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

Others present: Randy Berggren, Jim Wiley, Debra Smith, Dick Helgeson, Tom Buckhouse, Marty Douglass, Ken Beeson, Terry Bequette, Mel Damewood, Tom Williams, and Krista Hince of EWEB staff; and Joe Sams, Minutes Recorder for the City of Eugene.

MCKENZIE WILLAMETTE MEDICAL CENTER/TRIAD UPDATE

Vice President Bishop called the Work Session to order at 5:30 p.m. She noted that citizens interested in public comment would be able to speak at the regular meeting scheduled to begin at 7:30 p.m.

General Manager Randy Berggren said staff were continuing to work on the scope of services with the interim contract approved at the last Board meeting. He added that staff familiarized consultants and their related contractors with the work involved in doing the 30 percent design estimate. He said staff hoped to have that process completed by January 26, 2005.

Mr. Berggren said he needed action taken on due diligence. He said he was arranging a Special Full Board meeting to take action February 8.

Mr. Berggren outlined the process to date. He noted that McKenzie Willamette Medical Center/Triad (MWMC/Triad) had made an offer on the highest appraisal and the City of Eugene had offered to buy portions of the property in the riparian area and to contribute some funds for the relocation of the telecommunications center. He said the MWMC/Triad attorneys preferred a complete contract of sale, rather than an agreement in principal. He said there were areas that would not be able to be negotiated for a complete contract of sale in the near term and noted that the MWMC/Triad attorneys had come up with a streamlined contract of sale which identified issues that still needed to be resolved. He said he had told MWMC/Triad that he was not willing to provide his authority to an agreement in principal since what they wanted was not the agreement that was presented to him. He said progress was being made on a streamlined agreement that would address issues from both sides. He noted that MWMC/Triad wanted to reduce its amount offered since the City wished to purchase the riparian area of the site and it would not be included in the land sale to MWMC/Triad. He said he did not know when he would be able to come to the Board with an agreement.

Mr. Berggren said he had not agreed to start the 240 day time period because it was not supposed to start until both sides had signed an agreement.

Mr. Berggren reported that there were various other issues that needed to be addressed. He noted that the Patterson Underpass extension, as planned, would undermine part of the steam plant property which was not part of the MWMC/Triad land sale. He said alternative sites were being worked on but there was no definite time frame for completion.

He stressed that doing a feasibility study was a long way from combining the steam plant facility with the Willamette substation. He said there were options around relocating the steam plant or simply discontinuing steam production. He noted that there was no agreement with the City, or anyone else, regarding paying for relocating the steam facility. He said there would be additional costs involved with helping steam customers convert to other heat sources if the decision were made to discontinue steam production.

Mr. Berggren said Arlie & Company had proposed a back up offer for our site. He said he had included the letter sent by Arlie in the meeting packet for the Board’s information. He said he needed to hear from the Commissioners on whether it wanted to consider Arlie’s offer.

Mr. Berggren said he had included a memo in the meeting packet from the Public Affairs office regarding public input on the prospect of selling the EWEB property.

In response to a question from Commissioner Simpson regarding whether the steam production facility meant the new gas fired furnaces, Mr. Berggren said that was what he was referring to.

In response to a question from Vice President Bishop regarding the definition of “hot spots”, Mr. Berggren said he meant areas that had higher contamination than surrounding areas. He noted that there were two such areas. He said the University of Oregon was concerned that the sites would bleed over into University property and have impacts on future development. He said staff were looking at the costs associated with excavating those sites. He said there was a proposal to contain, monitor, and cap those areas and noted that there were negotiations with other agencies to do additional work to find out how much excavation would be necessary.

Vice President Bishop asked for copies of the old memorandums dealing with the issue of the Patterson Underpass. She said she had believed that the issue had been addressed in the past and expressed her alarm that excavation might be necessary. She said the City digging into the site to complete its Patterson Underpass was significantly different than containing and capping the site.

Vice President Bishop said staff needed to look at what it would cost to thoroughly clean all of the hot spots.

Mr. Berggren said approximately 83 percent of the cost would be paid for by the previous owners of the property but said he could not guarantee that the previous owners would be interested in paying for a complete clean up operation.

Vice President Bishop stressed the importance of the full Board having full knowledge of the history of the issue.

Commissioner Menagat stressed that the rate payers should not pay the costs of relocation of the steam plant.

Mr. Berggren said it was a significant risk point that virtually no one had brought up the topic of cost obligation for possible relocation.

Vice President Bishop stressed that there were no plans in place for taking an action that would affect steam customers.

In response to a question from Vice President Bishop regarding the constraints of moving the steam production facility, Mr. Berggren noted that they had to be in close proximity to the distribution system. He said there would be significant costs associated to the project as the equipment was moved farther from the distribution system.

Vice President Bishop asked staff for a report on how long the capital costs of relocation could be delayed.

Commissioner Simpson said he would not be in favor of upgrading the substation any more than necessary.

Vice President Bishop asked for Commissioner input on whether there were any next steps that the members wanted to add. She suggested a brief discussion on the two Board priorities of the 30 percent design estimate and completing due diligence on the Beltline/Roosevelt Site. She added that she wished to have a discussion on the merits of combined versus split operations.

Commissioner Menegat said the Board had already indicated to McKenzie Willamette Medical Center/Triad that the entire parcel was for sale. He said he wanted to see the 30 percent design option completed so there would be an exact cost estimate for the property proposed for sale.

Commissioner Simpson said the decision of combined versus split operations should have been one of the first discussions to happen when the process was begun. He said he did not know what good raising the issue at this late date would do. He expressed a desire to hear the desires of the full Board as soon as possible.

Commissioner Menegat said a board discussion would need to be held in the future to discuss the changing nature of the sale agreement with McKenzie Willamette Medical Center/Traid.

Vice President Bishop agreed and complimented staff on its work to keep the Board up to date on the pertinent information. She said Mr. Berggren had been very careful to comply with what the Board had requested.

Regarding public input, Commissioner Bishop said the public had not had the benefit of being intimately involved from the beginning of the process. She stressed that the issue was important to the public and remarked that a public input process had not yet been put in place.

Public Affairs Manager Marty Douglas said Public Affairs staff had been considering a couple of public forums to introduce the public to the entire issue. He said a public forum on the topic would bring in opinions from both sides of the issue but stressed that the Board would hear more from opposing viewpoints than those in favor of the land sale. He said a public forum would allow staff to make a presentation to outline the history of the issue to date and the decisions that the Board had made. He reiterated that the Board should be prepared to hear some very negative testimony. He added that, if a public vote became necessary, then a survey of the public would be useful as well. He stressed the importance of having a public involvement process for the issue.

In response to a question from Commissioner Simpson regarding the nature of split operations and whether the public completely understood the distinction between industrial type operations as opposed to the administrative operation on the same site, Mr. Douglas said some of the public understood the distinction but stressed that the matter needed to be explained in greater detail.

Commissioner Bishop stressed the importance of opening the issue to the wider community to solicit as much public input as possible.

Commissioner Menegat agreed and reiterated the importance of getting the public as much information on the issue as possible.

Vice President Bishop said the guiding principles of the Master Plan were still in effect although the details of operation had changed.

ALTERNATE SITE – DUE DILIGENCE REPORT

Master Plan Project Manager Mel Damewood introduced the design team who were available to answer specific questions from the Board.

Reviewing the site location, Mr. Damewood showed an overhead projection of the property. He noted that the site was approximately 46 acres and was zoned I-3 Heavy Industrial. He showed various photos of the property proposed for purchase. He noted that there were urban wetlands on the site.

Mark Oberle, EWEB’s Property Manager, noted that a purchase agreement had been signed in October, 2004. He said there were 120 days from that date to complete a due diligence study. He said the study had been completed on January 14 at its estimated cost. He outlined the scope of work that had been done in the study:

• Environmental Investigation
• Mr. Oberle said the wetlands on the site were deemed to be low quality. He noted that there were blackberry bushes present as well as derelict cars. He said the City of Eugene had no concerns over developing the wetlands because of their low quality. He said there was no indication that fill permits for the site would be a problem.

In response to a question from Commissioner Simpson regarding how much of the site was wetlands, Mr. Oberle said 23 of the 46 acres were low to moderate quality wetlands.

Mr. Oberle noted that analysis of groundwater had been designed to supplement the studies that had been done in the past. He noted that no serious contaminants were found but acknowledged that some arsenic was found in levels that were not out of the ordinary for the area. He said no contaminants had been found in the test wells that had been found. He added that monitoring wells would be dug on the south part of the site to intercept any contaminants from the Danebo Landfill. He remarked that he saw very little potential for off site contaminants to reach the site. He noted that the adjacent lots were light industrial rather than heavy industrial.

Regarding endangered species, Mr. Oberle said the optimum time for making an assessment would be from May to September. He said there were two endangered species to look for which were the Kincaid Lupin and the Fender’s Blue Butterfly. He said it was not expected to find significant numbers of either species.

• A Boundary Survey

Mr. Damewood said the boundaries were well established.

• Topographical Survey
• Floodway/Floodplain Determination

Mr. Damewood said the site was above the flood plain and no significant flood
concerns had been raised.

• Engineering Soils Investigation

Mr. Damewood said there was high ground water found from 2-9 feet. He said there was some clay soils that would need to be removed before development but said this was typical for that area of the Willamette Valley.

• Earthquake Hazard Analysis

Mr. Damewood recommended that more geotechnical work be done before developing the site.

• Utility Availability Analysis

Mr. Damewood said the southern corners of the site were too low for working sanitary sewers and if those areas were developed then they would have to be raised.

• Site Work Construction Analysis
• Traffic Impact Analysis

Mr. Damewood said there were traffic concerns for the area in the long term and noted that two access points would be needed. He said there would need to be a signaled intersection where the property would have access onto Roosevelt Boulevard.

• Lane Use and Zoning Analysis

Mr. Damewood said there were no land use or zoning issues with the site. He added that there were also no overlay zones.

• Archaeological and Historic Survey

Mr. Damewood provided a brief assessment of the site as it was provided in the staff report. He noted that access to Bertelson was not a certainty but said the adjacent land owner would be willing to cooperate with joint access.

Regarding the true costs of upgrading the site for development, Mr. Damewood projected a cost of $1.75 per square foot with a total of 1,998,097 square feet. He noted that most industrial land was selling for $2 per square foot. He said the staff recommended purchase of the site. He said the property was preferred by staff over all the other alternative sites.

Commissioner Simpson noted that the Fender’s Blue Butterfly depended on the Kincaid Lupin only in its larva form but noted that they would need nectar producing plants as adults, and that was not found in the vicinity.

Commissioner Menegat complimented the work done by staff and consultants. He said all of his concerns had been addressed but stressed the importance remaining ready to address additional issues as they occurred.

Vice President Bishop reiterated Commissioner Menegat’s compliments and expressed her appreciation of the pace of the staff work. She raised concern over access to the site and asked for a list of dates of the transportation projects that would happen in the area in the future. She said potential access problems gave her pause because the main problem with the current site was limited access. She said the issue would have to be specifically addressed before she would willingly move forward.

Commissioner Simpson said he would not be in favor of creating the same access problems of the current site for the new site.

In response to a question from Vice President Bishop regarding whether there was anything unusual about the site, Chris Clemow, EWEB consultant, said there were some transportation issues surrounding the site. He said those issues would balance on whether the West Eugene Parkway would be constructed. He said the Oregon Department of Transportation was moving forward with the assumption that it would be constructed. He stressed that there were many unknowns regarding transportation at the current time. He remarked that it would be beneficial to enter into joint access with the Weyerhaeuser property adjacent to the proposed development site. Monica Anderson, EWEB consultant, noted that there was no site review requirement for the land and noted that the other elements of development were ‘fairly usual.’ She said it was a clear sailing situation.

The work session adjourned at 7:25 p.m.

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Assistant Secretary President