AGENDA

EUGENE WATER & ELECTRIC BOARD
SPECIAL BOARD MEETING
(EXECUTIVE SESSION)
EWEB BOARD ROOM
JANUARY 12, 2004
(rescheduled from January 6, 2004)
5:30- 6:30 P.M.

  1. Pursuant to ORS 192.660(1)(d) to conduct deliberations with persons designated by the governing body to carry on labor negotiations - Randy Berggren, General Manager (60 min.)

WORK SESSION
6:30-7:30 P.M.

  1. Bonneville Power Administration's (BPA) Settlement and Slice Stipulation Agreements - Jim Wiley, Director of Electric Division and John Yanov, Senior Rate/Financial Analyst (60 min.)

SPECIAL BOARD MEETING
7:30 - 9:30 P.M.

  1. Agenda Check (President Lanning)
  2. Approval of Consent Calendar (Items will be approved by one motion and without discussion. If discussion is required, specific items will be removed from the Consent Calendar and considered separately.)
  3. Items from Board Members (5 min.)
  4. Correspondence (5 min.)
  5. Board Agendas (10 min.)
  6. Public Input
  7. Election of Officers for 2004 (15 min.)
  8. Appointment of Board Liaisons (15 min.)
  9. Commissioners' Priority Issues for 2004 - Board of Commissioners/Randy Berggren (Presentation - 10 min./Discussion 45 min./Information)
  10. Items removed from Consent Calendar

    Consent Calendar
    January 12, 2004

    RATIFICATION OF BOARD CONSULTANTS

    MINUTES

    1. November 18, 2003 Work Session and Special Board Meeting, and the December 2, 2003 Regular Board Meeting, and the December 16, 2003 Executive Session

      BUSINESS SERVICE AGREEMENTS
    2. Cornforth Consultants - 2003 Carmen-Smith FERC Part 12, Inspection and Safety Report - Electric Division. The existing contract with Cornforth Consultants, Inc. (CCI) needs to be amended to include additional work scope and a contract time extension. The proposed amendment would increase the value of the contract by $94,501 and change the contract not-to-exceed amount to $139,825. Board approval of the proposed contract amendment with CCI is requested to complete the required scope of work. For reference, elements of the additional contract scope are noted below. Funds to complete the contract will come from the existing 2003 budget for Job #23855 accrued to 2004 and an additional $67,767 that has been budgeted for this job in 2004.

      In January 2003, EWEB entered into a contract with CCI to perform FERC dam safety tasks for the Carmen-Smith Hydroelectric Project. The contract value was not-to-exceed $45,324 for the scheduled 2003 Part 12 Safety and Inspection Report as required by the FERC guidelines at that time.

      In May 2003, FERC requested that EWEB perform the upcoming inspections and reports in accordance with a new FERC Part 12 program and reporting format. The additional scope of work in this program included: i) conducting a Potential Failure Mode Analysis (PFMA) review and workshop; ii) preparing a baseline document (Supporting Technical Information document, STI) describing the key project features and summarizing the latest engineering analyses on specific issues; and iii) preparing the dam safety inspection reports in accordance with a new format and outline as specified by FERC. EWEB agreed to perform the dam safety review and report in accordance with this latest FERC request. EWEB has also received FERC approval to delay the submittal of the 2003 Carmen-Smith Part 12 Safety and Inspection Report to July 1, 2004. Contact person is Larry Billhartz, 484-2411, ext. 3215.
    3. Nixon Peabody LLP - Bond Counsel Services - Financial Services Division. A Request for Proposal (RFP) was used to survey the market and to determine which legal firm could best represent the utility as Bond Counsel. The RFP was advertised and solicited in accordance with State of Oregon Public Contracting laws and EWEB adopted rules. Proposals were received on Monday, October 27, 2003 and publicly opened and recorded. Five legal firms responded: Orrick Herrington & Sutcliffe LLP/Cable Huston of Portland, OR; Preston Gates & Ellis LLP of Portland, OR; Hawkins Delafield & Wood of New York, NY; Foley and Lardner of San Francisco, CA; and Nixon Peabody LLP of New York, NY. The proposals were evaluated and proposals ranked in accordance with the evaluation criteria described in the RFP. Nixon Peabody LLP was identified as the highest ranked proposer to replace Floey Lardner as the Board Appointed Bond Counsel.

      This initial contract, if approved, will be for three years with an option, at EWEB's discretion, to renew for two additional one-year periods. Nixon Peabody will be retained and used on an "as needed" basis. The exact annual expense amount is unknown; staff estimates that services will be approximately $200,000 each year, a possible total contract amount of $1 million over the five-year contract period. Costs of services will be unevenly divided over the five-year period. $53,000 has been budgeted for 2004 to cover costs that cannot be reimbursed out of 2004 bond proceeds.

      Staff requests that the Board appoint Nixon Peabody as the utility's Bond Counsel. Bond Counsel will be evaluated and their appointment ratified annual in the Board Appointed Consultant Evaluation Report. Contact Jim Origliosso, Customer & Financial Services Division Director, 484-3753.
    4. RSCI (Meridian, Idaho) - Carmen Turbine Cavitation Repairs and Butterfly Valve Upgrades - Electric Division. On September 16, 2003, the Board authorized EWEB staff to enter into a $127,708 contract with RSCI for Carmen Smith turbine and butterfly valve repairs. The contract amount was based on an estimated scope of work and unit prices were requested for additional work discovered during the outage. The actual contract costs will exceed the base bid amount by approximately $54,600 (42.75%) thereby requiring additional Board authorization. Staff believes this additional authorization is justified and correctly reflects the additional contract work scope encountered under difficult site conditions. Funding for this increase was provided under Job #23845 in the 2003 budget Since the work was completed at the end of 2003, funds to pay this remaining work will be accured from the 2003 budget to 2004. Most of the increased contract cost was associated with additional repair tasks on the two 114" diameter butterfly valves. The epoxy repair method chosen to refurbish the valve seats, in place, was labor intensive and had to be done under difficult conditions due to leakage in the Carmen Power Tunnel. The valve seats were extensively worn due to 21 years of increasing water leakage and corresponding erosion/cavitation damage. Other significant change order costs associated with the butterfly valves were as follows:

      •       Repairing cavitation damage in the butterfly valve bypass piping
      •       Replacing two (2) 1-1/2" isolation valves and associated piping due to 40 years of corrosion damage
      •       Re-adjusting the packing box and gland box on the #2 butterfly valve trunnions.
      •       Extra work and safety precautions associated with routing leakage around the butterfly valves.

      Contact person is Larry Billhartz at 341-1848 or E-Mail Larry Billhartz
    5. Devine Tarbell & Associates, Inc. - Stone Creek Hydroelectric Project Environmental Monitoring and Compliance - Environmental Management and Electric Division. Contracts for Environmental Consulting Services were awarded in 1994 and again in 1999 to Devine Tarbell & Associates, Inc. (DTA). DTA has been providing EWEB environmental consulting services in support of on-going requirements of our Stone Creek Hydroelectric Project's FERC License and State Water Right Permit. Major work items include: stream guage monitoring and maintenance to assure compliance with in-stream flow requirements, expanded Corydlis (sensitive plant) monitoring based on an approved revised sampling plan, technical support to EWEB in project coordination and negotiations with U.S. Forest Service and ODFW, and monitoring and compliance reporting. Cost of the contract is $100,000 for two years.

      Contractor personnel have a long history with Stone Creek Hydroelectric Project an dprovide unequalled experiece and expertise regarding environmental compliance at the project. Key personnel, such as the project manager and botanist/ecologist, have been under contract to EWEB since 1994 when EWEB took ownership of the project. In addition, prior to EWEB ownership, key personnel worked on original licensing studies and license compliance issues for previous owner. Long-term monitoring of flow and sensitive plant status are key on-going license compliance requirements. Contract has developed and implemented existing sampling plans and thus is uniquely qualified to continue this on-going work. Contact person is Tim Downey, 484-2411, ext. 3304.
    6. Mid-State Industrial Service Inc. - Parking Lot Sweeping and Sump Cleaning Services - Facilities Services - Corporate Services Division. In September, 2000, a solicitation was issued for parking lot sweeping, sump pump cleaning and the cleaning of roadways at construction sites. The bid was advertised in the Register-Guard and offers were received and evaluated in accordance to Oregon Public Contracting requirements and EWEB adopted rules. In October, 2000, the Board approved award of a contract to Mid-State Industrial Services, Inc., for an estimated total contract amount of $160,000 for five years (through October, 2005).

      These services; however, are obtained on an "as needed" bases. Work is defined by monthly and hourly rates depending on the work required. The contract is in its third year and usage has been higher than expected. One of the unexpected costs is the additional work associated with pole replacement work that is needed to proceed on a timely basis with the National Electric Code corrective work (i.e. PUC). In addition to cleanup services associated with the PUC work, Mid-States provides a vacuum truck to expose what is buried at the dig site to avoid damaging underground services in the area.

      Staff requests the Board approve continuation of the contract and the addition of funds "as needed" in order to accomplish the work as it may arise. Approval would be based on requirements and not on any specific dollar amount. Staff estimates annual expenditures to be approximately $72,500 a year, or $145,000 for the remaining two years on the contract. Funds for these services have been budgeted for in 2004. Contact person is Charlie Morris, 484-2411, ext. 3223.
    7. Pioneer Power Systems - Coburg Substation - Electric Division. The construction of Coburg Substation began in October, 2003, and the project completion is scheduled for the fall of 2004. Delivery and installation of the switchgear is scheduled for summer of 2004. The 2004 Electric Capital Budget includes $230,000 for purchase of this switchgear. Current market conditions resulted in very favorable bids.

      In December, 2003, bids were solicited for a 15kV, 2000A metal-clad switchgear for EWEB's new Coburg Substation. Ten proposals were received. Bids were evaluated for compliance with minimum requirements and compliance with terms and conditions of the bid. Pioneer Power Systems, Inc. was the lowest responsive-responsible bidder. Electric Engineering recommends award of a contract to Pioneer Power Systems, Inc. in the amount of $154,354. Contact person is Dean Ahlsten, 484-2411, ext. 3210.

      INTERGOVERNMENTAL AGREEMENT
    8. Lane County Human Service Commission - USP/Reach Low Income Programs - General Manager's Division. On January 1, 2002, an Intergovernmental Agreement (IGA) was executed with the Lane County Human Services Commission to assist EWEB in the development of the USP and Reach 2000 programs. Lane County has the resources and expertise to manage these programs, so they were asked to administer the programs from their inception. This is the second time this IGA will be extended. However, as part of the low-income program evaluation, we intend to put program administration for these and other low-income programs, out to bid in spring of this year.

      Staff requests Board approval to extend the IGA with Lane County through December 31, 2004. Expenditures are anticipated to be $240,000 and is included in the 2004 Budget. This contract extension will fund the budgeted amounts for USP and Reach for 2004. Contact person is Debra Smith, Assistant to the General Manager, 484-2411, ext. 3102.