EUGENE WATER & ELECTRIC BOARD
REGULAR BOARD MEETING
EWEB BOARD ROOM
DECEMBER 7, 2004
7:30 P.M.
Board Members present: Patrick Lanning, Sandra Bishop, Dorothy Anderson, Mel Menegat, and Ron Farmer.
Others present: Randy Berggren, Jim Wiley, Debra Smith, Dick Varner, Dick Helgeson, Jim Origliosso, Tom Buckhouse, Marty Douglass, Ken Beeson, Mat Northway, Terry Bequette, Mark Freeman, Brenda Sirois, Deborah Brewer, Jim Maloney, and Krista Hince of the EWEB staff; Ruth Atcherson, Minutes Recorder for the City of Eugene; and John Simpson, Commissioner-elect; Joe Harwood, representing the Register-Guard; Frank Nearing, representing KLCC, new crew from KEZI; and members of the public.
President Lanning convened the Regular Board Meeting of the Eugene Water & Electric Board (EWEB).
AGENDA CHECK
General Manager Randy Berggren announced that the meeting would begin with a small celebration in honor of Commissioner Dorothy Anderson's more than 14 years of service as a Board member of EWEB. He conveyed EWEB's tremendous appreciation for her dedication and outstanding service to the Eugene community. She was presented with a commemorative clock and a Discovery Brick was purchased in her honor in the new Riverplay Skinner's Butte Park playground. She received a standing ovation from all those present.
Commissioner Anderson said her years had been very enjoyable and had presented interesting challenges. She commented that the last few years had been difficult as no one wanted to have to increase rates. She had thoroughly enjoyed working with the staff and Board members and thanked the EWEB staff and Eugene voters for their support.
Vice President Bishop thanked Commissioner Anderson and said it had been a privilege to work with her.
Mr. Berggren invited everyone present to have cake and punch in her honor.
PUBLIC INPUT
President Lanning opened the Public Input portion of the meeting and outlined the rules for testimony.
David Hinkley, EWEB customer, stated that there were two pieces of property with motivated buyers and both in the hands of organizations that did not need to sell the property immediately. He pointed out that the Williams Bakery property contained less property and sold for nearly twice as much. He opined that if the people negotiating on behalf of the EWEB land were as good as those negotiating on behalf of the bakery EWEB would be able to sell the property for $76 million. He asked the Board to please reconsider its approval of initial negotiations with McKenzie-Willamette/Triad (MW/T). He felt the money was not there. He encouraged EWEB to tell MW/T as soon as possible that it needed to either look for more money or to look for a different property. He also thought more public involvement was needed.
Bob Cassidy, EWEB customer, thanked Commissioner Anderson and Vice President Bishop for taking a closer look at the proposed negotiations with MW/T. He commented that there was much uneasiness in the community about building a large hospital on land next to the river. He related that he had testified before the City Council on the previous evening and had conveyed his opposition to subsidizing a private institution with public money. He also had suggested to the council that the EWEB building be converted to a new City Hall. He said Mayor Jim Torrey had responded during the council comment period that the EWEB property would not pay property taxes if it was the City Hall.
Doug Newton, EWEB customer, agreed with Abraham Lincoln that one could not fool all of the people all of the time. He opined that whenever the Eugene City Council wanted something, it tended to "fabricate" reasons for doing it. He felt that suggesting that a large hospital move downtown was naive. He recommended EWEB take a blueprint of the building to a reputable contractor and see if it could be built for the amount of money MW/T was offering for it. He thought that if the move was a great idea, the people would vote for it and that they should be allowed to do so. He noted that the land had been owned by the utility for over 50 years.
Candace Nelson, EWEB customer, opposed accepting the MW/T purchase offer. She opined it was not commensurate with the value of the property. She predicted the new courthouse would increase the property values in the area. She said the EWEB site was centrally located in Eugene and its meeting rooms and plaza were used by many citizens. She felt EWEB had not adequately informed the citizens of the implications that the sale could potentially have for them. She suggested EWEB's property was worth much more than the offer that had been submitted and recommended the Board evaluate options that would be in the ratepayers' best interest.
Kevin Matthews, EWEB Customer, conveyed his opposition to the MW/T purchase offer. He asked that the Board reconsider its vote to enter into further negotiations with the hospital. He opined that the EWEB site was worth more money than the Williams Bakery site. He thought it would be a community scandal to sell it at this price and suggested it could even be illegal. He predicted such a sale would be devastating to the community and to the utility.
Charles Biggs, EWEB customer, said he was looking at the Willamette Greenway document. He commented that it appeared on the aerial photographs that the City of Eugene owned the portion of the property adjacent to the river. He felt that should EWEB sell the property, there should be a clause that provided the City of Eugene the first option to purchase the property should it be offered for sale in the future. He suggested EWEB sell portions of the property rather than the entire site. In closing, he advised against selling the site just to appease the Eugene City Council.
Marci Cauthorn, EWEB Customer, submitted her testimony in writing. She told an allegorical story, the point of which was that one should not undersell one's real estate assets as it ill affords a move. She thought the decision to enter into negotiations for the sale of the property should be rescinded. She opined that someone else's emergency should not constitute a "fire sale for EWEB." She did not have faith that there would be no negative rate impact to ratepayers. She felt there were a number of unknown costs. She challenged the Board to narrow its scope and deal with current needs. She thought some or all of the operations could be moved, while the rest remained at the current site. She underscored that the EWEB building had been built with a 50-year life span.
Paul Cauthorn, EWEB customer asked what the hurry was. He opined that a sale should be at EWEB's best price and at its own terms. He felt that MWMC/Triad was able to buy an underpriced property and all the Eugene City Council cared about was having a hospital. He underscored that the ratepayers own the utility and the property. As such, he thought ratepayers should have a right to make this decision. He recommended that the utility get more public input. He asked the Board to reject the MWMC/Triad offer as it stood. He thought it unwise to continue on this path.
Vice President Bishop noted that she would bring the proposed negotiations up for a second vote under item 4.
APPROVAL OF CONSENT CALENDAR
Minutes
Business Service Agreements
Resolutions
Grant Request
Customer Service Policy Revision
Commissioner Farmer, seconded by Commissioner Menegat, moved approval of the Consent Calendar. The motion passed unanimously, 5:0.
ITEMS FROM BOARD MEMBERS
Commissioner Menegat reported that he attended the Western Generation Agency (WGA) meeting as a representative of the EWEB Board, along with staff members Cathy Bloom and Jay L'Estrange. He related that there had been some concern about the taxability of the bonds for the Wauna cogeneration facility at Clatskanie, Oregon. He said the WGA had been to the Bond Council on two different occasions. The budget for 2005 had been passed, thought there were concerns that Georgia-Pacific may have been paid more than it was entitled to under the agreement. He added that this matter was being looked into by WGA attorneys and would be resolved.
Commissioner Menegat stated that the WGA was making some changes in its accounting processes, which had all been housed in EWEB. He related that it was proposed to be relocated to the Clatskanie facility along with the treasurer's position, but that the president's position would be located at EWEB so that each utility had an officer that could sign documents. He said the WGA would meet again in February, 2005, to finalize the transition of accounting procedures and to elect officers for the coming year.
Commissioner Menegat thanked David Hinkley (a member in the audience) for his testimony, commenting that it did not do justice to the email he had sent. He offered to make copies for the Board, adding that it seemed to set forth concerns that he felt to be representative of the community. He proposed that EWEB hold an open public forum to discuss the issues and address the questions that the community had. He felt the concern was that the Board had addressed issues based on the information it had and that the community did not have full access to all of that information. He also thought it would give the community an opportunity to voice concerns.
Commissioner Anderson conveyed her hearty support for the minor change made to the customer service policy.
President Lanning wished to acknowledge Commissioner Anderson's 14 years of commitment. He commended her dedication to the community. He lauded her as a role model for giving service to one's community and thanked her for all of the community service she had done.
President Lanning stated that he had, as EWEB's representative, declined to be president of the Lane Council of Governments (LCOG). He said he had been asked to be vice president and would consider serving in this capacity.
Vice President Bishop announced that State Senator Joan Dukes had been appointed to the Northwest Power Planning Conversation Council. She said Senator Dukes was a "quick study" and thought she would be someone the utility could work well with.
Vice President Bishop noted that she had testified before the Lane County Board of Commissioners in opposition of the Coburg power plant. She said she testified as an individual and not as a Commissioner.
Vice President Bishop agreed that the utility should hold a public forum regarding the offer from MWMC/Triad for the EWEB property. She noted that Board packets contained memoranda from the attorneys and General Manager Berggren regarding negotiations.
Vice President Bishop moved to rescind the motion by which the Board took action on November 16, 2004, to continue negotiations with McKenzie-Willamette Medical Center/Triad. Commissioner Anderson provided the second.
Vice President Bishop said she was trying to open up the item in order to give the public more opportunity to provide input. She thought the utility was jumping into a "fire sale." She recommended the Board rescind the motion and come back to the issue at the next meeting, scheduled for December 21 and set up a better and more public process. She thought the conditions for the sale were not being discussed in a logical manner and its timetable was being imposed by the potential buyer.
Commissioner Farmer said the agreement to negotiate with MWMC/Triad provided eight months within which to hold a public forum. He wanted to know what it would cost to move, regardless of whether or not EWEB chose to follow through with the sale, and so he was prepared to move forward with that portion of the agreement. He averred that if EWEB found that it could move, he thought the utility should do so. While he respected the opinions of laymen, he reiterated that the appraised price had come from the top appraisal firms in both Portland and Eugene.
Commissioner Menegat shared concerns regarding a lack of formal public process. He reiterated that the utility had made the commitment to move before the offer from MWMC/Triad had been made. He recapped the process by which the utility had arrived at this point. He thought it important that the public have the knowledge and information that the Board had available to it. He pointed out that the media had reported most of the information that the Board had, but had not reported all of it, and it had reported pieces of it over a long period of time. He felt comfortable with the decision made at the last meeting to proceed with the conceptual agreement. He commented that questions regarding the value of the EWEB property should be considered, but nonetheless it was not a prudent location to be deploying pole trucks from because of traffic on the Ferry Street Bridge. He questioned who would pay for a move if it was not part of a sale. He thought the Board had taken a responsible step to take the utility forward into the future and if this included a move, then a move should be undertaken.
Commissioner Anderson felt there was a flaw in Commissioner Menegat's argument. She said she voted to approve the purchase of the 'Brand S' property for operations because she agreed that the current site created logistical issues for the larger work trucks, but she did not feel the Board had adequately discussed whether or not to bifurcate the operations and administrative arms of the utility. She asserted it would be a public relations nightmare to sell the property by the river because it had become the symbol for EWEB.
Vice President Bishop commented that the appraised value was not necessarily the real value of a property, though she thought both appraisers to be credible. She said the EWEB property was unique and difficult to appraise. She likened it to trying to appraise Skinner's Butte. She asserted that there had not been a large piece of property sold in the area in a long time.
The motion failed, 3:2; Commissioner Anderson and Vice President Bishop voting in favor.
Commissioner Farmer noted that President Lanning had been approached by EWEB's legal counsel about the possibility of representing the Board in the pending legal matter with retirees over health care benefits. He said President Lanning had passed this to him and he had subsequently been in discussion with legal counsel regarding the issue.
Vice President Bishop remarked that media coverage of the previous meeting contained inaccuracies. She asked how they could be corrected. She related that she had convinced The Register-Guard to clarify errors in an opinion piece on the editorial page. She asked how the other inaccuracies would be handled, whether the public relations department or a Board member should take charge of it. She requested that this item be put into the queue for a Board governance discussion.
Mr. Berggren conveyed his belief that, in the case of issues such as this, inaccuracy could be in the eyes of the beholder. He felt staff could be placed in a difficult position should they be asked to interpret Board opinions.
President Lanning excused himself due to illness at 8:40 p.m. He turned the chair over to Vice President Bishop.
CORRESPONDENCE
Mr. Berggren reported the following:
Mr. Berggren asked for feedback regarding the letter to the PNUCC.
Commissioner Farmer asked why the PNUCC was not sending its opinion directly. Mr. Berggren responded that the PNUCC often sent such things through its member agencies.
Commissioner Anderson said she did not want EWEB's signature on such a piece. Commissioner Farmer concurred, but did not have an issue with forwarding it.
Vice President Bishop objected to the tone of the letter. She felt it could be attributed to EWEB by the media and could further tarnish its public image.
Power Resources Director Dick Helgeson averred there was likely another local utility manager that was in a position of greater comfort to send the PNUCC piece.
BOARD AGENDAS
Mr. Berggren provided an overview of the Eugene Water & Electric Board: Board Agenda Report; December 7, 2004.
Vice President Bishop asked if the special noon meetings were going to continue. Mr. Berggren responded that those meetings were slated to continue through December as needed and had only been scheduled in order to attain timely access to the Board as the Union contract and MW/T negotiations had unfolded.
Vice President Bishop asked if the Live Steam Museum Vision would be placed on an agenda soon so that Commissioner Anderson could be present. Mr. Berggren did not think it could be placed on an agenda until February, 2005.
2005 BUDGET AND WORK PLAN
Fiscal Services Supervisor Dick Varner said most of the material had already been covered in his previous presentations on the budget. He stated that the budget was the culmination of a year's worth of work, as the process had begun before the 2004 budget had been finally approved. He recapped the budget assumption changes and changes in expenditure levels. He underscored that any rate changes from the Bonneville Power Administration (BPA) in the spring would result in a proposal to the Board to adjust rates. He predicted that he would know more about BPA rates in the coming weeks as a report on the Financial Based Cost Recovery Adjustment Clause (FBCRAC) would be issued. He reviewed the budget with a power point presentation.
Commissioner Farmer asked if there were any issues in the budget the Board should be cognizant of in terms of General Manager goals. Mr. Varner replied that he thought the goals were fairly comprehensive, but that if he were to add a goal it would be to ensure that the utility had a quality workforce in the long-term given that so many had retired and were going to retire.
2ND PUBLIC HEARING ON 2005 BUDGET
Vice President Bishop opened the public hearing.
As no one had signed up to testify, Vice President Bishop closed the public hearing.
2005 BUDGET APPROVAL
Mr. Varner conveyed the staff recommendation to adopt the 2005 budget.
Commissioner Menegat moved adoption of the 2005 Budget as proposed. Commissioner Anderson provided the second.
Vice President Bishop expressed concern that, though the utility had told the public that it would not be spending any ratepayer money on the potential move, it seemed that some public money would ultimately be spent. She wished to stress that she did not approve of using the ratepayer's money to pay the costs of investigating the move nor the costs of the move itself.
The motion passed unanimously, 4:0.
INTEGRATED ELECTRIC RESOURCE PLAN
Commissioner Farmer noted that he had to leave at 9:30 p.m.
Resource Planning Analyst Brenda Sirois provided a brief overview of the memorandum on the Draft Integrated Electric Resource Strategy and Action Plan with power points. She introduced her presentation, stating that staff was before the Board to take into consideration any further input so that the finished Integrated Electric Resource Plan (IERP) could be brought to the Board meeting on December 21, 2004, for adoption.
Commissioner Anderson asked when the public open house was going to be held on December 16. Ms. Sirois replied that it would be held from 5:30 p.m. to 7:30 p.m.
Commissioner Anderson strongly recommended that staff define some of the jargon, such as "lost opportunity" and "market transformation." New Resource Project Manager Jim Maloney responded that the final document would include a glossary. Ms. Sirois added that she would also include an Executive Summary that would distill the process and resulting plan to "the bare minimum."
Commissioner Farmer said in terms of how to implement the IERP and how to create action steps whether it became part of the General Manager goals or not the plan should focus on how to bring the plan to fruition. Mr. Maloney commented that the descriptive bullet points in the plan needed to be translated into the work plans of various staff departments so that they would then get budgeted for. Ms. Sirois averred it was part of the design to have the IERP inform work plans.
Vice President Bishop thanked staff for the work done to create a concise document. She commented that what she had read thus far looked good.
Ms. Sirois invited the Board members to attend the open house scheduled for December 16.
Mr. Berggren complimented Ms. Sirois and Mr. Maloney on a job well done.
ITEMS REMOVED FROM THE CONSENT CALENDAR
There were no items removed from the Consent Calendar.
Vice President Bishop adjourned the meeting at 9:18 p.m.
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Assistant Secretary President