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

Others Present: Randy Berggren, Jim Wiley, Debra Smith, Jim Origliosso, Roseanna McArthur, Marty Douglass, Mark Oberle, Tom Buckhouse, Mike Logan, Lance Robertson, Mark Freeman, and Krista Hince of the EWEB staff; and Eric DeFreest, General Counsel.

Vice President Bishop called the Special Board Meeting of the Eugene Water & Electric Board (EWEB) to order at 11:30 a.m. She noted that President Lanning would be late in arriving.

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.

President Lanning arrived.

INPUT FROM BOARD MEMBERS

Commissioner Anderson reported on the most recent NWEC Board meeting, saying nothing controversial had come up and all was well.

Commissioner Menegat said he attended the recent community meeting regarding the work to be done in Leaburg and Walterville. He said EWEB distributed refrigerator magnets providing emergency contact numbers to residents. There was considerable discussion about the projects and people appeared to be aware of what was happening. He characterized the meeting as very positive.

Vice President Bishop acknowledged the recent election of John Simpson to the Board with his term to being in January of 2005.

CORRESPONDENCE

General Manager Randy Berggren had no correspondence.

BOARD AGENDAS

Mr. Berggren indicated there were no changes to the Board's schedule.

SITE SELECTION CRITERIA

Mr. Berggren recalled the 2002 Hovey Study, which addressed the potential move of all or part of EWEB's facilities. The study concluded that it was in EWEB's long-term economic interest in relocate from the current site because of the constraints that existed on the site. The study also concluded that it did not make sense to make major investments in the existing site. Mr. Berggren believed the study's conclusions continued to be valid, and that EWEB should begin to develop a schedule for site selection.

Mr. Berggren said EWEB would do everything it could to minimize the costs of relocation on the ratepayers. He said a move would allow EWEB to improve the efficiency of its operations, and the study identified a significant level of savings from that increased efficiency.

Mr. Berggren reviewed the site selection criteria, stressing that they were basic and that there were limited sites from which to choose. He believed the site selection decision would be a qualitative as well as a financial one.

SITE SELECTION ECONOMICS

Mr. Berggren suggested that one issue to consider was the tradeoffs between location and price. The price of a downtown location was beyond what was projected for the cost of relocation. Generally, most available locations were in west Eugene, and they were more within EWEB's price range but were not centrally located. Staff had assessed typical travel times from west Eugene and it appeared there would be some lost time with locating to the west as opposed to a central location, at an estimated cost of about $100,000 to $200,000 annually. He suggested that, based on that estimate, EWEB could not afford to pay more than a premium of $1 million to $2 million for a central location before it became uneconomical. Subsequently, staff had shifted its focus from the central area to the west.

MCKENZIE-WILLAMETTE MEDICAL CENTER SITE DISCUSSIONS

Mr. Berggren showed the Commissioners renderings developed by McKenzie-Willamette/Triad Medical Center of a medical center at the current EWEB site. He said it was his understanding that the site, as currently zoned, would accommodate the hospital's minimal requirements. The hospital being proposed was slightly larger than would be needed initially. He believed there were some major access issues regarding the site that the hospital would have to address with the City of Eugene. Mr. Berggren said staff was proceeding with appraisals of the site to establish a value foundation before concluding discussions with McKenzie-Willamette/Triad.

Mr. Berggren said if the Board decided to proceed with the sale, EWEB would first move its operations to increase efficiencies. Once that occurred, the administrative functions would follow. He anticipated a three- to five-year process.

President Lanning solicited questions from the Board.

Vice President Bishop determined from Mr. Berggren that he anticipated administrative employees would continue to occupy a portion of the site while construction occurred on another part of a site. Vice President Bishop suggested that was not the optimal working environment for employees.

Responding to a question from Commissioner Anderson, Mr. Berggren said he was unsure of the parking requirements the hospital would face, but the renderings showed surface parking with about 1,000 spaces as opposed to EWEB's approximately 440 spaces.

Commissioner Farmer acknowledged the subjective nature of the criteria but urged caution in terms of the staff's assumption about the geographic center of the community. He said as growth occurred, that changed. He pointed out the current site was not in the geographic center of the community EWEB served. Mr. Berggren concurred.

President Lanning adjourned the Special Board Meeting at 11:55 a.m.

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Assistant Secretary President