Board Members present: Dorothy Anderson, Patrick Lanning, Sandra Bishop, Paul Conte, and Ron Farmer.
Others present: Randy Berggren, Joanne Andersen, Tom Buckhouse, Dick Varner, Debra Smith, Roseanna McArthur, Jim Origliosso, Dick Helgeson, Charles Dalton, and Krista Hince of the EWEB staff; and Joe Sams, City of Eugene Minutes Recorder.
FOLLOW UP TO BOARD RETREAT FOR 2003 BUDGET
President Anderson called the Planning Session to order.
Dick Varner, Fiscal Services Supervisor, began a review presentation on the budget ideas discussed at the recent Board Planning Session.
Regarding Customer Service Department FTE Joanne Anderson, Director of Customer Services, noted that she had sent a detailed memo to the Board members containing FTE information.
In response to a question from Commissioner Farmer regarding how to track call efficiencies, Ms. Andersen commented that she could determine the number of calls coming in and the number of lost calls but noted that the time a person had to wait and the length of a call were able to be tracked by the system being used.
In response to a question from Commissioner Farmer regarding evaluating individuals rather than the entire office, Ms. Andersen said individuals were measured on the number of calls that an employee was suppose to handle. She said that number was determined on their performance evaluation and added that, for the upcoming year, call takers would be evaluated on how long they stayed on the line with customers.
In response to a question from Commissioner Farmer regarding how much the increased FTE would affect the budget, Mr. Varner said the Customer Service budget would be increased 3-4 percent. He stressed that the increase was relatively small compared to the whole customer service budget.
General Manager Randy Berggren said it would be worth taking time in the next year to look at opportunities at upgrading the call system. He noted that the current system was 13 years old. He said a new system would probably not address the specific problem in the next year but would help over time. He predicted that the change from a tiered rate back to a flat rate would generate an influx of calls that would have to be dealt with.
Ms. Andersen added that she would be glad to bring in a consultant to help with the numbers if that was the wish of the Board. She noted that it would take time to do the research and set up some different options.
Commissioner Bishop said if more staff was needed then more staff should be hired. She raised concern over making the issue too complicated. She added that it might be time to look at call taking during emergency events as well.
Mr. Varner said the cost benefit of a new call system would save as much as the cost of two FTE over the course of a year.
In response to a question from Ms. Andersen regarding whether the Board was comfortable moving forward with her recommendation, Vice President Lanning said the additional service reps were a bandaid and would not be the final solution. He expressed his difficulty seeing how a cost benefit analysis done by a consultant would help to improve the situation since he did not hear a strong recommendation from Ms. Andersen that a consultant was needed.
Ms. Andersen said the strategic plan called for developing an internet system where customers could pay online. She added that web base customer service would help during peak order times, citing the beginning of the school year at the University when the utility usually received 12,000 calls for ceasing or restoring service within a week.
Jim Origliosso, Treasurer, commented that the average time of a customer service call had increased. He said that the Board had implemented the most complex rate structure imaginable and customers were confused. He said the Board could help reduce costs by simplifying the rate structure. He said this would help with costs in the long run. He noted that this might cause other complications.
Vice President Lanning supported adding the five FTE but noted that more solutions would be required and expressed his support for examining internet billing solutions.
Commissioner Farmer commented that the Board should examine policy issues and not individual management issues. He said his focus would be on the total budget amount presented by the department.
Ms. Andersen noted that she was tracking twenty times as many complaints regarding the complexity of bills as she received three years ago.
In response to a comment from Commissioner Farmer that the budget had gone up 40 percent since 2001, Ms. Andersen noted that it was the increases in low income energy assistance, additional labor and customer service, and web initiatives that were the main drivers that had caused the increase.
Mr. Berggren said he would return with data to confirm the increases that the organization was experiencing.
Commissioner Farmer reiterated his confidence in letting managers deal with management issues. He said his concern was the overall budget amount.
Regarding low income rates, Ms. Andersen said there had been a staff recommendation for low income funding in the 2003 budget in the last memo to the Board. She said staff had recommended dropping low income funding from 2.5 million to 1.75 million dollars. She said the decrease in funding would flow back to commercial and industrial customers in the form of a rate reduction. She said the particulars of that rate action would be submitted to the Board as part of the rate case in Spring 2003.
Mr. Berggren commented that the issue of low income energy assistance was not given a lot of time during the discussion on tiered rates. He added that there had been a number of questions regarding the correct level of funding. He said one of the reasons that the utility had not spent the allotted $2.5 million for the year was because there was a limit of $300 per customer. He said the recommendation of the lower amount was a reflection of the amount of assistance disbursed during the current budget cycle. He noted that Charles Dalton did not agree with that recommendation and felt that the individual disbursal amount should be above $300. He said he had not been able to find a clear benchmark anywhere that was comparable to the level of low income energy assistance funding proposed by staff. He stressed that EWEB was higher than most utilities. He said the assistance program had an impact on large customers that were financing the program.
In response to a request from Commissioner Farmer regarding clarification of that impact, Mr. Varner explained that every commercial bill had 2 percent added to fund low income programs.
Mr. Varner said he was looking for two things:
1. What is the level of low income funding?
In response to a question from Commissioner Farmer regarding what large commercial customers were paying to the low income program, Mr. Varner said the largest customer paid $40,000 per month into the low income program. He added that the next largest customer paid $20,000. He said the large commercial customers were paying approximately 700,000 per year toward the low income program.
Commissioner Conte commented the utility had a broad responsibility to try to make affordable power available to all citizens. He said it was appropriate to charge a level percentage.
Mr. Varner noted that industrial customers were increasingly concerned over the cost of power.
Mr. Berggren noted that the utility used a rigorous cost of service methodology as a standard approach. He said the utility had historically worked with a no cost subsidy policy. He said the Board had to ask its self what is the expected subsidy from commercial customers to help residential low income rate payers.
President Anderson said commercial/industrial customers should contribute at least something but expressed a desire to examine a whole different process of low income rates.
Commissioner Bishop said she was not in favor of a low income rate structure. She questioned whether such a rate would be possible for the utility.
In response to a question from Commissioner Farmer regarding the percentage of the low income program funding provided by commercial/industrial customers, Mr. Varner said those customers were expected to pay about 60 percent of the fund.
In response to a question from Commissioner Farmer regarding how much that amount would drop if the $500 cap were implemented, Mr. Varner said the amount would drop from $1.5 million to approximately $1.1 million.
Mr. Varner called for Board input on how big the reduction in low income energy assistance funding should be and how broadly it should be spread over commercial/industrial programs.
Commissioner Bishop commented that the issue of low income energy assistance had been discussed under the context of discussion of in lieu of tax payments to the City of Eugene. She expressed a desire to have another discussion over the in lieu of taxes money that was paid to the City of Eugene. She said those payments should be reconsidered since the utility had no extra financial resources.
Mr. Berggren opined that the issues were disconnected. He said there were negotiations going on with the City regarding in lieu of tax payments. He said staff could return with more information but surmised that it would not affect low income program funding.
Commissioner Bishop stressed the importance of having a board level discussion on in lieu of tax payments to the City of Eugene.
Charles Dalton, Customer Relations Manager, commented that there were a variety of internal administrative issues that had slowed the low income energy assistance program during the previous year which had an influence on how much low income assistance funding had been disbursed.
In response to a question from Commissioner Conte, Mr. Dalton said 8,000 households were targeted but noted that approximately 6,000 were touched. He said there were multiple reasons why more people were not served.
In response to a question from Commissioner Conte regarding how many of those 6,000 hit the cap on funding, Mr. Dalton said approximately 75 percent of them had reached the cap. He noted that not all low income people actually asked for assistance. He cited senior citizens as an example and said that many of them were willing to forgo food or medicine to pay their utility bill rather than asking for financial assistance. He stressed the importance of tying an educational piece to financial assistance to teach people how to conserve energy and budget their money.
Debra Wright, Telecommunications Manager, added that the funding cuts would be in energy share. She commented that programs with an educational piece were working well.
In response to a question from Commissioner Farmer regarding the reasoning behind the $300 limit in the assistance program, Mr. Dalton said the amount was similar to the LEAP program as well as other programs.
Ms. Wright added that the previous limit had been $150 and had only been increased when the funding for the program had reached $2.5 million. She said the amount had been attempt to take all different types of low income energy assistance funding and reduce them to a common denominator which was funding per residential customer.
Commissioner Farmer said he was more in favor of programs rather than a separate low income rate.
Vice President Lanning commented that the utility should be on the high end of contributions to low income aid. He raised concern that the funding would be decimated.
John Yanov, Senior Rates/Financial Analyst, noted that there had been specific concern over tiered rates and low income
President Anderson said she wanted a low income rate because $300 did not address some customer's long range needs. She said a low income rate should go in conjunction with a return to flat rates.
Commissioner Conte said he had difficulty with a program that did not examine how it would affect customer behavior. He stressed the importance of any program having a well thought out self evaluation. He said he would support reducing the amount of program funding and using the carry over from the previous year in addition.
Commissioner Farmer expressed his belief that commercial/industrial customers should be contributing to low income assistance programs. He said he was also in favor of placing a cap on the contribution asked for. He added his opinion that the carryover from the previous year should be returned to customers since they had been charged and the money was not used.
President Lanning said he was not in favor of imposing a cap.
Commissioner Bishop commented that the money for low income assistance had not been spent because of the complications of setting up the program. She expressed a desire to see the carryover from the previous year put back into the low income assistance program.
Mr. Varner summarized that there was general support for a $1.75 million budget for low income energy assistance. He noted that he had feedback from three commissioners in favor of spreading the remainder of the assistance funds back to all customers and one in favor of giving back to commercial/industrial customers only. He said he would return with information about the impacts of a $750,000 cut to the low income energy assistance program.
The meeting adjourned at 12:30 p.m.
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Assistant Secretary President