Board Members Present: Ron Farmer, John Simpson, and Mel Menegat. Vice President Sandra Bishop was excused.

Others present: Randy Berggren, Dick Varner, Debra Smith, Jim Origliosso, Roseanna McArthur, Jim Wiley, and Judy Chase of the EWEB staff; Lynn Taylor, City of Eugene Minutes Recorder.

President Farmer convened the Work Session of the Eugene Water & Electric Board (EWEB) at 5:40 p.m.

BOARD GOVERNANCE

Debra Smith, Assistant to the General Manager, commented that the Board’s discussion of Financial Policy and Bylaws at its March 5, 2005, Planning Session was substantive and productive. She distributed a handout that summarized discussions related to strategic planning and governance and highlighted the following strategic planning issues:

• No anticipated change to mission, legacy or goals for 2006
• Environmental “Scan” will be completed as part of Carmen Smith financing strategy work
• Emerging issues will be brought to the Board at one of the regularly scheduled Carmen Smith strategy updates
• Strategic Thinking Group is to be used for initiative development and review of short-term contingency plans that are currently being developed
• 2006 initiatives and short-term contingency plans would be brought to the Board for approval at July planning retreat

President Farmer asked if the emerging issues would be general in nature and specifically related to Carmen-Smith. Ms. Smith replied that Carmen-Smith was so large that any significant emerging issue impacted it.

Continuing, Ms. Smith said the 2006 strategic planning process would be a full cycle with a review of mission, legacy and goals and would begin in January 2006 and continue through May 2006. She asked if the process as described would meet the Board’s needs.

Commissioners Simpson and Menegat agreed with the proposed 2006 strategic planning process.

President Farmer asked for clarification of the term “full cycle.” Ms. Smith replied that a full cycle process would examine mission, legacy and goals to determine if any changes were required. She said it was essentially building a plan “from scratch” and could include ratifying pieces of the current plan.

Commissioner Simpson asked if the process would begin with a brainstorming session. Ms. Smith replied that the brainstorming would begin in January 2006, initially with a Board review of mission, vision and values, and then a broader group would be brought into the process for strategic planning. She said that staff was open to exploring new approaches to the planning process.

President Farmer cautioned that a full planning cycle should not occur too frequently with respect to mission and legacy. He recognized that new Board members might have different perspectives but did not feel that the Board should reexamine mission and legacy more often than every three years. He observed that sometimes goals were established that were incompatible with parts of the mission or legacy or even other goals; some of the financial goals were an example with a desire to build reserves in conflict with no sales growth. He asked if the process would address whether goals, mission, and legacy were in sync. General Manager Randy Berggren replied that often there was a natural tension among those things and it was a question of managing the balance.

President Farmer said the Board should provide direction to staff that if that tension occurred, where the first priority was. Mr. Berggren agreed that the process could provide priority direction so it was not necessary to come back to the Board each time.

Ms. Smith remarked that the process could take a systems approach to determine how well integrated the components were and identify inconsistencies such as those President Farmer had pointed out between financial goals and financial policies.

Regarding governance issues, Ms. Smith referred the Board to her notes related to discussion of Bylaws. She asked Board members to review the notes and let her know if there were any additions or corrections. She reviewed the proposed schedule for Bylaws review, beginning with an initial wording and legal review at the April 5, 2005, Board meeting and concluding with adoption at the May 3, 2005, meeting. Board members concurred with the proposed schedule.

President Farmer suggested that Ms. Smith’s notes from the previous discussion be attached to the Bylaws to provide a context for each new discussion of the Bylaws. Ms. Smith agreed and noted that the Board’s discussion of the Bylaws was the most in depth review of them in many years.

Ms. Smith said she had divided governance into two categories: Board policy items and housekeeping items. She reviewed the list of housekeeping items:

• Use of the term “Governance”
• Budget amendment dollar limits
• Consent calendar dollar limits
• Meeting start times and daytime meetings
• Minute corrections
• Use of Resolutions for Board actions
• Affiliations and Board liaisons
• Compensation for EWEB commissioners
• Board policy to prohibit EWEB Commissioners from serving on other committees
• Violation of Commissioner’s Rules of Conduct

She indicated that Vice President Bishop might have some items to add to the list and that based on the Board’s discussion some of the housekeeping items could become Board policies. She said a list of the Board policy binder contents had been complied and divided into three categories:

• Policies requiring future discussion and approval
• Policies requiring modification before discussion or approval
• Policies previously approved by the Board

She said that the last category of previously approved policies had been numbered and placed in a different format and would be presented to the Board for ratification at the April 5, 2005, meeting for the sake of creating a record under the new method of organizing policies. She reviewed the proposed Board governance schedule for Bylaws, housekeeping issues, and policy review and approval in 2005. She said that President Farmer and Mr. Berggren could prioritize housekeeping and policy issues for consideration throughout the year.

President Farmer asked how governance issues would be scheduled on Board agendas throughout the year. Mr. Berggren replied that they could be treated as routine business items as agendas were developed. He said the priority of issues could be revisited at any point and proposals for changes submitted to the Board for consideration.

President Farmer suggested that a date such as April 10, 2005, be established to offer other commissioners the opportunity to provide input on housekeeping and other Board governance issues. Ms. Smith said that she would contact the absent Commissioners with a date and commended them for the progress that was made at the planning meeting.

President Farmer cautioned against merging Board policies and operating procedures because policy should be broad enough to allow distinct discretion on how to operate within it. He had a sense that that was not the case with some policies. Ms. Smith said that two items in the Board Policy Manual: SD8 Power Risk Management Policies and EL4 Investment Policy were two examples and while she was asking the Board to ratify them as they were standing, Board-approved policies, it was likely that staff would recommend during the review process that they be removed because they involved procedural matters. She said that new policies when incorporated in the financial policies would take the place of those two policies.

President Farmer stated there needed to be a process for prioritizing and reviewing policies to manage the workload throughout the year

President Farmer adjourned the meeting at 6:10 p.m.

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Assistant Secretary President