Board Members present: Patrick Lanning, Ron Farmer, and Sandra Bishop. Commissioner Dorothy Anderson was excused.

Others present: Randy Berggren, Debra Smith, Jim Wiley, Mat Northway, Dick Varner, Marty Douglass, Marc Anderson, Ken Beeson, Terry Bequette, Roseanna McArthur, Tom Buckhouse, Dick Helgeson, and Krista Hince of the EWEB staff; and Ruth Atcherson, City of Eugene Minutes Recorder.

AGENDA CHECK

President Lanning called the Regular Board meeting of the Eugene Water & Electric Board (EWEB) to order at 7:52 p.m..

General Manager Randy Berggren noted that Agenda Item 7, McKenzie River Issues Update, had been covered in the Work Session. He also called attention to the memorandum he had provided the Board regarding an item which had been removed from the Consent Calendar that had sought Board approval for a consultant for the purposes of union contract negotiations, should they be needed later in August. He said that a corollary to this was a request that an item be added to the agenda to clarify an interpretive issue with the Oregon Revised Statutes (ORS), noting that he would be scheduling an executive session on July 15 to specifically address these issues. He stated that the general manager needed to be provided direct and clear authorization to negotiate labor contracts and that this would provide him a position of comfort to initiate the executive sessions, the purpose of which was to provide updates on staff work on the process. He noted that, as one item had been removed from the Consent Calendar, another item had been added to it, which would provide consent for a five-year contract with the National Wood Treating Company for wood pole inspection and treatment services.

There were no other changes to the agenda.

APPROVAL OF CONSENT CALENDAR

MINUTES

• Minutes of the April 15, 2003, Special Board Meeting, the May 6, 2003, Work Session and Regular Board meeting, the may 20, 2003, Work Session Minutes, and the June 3, 2003, Work Session and Regular Board Meeting Minutes.

BUSINESS SERVICE AGREEMENTS

• BSA Testing Services - Backflow Assembly Testing Services - Multiple Contractors - Water Division - $30,000 per year of $150,000 over five years

3. JCI, Jones Chemicals, Inc. - Liquid Chlorine - Water Division - $40,000 of product each year, for possible amount of $160,000 over the four-year period

• Virginia Transformer Corporation - Coburg Substation - Electric Division - $231,500
• National Wood Treating Company - Right of Way Maintenance - Electric Division - $40,000 total projected purchase, or for the five-year period, $200,000
• Montgomery Watson Harza (MWH) - Carmen-Smith Relicensing - Electric Division - not too exceed $1 million

Commissioner Bishop moved to approve the Consent Calendar as written in the revised agenda. Vice President Farmer provided the second. The motion carried unanimously, 4:0.

Commissioner Bishop moved to authorize the General Manager to enter into negotiations for union labor contracts. Vice President Farmer provided the second.

Commissioner Bishop clarified that this item was to remove any legal ambiguity in the ability of the Board to meet with the General Manager in executive session for the purpose of discussing possible upcoming issues and negotiations with union representatives.

The motion passed unanimously, 4:0.

ITEMS FROM BOARD MEMBERS

Vice President Farmer asked if there had been any response from the City regarding the request for exemption from the natural resource study that the utility had made. Mr. Douglass responded that there was not a formal reply, but that there had been indications that the City staff was looking on the request favorably.

Commissioner Bishop commented that she felt unsure as to what the board role would encompass in the union negotiations. Mr. Berggren replied that staff was looking into this and that the consultant had advised that the General Manager hold several executive sessions to firmly determine what this role would be.

Vice President Farmer reported that he and President Lanning had attended the APPA conference, held one week prior to the meeting. He related that all of the classes that he had attended had been on governance. He felt that there was a lot of valuable "food for thought" provided in the classes. He brought the instruction materials to share with fellow Board members.

President Lanning noted that former Commissioner Masterson's wife had passed away on June 28. He called attention to the card that was being circulated for Commissioners to sign to convey their condolences.

President Lanning commented that he had attended sessions at the APPA conference that had provided him a better depth and breadth of understanding of the energy systems around the United States. He also felt that the Governance sessions were helpful, with the exception of one.

Mr. Berggren reported the following items:

• EWEB will once again sponsor a water booth at the Butte to Butte Run on July 4. He noted that Commissioners wishing to participate in the run would receive complimentary registration.
• There was a backgrounder sent to Commissioners on June 9 containing articles from the McKenzie River Reflections on the activities of EWEB in the area.
• A memorandum from Jean Meyers was sent on June 23 to provide a status update on union organizing and who was in the bargaining unit. More information was forthcoming.
• A memorandum from Deborrah Brewer regarding the Downtown Plan Update being currently conducted had been provided to Board members.
• Debra Smith sent a memorandum on June 18, regarding the water rights extension process.
• Board members were provided with a memorandum from Dick Helgeson on the annual customer confidence report.
• Agenda topics to come before the Board included the Budget Planning Retreat scheduled for July 8, from 5:30 to 9:30 p.m. and was to begin the 2004 budget development process and also a five-year financial review. The tentative plan for the July 15 meeting was to include an executive session on bargaining, and the work session and regular sessions would include financial policies and the commissioner selection process. The August 5 agenda would likely include a discussion on BPA rates, an update on the General Manager goals, a Wanapa update, and an update on the process of selecting a new commissioner.
• A Board Governance Retreat was scheduled for July 28 and 29.

Vice President Farmer conveyed the Board's strong wish to hold the latter in a different environment.

PUBLIC INPUT

President Lanning called for public input.

Patrick Donnelly stated that he had been in contact with FERC and that he was speaking to EWEB because it was his only outlet. He opined that the EWEB management did not have any intention of cleaning up the slash piles by the McKenzie River. He asserted that EWEB was going ahead with other projects and not meeting their commitment to the McKenzie Valley community. He related the story of a community member who allegedly had his fence taken down and two poles installed without provision of permission to be on the property. He said that the fence had been left down. He asked who authorized such a thing. He stressed that area residents were very angry and felt that EWEB staff was not fulfilling any promises. He declared that area residents needed people who could provide honest answers regarding the situation in the McKenzie River Valley area.

John Simpson commented that he respected the feelings of the residents of the McKenzie Valley area and that he thought special attention should be paid to what had gone awry in the process there.

Mr. Simpson stated that he wished to discuss the automated outage system. He related that he had formerly been able to talk to a human being, but now the phone was answered by a computer. He remarked that this was "very dissatisfying."

Regarding the EWEB Web site, Mr. Simpson opined that it was attractive, but static. He recommended that EWEB hire an in-house Web manager. He thought that outage news could be mounted on the site as well as the current electrical and water load, Board agendas, and current events. He added that the Web site was also a great way to attain public input.

BOARD VACANCY PROCESS

Marty Douglass, Public Affairs Manager, reviewed the attachment entitled Board Vacancy Appointment Process. He noted that five inquiries into the Board position had been received thus far.

Members of the Board determined that the meeting to interview potential candidates would be held on July 25 at noon and the meeting for candidate selection would be held on July 31 at 5:30 p.m.

Mr. Douglass stated that there was time reserved during the meeting scheduled for August 5 to make the appointment and swear in the new Commissioner.

Mr. Douglass requested that Commissioners look over the interview questions used during the previous application process and provide feedback.

Vice President Farmer commented that the questions, as written, were adequate. He suggested that questions 3 and 5 be combined, along with a query as to how the role of the Board was perceived by the candidate, so that it read:

"What do you see as the role of an EWEB Commissioner? The Board? The General Manager?"

He recommended that candidates be asked what their vision would be for the utility as well. He also felt that, in order to ascertain the depth of a candidate's thinking, there should be questions on what issues the candidate perceived to be the most important, both in the present and in the future.

Continuing, Vice President Farmer recommended that the candidates submit three references, none of them from family, and a resumé.

Commissioner Bishop asserted that this was not a hiring process and should not be treated as a job interview. She commented that, had there been a requirement to furnish three professional references, Commissioner Anderson might not be serving on the Board. She said that she did not want to be exclusive. She advocated for striking the word "personal" from in front of the word "references." Mr. Berggren suggested that placing "please no references from relatives" in parentheses would address that concern.

Commissioner Bishop objected to reading resumés. Vice President Farmer called it irresponsible to appoint a Commissioner without a sense of his or her background. He stressed that the Board had a fiduciary responsibility to appoint someone who would excel in the position.

President Lanning felt that this sort of information could be ascertained from an expansion of the questions. He opined that, as this was not a hiring process for a job, a resumé was not necessary.

Commissioner Bishop requested that the second half of question 6 be stricken. President Lanning and Vice President Farmer indicated that they would support this.

Mr. Douglass stated that he would bring back a draft with 13 questions on it, including questions on the past, present, and future.

Commissioner Bishop expressed discomfort at the process.

Vice President Farmer reiterated that the process was to determine, first, whether the person was just walking in off the street or whether he or she could "hit the ground running" and, second, to gain understanding of the candidates' concept of what the future held.

President Lanning commented that the last interview process did not include enough questions. He felt that adding a little more retrospective was helpful in candidate evaluation.

Vice President Farmer suggested that candidates be asked what quality distinguished them from the other candidates.

ITEMS REMOVED FROM CONSENT CALENDAR

There were no items removed from the Consent Calendar.

President Lanning adjourned the meeting at 8:55 p.m.

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Assistant Secretary President