Board Members present: Peter Bartel, Susie Smith, and Patrick Lanning. President Dorothy Anderson and Commissioner Sandra Bishop were excused.

Others Present: Randy Berggren, JoAnn Andersen, Terry Bequette, Tom Buckhouse, Dick Helgeson, Jim Origliosso, Roseanna McArthur, Debra Wright, Jim Wiley, and Krista Hince of the EWEB staff; and Kris Aanderud, City of Eugene Minutes Recorder.

Vice President Bartel called the Work Session of the Eugene Water and Electric Board (EWEB) order at 7:05 p.m.

TELECOM BUSINESS PLAN

Debra Wright, Telecommunications Project Manager, reviewed issues regarding the Telecom Business Plan, as outlined in a Memorandum dated August 29, 2001 from Ms. Wright, regarding MetroNet Joint Resolution. A Draft Amendment to Joint Resolution of the City of Eugene and The Eugene Water and Electric Board (EWEB) was attached to this memorandum. Ms. Wright noted that tonight's work session was critical in terms of timing, noting the City Council meeting was scheduled for September 19, 2001, which will necessitate materials be completed for Council packets by the end of this week.

Jim Origliosso reported that the outcome of the July 10, 2001 City Council meeting, was that City Council agreed that bond proceeds from bonds issued from 1988 could be used, but that the Council had some concern about authorizing additional debt without a public vote. Mr. Origliosso said that funding for MetroNet was secure for the first two to three years, at which time a measure could be placed before the voters. In addition, three local banks have been contacted to test their willingness to loan funds on this project, based on the current business plan: Pacific Continental, and South Umpqua State Bank. The fundamental strategy proposed to use the unspent bond proceeds, until there is sufficient track record on the project, projected two years out, and then put a measure before the voters.

Ms. Wright noted that the timing for the build of the project was not proposed to change, but that there was a risk in that there was no funding past the second or third year.

Vice President Bartel asked if after the two to three year period and the funds run out, and if the project appears to be successful, what would be required to change the bonding authority. Ms. Wright said that the City Charter does not have the authority to allow bonding. She said that it would require an amendment or clean-up language. Bonds could be issues, under the existing Charter authority. However, the resolution says that the bonds would be put before the voters. This would necessitate an amendment to the resolution to not go to a vote on this issue. She said that an amendment might be proposed at a later time, but was not being proposed at this time.

Ms. Wright reviewed the Draft Amendment to the Joint Resolution. In Section 2, changes were incorporated to reflect the uncertainty regarding the universal build. Section 2 (c) acknowledges that the Public Agency Network (PAN) is completed. The following two subsections are new. Ms. Wright characterized Section 3 as the key component which was being changed. Section 5 speaks to the public briefings and public hearings which have been held and the commitment to further public briefings and public hearings.

Commissioner Lanning asked where the liability falls if the Phase 1 bonds were used. Mr. Origliosso said that the bonds would paid back by MetroNet, but that the obligation falls to the electric utility if MetroNet is unable to make payments.

Vice President Bartel noted that he had an e-mail from City Councilor Gary Rayor. Ms. Wright noted that she had responded to Mr. Rayor's e-mail, which focused on technical comments, first surrounding financial computations. She said that she felt Mr. Rayor's comments were on target that there was not a wholesale rewrite of the Charter, nor the elimination of the anti-regulation, non-cross subsidization and that he had no concern with an extension or a waiver. Ms. Wright said that staff has tried to be sensitive to the comments by all of the City Councilors and have tried to incorporate changes as requested. She said that the final changes have not been forwarded to the full City Council, pending EWEB members having an opportunity to review and comment on the proposed amendment.

Commissioner Smith said that she wanted to express her commitment to take the issue of "universal build" to the voters.

The meeting was adjourned at 7:25 p.m.

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Assistant Secretary President