Bishop, Dorothy Anderson, and Peter Bartel.
Others present: Randy Berggren, Dick Helgeson, Garry Kunkel, Roseanna McArthur, Jim Origliosso, Dick Varner, Krista Hince, and other members of the EWEB staff; members of the public, and Daniel Lindstrom, Minutes Recorder.
President Susie Smith called the December 1999 Regular Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:40 p.m. She determined that there were no requests to alter the published agenda.
CONSENT CALENDAR
President Smith noted that items presented for approval on the Consent Calendar included the following:
President Smith noted that Item #8 had been added to the revised agenda distributed before the meeting.
Vice President Mike Dyer requested that Item #2 be removed from the Consent Calendar to be considered later in the meeting.
President Smith noted that blanks in item 2 of paragraph 2 on page 2 of the minutes of the November 2 Work Session should be filled with the words "Uniform Revenue Bond Act." She determined there was no objection to the correction and stated that the minutes were amended.
Vice President Dyer moved, seconded by Commissioner Peter Bartel, that the Consent Calendar for December 6, 1999, be approved, with the Minutes of the November 2 Work Session amended, and without the Budget Amendment related to the Buy-down of EWEB's Public Employees Retirement System (PERS) Liability. The motion was adopted unanimously, 5:0.
ITEMS FROM BOARD MEMBERS
Commissioner Dorothy Anderson referred to a memorandum that Corporate Services Director Roseanna McArthur distributed with the agenda of the meeting, regarding a funding request from the Lane County Human Services Commission. She asked if consideration of the request would be given before adoption of the 2000 Budget. General Manager Randy Berggren replied that it could be added during adoption of the budget later in the meeting, or as a budget amendment, at a later time.
Commissioner Anderson said she believed it would be best to give as early as possible consideration to the request. She said she was sympathetic to the request, but that she believed adding support for increased Human Services Commission staff and to increase the capacity of the Low Income Energy Assistance Program was premature. She said she believed the request for $50,000 for the 2000 Reach program, $3,900 to support counseling service through the Lifeline program, and $5,000 to continue funding TheLane should be added to the budget.
President Smith said she had assumed commitments had been made to provide program funding for the requests of the Human Services Commission and that they were embedded in the budget. She said she supported the proposal to add the three elements identified by Commissioner Anderson to the budget. Mr. Berggren suggested that the proposal be considered at the time of the adoption of the budget later in the meeting.
Vice President Dyer referred to a memorandum dated December 2 from Debra Wright, regarding preferences in public contracting, distributed with the agenda of the meeting. He said he agreed with the opinion of legal council attached to the memorandum that Oregon law did not provide authority to grant a geographic-based preference in competitive bidding processes, but that he was concerned the Board policy which stated that EWEB activities should benefit area citizens was not being followed. He said he also believed loyalty to EWEB would be engendered by determining ways to support rate-paying businesses by using them as vendors whenever possible. He pointed out that a recent construction Request for Proposals (RFP) of the Eugene School District 4J included a provision that cost was only one of several factors which would be considered. He said he hoped EWEB could also determine ways to creatively allow local contractors to successfully bid on construction projects.
President Smith asked if it would be possible to create criteria for awarding contracts by not using the competitive bidding process. She said she did not believe the legal opinion received applied to a RFP process.
Mr. Berggren replied that the suggestion of President Smith was correct, but that an RFP was typically used only when there was uncertainty on how to proceed with a project. He said that the project which had engendered the request for information by Vice President Dyer had predetermined a rigid specification and did not include design elements.
Commissioner Sandra Bishop asked if it was possible for the Board to adopt an over-arching exemption of the competitive bidding process to meet the concerns of Vice President Dyer, or if a case-by-case exemption was required. Legal Counsel Win Calkins replied that it had been determined that an exemption was not possible in any situation.
CORRESPONDENCE
Mr. Berggren referred to a memorandum from HR Operations Supervisor Jean C. Meyers dated November 30, regarding the status of the implementation of EWEB's new pay plan, distributed with the agenda of the meeting.
Commissioner Bishop asked if the compensation plan memorandum would be discussed by the Board. Mr. Berggren said that he would add a discussion regarding it to the agenda of a future Board meeting.
Mr. Berggren referred to a memorandum and attached correspondence from Claims Adjuster Douglas Caven dated November 30, regarding issues related to a claim for damages by Track Town Pizza, distributed with the agenda of the meeting.
Mr. Berggren reviewed the agenda of January meetings of the Board. He noted that there would be no second Board meeting in December.
PUBLIC INPUT
Mr. Steve Manela stated that he was lead staff person of the Lane County Human Services Commission. He expressed appreciation for the Board's support of programs providing assistance to low-income families. He reported that Senate Bill 1149 adopted during the 1999 Oregon Legislative Session provided new opportunities for partnerships between utilities and assistance agencies and to develop increased support for such programs. He said the number of persons served by energy assistance and weatherization programs could be doubled in the state. He said it would be important for EWEB to continue to be aware of opportunities to assist low-income citizens with utility-related problems.
2000 WORK PLAN AND BUDGET
Fiscal Services Supervisor Dick Varner reviewed the process followed by the Board in development of financial strategies and preliminary budget policies. He explained work completed by staff in preparation of the 2000 Work Plan and Budget. He emphasized the importance of Board discussions of Conservation Capital Loan budget administration overhead and interest on Conservation Loans held at the November 23 Work Session. He said it was assumed that in 2000 and beyond there would be a revolving loan pool of approximately $3 million and that any additional loans made would be covered by bonded borrowing. He said the assumptions had minimal impact on the previously presented budget. Mr. Berggren added that it had been agreed that interest would be charged on new conservation loans.
President Smith said she agreed with the summary and description provided by Mr. Varner and Mr. Berggren.
President Smith proposed that the Board consider adding support for low-income assistance programs to the budget, as follows:
President Smith said her proposal would maintain the status quo of EWEB support for the programs. She said she would also like an early completion of the analysis of low-income programs previously undertaken by staff to enable Board consideration of other proposals for support received from the Lane County Human Services Commission other related issues.
Mr. Berggren stated that staff had been waiting until the Banner accounting system was operational to begin the analysis. He said he believed the analysis could be undertaken in January and February and reported to the Board by April.
Commissioner Anderson said she understood the analysis would include data from an entire heating season and that she did not believe it was likely that it could be completed until late spring or early summer.
Commissioner Bishop asked that the staff who prepared the recommendations contained in the memorandum of Ms. McArthur be identified. Public Affairs Manager Marty Douglas replied that the recommendations had been prepared by himself, Ms. McArthur, and Customer Relations Manager Chuck Dalton.
Commissioner Bartel said he hoped the Board could discuss the issues involved in support of low-income programs, including the requirements of S.B. 1149.
Commissioner Bishop asked if the additional funding proposals of the Human Service Commission would be able to be considered after the analysis of current programs was completed.
Mr. Dalton said he anticipated the additional proposals would be relevant to the philosophical discussion the Board would hold following the report of the current program analysis. He said he believed the Board had previously indicated support for a "complete package" and that the additional proposals were part of such a package. President Smith added that the Board had picked the programs for potential funding from a list of others.
Mr. Manela said that the implementation of the proposals could be done collaboratively. He said the Human Services Commission hoped to determine energy assistance needs by March and discuss with EWEB staff preparation of a longer term process.
Commissioner Bishop observed that there were increasing pressures on EWEB budget resources and that it was important to support the low-income assistance programs because a commitment had already been made to them. She said she hoped decisions could be made about them by early spring.
President Smith determined that Commissioners had no further questions or comments.
PUBLIC HEARING ON 2000 BUDGET
President Smith opened the public hearing on the 2000 Budget and determined that there was no one present wishing to provide testimony regarding it.
President Smith closed the public hearing.
ADOPTION OF BUDGET
Commissioner Bishop stated that she hoped serious consideration would be given in the next budget preparation cycle to reducing the rate at which capital reserves were funded. She said a reduction in the rate in the 2000 Budget could have avoided staff reductions.
Mr. Berggren stated that there had been no employees laid off as a result of the 2000 Budget.
Vice President moved, seconded by Commissioner Bartel, that the 2000 Budget and Work Plan be adopted, with the addition of $58,900 for low-income assistance programs, as proposed by President Smith. The motion was adopted unanimously, 5:0.
TELECOMMUNICATIONS PHASE II DEVELOPMENT PROCUREMENT PROCESS
Telecommunications Project Manager Ken Beeson referred to his memorandum dated December 2, 1999, regarding an alternative selection process for Phase II of the Telecommunications Project distributed at the beginning of the meeting. He reviewed information contained in the memorandum about the change made from the initial intention to use a standard Request for Proposal (RFP) process to identify a company to work with EWEB in the development of Phase II. He said concerns which had led to the change included the amount of time it could take to prepare an RFP and the need to learn more from potential partners about their capabilities.
Purchasing Coordinator Ed Case stated that the Telecommunications team had developed an alternative procurement process which would open communications with all interested parties, allow gathering of information, identification of qualified competent business partners, narrow the scope of work, and assist in development of a clear and concise final solicitation document addressing the best possible strategy for Phase II development.
Mr. Case pointed out that the Board had discussed the alternate solicitation process at previous meetings and that it was fully described in the resolution authorizing the process attached to the memorandum of Mr. Beeson.
Commissioner Bartel noted that a time line for completion of work tasks related to the alternative procurement process was included in the memorandum of Mr. Beeson. He asked if it was realistic to assume responses from potential development partners could be received in a month's time that included holiday observances. Mr. Case replied that five sources to contact such partners had been identified, as follows:
Mr. Beeson said he was confident the notification could be accomplished by the date set in the time line.
Commissioner Bishop said she was concerned that the proposed time line was overly long. She asked why a two-month period was set for evaluation of the responses. Mr. Beeson said he believed the process would take that long because it included development of the parameters of the final proposal for the Phase II system.
Commissioner Bishop asked what would happen if a viable development partner was not identified within the time line proposed. Mr. Beeson replied that he did not believe such an eventuality was likely, but that if it did occur, it was likely that the goals for Phase II would be re-visited.
Mr. Beeson referred to the resolution to authorize the procurement process attached to his memorandum. He explained that approval of it by the Board would adopt the alternative procurement process and draft findings for exemption of the Alternative Procurement Process from Oregon Revised Statute 279.025(1). He said a public hearing would be held on the process on January 4, 2000.
President Smith asked why findings were included in the resolution before a public hearing was held. Mr. Beeson replied that the exemptions included in the resolution were prescribed by ordinance.
Vice President Dyer moved, seconded by Commissioner Bartel, that the resolution entitled "Resolution Authorizing Alternative Process for Selection of Telecommunications Project Phase II Development Partner" dated December 2, 1999, be adopted. The motion was adopted unanimously, 5:0.
OREGON UTILITIES RESOURCES COUNCIL ASSOCIATION REPRESENTATIVES
Mr. Berggren referred to a December 2 memorandum from Power Management and Planning Manager Scott Spettel, regarding EWEB representation on the Oregon Utilities Resource Coordination Association (OURCA) Board of Directors, distributed with the agenda of the meeting. He described the function of the board, as created by a Intergovernmental Agreement (IGA), and noted that staff recommended that Mr. Spettel be appointed as the representative, with himself as alternate.
President Smith asked how decisions of the OURCA Board regarding buying and selling of power related to the interests of the EWEB Board. Mr. Berggren replied that the IGA provided that members of the association had to authorize its actions. He said members had pre-authorized certain limited activities of OURCA and that the issue raised by President Smith was a concern for all members.
Vice President Dyer moved, seconded by Commissioner Bishop, that Scott Spettel be appointed as the EWEB representative on the OURCA Board of Directors, with Randy Berggren as the alternate representative. The motion was adopted unanimously, 5:0.
EWEB POWER PURCHASES/POST-2001
Mr. Spettel referred to his December 2 memorandum, regarding Post-2001 Power Supply decisions, distributed with the agenda of the meeting. He reminded Commissioners that expiration of Bonneville Power Administration (BPA) contracts would require replacement of approximately two-thirds of EWEB's power supply between 2002 and 2006.
Mr. Spettel reviewed information about issues to be faced regarding the replacement contained in the memorandum. He also reviewed information contained in a document attached to the memorandum entitled "Description of the Bonneville Power Administration's 2002 Wholesale Power Products and Services - Prepared by the Oregon Utility Resource Coordination Association Technical Workgroup." He explained that the BPA was currently conducting a rate power case to determine the rates, terms, and conditions for the products and services. He said the case was scheduled to close on April 21, 2000, and that customers would have approximately 120 days to purchase the products and sign contacts on terms and conditions set.
Mr. Spettel described BPA Core power products to be offered, as follows:
Mr. Spettel described BPA customized power products to be offered, as follows:
President Smith said a ideal power purchase package from her perspective would be that EWEB could choose BPA "green power" which would be different than securing renewably generated power from all over the system.
Vice President Dyer said that the stability of power prices over the next several years would be important in maintaining affordability. He said if open access occurred, it might be necessary to tie power purchases to the needs of customers.
President Smith said it would be important for the Board to understand cost implications of various purchase options when decisions regarding them were made. Mr. Berggren added that it would be important to consider more than financial implications.
Commissioner Bishop said it appeared that the most local control of power utilized would be available in the Slice options.
Mr. Spettel stated that additional reports would be made to the Board regarding power purchase options at future meetings.
CITY CHARTER BORROWING AUTHORITY
Treasurer Jim Origliosso referred to his December 1 memorandum, regarding EWEB's borrowing authority provided by the City Charter, distributed with the agenda of the meeting. He explained that the charter allowed EWEB to incur short-term debt up to a maximum of five percent of accumulated net revenue. He said having short-term borrowing authority for use in emergencies provided financial flexibility and reduced the needed level of funded reserves.
Commissioner Anderson stated that the Eugene City Club was studying the City Charter and had asked if it would be appropriate to remove the provision for EWEB's short-term borrowing authority. She said she had explained the information provided by Mr. Origliosso to representatives of the Club and they had agreed that its removal would not be recommended. She said it was also agreed that EWEB only should deal with sections of the charter related to it.
Commissioner Bishop also wanted the verbiage looked into changing when sworn in for public office. She said that an individual shouldn't have to "swear to God" if they didn't want to.
Mr. Berggren said there were other issues related to EWEB authority contained in the City Charter which the Board would be asked to consider at a later meeting.
ITEMS REMOVED FROM CONSENT CALENDAR
Buy-Down of PERS Liability
Vice President Dyer said he had asked that authorizing a $3 million payment to buy-down EWEB's obligation to PERS be removed from the Consent Calendar to enable him to comment that he believed current attempts to resolve differences over rate increases were credible and that the buy-down should not be made. He said it would likely be difficult to recoup the payment if litigation was successful and that he believed the funds were needed for operation of EWEB.
Mr. Berggren stated that the buy-down was recommended because it would ultimately result in savings in operational expenses. He said the payment would also provide evidence that EWEB was committed to paying its obligations, especially those related to employees.
Commissioner Bishop said EWEB would continue to owe funds to PERS obligation during determination of legitimacy of the obligation.
Commissioner Bartel asked if it would be possible to place the funds in an escrow-type account until the legitimacy of the obligation was determined. Mr. Origliosso said that it was not possible to make such a placement.
Vice President Dyer asked what interest charge would be incurred, if EWEB did not make the buy-down during the period of the litigation. Mr. Origliosso replied that the litigation could take as long as three-years to resolve and that there could be a penalty for non-payment of $750,000.
Vice President Dyer said that he believed there were credible arguments in favor of EWEB's position in the litigation. Mr. Berggren replied that the arguments hand not yet been proven and that the finance officers recommended that the buy-down payment be made.
President Smith asked if it would be possible to consider a payment of $1.5 million dollars. There was no response to her suggestion.
Commissioner Bishop said she believed the buy-down payment should be made as evidence of EWEB support of its employees.
Commissioner Bishop moved, seconded by Commissioner Anderson, that a $3 million budget amendment be approved to provide for a buy-down of EWEB liabilities with the Public Employees Retirement System, and that the source of the funds be unbudgeted capital improvement reserves previously set aside from accumulated assets of the Electric Utility and unbudgeted capital improvement reserves of the Water Utility. The motion was adopted, 4:1, with Vice President Dyer voting no.
Mr. Berggren made presentations of a replica of the Thomas Edison electric light to Commissioners, in appreciation of their service, and in commemoration of the conclusion of the twentieth century.
The meeting adjourned at 9:45 p.m.
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Assistant Secretary President