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

Others Present: Jim Wiley, Debra Smith, Jim Origliosso, Roseanna McArthur, Marty Douglass, Tom Buckhouse, Mike Logan, Charles Dalton, Jay Bozievich, Lance Robertson, Mike Freeman, and Krista Hince of the EWEB staff; Ruth Atcherson, Minutes Recorder for the City of Eugene.

Vice President Bishop called the Special Board Meeting of the Eugene Water & Electric Board (EWEB) to order at 7:48 p.m.

AGENDA CHECK

There were no changes to the agenda.

PUBLIC INPUT

There were no members of the public who wished to speak at this time.

APPROVAL OF CONSENT CALENDAR

Minutes

1. Minutes of the April 6, 2004, Executive Session.

Business Service Agreements

2. Newmark International, Inc. - Coburg Substation, Transmission Pole Replacement - Electric Division

• Berry Architects - Final Design - Leaburg maintenance Shop - Electric Division
• Good Software Solutions - Backflow Database Support - Water Division

Intergovernmental Agreement

• U.S. Department of the Interior, U.S. Geological Survey - Source Protection Monitoring - Environmental Management - Corporate Services

Public Use of EWEB Facilities

• North Building Meeting Rooms - Re-doing application process to streamline use of facilities, making it easier to use and more user-friendly

Commissioner Menegat, seconded by Commissioner Farmer, moved approval of the Consent Calendar. The motion passed unanimously, 4:0.

ITEMS FROM BOARD MEMBERS

Commissioner Anderson reported that the McKenzie Watershed Council (MWC) had a meeting at which Laurie Power, who is currently retiring from EWEB, was recognized for her service on the Watershed Council. She explained Ms. Power had done much to help the council. She shared an article that had been included in MWC member packets about global warming entitled The West Goes Dry.

Vice President Bishop suggested staff make copies for all of the Board.

Commissioner Anderson related that the Northwest Energy Coalition (NWEC) had a lawsuit pending regarding fish in the Columbia River. They had asked if any members of the coalition wanted to opt out of the lawsuit and EWEB had chosen to opt out, because of work being done with other utilities.

In response to a question from Vice President Bishop, Commissioner Anderson explained that she would sign the letter as the Board liaison to the NWEC. Acting in the Absence for General Manager Randy Berggren, Electric Division Director Jim Wiley affirmed it had been checked by the General Counsel to EWEB.

Commissioner Farmer asked for feedback on the following issues, noting it was not important whether he received it in a backgrounder or another way:

• He wanted management's recommendation for what was being done with the Williams' settlement,
• Noting there were a number of news articles recently on possible Bonneville Power Administration (BPA) rate actions, he asked for staff's forecast on it.
• He wanted an update on what was happening with the issues raised by the Army Corps of Engineers (ACOE) regarding the project upriver, and
• He wished for an update on issues raised by the residents of the McKenzie Valley.

Mr. Wiley noted there would be a financial pro forma for the first three months provided at the next meeting that would include staff's forecast on BPA rates.

Vice President Bishop reported that she had spoken before a group of subcontractors and vendors.

Vice President Bishop commented that she wanted a Board discussion on the three-minute limit to public testimony. She thought this to be too restrictive at times.

Commissioner Farmer suggested the Board discuss time management within the context of its governance talks.

Vice President Bishop noted she would be attending the NWEC conference in a month in Vancouver.

CORRESPONDENCE

Mr. Wiley reported the following:

• The Board retreat had been rescheduled for May 17 and 18 and would be held on the top floor of the Hilton Hotel. Members of the Strategic Thinking Group (STG) would be present as well.
• Monthly meetings with the group up the McKenzie River Valley were beginning on Thursday, April 29, at the Vida Community Center. Thereafter, meetings would be scheduled for the third Thursday of the month through October.
• There were two slots available to hear the Governor speak before the Forum for Business and Environment on May 4, scheduled for 11:30 a.m. at the Multnomah Center in Portland.

Vice President Bishop volunteered to attend.

• There was a memorandum on the Memorandum of Understanding (MOU) on the purchase of land in the South Hills from the City.
• Continuing Goal 1, Strategy 1 work of outreach to the community, there were notes from Commissioners who had made attended neighborhood groups included in the Board packet.

Commissioner Anderson noted she would not be able to attend the Regular Board Meeting scheduled for May 4.

BOARD AGENDAS

Vice President Bishop commented that she had noticed the Work Session of June 15 had scheduled 90 minutes to review by-laws. She suggested another item be added to the agenda. Mr. Wiley responded that it was a governance issue and there would likely be others.

Assistant to the General Manager Debra Smith clarified that the Work Session had been in response to Commissioners' requests to take an in-depth look at the By-Laws. She said there was a perfunctory review each time a new Commissioner came in, but it had seemed that the Board wanted more discussion on them.

LOW INCOME PROCESS IMPROVEMENT PROJECT RECOMMENDATIONS

Ms. Smith stated that changes were being made to EWEB's Low Income Energy Assistance Programs and staff would ask the Board for action. She noted the information was included in a memorandum entitled Low Income Process Improvement Project Update. She reminded the Board that improvement of the low-income programs was an operating initiative within the General Manager's goal document and the proposal was formulated from information provided in the Quantec report. She said a compromise was being sought.

Customer Relations Manager Chuck Dalton recapped the proposal in the backgrounder that a "one-stop shop" concept be implemented primarily by eliminating the "walls" between the programs. He suggested that the program would be presented in a "menu format" that could be tailored to individual customers and would allow more flexibility in addressing customer needs.

In response to a question from Commissioner Anderson, Mr. Dalton assured her that other agencies would be handling the program and would be selected through a request for proposal (RFP) process.

Commissioner Anderson asked what was meant by a "consumption based incentive." Key Accounts Manager Mike Logan explained that it was a proposal for tracking the reduction of energy use as a result of energy education.

In response to a question from Commissioner Farmer, Mr. Dalton clarified that when a customer was enrolled in a Universal Service Program he or she had to pay an average amount per month, based on projected energy use at the outset, and if at the end of a year the customer was still in arrearage despite best efforts, this debt could be forgiven.

Commissioner Farmer asked if it the total cost for the low-income assistance, would exceed the budgeted amount. Mr. Dalton replied that it would not.

Seeing no more questions on the change to LIEAP, Ms. Smith moved the conversation on to the deposit policy. She related that staff had become increasingly aware of the hardship the policy presented to low income customers.

Mr. Dalton explained that deposits were calculated on two times the highest bill. A service organization group, the Housing Stabilization Providers of Lane County, had brought a proposal forward to change the deposit policy so that deposits were based on one month's bill. He commented that the deposit, as it stood, created a hardship on someone who already found difficulty in paying the bill in addition to two extra months for a deposit.

Commissioner Anderson commented that this change was necessary. She related that when she was serving as president, she heard from many low income customers who were in dire straits and unable to pay the deposit to reinstate their utility service.

Commissioner Farmer opined that it would add another tier to an "already over-tiered place." He was bothered by the idea of charging one person more than another. He added that deposits were utilized for sound credit reasons. He would, however, support applying some low income funds toward deposits.

Commissioner Menegat supported lowering the deposit for low income customers. He shared that he had received calls from people for whom the level of deposit required was beyond their grasp. He said he assumed staff had looked at the issue from the standpoint of fiscal responsibility.

In response to a question from Commissioner Menegat, Mr. Dalton explained that the historical highest billing month service period encompassed the previous year.

Commissioner Farmer asked if the finance department approved of this change. Customer Services/Field Services & Cash Collections Supervisor Mark Freeman responded that any changes made needed to meet the budget requirement. He added that sometimes two times the bill barely covered or did not cover what was owed as a customer was three months behind when the service was cut off.

Commissioner Farmer asked what the expectation was of how much bad debt expense would rise. Mr. Freeman replied that it would take painstaking analysis to adequately determine the cost. He thought there could be an impact.

Vice President Bishop shared Commissioner Farmer's concern regarding the change in a policy for one segment of customers and not another.

Mr. Wiley stated that staff was continuously looking for better use of administrative dollars and the proposed changes increased the effectiveness of this money.

In response to a question from Commissioner Farmer, Ms. Smith said that customers qualified for low income assistance when their incomes were at 60 percent of the median or less. She related that the policy spoke broadly enough that there was some flexibility with those numbers.

Mr. Dalton stated that historically the programs had been built to react to crises, which comprised the lion's share of assistance provided. He noted that the restriction that dictated a customer had to be on the verge of a shut-off order to receive assistance had been lifted and this had mitigated the number of deposits required. Still the population receiving Energy Share had a cyclical problem.

Commissioner Anderson expressed her preference for having everyone pay the lower deposit amount, rather than losing the possibility for lowering it to the low income assistance customers.

Vice President Bishop agreed that deposits at EWEB appeared to be too high. She recognized Mr. Freeman's contention that the amount of arrearage was often higher than this, but also acknowledged the financial bind the deposits sometimes created for people. She supported the first staff proposal to forgive the arrearage at the end of a year.

Commissioner Farmer asked how EWEB deposit requirements compared with those of other utilities. Mr. Freeman responded that, according to an article in The Register-Guard, EWEB was in alignment with other utilities and with what the Public Utilities Commission (PUC) described.

Commissioner Farmer asked if money was taken from the Energy Share to mitigate deposits that would result in less money to help program users. Ms. Smith affirmed there would be less, though using it for deposits would create more of a revolving fund as the money would ultimately be returned to EWEB.

Vice President Bishop took a straw poll of Board members to determine if there was support for using Energy Share money for deposits. Commissioners Anderson, Menegat, and Farmer supported it. Vice President Bishop registered her opposition.

Commissioner Menegat reiterated his support for changing the level of the deposit to the highest month utility bill in a year, rather than two months. He was prepared to take action.

Vice President Bishop opposed taking action as the agenda had not expressly specified that action would be taken.

Regarding late fees, Commissioner Menegat asserted that someone who could not afford the utility bill in the first place would not be in a position to pay additional fees.

Mr. Logan explained that a late fee had been identified as a proactive and preventative approach to billing as opposed to a reactive, e.g. final notice and shut-off notice, approach. He added that, based on the preliminary research, EWEB seemed to be an "exception to the rule" regarding late charges. He noted that Lane Electric Cooperative and Emerald Public Utility District both added a $5 late charge to overdue bills. He suggested that customer service representatives have the flexibility to waive the late fee for customers that make a good faith effort in paying their bill.

Ms. Smith said, in response to Vice President Bishop, that staff was looking for a "head nod" to pursue the formulation of a late fee policy, but sought action at a forthcoming meeting on the proposed changes in the deposit policy.

Vice President Bishop requested the latter be placed on the agenda for May 18.

Commissioner Farmer asked staff to determine how many people qualify for low income assistance so that he could be assured that using the funds for deposits would not cut other people from needed assistance due to financial constraints.

Vice President Bishop considered deposits and late fees to be connected. She felt a penalty for bad behavior had some benefit, but a penalty in advance of possible bad behavior was out of line.

Commissioner Farmer commented that late fees did not work and only made people angry. He asserted that a person who could not afford to pay the utility bill could not afford the late fee either.

Mr. Dalton indicated there was a connection between the late fee and the deposit issue. He felt the late fee provided some cover for the utility to provide more funding for deposits. He related that low income customers were more likely to take action on their own when they perceived the number they were asked to contend with was attainable. He asserted people in that position "tried harder" to resolve a situation. Should the customer perceive the number to be insurmountable, he or she was more likely to run from the bill or to behave badly, such as tampering with the meter. He cited, as an example, a customer who had to raise $200 in order to receive $300 from Energy Share. He provided the customer with numbers for resources to obtain the $200. Eventually she was able to raise $100 and St. Vincent DePaul provided the other $100 from a different fund.

BOARD GOVERNANCE

• External Communication

Public Affairs Manager Marty Douglass said the memorandum entitled Board Governance - External Communications Policy adequately covered the topic and highlighted the points covered. He felt a procedure should be formalized for customer letters, noting it was not called out in the suggested policy. He stated that, in practice, the measures before the Board were being used.

Commissioner Farmer suggested the third bullet point should include a formalization of the aforementioned procedure. He thought there should be a policy as well that provided a framework from which Board members could respond to spontaneous queries from the press. He expressed concern that the last bullet point, specifying that the Public Affairs staff would coordinate interactions with the news media, restricted such contacts.

Vice President Bishop felt this bullet point should be the first one and that it should be stated that it was appropriate within the context of the role of the Board to respond to the press.

Vice President Bishop asked, regarding the second bullet point, what would be considered to be "politically sensitive." She felt this judgement was subjective and, more so, that all workings of a public utility should be transparent.

Commissioner Farmer thought that the bullet point spoke to the value of the Board speaking to high visibility issues.

Commissioner Menegat did not feel comfortable approaching the media with the thoughts of the Board. He said it was his purview to voice his opinion and averred the Board's representative was the President.

Vice President Bishop recommended that the third bullet point be split so that the portion of the point that indicated commissioners may deliver speeches was separated. She felt the portion regarding commissioners being designated spokespersons in their areas of interest or expertise was vague.

Mr. Douglass replied that he envisioned an issue discussed in a Board meeting could be anticipated to attract media attention and in this case a Board member could be designated to respond.

Vice President Bishop disagreed, and asserted that the Board president should play this role.

Mr. Douglass said, in response to Commissioner Farmer, that another bullet point should call out the procedure for a Board member giving a presentation, such as those recently given to neighborhood associations.

Vice President Bishop commented that the fourth bullet point should not indicate that staff would spend a "limited amount of time" to review Board communications for accuracy. Mr. Douglass did not feel such requests would take time.

Mr. Douglass said he would work with this feedback and bring the draft back for Board review in email form.

Vice President Bishop opposed placing the item on the Consent Calendar.

Commissioner Farmer asked how this item would be measured and reviewed so that it would not become forgotten work. He recommended reviewing how the Board was operating under the policy.

Vice President Bishop deferred the second item of governance, New Commissioner Orientation, for another meeting. That there could be elements in the report that the Board should not share with the public.

ITEMS REMOVED FROM THE CONSENT CALENDAR

There were no items removed from the Consent Calendar.

Vice President Bishop adjourned the meeting at 9:32 p.m.

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Assistant Secretary President