EUGENE WATER & ELECTRIC BOARD
SPECIAL BOARD MEETING
EWEB BOARD ROOM
OCTOBER 29, 2004
12:30 P.M.

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

Others present: Jim Wiley, Debra Smith, Dick Varner, Lance Robertson, Mel Damewood, Tom Buckhouse, Marty Douglass, Mark Oberle, and Krista Hince of the EWEB staff; and Ruth Atcherson, Minutes Recorder for the City of Eugene.

Vice President Bishop convened the Special Board Meeting of the Eugene Water & Electric Board (EWEB) 12:54 p.m. after the Executive Session was adjourned.

AGENDA CHECK

There were no changes to the agenda.

PUBLIC INPUT

There was no one present who wished to speak at this time.

APPROVAL OF CONSENT CALENDAR

Minutes

• September 13, 2004, Special Board Meeting.

Business Service Agreements

• SelecTemp - Temporary Services - Corporate Services - $2,780
• Wesco Distribution, Inc. Molded Rubber Products - Electric Engineering, Electric Division - $466,739
• University of Oregon Solar Monitoring Lab - Monitoring and Analysis of Solar Radiation - Energy Management Services Division - Power Resources Division - $125,000

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

ITEMS FROM BOARD MEMBERS

There were no items from Board Members.

CORRESPONDENCE

Electric Division Director Jim Wiley reported the following:

• The employees appreciated the Commissioners' attendance to the SHARP award presentation on the previous day.
• The Founding Fathers of Conservation and Energy Efficiency meeting was scheduled for November 4 in Portland. He noted that EWEB was a sponsor for the meeting and reminded Board members that the deadline for submitting their intentions to attend had passed two days earlier. Vice President Bishop stated that she and Commissioner-elect Simpson would be in attendance.

BOARD AGENDAS

Mr. Wiley highlighted the agenda for the meeting scheduled for Monday, November 1.

OFFER TO BUY PROPERTY AT ROOSEVELT BOULEVARD AND BELTLINE ROAD

Assistant to the General Manager Debra Smith explained that staff was mostly interested in answering any questions that the Board had regarding the property and potential purchase agreement.

Property Manager Mark Oberle said EWEB had reached a signed purchase agreement, which would enter the utility into the due diligence phase of the potential purchase. He stated that the agreed upon price was $1.6 million, with $600,000 to be paid upon closing and $1 million to be financed by the seller over a ten-year period. He underscored that due diligence allowed the utility to exit the agreement should any problems with the property be uncovered.

Master Plan Project Manager Mel Damewood reported that staff had issued a request for proposals (RFPs) from three engineering firms on October 20. He noted that the utility had 120 days. Included in the work, he explained, would be a geotechnical assessment of the soils to determine what kind of foundation would be necessary to build and an environmental review. Regarding the former, he said the types of soil would determine whether the utility would have to drive piles for a new building, which would substantially increase construction costs. He stated that boundary surveys were being conducted, as well as topographic surveys to determine drainage. He noted that a wetlands delineation would be looked into to determine the level of wetlands mitigation that would be required.

Additionally, Mr. Damewood said vehicle access and other issues specific to conducting EWEB business at that site and anything that would impact construction were also being explored and should anything be deemed unsatisfactory, EWEB would discontinue the purchase agreement.

Commissioner Farmer asked what the history of the property was. Mr. Oberle replied that it had been a mill site. He said, in response to a second question from Commissioner Farmer, that a pond was located on the property from the mill. He added that whether the wetlands were natural or a result of how the property had been used was uncertain, but given the location, it was likely that it was natural.

Commissioner Farmer asked, should the utility decide to build on the property, if there would be any extra acreage. Mr. Oberle replied that surveying would provide the information needed to make a site plan.

Mr. Oberle stated, in response to Commissioner Farmer, that staff had not reached the level of detail at which the amount of parking there was room for at the new site was known.

In response to Vice President Bishop, Mr. Oberle clarified that the per acre price for the wetland mitigation bank cost was $50,000 per acre.

Vice President Bishop asked how long the due diligence phase would take to complete. Mr. Damewood replied that it was hoped that an engineering firm would be hired by November 16 and that a draft report on the findings on the property would be completed by late December or early January. He predicted that any potential deal breakers would be uncovered by then.

Vice President Bishop wanted to make it clear that the purchase of this property had been part of long term master planning since 1998 and did not relate to negotiations for a potential land sale to the hospital. Ms. Smith confirmed that the property purchase was completely independent activity from the need for financing or what might be built there. She stressed that the shortage of industrial land in this area made this purchase a logical step to take and that the property was a good parcel and was within the budget.

Vice President Bishop asked where the financing would come from. Ms. Smith replied that the down payment would come out of the working cash reserve and then the rest would come over time. She added that there was some bonding capacity. Fiscal Services Supervisor Dick Varner clarified that the plan was to bridge the gap with money out of the cash account and then reimburse that account with bonding authority funds. He said in following years the money to pay for the property would be built into the budget each year or the money might ultimately come from bonding.

Vice President Bishop wished to stress that the utility was not going out for a bond, but was pursuing its existing bonding authority the utility had for many years. She reiterated that the property purchase was "just a step along the process that the utility had been gradually working through since the Master Plan work" and that this was moving the utility along a logical path.

Mr. Oberle added that there was a "slight" tie between the potential purchase of the property under consideration and the possible sale of the current EWEB site to the hospital, in that, should the property not work out for the utility, a condition was built into the potential agreement with the hospital allowing the utility to pull out. Vice President Bishop acknowledged this, calling it a "reverse on ramp."

Mr. Damewood said again that the report on the due diligence would be presented at the meeting scheduled for November 16.

Vice President Bishop adjourned the meeting at 1:15 p.m.

_____________ ______________________________________

Assistant Secretary President