Board Members present: Dorothy Anderson, Patrick Lanning, Sandra Bishop, Ron Farmer, and Paul Conte.
Others present: Randy Berggren, Dick Varner, Jim Origliosso, Jean Meyers, Jim Wiley, Dean Ahlsten, Mark Oberle, Debra Smith, JoAnn Andersen, Roseanna McArthur, Mark Anderson, Dick Helgeson, Lance Robertson and Krista Hince of the EWEB staff; Ruth Atcherson, City of Eugene Minutes Recorder; and Kurt Yeiter, Planning Division, City of Eugene.
President Anderson called the Regular Board Meeting to order at 7:55 p.m.
AGENDA CHECK
Commissioner Conte requested that the Board address agenda item regarding compensation for the General Manager (GM) prior to the agenda item regarding the Master Plan update. The Board was amenable to the change.
APPROVAL OF CONSENT CALENDAR
BUSINESS SERVICE AGREEMENTS
President Anderson pulled the minutes from August 6, 2002 Work Session.
Commissioner Bishop pulled the minutes from the Board Planning Session held on July 9, 2002.
Commissioner Farmer, with a second from Vice President Lanning, moved to approve the Consent Calendar as amended. The motion passed unanimously.
ITEMS FROM BOARD MEMBERS
Commissioner Bishop thanked Jim Wiley, Electric Division Director, for taking Commissioner Conte and her on a tour of the plant at Walterville. She said that they had observed the people at work there and that they had learned about the fish screen. Commissioner Conte added that he appreciated the hard work that people do at the utility in the "muck and cold."
Commissioner Bishop noted that the conference on buying and selling electricity would be held on January 16 and 17, 2003, in Seattle. She said that she would be attending and urged the other Commissioners to attend as well.
Vice President Lanning related that the Lane Council of Governments (LCOG) had put out a request for recommendations for people to be lauded for their public service. He noted that former Commissioner Peter Bartel had served as chair for LCOG for a year and had contributed a "considerable amount of time" to both LCOG and EWEB. He suggested that EWEB submit his name. The Commissioners unanimously agreed to support this motion of recognition for Commissioner Peter Bartel.
President Anderson noted that she had read that Mat Northway (Manager of Energy Management Services) was now treasurer for the Northwest Energy Alliance Board. She also pointed out a letter received from Michael Mabon praising EWEB staff.
CORRESPONDENCE
General Manager Randy Berggren highlighted the following items:
PUBLIC INPUT
Kathleen Hastings, 1577 Bar M Drive, Eugene, expressed considerable frustration over the size of her bill, the deposit requirement, and the amount of time she had been given to pay it. She commented that it was unfair for the Utility Board to consider a raise in salary for the General Manager in the current economic climate. She also felt that EWEB spent too much money on catering for board meetings.
Commissioner Bishop asked for clarification as to what Ms. Hastings was seeking. Ms. Hastings replied that she would like to be reimbursed $179.16 for a deposit she felt had been unfairly required of her. Commissioner Bishop explained that EWEB was not able to provide cash reimbursements. She said that she would look into the situation for Ms. Hastings.
Commissioner Bishop noted, for the record, that Commissioners are not provided cash compensation for the time spent in meetings, but are provided with dinner.
2003 WORK PLAN/BUDGET
Fiscal Services Supervisor Dick Varner provided a review of the proposed 2003 electric budget, as had been outlined in the previous November 19 Special Board Meeting. He stated that the 2003 electric budget had a $21 million surplus in it and that this surplus, combined with the surplus from the current year would likely pay down the short-term debt and replenish most of the reserve that had been utilized to cover the energy crisis.
Mr. Varner noted that there are risk factors, the largest of which was that the rains had yet to begin in force. He said that the Bonneville rate action was another risk factor as it was unpredictable at this point. He added that the retail load, dependent upon how cold or hot it will be, was also a risk factor.
Continuing, Mr. Varner affirmed that the utility was currently "well-hedged," adding that there was a small risk inherent in hedging in that it was possible that a utility that EWEB was doing business with might not live up to their end of the bargain.
In response to a question from Vice President Lanning, Mr. Varner stated that the budget was still assuming that weather patterns will be normal. He noted, however, that stream flows in the Columbia Basin were the lowest on record for the months of October and November and that this was a cause for concern. He explained that should the utility experience a 10 percent reduction in generation, approximately half of the surplus would be eliminated.
Commissioner Bishop asked for clarification on the projected surplus. Mr. Varner responded that there would be $21 million more than what it would take to pay the "day to day bills." He said that it had been planned to generate substantial surpluses because there was $30 million in short term debt, of which $15 million had been paid down, and there was another $10 million in reserve replenishment to return to minimum reserve level. Commissioner Bishop noted that the budget translated to the utility being $4 million short of meeting all of its obligations. She stressed that the volatility on a quarterly basis was more than $21 million. She felt it to be inaccurate to portray the $21 million figure as a surplus.
In response to a question from Commissioner Farmer, Mr. Varner replied that the surplus covered the debt service.
Mr. Varner, addressing the water utility budget, explained that the largest mitigating factor was how hot and dry the summer of 2003 would be. He added that the capital budget for the water utility represented a three percent decrease. He said that this was due to the completion of the Hayden Bridge project.
Commissioner Bishop recommended that the Board look closely at the capital budget for 2004 when it was time to enter into the budget process as she felt that the utility had been under-funding its capital.
PUBLIC HEARING ON 2003 BUDGET
President Anderson opened the public hearing.
Seeing that no one present wished to provide comment on the 2003 budget, President Anderson closed the public hearing.
2003 WORK PLAN/BUDGET
Vice President Lanning asked what the ratio of employee to customer would be after current staff reductions and how that compared to the past ratio. Mr. Varner stated that the ratio would be 1:185. He said that the ratio had been 1:140 in the past. Mr. Origliosso clarified that the current ratio of staff to customers was 1:170.
President Anderson was pleased that the utility did not have to raise rates at this time.
Commissioner Bishop moved to adopt the 2003 Work Plan and Budget as proposed by staff. Commissioner Conte provided the second. The motion carried unanimously.
GENERAL MANAGER COMPENSATION
Commissioner Bishop felt it extremely important that the Board make a decision regarding compensation for the General Manager (GM) at the present meeting and then address any possible changes in the process at a future meeting. She stressed the importance of putting the larger issue into the queue so that it would not be postponed indefinitely.
Commissioner Farmer commented that compensation should have been addressed at the time of the performance review which had been conducted in June of 2002.
Commissioner Conte agreed with Commissioner Bishop.
Vice President Lanning said that compensation for the GM had to be tied to the assessment and compensation structure that was currently in place. He added that he was comfortable in making a decision at the current meeting, but that he wanted to address the issue of redesigning the overall process.
Commissioner Conte moved that the Board appoint a subcommittee consisting of Vice President Lanning and Commissioner Farmer to look at the structure of the General Manager assessment and compensation process and report back to the Board on its findings and recommendations no later than March 1, 2003. Commissioner Bishop provided the second.
Commissioner Farmer expressed reservations regarding the time line.
Commissioner Bishop moved to amend the previous motion to extend the deadline to April 1, 2003. Commissioner Farmer provided the second. The motion to amend the motion passed unanimously.
Commissioner Farmer, noting that neither he nor Vice President Lanning were experts in compensation, asked how much liberty they would have to draw on other resources. Commissioner Bishop commented that, when working on the supplemental compensation process, the Board had worked with a financial advisor. Human Resource Manager Jean Meyers thought it possible to request advice from Cardwell and Associates, with Board approval.
Commissioner Conte moved to amend the motion to direct the subcommittee to include a discussion with Mr. Berggren on compensation for the General Manager. Commissioner Bishop provided the second. The amendment carried unanimously.
President Anderson called for the question. The motion passed unanimously.
Vice President Lanning said that he was satisfied with the work that he and Commissioner Conte had done on the document with information for the Board regarding adjustments to the General Manager's compensation. Commissioner Farmer said that, for lack of another structure, he would support determining an adjustment in the compensation package in this manner.
Vice President Lanning related that he had rated Mr. Berggren as meeting or exceeding expectation in all categories of assessment.
Commissioner Conte discussed the Decision Process, as outlined on page 5 of the document submitted by himself and Vice President Lanning entitled General Manager's Compensation.
Commissioner Bishop conveyed her discomfort in raising the salary of the GM in the current rate and economic environment. She stressed that this had nothing to do with his value to the organization. She stated emphatically that she felt that he was "one of the best general managers in the region."
Commissioner Farmer commented that a one percent raise for Mr. Berggren would equal $1300. He felt that, when the budget included approximately $800,000 in salary increases for employees, a one percent raise for the GM would not impact the organization.
Vice President Lanning lauded the GM's performance in a year in which the utility had experienced extreme damages from a 40-year wind event and extreme fluctuations in the energy market.
Commissioner Conte recommended that the utility maintain parity with the 55th percentile of the industry standard for GM compensation.
President Anderson said that Mr. Berggren did not deserve to receive a zero increase in compensation for yet another year. She recommended that the Board vote for an increase of $2000 or $2500 to his annual salary.
Vice President Lanning stated that it had been "too long" since the GM had received a raise. He added, however, that he was not prepared to make a motion.
Commissioner Farmer stressed that the Board was obligated to match GM compensation with his evaluation. He said that he would support a raise.
President Anderson noted that a raise of $2500 was a raise of less than two percent. Vice President Lanning added that it had been two years since the GM was last awarded an increase in salary. Commissioner Farmer commented that this raise would not cost as much as the staff time that had gone into this issue.
Commissioner Conte reiterated Commissioner Bishop's concern that the public would perceive a raise in salary for the GM badly, but added that compensation should be based on the overall health of the organization.
Commissioner Conte moved to increase the annual salary for the General Manager by $400. The motion died for lack of a second.
Commissioner Farmer moved to increase the base salary of the General Manager by $2600, retro-active to July 1, 2002. President Anderson provided the second.
Vice President Lanning stressed that it should be clearly noted in the media that in the year preceding July of 2002 the General Manager was not given an increase in salary. He felt that the public needs to be aware of this. He said that it should be emphasized that the increase would keep EWEB close to market value for the position.
Vice President Lanning moved to amend the amount of the salary increase to $2000. Commissioner Conte provided the second. The amendment passed, 4:1, Commissioner Farmer voting no.
Commissioner Bishop stated that she would vote in opposition to the motion. She reiterated that, while the salary increase was a token amount, it would send the wrong message to the community in a time when people everywhere were having to tighten their belts.
Commissioner Farmer said that the increase represented .8 percent of the total compensation package and, as such, it did not cause him concern.
Commissioner Conte said that he would vote in opposition to the motion. He commented that, while the monetary amount did not give him pause, he agreed with Commissioner Bishop and further felt that the utility needed to fix the "comparability problem in the market."
The motion carried, 3:2, Commissioners Conte and Bishop voting no.
MASTER PLAN UPDATE
Mark Oberle, Real Property Manager, highlighted staff conclusions contained in the memorandum entitled Update of EWEB Master Plan that discussed the pros and cons of joining the process for the City's update of the Downtown Plan.
President Anderson expressed reservations about potential re-zoning of the EWEB river front property. Mr. Oberle requested that Kurt Yeiter, from City Planning Division, speak to her concerns. Mr. Yeiter said that future use of the waterfront would be controversial regardless of what EWEB chose to do. He explained that the Metro Plan was unclear as to how the land use changes would affect the EWEB property. He stated that the intention of the Planning Division was to remove the industrial zoning of the area, primarily of the former Agripac site, in order to begin connecting the river front to the downtown area, noting that there was a question as to how much development should be allowed on the river front. He opined that an urban waterfront scenario was unlikely to happen.
Continuing, Mr. Yeiter said that the first step was to update the plan and that rezoning would occur much later, perhaps even after EWEB had decided to move its operations elsewhere.
In response to a question from Commissioner Bishop, Mr. Yeiter stated that the EWEB site could be added to the Chiquita site (Agripac) in the land use process. He explained that the Planning Commission plus three members of the City Council, Mr. Meisner, Ms. Nathanson, and Ms. Bettman, were overseeing the process and making recommendations.
Commissioner Farmer asked what the timeline was. Mr. Yeiter responded that it was hoped that there would be a draft Metro Plan for the entire downtown area by April of 2003. He explained that EWEB could be part of the planning process or it could take time to prepare its own master plan and conduct its own market analysis and then submit it for approval as part of the Metro Plan. He noted that, should EWEB join the planning process already in motion, it was conceivable that the Board might not like the proposal that goes forward.
Mr. Yeiter clarified for Commissioner Bishop that the plan that was being updated was the Down Town Plan from 1984.
Commissioner Bishop commented that she would be for joining forces with the City Planning Division in this if she was certain that EWEB needed to be in the Metro Plan. She added that she had some reservations regarding whether this plan designation might restrict current EWEB operations.
President Anderson said that she was in favor of authorizing staff to include EWEB property in the City's process to update the Downtown Plan. She felt that it would facilitate getting equipment in and out of the former Agripac site.
Commissioner Bishop stated that there would not be resistance in the future in the Metro Plan and, as such, it was not necessary to render a decision on this at the present time. Mr. Oberle responded that staff needed to prepare a document in response to the City by January 14, 2003.
President Anderson asked if the process was binding. Mr. Yeiter responded that it was not a contractual relationship and the Board could choose to opt out at a future point.
In response to Commissioner Farmer, Mr. Yeiter said that the updated plan involved hundreds of properties and that the determining factor on whether a property was involved was its location in proximity to the area affected by the updated Downtown Plan.
Commissioner Bishop recommended that the Board instruct staff to attend the planning meetings. She said that, at this point, she did not feel that the Board was ready to enter into a Metro Plan amendment. She advised staff to put this item on a future agenda for further consideration.
Mr. Berggren summarized the discussion, stating that the Board did not seem ready to take action at this time and that more information was needed. He added that, for the present, there was no site to move to and no prognosis that EWEB would be moving soon.
Commissioner Farmer requested that staff get input on this issue from the EWEB legal counsel. Mr. Yeiter responded that the City had power to change the Metro Plan zoning for any property but that which was owned by another government entity, such as EWEB.
Facilities Director Tom Buckhouse said that staff would not proceed at this time, but that should anything of note arise, staff would report back to the Board.
ITEMS REMOVED FROM CONSENT CALENDAR
President Anderson noted that minutes of the Special Board Meeting held on August 6, 2003 were incomplete as Mr. Spettel's comments were not included.
Commissioner Bishop offered the following corrections to the minutes of the Board Planning Session held on July 9, 2002:
Commissioner Bishop noted that Commissioner Farmer was not listed as being in attendance at the Regular Board Meeting held on July 2, 2002, though he was sworn in at that meeting.
Commissioner Bishop moved, with a second from Vice President Lanning, to approve the items removed from the Consent Calendar, as amended. The motion carried unanimously.
The meeting adjourned at 10:40 p.m.
_____________ ______________________________________
Assistant Secretary President