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

Others Present: Randy Berggren, Debra Smith, Tom Buckhouse, Jim Wiley, Dick Helgeson, Roseanna McArthur, Jim Origliosso, and Krista Hince of the EWEB staff, and Ruth Atcherson, City of Eugene Minutes Recorder, and a member of the public.

INTRODUCTION

Assistant to the General Manager Debra Smith began the retreat by describing the process. She indicated that the work of the retreat was to inform the Board for the 2005 budget and beyond, as well as to do governance work. She circulated copies of a graph that delineated the EWEB Management Model; Conceptual Process Components and an Organizational Fitness model. She noted that the Board would hold a retreat again on April 20, 2004.

Regarding the latter, Ms. Smith stressed that the largest component of operational planning was the budget.

General Manager Randy Berggren remarked that the retreat represented a significant change in the way the Board and staff worked together.

President Lanning expressed concern that the Organizational Fitness model did not include the subjective piece, that of interaction.

Mr. Berggren felt that the part of the operational performance measures (OPMs) could be called out, such as the level of lost calls, meant that a level of subjectivity was included in the development of operational strategies.

Ms. Smith pointed out that the mission of the utility had to align with what was possible to market and that the internal structure of the organization had to align with the mission. She felt it imperative to identify areas of weakness. She passed out copies of a set of definitions entitled Strategic Planning Elements.

The Commissioners read the attachment.

Continuing, Ms. Smith stated that the focus of the retreat would be the market environment.

Ms. Smith discussed the role of the Board, as had been discussed at the retreat held in August, 2003. She said a strategic thinking group (STG), consisting mostly of supervisors and managers, had been formed in order to help the Executive Management Team (EMT) and Commissioners "think outside the process." She underscored that the Board should drive who the Eugene Water & Electric Board were and where it was going. In this respect, the development of the Mission, Vision, and Values was the work of the Board.

Ms. Smith stated that the April retreat would include an introduction to the STG, and that a third retreat would be held for only the EMT and the STG.

President Lanning supported this process.

Vice President Bishop asked how often this work would occur. Ms. Smith responded that 2003 had been a "big year." She recommended the Board return every year to this process and assess the results.

Commissioner Menegat thought it was a good process.

Commissioner Farmer agreed, and averred that this would put "things in action."

Mr. Berggren reiterated that the goal was to complete the strategy work "in front of the budget." He felt the work the Board was doing was "tying up loose ends" as it was clarifying the relationship between the Board and the EMT. He thought the governance work had been effective.

Ms. Smith introduced John O' Connor, who facilitated the following processes.

CONFLICT TOOL

Mr. O' Connor guided the Commissioners through the Thomas Kilmann Model. He stressed that the model represented indications of tendencies.

Vice President Bishop commented that the Board seemed very balanced.

Mr. O' Connor stated that the two basic skills within the Kilmann model were advocacy and inquiry. He explained that the advocates would put forth their own point of view and data, while those who were on the side of inquiry were more concerned with relationships and more focused on others. Both were valuable to an organization.

In response to a question from President Lanning, Mr. O' Connor said people moved from one aspect to the other all of the time. Commissioner Farmer opined that most people had gone through a number of profiles. He felt there was a basic operating mode and a default mode of behavior, which came into play when a person experienced stress.

Vice President Bishop noted that, according to the conflict resolution model, she and Commissioner Farmer were more likely to state their opinions.

Mr. O' Connor commented that, possibly, a better way of working through the issues would be to work through the opinions from others. Vice President Bishop remarked that President Lanning did just this.

CHECK IN ON COMPLETED GOVERNANCE WORK

Mr. O' Connor directed the Commissioners to look over the attachment entitled Board Governance; Agenda Management. He asked Commissioners to "check in on the process."

Commissioner Farmer related that when he had begun serving on the Board, it did not seem that the Board had any input into the agenda.

Commissioner Menegat concurred. He felt the Board had been driving the work and that, as a Board, the Commissioners had addressed the issues. He approved of the process whereby the General Manager (GM) and the Board President worked together to develop agendas.

Commissioner Farmer felt the process could be refined by fine-tuning the prioritization process. He advocated for a more strategic process using "big picture thinking."

Vice President Bishop thought the agenda was in a reactive mode. She felt the agenda setting process was going well, though she recommended taking a longer-term point of view and putting a placeholder on the agenda for the three or four items that might arise.

Vice President Bishop suggested the Board codify the Board President's role in agenda setting.

President Lanning stated that he had provided the GM with copies of the draft Board policies, which included the code of conduct and the role of the Board President.

Mr. Berggren stated that, for the first time, there was a sense of how the agendas were going to fall out over the next year. He added that there were several agenda items that would be arising in the next 12 months which merited a watchful eye. He opined it was difficult to "squeeze meetings down," adding that it would be interesting to see if the content could be at all changed. He noted that Commissioner Farmer had asked for more Board consideration of strategic issues and, though the Board was trying to curtail the second meetings, the next "special" meeting of the Board was already approaching four hours in length.

Commissioner Farmer clarified that when he spoke of strategic items, he intended it to mean policy items versus operational items. He felt there had to be some strategic thinking on what really needed to come before the board. He commented that the process the board had set out on, though it could be perceived as "painful" in the first year or two, would ultimately save time.

President Lanning agreed the board needed stronger governance. He stressed that there would always be Commissioners elected anew to the board and, as a result, there would always be a need for these sorts of discussions.

Commissioner Menegat recommended that there be some fluidity to the agendas. He was concerned that the Board could be locked into a structure that would be too rigid to allow for changes in the utility to be addressed.

Regarding backgrounders, Mr. Berggren asserted that it may be unrealistic to expect them to be ready three weeks prior to Board discussion of an item.

Ms. Smith noted that staff was trying to cover more material with backgrounders than before.

Commissioner Farmer suggested that, in the interest of expediting the meeting process, items that needed no Board action not be allotted time on the agenda. He felt the Board could ask for time to ask questions should the need be felt. He commented that, oftentimes, the backgrounders seemed to present positions that staff had already developed on an issue.

Vice President Bishop commented that staff's opinion on an issue was a resource more often than not. She noted that many backgrounders tell the Board what is being done on a specific item.

Commissioner Farmer remarked that staff should not spend huge amounts of time writing backgrounders.

Mr. Origliosso noted that one directive he had received was to provide direction or a recommendation to the Board in backgrounders.

Commissioner Farmer related that he had pushed harder for recommendations than anyone, but that he did not want staff to put a lot of energy into a recommendation if there was strong Board support for an issue.

Mr. Berggren thought the need for a recommendation should be indicated by whether an item was directly related to policy or related to something that was less concretely defined by policy.

Mr. O' Connor called for a 15-minute break. The group broke and reconvened to discuss the rules of conduct.

President Lanning suggested that the Board not spend time on the rules of conduct at the present meeting. He felt the discussion should be held when Commissioner Anderson could be present.

Vice President Bishop agreed that it did not make sense to discuss the rules of conduct at the present meeting. She commented that a discussion was needed, however, as there had been a "real-time violation" of the rules. She alleged that Commissioner Anderson had maligned her in a radio interview. She added that she had agreed to take part in a mediation facilitated by Mr. O' Connor.

Commissioner Farmer supported postponement of discussion of this item.

MISSION/VISION/VALUES

Mr. O' Connor asked to what extent the Board and staff were satisfied that the legacy guided EWEB.

Electric Division Director Jim Wiley commented that the utility should indicate to the residents of the McKenzie River Valley that they were represented, too. Mr. Berggren responded that the dissonance heard from that area had been ongoing for as long as he had worked as GM. He called it a share-holding concern, in that the citizens of Eugene owned the utility, even though it also provided service outside of the City limits.

Commissioner Farmer felt it was a benefit to the shareholders, but that a business was always run from the standpoint of the customer.

Vice President Bishop supported changing the language of the mission statement and possibly eliminating the last portion that indicated that part of the mission was to benefit the citizens of Eugene. She felt it would change the dynamics and would be less inflammatory to those customers who reside outside the City limits.

Ms. Smith suggested substituting the word community for the phrase 'citizens of Eugene.' Mr. Berggren asked to what degree economic development should be included in the mission of the utility.

Mr. Helgeson pointed out that, when selling power on the trading floor, there needed to be clarity that the benefit was to Eugene specifically and not to an unnamed community.

Corporate Services Director Roseanna McArthur stated that, in practice, the citizens of Eugene elected Commissioners and voted on bond issues. She thought removing the reference to the citizens of Eugene could negatively impact the utility.

Vice President Bishop commented that perhaps it was not so much a rewording of the mission statement that was needed as it was an issue of the Commissioners becoming more conversant in the distinction of the mission.

Commissioner Farmer stated, regarding economic development and the community, that trying to get power to the customers was the main goal of the utility. He averred this drove economic development. He was not certain economic development needed to be identified as a key element in the mission statement, adding that there was value in the provision of cost effective services. This, he said, was the driver of such development. Contextually, he noted one utility at the APPA convention had, to the shock of other members, added economic development to its mission statement.

Mr. O' Connor asked the Board to consider the Draft Legacy/Vision work that had come from the retreat held in August, 2003.

In response to a question from Vice President Bishop, Mr. Berggren explained that strategic environment indicated all arenas of power generation. Ms. Smith added that the Board had intended it to have longer-term connotations.

Regarding the last bulleted point under the heading Staff/Organization, Commissioner Farmer thought it would be more accurate to write it as follows:

"The organization should be is financially stable."

Mr. Berggren suggested, regarding environmental sustainability, that it simply say that EWEB is a friend of the environment. He underscored EWEB's sensitivity to and responsiveness to citizens' concerns regarding the environment. Regarding social issues, he pointed out the grant program and the low-income programs as examples of EWEB's commitment to social sustainability.

Mr. Helgeson commented that the tension was in planning for the short-term and the long run, as in the moment the utility sought to "batten hatches" in the face of the energy crunch. He stressed the importance of not losing sight of social and environmental sustainability.

Mr. Berggren recommended separation of social, economic, and environmental sustainability. He advocated for the definition of a process that would capture the dimensions of the question and then would measure it.

Mr. O' Connor polled the Board as to how they would choose to define this. Commissioner Menegat, President Lanning, and Commissioner Farmer supported breaking the three elements apart for separate consideration. Commissioner Bishop felt they should be considered and balanced together.

President Lanning commented that, for quantitative measurement, it made sense to address the three components separately, but that it was important not to lose sight of the balance.

Ms. Smith remarked that the difficulty lay in that, in consideration of the vision of the future of the utility, it seemed it should be measurable, while values were more difficult to measure. She said values represented who we are.

Mr. Berggren agreed with the concern expressed regarding the tension between long and short-term planning. He suggested the Board pay close attention to a new part of the customer survey on outputs. He felt this would help contribute to understanding community expectations from a statistical point of view.

Commissioner Farmer commented that the utility could change its targets from year to year based on economic tensions and not lose sight of its vision.

Mr. O' Connor surmised from the discussion that the Board wished to maintain the stewardship of the environment as a part of the vision. He suggested that two more statements be crafted to indicate EWEB's vision for social and economic sustainability.

Mr. Berggren offered the following statements:

• EWEB is concerned and is responsive to social issues related to the provision of water and energy service.
• EWEB's rates, fees, and charges are effectively priced so as to contribute to the economic well-being of the community.

Mr. Wiley asked where reliability fit in. Mr. Berggren said it was covered under customer outputs.

Mr. Helgeson pointed out there was a service dimension to the output. He elaborated, stating that it should include a quality of service delivery component in order to determine how people perceived the quality of engagement with us.

Mr. Berggren thought there should be a third bullet under customer outputs, so that it would encompass quality, quantity, and cost.

Mr. Helgeson felt quality of the customer experience was "the third leg of the stool."

Mr. Berggren responded that it would be difficult to discern, between quality, quantity, and cost, which contributed most to customer satisfaction.

Mr. O' Connor asked those present to look over the Eugene Water & Electric Board Organization Values Discussion from May, 29, 2003, and also the Subsequent Commissioner Input on the following page. He commented that some values were duplicated.

Mr. Berggren noted that public ownership was not a duplicated value.

Commissioner Farmer said he would be shocked if a Commissioner did not value this highly. He commented that the Board had no authority to decide to be privatized, as all authority embodied in the Board came from the City Charter. He thought it to be somewhat academic.

Mr. Helgeson remarked that public ownership was not necessarily an organizational value because if the utility did not deliver the power it would not have the value.

Ms. Smith asked if the priority list of values was an accurate representation. She noted that the book It's Your Future... Lead advocated for keeping the public in public power. She commented that putting the community first and showing the value of public ownership was more complicated than could be described in a few words.

Mr. O' Connor said that the legacy was the desired state and the values held let the Board analyze where they were in the course of pursuing that state.

Commissioner Menegat remarked that he had not been present and was not certain about some items on the list of organizational values. Mr. O' Connor suggested that staff bring information regarding public ownership to the Board.

Commissioner Farmer opined that he was unsure whether the Board should spend more time on this. He said the Board created its draft legacy/vision. He stated that, should the Board agree on it, it could choose to review and measure on whatever basis it so chose.

Mr. Helgeson remarked that he found useful the distinction between where the utility would go versus how it would act

Ms. Smith said she would compile the input from the retreat and bring it back to the Board.

President Lanning thanked Mr. O' Connor for his facilitation. The retreat broke for lunch at noon.

LUNCH BREAK - FIVE-YEAR FORECAST

During the lunch break, Commissioner Lanning reconvened the meeting.

Fiscal Services Supervisor Dick Varner joined the Board for a presentation of the Five-Year Pro Forma for the electric and water utilities. Speaking about the electric utility, he reported that the commercial paper had been paid off and EWEB had more than $20 million in reserves, $15 million of which staff was recommending be dedicated to the General Account. Debt service coverage was good although the debt load continued to be heavy and above desired targets. He hoped to achieve the targets in the next few years. He said at this time EWEB had limited ability to mitigate any adverse impact on customers that resulted from unforeseen events such as bad water years or uncertain power markets.

Speaking about the water utility, Mr. Varner reported EWEB had a good reserve position, particularly for capital. He reminded the Board that two-thirds of that was in systems development charge reserves that could only be spent on certain types of capital projects. It was not available for general use. The reserves gave EWEB some flexibility to address the demands of construction cycles. He said the debt load was modest with good debt service coverage. He said the capital reserves provided EWEB with the ability to get through two to three years of bad retail sales performance before an impact was felt. Mr. Varner anticipated biennial rate increases in the water utility of 5.5 to 6 percent.

Mr. Varner reported that EWEB had borrowed most of the money needed for the groundwater supply project and it was being held in reserve.

Mr. Varner identified the following issues related to the water utility: sales growth lagging cost escalation; size of capital reserves; and completion of the groundwater project.

Responding to a question from President Lanning, Water & Steam Division Director Tom Buckhouse confirmed that EWEB was moving forward with the groundwater project. Staff was currently working through issues related to water rights.

Commissioner Farmer asked if the debt service amount began to decline at some point in time. Mr. Varner said some debt went away in 2008, but there was not much reduction in debt service in the next 15 years because of the way debt was structured around the mini-bonds. Commissioner Farmer asked if staff created any scenarios in which expenditures matched revenue levels. Mr. Varner said not explicitly; EWEB would have to reduce expense growth to the one to two percent range, or it would have to find efficiencies on the magnitude of three percent annually, which would mean staff reductions, which was half the cost of the water utility. Mr. Helgeson said to keep the projection flat with no increases, the budget must be cut annually by $500,000. Commissioner Farmer suggested that rather than increasing rates biennially, staff could take a more "flat line" approach and increase rates three percent annually, tying the increase more or less to the rate of inflation. Mr. Varner pointed out that would be an increase that went beyond inflation, and would require the Board to go to the voters each year, which had political implications. Mr. Berggren said the Board had discussed the timing of rate increases in the past, but it could revisit the issue. Commissioner Farmer indicated interest in having that discussion.

Mr. Helgeson raid EWEB's rates were the third lowest among the comparable group in Oregon. He said if the Board wished to hold the rates flat for a period, it would have to change the underlying cost structure of the organization to avoid inflationary impacts. Commissioner Farmer asked if other utilities were in the same position of having to continue to raise rates because their costs exceeded their revenues. Mr. Helgeson said yes, unless the community was one with phenomenal sales growth. Even if the population grew at the same rate as inflation, per capita water demands did not tend to increase because of higher densities in an existing geographic area. Other utilities have had to raise rates to catch up with the capital needs not covered by systems development charges.

Vice President Bishop determined from Mr. Helgeson that staff believed wholesale prices may not be capturing the cost of providing the service. Mr. Varner added that there was some movement in the COSA to decreasing the differential between water districts and in-city customers.

Returning to the subject of the electric utility, Mr. Varner anticipated that EWEB would have less of a surplus than anticipated in the budget recently approved. He forecast several issues affecting prices and rates in the future, emphasizing the negative impact of volatility in out-year prices, the continuing volatility of the market, the impact of surplus sales revenue on financial performance (volume uncertainty, price uncertainty, hedging cash flow), the impact of sales growth less than nonpower cost escalation, the uncertainty of the timing of ending the surcharge, the utility's ability to meet rate targets, and Bonneville Power Administration cost stability.

Vice President Bishop determined from Mr. Berggren that the cost of the last relicensing process and turbine life extension was approximately $46 million.

Commissioner Farmer asked if the margin was being held constant throughout the five-year projection. Mr. Varner said the cost was largely fixed, with the exception of BPA. At this time, he was assuming the numbers EWEB received from BPA for the remaining years of the contract were fixed. Commissioner Farmer asked how that related to revenue. Mr. Varner said that was based on what market price was as of the last week. It was a forward price curve that ran out five years. He confirmed that it was a variable margin, and Mr. Berggren added it tended to vary a great deal. Commissioner Farmer confirmed with Mr. Varner that the revenue projections three years out were a function of both volume expectations and margin. Members and staff briefly discussed the difficulty of making projections given the many unknowns regarding the future. Commissioner Farmer suggested the potential of planning for a downsize, or more conservative case, scenario, and allocating any additional dollars above that.

Vice President Bishop did not believe that downsizing was the correct approach. She called for upsizing. She believed EWEB should put more into its reserves as the organization was squeezed as much as possible, and she did not believe the solution would reduce personnel. The additional reserves were needed to address the issue of extreme volatility. Commissioner Farmer said that his concern was not about expenditures but about revenues, and acceptance of the revenue projections given volatility.

Mr. Helgeson suggested the potential of a rate stabilization fund.

Mr. Varner noted that in the upcoming year the Commissioners faced another set of strategic choices in determining EWEB's power portfolio, and how that should be structured relative to the retail load. In addition, EWEB would need to determine how exposed it wanted to be to the wholesale market. Mr. Helgeson noted the adoption of the last Integrated Energy Resource Plan, which created lower cost power supplies but introduced a degree of volatility that was challenging to deal with. Mr. Varner observed that EWEB's penchant for renewable resources meant there was more variable volume in what was received from the resource. EWEB could purchase the environmental benefit but paid the price in volatility and exposure to the year when the resource did not produce what was expected on average. Mr. Varner said the resources introduced more volatility in the financial picture that was less easy to hedge.

Commissioner Farmer determined that Mr. Varner was including hydro in the list of renewables.

Mr. Lanning called for a brief meeting break.

MISSION/VISION/VALUES

Ms. Smith distributed evaluation forms and asked the Commissioners and Executive Management Team members to complete them, and to note with a B or an E if they were a Board or Executive Management Team member.

Mr. Berggren previewed the agenda for the April 20 retreat, and indicated that he hoped to build on today's efforts and to have codified goals by the second day of the retreat as the groundwork for the Board's strategic planning effort. He expected there to be a high degree of continuity between the Board's last set of goals and its new goals.

Board members and staff divided into small groups and brainstormed strengths, weaknesses, opportunities, and threats in the following categories for the long-term (five years): social, economic, technological, environmental, political, and internal. Following the small group exercise, Mr. Berggren reported out the results for Group A, Mr. Wiley reported out the results for Group B, and Mr. Helgeson reported out the results for Group C, as follows:

Group A (Commissioner Menegat, Randy Berggren, Tom Buckhouse)

Political

SMD/RTO - Deregulation/FERC

State Water rights

Revenue/funding shortfalls - city/County/State

New City Manager/council/Changeover/Annexation

Undergrounding of facilities

Economic

Medical costs/health care

Continuing impacts recession in Organization/Northwest/Jobs

EWEB's rising cost of doing business (Ins.)

Wholesale power market volatility

Readiness for another large water consumer (economic view)

Technological

Broadband power line carrier

Commercial cost of distributive generation coming down (photo voltaic)

Too much information available (social/tech)

Technical - Security

Environmental

Global warming/pacific Northwest Generation

Low Emission vehicles

Groundwater contamination/well fields

Increasing reporting/monitoring safe water drinking act

Fish on Columbia River

ESA on McKenzie (Fish)

Social

High percentage of Low Income customer in Eugene/County

Influx of immigrant/changing cultural, expectations/needs

Aging population/baby boomer bubble

Social revolution - rich - richer poor-poorer

Shifting attitude toward conservation costs of services

Growing dependency of people on the systems/tendency to use the system

Increasing fears/concerns about public safety/terrorism

Increasing complexity of life and decisions on the basics

Internal

Union

Reserve needs

Increasing complexity/amount of work

Bench Strength

Carmen-Smith Relicensing

Board change over

Master Plan/site acquisition

Generation/Power supply uncertainty

Power sales Credit/Risk

Power Supply Portfolio (WANAPA)

Level of Capitol Investment/Aging Infrastructure

Group B (President Lanning, Jim Wiley, Roseanna McArthur)

Social

Aging customer base generally aging population

Increasing diversity in community

Information age allowing people to communicate more quickly - lots of data available

Increase in low-income population; bigger gap between have's and have nots.

Educational system suffers with lack of public funds

Fear-based culture

Lack of new jobs

Economic

Health care costs; cost of labor

Volatility of energy costs

Influence of global economics

People's ability to pay; commercial and industrial rates higher than rate of inflation

BPA impact on regional power costs

Mergers and acquisitions - corporate vs. public

Ability (financial) to develop new resources

PERSONAL Financial performance of utility industry - credit worthiness of trading partners

Technology

More energy required to power technologies

Distributed generation vs. investment in distribution system

Consistency of distributing system design

Telecom - role, leverage investment

Population that expects to communicate via internet

Leverage power of Internet

Maximize use of technology to allow redeployment of human resources for more value added

Mobile technology - date acquisition, mapping etc.

Environment

Global warming

Increased regulations

Laxing of environmental regulations

Volatility of hydro-generation - no more permits

Columbia Rive ESA biological opinions

Water rights

Awareness of "sustainability"

EMF's

Conservation - need, cost, acquisition

Political

Joint ventures with other entities (our ability)

Continuation of renewable tax credits

Energy acts

Proliferation of fear-based culture

Changing local politics

NAFTA - outsourcing - overseas

Impact of August 2003 blackout

Changing board 2004-05

Polarization of world view

City takeover of EWEB

Internal

Aging work force

Knowledge of ability of segments of workforce

Attraction and retention of work force - budgetary constraints

Move off of current site

Not enough investment in technology, infrastructure

Doing well with fewer people

Work more complex

Old EMT going to MARS - senior succession planning

Budgetary constraints in training and development

Group C (Vice President Bishop, Commisisoner Farmer, Dick Helgeson, Jim Origliosso)

Economic

Fluctuation in economy

Recession

Economic recovery?

Local vs. national (world)

Jobs and measurements showing strong economy; disconnect

Wages level of pay versus number of jobs

Purchasing power/standard of living/ability to pay

Middle class is shrinking (disappearing)

Rich

Poor - greater divide - haves and have-nots:

Education - divided

Manufacturing

Government and service sector jobs

Overseas

Interest rates (going up)

Environment and Economic

Choice to live in Eugene

Technology allows people to work here

Increased diversity

Ethnic

Income

Age - population aging in general

Technical changes and advances could have large impact

Outside five year view (20 years more realistic)

Distributed generation - noncentralized

Photo voltaic - et al. immature - won't be driving force within five years

EWEB to lead or follow

Environment and Economic (continued)

Infrastructure

Technology vs. cost

Technology change accelerating rate of Change

Internet technology and other computer technology

Customer expectations higher because customers are

getting technology advance services at other businesses

Delivery of services

Telecom - will result in automatic

GIS Mapping and facilities - meter reading

Enhances function of field/operators

Integration off functions will follow integration of systems

Management - allows integration of information

EWEB traditionally has under use of technology (information technology)

Relicensing decision i.e. Investment

Danger of going down wrong road e.g. hydro vs. fuel cells

Changes in work of rates

Technology

Development costs - who pays for what?

Turnover on board

BPA structure/politics of regional contract vs. national

Transmission and related regulation

RTO, FERC jurisdiction, etc.

Wholesale markets, too

Polarization swing from conservative to less so

Locally - continued diverse of view points

City Council? EWEB/City issues persist--undergrounding; in-lieu of taxes; water issues;

headquarters site; hydrants; control issues

Board's role in social support mechanisms related; low-income/education grants to utility service

Internal

Turnover of senior staff/employee base

EWEB's association/riverfront development operating/e.g., sitcom system; power supply (IERP);

relicensing

Union contracts

Board governance codify

Building parsim cost

Environment

Water rights - pressure generally (political and EWEB-specific (external/wells)

Headquarters site - coal gas site - disposition

Pressure to remove dams

Coburg power plant? Impacts?

Steam system and plant

Vice President Bishop left the meeting at 2:25 p.m.

Ms. Smith reviewed the themes in the work done by the small groups, and indicated that staff would produce a consolidated list of issues and condense duplicates. Then work would begin on a fitness assessment. She said the outcome would be a series of statements about improving the organization. She solicited suggestions for themes that had arisen in the small group work. Commissioners and staff mentioned financial stability, volatility, the BPA contract, EWEB's role in the local economy, Board transition, and the increasing diverse customer base.

The meeting adjourned at 4:08 p.m.

_____________ ______________________________________

Assistant Secretary President