Board Members Present: Dorothy Anderson, Peter Bartel, Patrick Lanning, and Sandra Bishop.
Others present: Randy Berggren, JoAnn Andersen, Marc Anderson, Tom Buckhouse, Ed Case, Bill Fletcher, Marty Douglass, Dick Helgeson, Jim Origliosso, Mark Oberle, Roseanna McArthur, Dick Varner, Jim Wiley, and Krista Hince of the EWEB staff; members of the public; and Ruth Atcherson, City of Eugene Minutes Recorder.
President Anderson called the Regular Board Meeting to order at 7:39 p.m.
AGENDA CHECK
There were no changes to the agenda.
APPROVAL OF CONSENT CALENDAR
Minutes
Minutes of the February 19, 2002, Executive Session, Work Session, and Special Board Meeting; the March 5, 2002, Regular Board Meeting, and the April 2, 2002, Work Session and Regular Board Meeting.
Business Service Agreements
Lease Agreement
Northwest Open Access Networks of Oregon (NOANET) - NOANET Dark Fiber Lease and EWEB - Twenty year dark fiber lease - Will reimburse EWEB for all capital costs incurred
President Anderson pulled the minutes from the February 19 Work Session and Special Board Meeting. Vice President Bartel requested that Item 2, regarding SPATIAL Info, be pulled from the consent calendar.
Vice President Bartel moved, with a second from Commissioner Lanning, to approve the consent calendar, as amended. The motion carried unanimously, 4:0.
ITEMS FROM BOARD MEMBERS
Vice President Bartel stated that he had attended a conference on water sponsored by AWWA. He reported that it was very interesting and included discussions on board governance work. He commended the staff for the excellent work done to facilitate the conference here, specifically thanking Steven West, Doug Wise, Kathy Gray, Melissa Wisely, Ron Wilson, and Ron Huddleston.
Vice President Bartel shared that he had also attended the ESA (endangered species act) portion of the conference. He felt that EWEB was “light years ahead of the pack.”
President Anderson related that the McKenzie Watershed Council has expressed a great deal of concern regarding the increase of turbidity due to the work done by the Army Corps of Engineers (ACOE) at Cougar Dam. Mr. Helgeson explained that higher turbidities have been noted at the intake at a level three to four times the norm. He stated that the turbidity was anticipated to subside.
Vice President Bartel commented that the brochure that the watershed council has produced on native plants is beautiful.
Commissioner Bishop reported that she had attended a noon-time meeting of the City Council. She said she had hoped to learn more about the workings of the council than she had. Commissioner Bishop added that she had included information on wind power in Commissioner’s packets.
CORRESPONDENCE
General Manager Randy Berggren stated that the AWWA conference, held here at the Eugene Hilton Hotel, had been attended by 670 people. He said EWEB’s staff had done an outstanding job of organizing the conference.
Mr. Berggren reported that he, President Anderson, and Jim Origliosso, Treasurer, had gone to San Francisco, California and met with representatives of Standard & Poors and Moody’s Investments and reviewed the utility’s financial report and that the bond ratings are good. He said that EWEB is the only utility in the Pacific Northwest aside from the Bonneville Power Administration (BPA) that has a double-A rating from S & P, though it has been reduced to a double-A minus. He felt that this represented validation for the direction that the Board provides.
Mr. Berggren related that Ms. Hince would be calling the board members in the next few days to begin organizing the Board Retreat, to occur in June or July.
Mr. Berggren stated that he had sent first quarter financials to the Commissioners. He noted that he had also sent a backgrounder from Dean Ahlsten on the status of the RTO to the Board.
Continuing, Mr. Berggren noted that bills with the new surcharge were about to be mailed.
Mr. Berggren highlighted the next board agenda for the meeting to occur on May 21, 2002, noting that there would be an update on the manufactured gas plant site and an update on the Wanapa project during the Work Session and a water service request for the planned Armory building and an update on the post-2006 Bonneville contracts.
President. Anderson related, regarding the RTO, that she felt concern over the lack of local control in the situation. Mr. Berggren offered to schedule a presentation and provide information for the members of the Board on this. He felt that EWEB may want to express its point of view on the topic. President Anderson offered to make a list and email it to the Board.
PUBLIC INPUT
Jim Seabury, 3294 Stark Street, Eugene, spoke as a representative of the River Road/Santa Clara Property Owners’ Association. He said that the Association has met with the Santa Clara water board. He related that it is the understanding of the Association that water serving the Santa Clara area is flowing through lines that belong to Santa Clara. He asserted that this is not a “good business deal.” He stated, on behalf of the group he was representing, that there should be a flow charge on this water. He felt that this had been brought to the attention of the EWEB Board before.
Mr. Berggren responded that Susie Smith would have likely been the person to have knowledge of this. Mr. Helgeson added that the real issue is around road work in the area and who is having to pay for it. He stressed that the water lines are inter-connected and are approximately equally dispersed between EWEB ownership and Santa Clara water district ownership.
Mr. Seabury concluded by saying that even if it is a “wash” the charges should be reflected as such.
PURCHASE BID THRESHOLD
Ed Case, Purchasing/Risk Manager, directed the Board of Commissioners to look over the memorandum entitled Request to Raise Formal Bid Thresholds and the subsequent attachments entitled Copy of EWEB Rule 030-0001: Board Approval Process, and EWEB Rule 030-0002: Purchasing Thresholds. He provided a brief overview with the aid of overhead projections.
Vice President Bartel expressed concern that speeding up the decision process within the context of the current economic environment may lead to decisions that are not as well thought out. He asked what kind of dialogue preceded this proposal. Mr. Case responded that most of the purchases were “fairly routine.” He said that, unless it is a specialized item, the procedure has been to contract locally for goods and services.
Commissioner Bishop expressed hesitance, noting that it may not be an optimal time to raise the threshold. She felt unsure of the driving logic behind the proposal.
Mr. Berggren responded that the utility is down one buyer and has an abundance of projects. He said the proposal was a result of attempting to find areas in which the efficiency could be improved.
President Anderson suggested the possibility of raising the bidding threshold for a trial period of a year and then monitoring the results. Commissioner Lanning concurred, stating that it was important to have strong purchasing policy.
Vice President Bartel moved, with a second from Commissioner Lanning, to approve the recommendation to amend the purchasing policy to allow the bid threshold to be raised from $50,000 to $75,000 for a period of a year, at which time the change will be assessed and the data will be provided to the Board in an annual report, and then will be determined whether it will be instituted as permanent policy.
Commissioner Bishop requested the opportunity to ask a question of Mr. Origliosso in private. President Anderson excused the Commissioner. Commissioner Bishop briefly left the room and returned.
The motion carried 3:1 (Commissioner Bishop opposed).
Mr. Case explained the second amendment proposed to raise the bid thresholds, an amendment to exempt a class of contracts. Eric DeFries, EWEB General Counsel with the law firm, Calkins & Calkins, clarified that the exemption would need to be granted under the statute by the Board after the Board determined two findings:
1) that it was unlikely to encourage favoritism in the awarding of public contracts or substantially diminish competition for those contracts;
2) that there is a cost benefit to raising the threshold;
The findings would need to be considered by the Board and there would be an opportunity for public comment at a meeting in the future for which there would be 14 days notice and draft findings are prepared.
Mr. Case stated that the next step would be have a public hearing and that this hearing be posted in a state-wide publication. Mr. Berggren added that staff would provide recommendations on how the Board “could find” on the proceedings.
Mr. Berggren noted that a motion was not needed. Rather, he said, it is hoped that the Board will recommend that staff proceed with pursuing the public input portion of the process.
ELECTRIC BOND RESOLUTION
Jim Origliosso, Treasurer, called attention to the attachment regarding the Supplemental Bond Resolution. He explained that he was seeking a resolution to authorize staff to proceed with the preparation of the bond issue. He noted that two components of the resolution were pursuant to the tool kit discussion, that the utility borrow for conservation rather than pay for it out of cash reserves and that the obligation be extended over a ten year period. He noted that the aforementioned are taxable. The “C Series” has two components as well. He said that the first is a new money issue to capital improvements and the second component is a re-funding of the current year maturities of three different bond issues. He explained that the latter is expected to help achieve a cash flow benefit. He noted that the debt service would be increased by $200,000 per year.
In response to a question from Vice President Bartel, Mr. Origliosso said that the expected cash flow gain from these actions was $2 million. Vice President Bartel asked what the $2 million would be applied to. Mr. Origliosso answered that there will be some budget amendments that will need funding and some unfunded liabilities as a result from the storm.
President Anderson noted that the Board and staff would be reviewing the finances of the utility in October, 2002, after the BPA reveals what the financial-based CRAC will be.
In response to a question from Commissioner Bishop, Mr. Origliosso said that the total amount will be $25.5 million.
Mr. DeFreest affirmed that it was not necessary to read the bond resolution into the record.
Vice President Bartel moved, with a second from Commissioner Bishop, to approve the bond resolution.
Vice President Bartel remarked that the bond resolution should have been submitted to the Board with more time for consideration. Mr. Origliosso apologized, noting that the bond resolution had been in process up to the last minute.
Vice President Bishop related that the Eugene City Council had commented that the EWEB bond issues were not presented with enough time to give them proper consideration. Ms. Origliosso commented that this bond resolution is not “business as usual,” but rather a process that was initiated in November. He stressed that time is of the essence for this particular bond issue.
Commissioner Lanning called the question. The motion carried unanimously, 4:0.
ITEMS REMOVED FROM THE CONSENT CALENDER
President Anderson offered the following correction to the minutes from the Work Session held on February 19, 2002:
Page 2, paragraph 4, last sentence: strike “...dead-lining” and replace with red-lining.
President Anderson noted that the meeting time for the Regular Board Meeting held on February 19, 2002, was incorrectly listed as 5:30 p.m. and should read 7:30 p.m.
President Anderson also noted that under Items from Board Members it should be clarified that the budget committee meeting she had attended was the Eugene Budget Committee.
Commissioner Lanning offered the following correction to the minutes from the Work Session held on February 19, 2002
Page 4, paragraph 1, third sentence: strike “...salient...” and replace with solvent
Mr. Helgeson, responding to concerns expressed by Vice President Bartel regarding item 2 on the Consent Calender, explained that the utility has an existing investment in a water facilities mapping system that is specifically designed and maintained in such a way as to provide mapping information for EWEB facilities. He added that it also ties into some attribute information that catalogues the various elements of the system. As such, he said, it provides a platform for operations out in the field and is a support tool. He noted that there are certain elements that relate to the mapping system maintained by the Lane Council of Governments (LCOG).
Kevin Biersdorff, Facilities Graphics Manager, added that there are no huge compatibility issues as most systems are now capable of reading multiple formats.
Responding to a question from Vice President Bartel, Mr. Biersdorff explained that the utility maps any water facility information that constitutes an investment. He said that all of the utility’s inventory is collected and modeled in the system. Mr. Helgeson added that the data is a facility schematic drawing and that associated with each line and vector is attribute information
Vice President Bartel stated that his concern was the compatibility issue. Mr. Biersdorff stated that the utility does regularly provide information to the fire department, LCOG, etc. and has not run into any compatibility issues. Vice President Bartel asked how this data that is visually represented will be able to address the increase in housing density. Mr. Helgeson explained that information is routinely provided in periodic facilities plan updates and that the utility should have no trouble updating the schematics as population increases.
Vice President Bartel moved, with a second from Commissioner Lanning, to approve the items removed from the consent calender. The motion passed unanimously, 4:0.
The meeting adjourned at 9:00 p.m.
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Assistant Secretary President