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

Others present: Randy Berggren, Jim Origliosso, Tom Buckhouse, Dick Helgeson, Debra Smith, Terry Bequette, Ken Beeson, Roseanna McArthur, Dick Varner, Mark Oberle, Lance Robertson, Deborah Brewer, and Judy Chase of the EWEB staff; Ruth Atcherson, City of Eugene Minutes Recorder, and John Simpson, Commissioner-elect.

President Lanning called the work session of the Eugene Water & Electric Board (EWEB) to order at 5:37 p.m.

Board Governance

• Policy Overview

Debra Smith, Assistant to the General Manager, explained that she had set forth a proposal for how the Board might organize the work that had been done and the work left to do. She related that she had met with President Lanning and had incorporated some of his thoughts into the proposal, as written in the memorandum entitled Board Governance and Policy Review dated August 12, 2004.

In response to Commissioner Farmer, Ms. Smith stated that the premise behind the Carver Approach was that it was a stacked or modular approach and each piece was dependent on the next piece. She said should the Board deviate from the end policies, which were the driving force, then the Board would lack the appropriate shared understanding that would allow the Board to proceed to the next piece.

Commissioner Farmer asked if the responsibilities of the Board, regarding contract review, were outlined in any resource document. Ms. Smith deferred the question until later in the discussion.

Commissioner Farmer requested a brief explanation on the statutory changes in the last year regarding local purchasing rules. Ms. Smith responded that some of the controls had been loosened and this posed to the Board the issue of how much it wanted to adopt. She noted that staff could adopt the simpler housekeeping rules without bringing it before the Board, but enough was changing that some of it would have to come before the Board for formal action. Commissioner Farmer pointed out that it appeared that it would be brought before the Board three times. Ms. Smith replied that Ed Case was working on rewriting it in order to bring it before the Executive Management Team for a first discussion on September 8. She stated that it would come before the Board for a 60 minute discussion on December 7. She predicted the substance of the matter would be addressed at that session and would be followed with separate nights for a public hearing and formal adoption.

In response to another question from Commissioner Farmer, Ms. Smith stated that through the Bylaws the Board gave all Human Resources authority to the General Manager and maintained the manager as its only employee. Commissioner Farmer felt the Board should review the policy. Ms. Smith agreed that it was time to review all of the policies.

Commissioner Farmer asked if there was a set schedule for review of the financial policies. Treasurer Jim Origliosso responded that there was not a set schedule, but the policies were generally reviewed when a new commissioner came onto the Board or when there was a need for a change. Commissioner Farmer commented that good governance seemed to indicate a regular schedule of review. Ms. Smith said staff wanted to identify the frequency that such review should occur.

Commissioner Farmer remarked, regarding the Mission/Vision/Values portion of the discussion, that he would not want to give up having a target or achievement that the utility was pursuing.

Commissioner Anderson commented that the Board needed to make a decision on whether it wanted to give up short less frequent meetings and place more responsibility on the shoulders of staff. She noted that the Sacramento Municipal Utility District (SMUD), the governance model of which the Board intended to review, had a great deal more meetings than the Board of EWEB. She added that the SMUD Board was paid for its service. She thought it presented a quandary to the Board as to how much time it wished to put into oversight of the utility.

Commissioner Farmer related that the chair of the Lane Electric Cooperative had provided a copy of their governance model, which he shared with Mr. Berggren. He said the Bylaws had taken them a long time to put together but had ultimately saved time.

Ms. Smith shared copies of a document from The Policy Place, an intranet site available only to EWEB employees.

Commissioner Farmer expressed a preference for delineation between policy and procedure so that it was clear which things were directives from the Board. Ms. Smith concurred, stating that policies were created through the Bylaws and procedures came from the General Manager.

Ms. Smith provided an overview of the schedule for policy review. She said she would provide Commissioners a disk of each of the policies the Board would review. She also offered to provide a copy of a memorandum written by EWEB attorney Win Calkin on the Board's responsibilities. In response to a question from President Lanning, General Manager Randy Berggren said there was no identified schedule for policy review at this time. Ms. Smith noted that customer service policies were inspected every time there was a rate action.

Commissioner Anderson expressed concern that too much time was being devoted to governance work. She was disinclined to spend as much time on the subject in the coming year. She felt there were pressing issues that required serious consideration of the utility's future and its priorities.

Ms. Smith noted that Power Resource Director Dick Helgeson would be bringing regular reports on regional developments for utilities. Mr. Berggren added that quarterly slots had been reserved to bring these reports before the Board.

Commissioner Menegat perceived the governance work to be "one-time" work that would form the basis from which the Board would proceed.

President Lanning suggested, in looking at the best possible use of time, that a subcommittee of Board members be formed to work with staff on background information so that it did not take the time and energy of the full Board.

Commissioner Farmer felt Work Sessions were missing Board-level philosophical debates on where the utility should be in the future.

President Lanning said he and the General Manager met to identify the agenda for Work Sessions and, for the most part, it was a staff-driven agenda as that was who best knew the needs of the organization. He felt the governance work sought to clarify the role of the Board and would ultimately help to guide future agendas.

Ms. Smith commented that staff, in response to Board direction, had attempted to have fewer presentations.

Commissioner Farmer asked if there was a subcommittee working on the General Manager review. President Lanning noted that Commissioner Menegat had expressed interest in participating on the subcommittee. It was determined by a coin toss that Commissioner Farmer would be the other subcommittee member.

ALTERNATE SITE TOUR FOLLOW-UP

Mr. Berggren discussed the attachment entitled Criteria for Alternative EWEB Site. He said a philosophical discussion on whether or not it was a good idea to separate administration and operations had yet to occur. He reported that McKenzie-Willamette/Triad would be coming back with another offer, but he did not anticipate much movement from the initial offer. He gave a brief overview of the time line, which he deemed challenging. He opined it would be difficult to find the appropriate site, determine its viability, and purchase it within six to twelve months. He added that, once a site was selected, other requirements could be impose should such things as boundary issues or wetlands mitigation needs arise through the due diligence process..

Commissioner Anderson said the 2^nd Avenue and Chambers Street had been her first choice until she had "pulled out the calculator." Her second choice was the Greenhill Road site. She felt it would be possible to have both the administrative and operative arms of the utility housed at there. She wanted more information on that site.

Commissioner Anderson said, in response to Mr. Berggren, that she could not absolutely state that she preferred having management and operations together or not. She recalled that, as a Planning Commissioner for Eugene, she had heard testimony regarding the current site that had indicated that the two should be housed on the same site. However, she did not entirely understand why it was more convenient to have the two at the same place.

Commissioner Menegat commented that management and operations would work well if housed at the same site or housed at different sites. His main concern was how the utility would fund $14 million. He felt all of the sites had something to offer, but the 2^nd Avenue and Bertelson Street site was perhaps the best. He thought the Roosevelt Boulevard site solved transportation issues.

Commissioner Farmer interjected that the former was his second choice.

Commissioner Menegat noted that one site had a 150 foot right-of-way through it. He was uncertain how the utility could place its building footprint on the property. Regarding the Greenhill site, he thought parcel 2 would be adequate for the operations, but that parcel 1 would also have to be purchased for administration. He wondered if this would surpass what EWEB could spend. Mr. Berggren said the property would meet the minimum for a combined operation, though a portion of the land would have to undergo wetlands mitigation. He thought it possible to locate the operations on that property and to locate the administration on the West 11^th Avenue site.

Responding to concerns regarding financing, Mr. Berggren recommended finding a funding strategy for the purchase. He did not think the utility should wait until it had a buyer for its current property and should plan in advance.

Commissioner Farmer preferred a combined operation. He liked the Clear Lake Road site, in part because EWEB already owned it. He predicted that the City was going to grow in that direction and that it would be possible to obtain a variance to develop the property outside of the City limits.

Commissioner Anderson pointed out that, in order to develop that property the County, State, and City would have to agree, as the land was currently zoned Agricultural.

Commissioner Farmer preferred the Weyerhauser/Brandis site over the Willow Creek site because the traffic had a better flow. He was concerned about the wetland issues that the Green Hill Road site posed. He liked that the Green Hill Road site was "shovel ready," but did not think there would be a lot of other development in that area. Mr. Oberle reminded the Board that the wetland mitigation had yet to occur at that site.

Commissioner Farmer liked the Speedway site, but said it was his fourth choice. Mr. Berggren commented that he had met with City Manager Dennis Taylor and Mr. Taylor had indicated the City would consider exercising its right to assert eminent domain for that site.

President Lanning said, from a 50-year point of view, that it was imperative to have the utility be as centrally located as possible. While the cost seemed immediately significant, he averred that the 2^nd Avenue and Chambers Street site was the best location for the utility's operations and management. His second choice was the Weyerhauser/Brandis site. If those were not possibilities, he expressed secondary preference for the Willow Creek site and the Green Hill site purely because they had good transportation access. He chose the Clear Lake Road site for his third option, for the same reasons Commissioner Farmer did.

Regarding whether to colocate operations and management, President Lanning felt the two parts of the utility should remain combined.

President Lanning agreed with Mr. Berggren that waiting for a buyer was not the most prudent approach. He supported forming and maintaining the funding strategy for the move and then proceeding with it, with consideration of the sale of the existing property as a separate issue.

Property Manager Mark Oberle shared staff's agreement that access was a key issue. He reported that staff members had driven to and from each site in order to determine which site had the best possible ingress and egress and access time. He noted that, though the 2^nd Avenue and Bertelson Street site was centrally located, the drive was slowed down by traffic and lights.

Commissioner Anderson noted that the Beltline Road was a "mess" after 3 or 4 p.m. in the afternoon. Mr. Oberle responded that staff had discussed transportation with the Oregon Department of Transportation (ODOT) and they had indicated that there was a plan underway to relieve some of the constriction now felt on the road.

Commissioner Farmer wished to clarify that he was "leaning" toward the Weyerhauser/Brandis site because of its location.

Commissioner Anderson said she was concerned with wetlands issues regarding the Greenhill Road site. In the long term, she felt the site on Clear Lake Road was the logical place to move to. She felt the Greenhill site had potential for becoming an ugly industrial site.

Mr. Berggren thought the preliminary site selection process had been fruitful as nine sites had been reduced to four. He suggested staff development of more information on the sites the Board indicated a preference for would assist the Board in moving forward.

Mr. Oberle said he wrote the questions down that staff needed to get answers to and would work on providing the necessary information.

Intergovernmental Affairs Coordinator Deborrah Brewer commented that the Region 2050 Study came out with three growth scenarios, all of which include a growth pattern in west Eugene that was similar. She noted the projected growth patterns included Alvadore and Junction City. She felt the possibility existed, though it was questionable, that EWEB would provide service to those areas in the distant future. Mr. Berggren responded that the opportunity existed, but that provision of service to those areas presented a challenge.

Ms. Brewer pointed out that the Lane Community College area basin was also an area that was projected to grow.

Mr. Oberle shared his surprise that no one indicated an interest in the Eden Prairie property. He noted it was shovel ready.

Commissioner Menegat wished to clarify the time line. He acknowledged that staff would provide the requested information and asked if the Board would then identify the property to purchase and conduct its due diligence. He noted that there would be a quorum in attendance at the next Board meeting, but one Commissioner would not be present.

Commissioner Farmer opined that EWEB should have a team of four or five people working on only this move. Mr. Berggren pointed out that it would cost money to do so. He said he would target the meeting for September 7 to bring back the information.

President Lanning closed the work session at 7:24 p.m.

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Assistant Secretary President