Board Members present: Susie Smith, Mike Dyer, Sandra Bishop, Dorothy Anderson, Peter Bartel, Sandra Bishop, and Mike Dyer.
Others present: Randy Berggren, General Manager; JoAnn Andersen, Ken Beeson, Deborrah Brewer, Cathy Bloom, Tom Buckhouse, Ed Case, Sandy DeLuna, Marty Douglass, Tim Downey, Cathy Hamilton, Everett Jordan, Garry Kunkel, Roseanna McArthur, Jim Origliosso, and Krista Hince of the EWEB staff; Win Calkins, General Counsel; members of the public; and Daniel Lindstrom, Minutes Recorder.
President Susie Smith called the Work Session of the Eugene Water & Electric Board (EWEB) to order at 5:40 p.m.
TELECOMMUNICATIONS PHASE II - CITY CHARTER AMENDMENT PROPOSAL
General Manager Randy Berggren reminded Commissioners that Board consideration of Phase II of the Telecommunications project on December 7 had dealt with an alternate development partner procurement process. He said further staff work had led to determination of the importance of securing authority for the development through an amendment of the Eugene City Charter. He said the workshop would be the opportunity for the Board to discuss issues related to the amendment process.
Telecommunications Manager Ken Beeson said he would present reasons staff was convinced of the importance of EWEB receiving authority to engage in telecommunications through a charter amendment, the process to be followed in getting a charter amendment on the ballot, and seek Board agreement to proceed.
Mr. Beeson reviewed the Vision developed for Phase II of the Telecommunications project, as follows:
Develop some locally owned and managed high speeds broadband network throughout the City of Eugene that provides capability for
Mr. Beeson said that implicit in the vision was that EWEB would be a "transporter" of telecommunications services and that authority to do so needed to be provided. He added that any decision regarding EWEB involvement with telecommunications content would be made by the Board, in the context of a business plan and public discussion.
Mr. Beeson reviewed draft language of a charter amendment, as follows:
The power of the city to generate, collect, and distribute electricity, steam, and other kinds of physical energy, and the power to provide advanced telecommunications capability and associated services including, but not limited to, voice, video, data, Internet, and telecommunications services are hereby vested in the Eugene Water & Electric Board.
Mr. Beeson said legal counsel had advised that gaining telecommunication authority through a charter amendment provided the most clear statement of it, whatever structure was finally developed.
Commissioner Anderson said she had discussed the possibility with City Councilor Nancy Nathanson and that she had said she did not believe using amendment of the City Charter was essential. Mr. Beeson replied that other cities had gained the needed authority by amending their charters. He also said putting the amendment on a ballot gave citizens an opportunity to participate in the decision.
President Smith asked if an element of the proposal for a charter amendment was a desire to not allow the City to have control over how EWEB operated the telecommunications project. Mr. Beeson replied that it was not.
Mr. Beeson reviewed draft language of a Ballot Title for the charter amendment proposal distributed at the beginning of the meeting. He said it had been developed by staff and legal counsel and was subject to change.
Commissioner Peter Bartel said he agreed with Commissioner Anderson that reasons given for seeking a charter amendment needed strengthening. He said he believed that concern about the telecommunications project were about competing with the private sector and whether EWEB would provide telephone and cable TV service and that they needed to be addressed in the Ballot Title.
Mr. Beeson replied that utilization of the telecommunications project infrastructure was divided at the point at which it was "lighted" and able to transmit information. He said utility applications and licensing dark fiber could be accomplished without additional authority, but that clear authority was essential if the system was built out and connected to customers, if it was lit, and if EWEB acted as a transporter for content providers.
President Smith suggested that the issue was similar to the difference between providing electric transmission lines and being an electric distributer.
Vice President Dyer asked for an explanation of the difference between licensing dark fiber and licensing bandwidth. Mr. Beeson replied that the difference was about having control of the fiber.
Mr. Beeson said it was possible to utilize authority gained in a charter amendment to become a content provider, but that it would take Board policy decisions to do so.
Commissioner Bartel asked if it would be possible for a private company to gain authority to be a telecommunications transporter. Mr. Beeson replied that doing so would require permission from the Oregon Public Utility Commission and a franchise agreement with the City of Eugene.
President Smith said she did not fully understand how a charter amendment would provide more authority to develop the telecommunications project than a Memorandum of Understanding with the City. Mr. Beeson replied that EWEB counsel had advised that having charter authority was more clear, provided additional authority in terms of electric and water utilities, and was more consistent with the way other cities had proceeded. Mr. Berggren added that it reduced Board liability and the ability for it to be challenged through litigation.
Commissioner Bartel asked if there was case law dealing with granting authority through charter amendments or memorandums of understanding. Mr. Beeson said such case law was currently being developed. Legal Counsel Win Calkins added that the lack of case law was one reason for the recommendation that a charter amendment be sought.
President Smith suggested that the City Attorney needed to give advice to the Eugene City Council regarding the value of seeking a charter amendment.
Commissioner Bartel asked if the topic of a telecommunications authority charter amendment had been discussed with the Eugene City Attorney. Mr. Calkins replied that the concept had been discussed, but that the specific language in the draft amendment and ballot title had not been shared. He said the City Attorney had informally expressed the opinion that it made most sense for EWEB to undertake development of a telecommunications project on its own.
Vice President Dyer said he was confused by conflicting language in the draft charter amendment and draft ballot title regarding whether EWEB would become a provider of telecommunications services. Mr. Berggren replied that the attempt had been made in the language to indicate that there was currently no intention for EWEB to provide such services, but that the possibility was left open.
Vice President Dyer said he believed the City Councilors with whom he spoke would not support EWEB providing cable TV and Internet access services. He suggested that providing such services should be clearly eliminated in the draft proposals. Mr. Berggren replied that the decision was up to the Board, but that he believed it should be left as a possibility. He illustrated why it might be decided that EWEB should provide telecommunication services with a hypothetical example. He also said the vision of having universal telecommunications service available might also depend on EWEB being able to provide some sort of service. He concluded by suggesting that seeking a charter amendment was an easy way to determine if the community wanted EWEB to have telecommunications authority.
President Smith suggested that there was a "technical information gap" between the understanding of staff regarding the issues involved in the telecommunications project and that of Commissioners. She proposed that Commissioners be assisted by staff in seeking support for a charter amendment from members of the City Council.
Commissioner Bishop said she did not believe concerns raised by City Councilors would be insurmountable, although she agreed the gap identified by President Smith was real. She said she believed the only alternative to having telecommunications authority from the city charter was suspending Phase II of the project. She suggested that Commissioners clear their confusion regarding the issues involved because delays could threaten its potential for success.
Mr. Beeson stated that there had been discussion of a joint EWEB/City Council work session on the telecommunications project early in February. He said a background paper on the project was being prepared.
Commissioner Anderson asked if potential project development partners had identified the need for authority for the project to come from a charter amendment. Mr. Beeson replied that they had.
Commissioner Anderson said she understood that the concerns being raised by councilors involved the potential of EWEB becoming a competitive service provider of telephone and cable TV services and that it might not be possible to convince a majority of the voters to support its approval.
Commissioner Bartel said he believed there were two fundamental questions being asked - Why are we doing this? And will we be providing content in competition with the private sector? Mr. Berggren replied that answers to the questions changed if they were given from the standpoint of authority or of intended public policy.
Mr. Beeson said staff believed there was a strong linkage between what was being proposed in the Telecommunications project and the future viability of the electric and water utility businesses. President Smith replied that tying the future of EWEB to the telecommunications project was convincing her to support the need for charter amendment authority.
Vice President Dyer said that having customer connection was the only reason he supported going forward with Phase II of the telecommunications project. He said he believed a development partner should be secured who, in exchange for the right to lease the bandwidth, would help pay for the cost of construction. Mr. Berggren replied that such an arrangement would not guarantee universal access build out of the project and that authority was needed to ensure that it was built into the system.
Commissioner Bishop asked how much money was being paid out for telephone lines before the core telecommunications system was built. Mr. Beeson replied that $55,000 a year was spent on the use of telephone lines no longer needed since completion of Phase I of the project. He said he did not believe the entire system had yet been switched to the telecommunications fiber.
Commissioner Bishop suggested that sophisticated energy management in the future would require use of a telecommunications infrastructure such as planned in Phase II and that either telephone lines or fiber optic cable would have to be leased from a telecommunications service provider if EWEB did not create the capability itself.
Facilities Services Director Tom Buckhouse said that he believed the most important objectives of Phase II of the Telecommunications project were long-term viability of the electric utility, universal service, and public ownership and management of the system.
Mr. Beeson said that he was hearing from Commissioners that it was important to clearly state the reasons for EWEB to be telecommunications in material regarding the project. President Smith added those reasons for reserving the ability to be a content provider should also be included, but that limitations and requirements for doing should be stated.
Commissioner Bartel said he did not believe specific potentials of providing content should be covered in material regarding a charter amendment proposal. He said he was most important for the Board to be unified in its support of the project.
Commissioner Bishop suggested that specific examples of what other jurisdictions and utilities were doing with telecommunications be included in material prepared about the charter amendment proposal.
Mr. Beeson said he would take the suggestions and concerns of Commissioners, rework the draft Ballot Title with EWEB and City staff, prepare a resolution and other material for presentation to the City Council, and return to the Board for final approval of the request to place a charter amendment on the ballot. Mr. Berggren said the issue would be placed on the agenda of the next Board meeting.
President Smith suggested that a joint work session of the Board and City Council be held to consider changes to wording of the proposed amendment and Ballot Title. She said EWEB counsel and the City Attorney should also be present. Mr. Berggren replied that he had learned in conversation with City Manager Jim Johnson that Mayor Jim Torrey supported having EWEB present a proposal for a charger amendment, rather than having the Board ask the City Council for advice on what should be placed on a ballot.
Commissioner Bartel said he believed the language of a charter amendment and Ballot Titles were less important to members of the City Council than dealing with concerns about competition with the private sector and EWEB providing content. He suggested preparation for a joint work session should include development of simple answers to the "top ten" questions likely to be asked.
Mr. Berggren said he believed there was confusion among City Councilors about the role of the City in telecommunications. He said the City Manager was having a summary of the City's telecommunications work and activities prepared for them. He said he would seek to arrange a joint work session on either February 2 or 14.
Commissioner Bishop recommended that sentences' four and seven of the explanation paragraph in the Draft Ballot Title be changed, as follows:
If the amendment passes, EWEB will be authorized to offer directly to the public various services directly to the public, including without limitation video, voice, data, internet and telecommunications services without limitation. . . . If the amendment is not adopted, EWEB will lease excess core communication system capability until it is currently not required for electrical or energy purposes but EWEB will not be able to offer telecommunications services to the public.
GENERAL MANAGER EVALUATION
Mr. Berggren referred to his December 29 memorandum, regarding the performance evaluation of the General Manager, distributed with the agenda of the meeting. He noted that Goals for the General Manager, Criteria for Success, Evaluation Criteria, and other related material was attached to the memorandum. He suggested that Commissioners discuss whether and if the criteria should be changed.
Human Resources Manager Sandra DeLuna observed that Goals for the General Manger set by the Board were somewhat diverse and difficult to evaluate. She noted that general management evaluation criteria were attached to her memorandum dated December 23 distributed with the agenda of the meeting. She suggested that EWEB Strategic Goals adopted by the Board might also be considered in evaluation of the General Manager.
President Smith asked if changes were contemplated in general management evaluation criteria. Ms. DeLuna replied that no changes were planned.
President Smith determined that Commissioners were satisfied with the criteria established for evaluation of the General Manager.
Commissioner Bishop said she found it difficult to access information in the General Manager's Goals Report. President Smith said she found the format of the report useful. Mr. Berggren said he would provide a brief assessment of his work at the time of his evaluation by the Board.
President Smith said she would appreciate incorporation of EWEB's strategic goals into the evaluation of the General Manager.
Ms. DeLuna asked if it would prove helpful for a process to be used to consider the strategic goals in the evaluation of the General Manager. Commissioner Bishop replied that she believed it would be helpful to develop as much a focus in the evaluation as possible.
Mr. Berggren stated that the evaluation of the General Manager would be held during an Executive Session scheduled for February 1, 2000.
The work session adjourned at 7:20 p.m.
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Assistant Secretary President