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

Others present: Jim Wiley, Dick Varner, Debra Smith, Mel Damewood, Tom Buckhouse, Lance Robertson, Mark Freeman, Steve Stuart, Brad Taylor, Rich DeLuna, Teresa Siemanowski, Rick Riley, Nancy Cook, Dawne Howard, Catherine Gray, Jennifer Mellone, and Krista Hince of the EWEB staff; John Simpson, Commissioner-elect:; Rick Lindholm, Consultant; Ruth Atcherson, City of Eugene minutes recorder.

Vice President Bishop convened the work session of the Eugene Water & Electric Board (EWEB). President Lanning and Commissioner Farmer were excused.

1) Customer Service Survey

Mark Freeman, Customer Services/Field Services & Cash Collections Supervisor, introduced Rick Lindholm of Lindholm Research. He explained that a survey had been initiated to determine the level of satisfaction with customer service and had focused specifically on the start process. The reason the start process had been the subject of the survey was that it was the call on which service representatives spent the most time with customers. He reported that the rate of survey participation had been 75 percent, which was considered outstanding.

Mr. Lindholm provided an overview of the EWEB Customer Service Survey, June, 2004, Final Report. He stressed that throughout the survey, EWEB had performed better than expected. Mr. Freeman added that it had been thought that deposit requirements would impact satisfaction, but those surveyed reported higher levels of satisfaction than had been predicted.

Commissioner Anderson asked if results would have been different had the survey been conducted in September when university students were returning to the City. Mr. Lindholm suspected it might have been better, though there was no sub-sample in the survey that did not give the process high ratings.

Electric Division Manager Jim Wiley commented that the Executive Management Team (EMT) had reviewed the results and were amazed at how good they were. He opined that Mr. Freeman and his staff had done a great job of improving the quality of the customer experience.

Commissioner Menegat thought it was a result of an intentional focus on customer service. He attributed it to hiring good people.

In response to a question from Vice President Bishop, Mr. Freeman stated that 43 employees worked in the cashier service.

Vice President Bishop asked if the survey would become an annual process. Mr. Freeman responded that staff wanted to make it a repeatable process, but that no schedule for such a survey had been determined. He added that a survey conducted on the collections department would likely bring in different results.

Board Governance - Customer Service Philosophy

Mr. Freeman showed a power point slide that indicated the members of the team that worked on the Customer Service Philosophy and the number of years they had worked for the utility. He said the team had determined it should be called the EWEB Service Philosophy so that it would represent all of the utility. He described the process by which the team had created a strategy that all of EWEB could use in interactions with internal and external customers. He thought the best strategy would be used as a benchmark and also as a way to bring all of the employees together.

Teresa Siemanowski, Financial Services Management Assistant, explained that the background memorandum dated October 19, 2004, and entitled EWEB Service Strategy provided a more detailed overview of the process. She said it had been a collaborative approach over the course of many meetings, meetings that were governed by ground rules agreed upon by everyone. She related that the process had drawn on group perceptions of EWEB's assets and its drawbacks and also from the results of the customer survey.

Mr. Freeman shared the EWEB Service Strategy:

Mr. Freeman thought those words were the beginning of many sentences that could resonate throughout EWEB. He related the team's feeling that it brought in reliability, bound the employees together as an organization, and spoke to all of the things the utility did.

Rich DeLuna, Distribution Engineering Technician, said he had initially been skeptical about this exercise. After learning more about the endeavor, he felt it was a great idea. He likened the process to making good food from a recipe.

P. Steve Stuart, Energy Services Specialist III, said the team extrapolated from the customer survey that reliability was their chief concern. He felt it encompassed trustworthiness. He noted that it meshed with every point of the EWEB mission statement. Ultimately, he related that the team had unanimously arrived at the strategy. He added that it passed "the coffee cup test," i.e. fit neatly on a coffee cup.

Vice President Bishop expressed her delight at hearing from the EWEB employees involved in this endeavor.

Mr. Freeman said an implementation plan for the service strategy would be created, beginning at the end of October. He reported that a presentation would be made to sponsors and an employee expectation paper would be generated. He showed, with slides, some ideas of how the slogan could be added to the EWEB logo.

Mr. DeLuna commented that the strategy applied today and would apply 20 years from now.

Commissioner Menegat conveyed his appreciation for the process.

In response to a comment from Commissioner Anderson, Mr. Stuart explained that he and Nancy Cook, Customer Service/Credit and Collections Coordinator, taught a class at EWEB called Service Ambassadors, the purpose of which was to encourage employees to be pleasant and approachable and to impress upon them that they represent EWEB in all things they do.

Ms. Siemanowski shared that in the brainstorming process this was a recurring theme.

Vice President Bishop thanked the team for the work they had done.

WATER MASTER PLAN

Mel Damewood, Water Engineering Manager, introduced Brad Taylor, Water Resource & System Planner, and project manager for the Water System Master Plan. He recapped the previous presentation to the Board, noting that staff had sent Commissioners three subsequent memoranda regarding water supply, raw water intake, and the aging infrastructure. He and Mr. Taylor provided a power point presentation, the purpose of which was to provide the opportunity to discuss in detail the proposed master plan strategies prior to Board action, scheduled for December 21.

Mr. Taylor commented that the recommended service strategy was apropos for the water supply, as everyone wanted to rely on it. He stated that the utility had an obligation to maintain the water supply in the short and long term. He discussed the development of a groundwater supply from the confluence wellfield as a backup resource to the McKenzie River water source.

Regarding funding, Mr. Taylor said staff would return before the Board to provide more detail on the financial components of the master plan. He noted that the Board had authorized bonds to fund the groundwater project in 2002. He stated that $12 million was authorized, $10 million had been issued, and the utility was currently paying approximately $400,000 in interest on that money. He reported that, in 2007, the utility would begin making principal interest payments of $860,000 per year. He brought the numbers before the Board to point out that it was 2004 and less than $1.5 million had been spent on the project, the utility had run into significant hurdles, and as a result, it was "sitting on a considerable amount of money." He pointed out that bonds were 100 percent funded by customer rates.

Mr. Taylor reported that the utility had acquired one property and two permanent easements for the wellheads and additional facilities. He opined it was more beneficial to purchase the properties than it was to delay, though the conflict with the Springfield Utility Board (SUB) and the Rainbow Water District (RWD) had yet to be resolved. He underscored that water rights were first-come-first-serve and EWEB would not be able to just go in and develop the wells. He said SUB and the RWD had yet to be convinced that EWEB wanted to work with them. The EWEB water right application was currently on hold and, as a result, the design and construction was on hold, too.

Mr. Taylor stated that EWEB had an existing water right claim on the Willamette River that predated Oregon water law, written in 1909, and had not been used since 1927. He related that staff was uncertain whether it would still stand up in a court of law. He also expressed concern that the Willamette River could raise other issues of water safety and standards, though several other communities drew their water supply from the river with little or no problems.

Mr. Taylor reported that the utility was "bumping up against" the Hayden Bridge Intake Facility's capacity. He predicted that it may require enlarging the facility, which would impact rates and staff time.

Commissioner Anderson suggested that SUB and the RWD may be more cooperative if they could better understand that the relationship between EWEB and them could be mutually beneficial as EWEB could supply water to them, should they ever be in a bind.

Commissioner Anderson asked how a toxic spill on the McKenzie River would affect the groundwater that SUB and the RWD drew from. Mr. Damewood replied that the groundwater flowed in to the river and there would be little or no seepage into the wellfields. He stated that staff was trying to impress upon the other water utilities that EWEB would be willing to back up their water supply. He added that EWEB required 20 to 30 million gallons per day.

Commissioner Menegat asked how the proposed power generation plant in the City of Coburg would affect the wellfields. Mr. Damewood responded that it would not, as it had a surface water rights via the McKenzie River through an irrigation channel. He said it would pose some competition for surface water. Mr. Taylor commented that it was unclear how the power plant would address this, but he was aware that the developers of the plant were forming a relationship with the Muddy Creek Irrigation Association which held a right that was senior to EWEB's rights on the McKenzie River.

Vice President Bishop asked if EWEB sold water to the RWD. Mr. Damewood replied that the RWD had its own wellfields and sold water to SUB. He added that there existed an inter-governmental agreement (IGA) with the RWD, SUB, and EWEB regarding a specific temporary exchange station located near 31^st Street in Springfield that had been constructed to counteract a toxic plume exuding from Weyerhaeuser Company.

In response to a question from Vice President Bishop, Mr. Taylor stated that when the test wells had originally been drilled and tested it was determined that development of a well to provide 30 million gallons per day would significantly impact the other wells utilizing the confluence wellfield. Mr. Damewood stated that the original permit had sought to develop a well with 15 million gallons per day capacity, but that it had been reduced to 12 million gallons per day based on test results.

Vice President Bishop asked if it would be feasible to work out agreements in which EWEB stressed its intentions of keeping SUB and the RWD whole. Mr. Damewood responded that they were at least coming to the table because they saw some possible benefits.

Mr. Taylor pointed out that the water supply had been fully appropriated.

Vice President Bishop asked for elaboration regarding the water rights on the Willamette River. Mr. Taylor replied that the adjudication was years off and claims that were potentially senior to EWEB's would have to be brought out in the courts. Vice President Bishop noted that water claims were being sold. Mr. Damewood affirmed that they were, adding that EWEB could potentially go out and seek the purchase of other water rights on the Willamette River.

In response to another question from Vice President Bishop, Mr. Varner explained that the bond authority had been relatively specific regarding the uses it could be applied to. He did not think it likely that it could be spent on anything too "far afield" from groundwater.

At Vice President Bishop's request, Mr. Taylor clarified that, while the term 'supplemental production' was vague, the secondary water source was intended to provide emergency backup to the McKenzie River source.

Commissioner-elect Simpson asked a question from the audience, if EWEB was restricted to drawing the water from the Willamette River at the EWEB site. Mr. Damewood said there was a small amount of latitude from which the water could be drawn from, but it had to be drawn from the same area described in the original water claim, which was in the vicinity of the site.

Mr. Damewood showed slides of the intake facility at Hayden Bridge, which required modification to its intakes that were projected to cost $8 to $9 million. He said the current fish screens violated the velocity rule four months out of the year. He also said there was a sweeping velocity violation in that there was no sweeping velocity to aid fish to come away from the screens and the screens did not have fish return facilities. He reported that the master plan recommended modifications to the intakes and the only way they could be afforded would be through bonding. He stated that EWEB was gathering data on the level of impact to the fish that the intake had. Staff recommended being proactive and studying the impacts, then developing a plan and schedule to meet the criteria and enter into an agreement with the agencies in charge.

Commissioner Anderson conveyed her whole-hearted agreement with staff's recommendation. She opined that anything to keep the Oregon Department of Fish and Wildlife (ODFW) happy would be to the benefit of the utility.

Mr. Damewood highlighted some of the issues that aging infrastructure was presenting to the utility. He added that he would be providing a backgrounder on what EWEB had to support new development, with regard to the master plan, that would be coming onboard between the present and 2025.

Vice President Bishop noted that there had been a lot of breaks in the water system and wondered why that was. Mr. Damewood responded that there had been a lot of media coverage of the breaks, but engineering was looking into it. He theorized that there had been pressure transience in the system due to the new pump station at Hayden Bridge. He also noted that there had been other issues with street sweepers and other entities opening and closing hydrants quickly which sometimes caused "water hammer."

Vice President Bishop asked if it was possible to track liability and get reimbursement for extra costs when the fault was not EWEB's. Mr. Damewood replied that, when possible, EWEB did so. He added that staff was working with the City of Eugene Fire Department and others to educate them so that they would not shut off fire hydrants abruptly.

Vice President Bishop commended the response to these water breaks. Mr. Damewood said EWEB had been very diligent about mapping the water system so that it was very easy to locate valves.

Vice President Bishop adjourned the meeting at 7:20 p.m.

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Assistant Secretary President