Board Members present: Sandra Bishop, Dorothy Anderson; Peter Bartel, Susie Smith, and Patrick Lanning.

Others present: Randy Berggren, Dick Helgeson, Dick Varner, Dave Koski, Mel Damewood, Tom Buckhouse, JoAnn Andersen, Burt Dunn, Roseanna McArthur, Jim Maloney, Eric Hiaasen, Cathy Grey, Mat Northway, Scott Spettel, and Krista Hince of the EWEB staff.

President Bishop called the Regular Board Meeting of the Eugene Water & Electric Board (EWEB) to order.

AGENDA CHECK

The Board offered no changes to the agenda.

Consent Calendar

There were no items on the Consent Calendar.

Correspondence

General Manager Randy Berggren had no correspondence to report on.

Items from Board Members

Vice President Anderson reported on the most recent meeting of the Ad hoc Committee on Greater Downtown Visioning, saying that she had made it clear to other committee members that EWEB had its own consultant and was looking at own site plan, and that would be the determining factor for what happened on EWEB property in the committee's study area.

President Bishop said that Vice President Anderson made an excellent presentation and had made it clear to the committee that the City would not determine the use of EWEB's property, which was intended for the future benefit of the utility. In response to a concern expressed by a Eugene City Councilor regarding the need for EWEB's cooperation and partnership, several members pointed out to that individual that the process was an example of cooperation and partnership. President Bishop said that she believed the process was being fast-tracked and its outcome was predetermined, and she intended to personally request that more public input be allowed.

Responding to a question from Commissioner Smith, Vice President Anderson clarified that she had submitted her remarks to the committee in writing.

Commissioner Smith recommended that the EWEB Board formally comment on the committee's final report. President Bishop agreed, saying that the Board would track the committee's time line and provide comment when appropriate.

President Bishop reported that she had attended the 100^th birthday of Senator Wayne Morse and spoke to the person doing the engraving on the statue. She said that the quote chosen by EWEB would not fit in the space provided but a shortened version work well. She noted that four of six public utilities in the state have agreed to supply quotes. She called the Board's attention to a brochure providing information about donations to the effort.

President Bishop noted the upcoming MEC meeting, and upcoming technology summit, entitled Understanding Telecommunications in the Southern Willamette Valley--A Building Block Approach, scheduled on November 1 at the Chambers Media Center. She called the Board's attention to a brochure regarding the latter item.

Public Input

Tim Wright, 90701 Fish Hatchery Road, Leaburg, the manager of the Leaburg Hatchery, spoke on behalf of the hatchery staff in favor of naming something in memory of Lloyd Knox. He praised Mr. Knox's cooperation with hatchery staff and said the tours he provided presented a positive picture of the hatchery.

Judith Olsen, 44953 Leaburg Dam Road, Leaburg, said that she had left approximately 400 signatures requesting that Water Board Park be renamed in honor of Lloyd Knox. She believed the signatures represented a small fraction of the support for the proposal.

At President Bishop's request, several citizens raised their hands to indicate support of the petition submitted by Ms. Olsen.

Sue McKinney suggested that the Board consider renaming the park "EWEB Lloyd Knox Memorial Park."

President Bishop thanked those in attendance for coming to the Board meeting and sharing their sense of community, which she found inspiring.

Recognition for Lloyd Knox

General Manager Randy Berggren recollected the Board's previous discussion of a staff recommendation to name an educational shelter for Mr. Knox. He said that the Board received considerable testimony at its previous meeting calling for the renaming of Water Board Park in honor of Mr. Knox. That testimony had led staff to rethink its recommendation. Mr. Berggren said that it was also possible that FERC would preclude the construction of the educational shelter. He said that after reconsideration, staff believed that the public's wishes should be honored and the park named after Mr. Knox. A resolution implementing the staff recommendation was before the Board.

Commissioner Bartel expressed pleasure that the Board was acting on the resolution, saying that his own experience with Mr. Knox was inspiring. He found the reasons offered by the public to be compelling, and supported the resolution.

Commissioner Smith said that she had never been as touched as she was by the testimony of residents who obviously loved Mr. Knox. She also found the residents' support for Mr. Knox inspiring and was moved by the sense of community that was demonstrated by the testimony.

Commissioner Smith recommended that the resolution be modified to include a "whereas" clause that recognized the overwhelming community support for Mr. Knox. She also suggested that the resolution be amended to name the park the Lloyd Knox Water Board Park. The name recognized Mr. Knox as well as acknowledged the Board's concern about the historic nature of the name's association with EWEB.

Vice President Anderson suggested that interpretative signing could be installed explaining both the history of the park and discussing Mr. Knox's contributions. Marty Douglass, Public Affairs Manager, indicated that an event was planned for November 4 at Water Board Park during which staff would unveil the drawings for a new sign reflecting the new name. He envisioned a sign that included the park's name, information about Mr. Knox, and information about the park itself as staff believed the park was inadequately signed now.

President Bishop said she had been somewhat hesitant about naming the park in honor of one EWEB employee when she knew there were so many dedicated EWEB employees, some of whom had worked all their lives for the utility. She was worried about the precedent set. She said that upon consideration, she realized that the park could be shared with the other employees as a type of tribute. President Bishop agreed with Commissioner Smith's suggestion about the name. She recommended the following "whereas" clause: "Whereas, the McKenzie river community has expressed overwhelming support for recognizing the contribution of Lloyd Knox. Now therefore. . ."

Vice President Anderson read the resolution into the record.

Vice President Anderson moved, seconded by Commissioner Bartel, to adopt the resolution.

President Bishop said that she would not give up on an educational shelter at the Leaburg facility, which she thought was needed for many reasons.

The motion passed unanimously, 5:0.

On behalf of the McKenzie residents, Ms. Olson thanked the Board for its action. She believed that the Board's action would have a good effect on Mr. Knox. She encouraged the Board to involve Mr. Knox in the education facility, which she thought was an excellent idea.

President Bishop called a brief meeting recess.

Telecommunications Development Status

Ken Beeson, Telecommunications Project Manager provided an overview of progress on Phase II of the EWEB Telecommunications Project. He alerted the Board to the fact it might not be possible for EWEB to meet the initially established May election date and requested feedback on a proposal to delay the election to fall 2001.

Commissioner Bartel supported delaying the election until November 2001. He did not want to be so committed to a particular date that the Board made a bad decision.

Vice President Anderson favored delaying the election to allow the proper analysis to occur. She liked the flexibility provided by a November 2001 election date.

President Bishop said that caution was appropriate. She wanted to see a business plan and to test the market before proceeding. However, if the Board kept delaying the election she was concerned that the business plan would be out of date. She hoped that staff would continue to track that issue.

Mike Logan, Telecommunications Project Team Member, reminded the Board of a report he had made in 1997 regarding some examples of utility energy management applications managed by other utilities in the United States. Since that time, there were other examples to consider.

Mr. Logan reported on the energy management applications operated by EWEB.

Mr. Logan reported on three examples of telecommunications systems completed or underway with electric utility applications involving Tacoma Public Utilities, City of Ashland, and City of Glasgow, Kentucky. He intended to contact the utilities to learn how they valued the applications and how they intended to move forward.

Mr. Logan discussed the functionality customers would see in their homes and businesses using the four applications that staff was proposing for board consideration. The four applications were: 1) Automated Meter Reader (AMR); 2) Remote Connect/Disconnect; 3) Real Time Information/Pricing; and 4) Customer Load Management.

Referring to AMR, Commissioner Smith said that it was understandable that businesses would want to take advantage of automatic meter reading but she questioned how useful the applications would be to residents. Mr. Logan agreed. He said that staff was installing some meters at difficult-to-read locations and was learning more all the time. Commissioner Smith wondered how staff was going to determine the demand for the services to be available. Mr. Logan said that for residential customers, the ability to access historical usage data and to act as their own customer service representative would have value. He said that EWEB's use of the customer's phone line was also an issue as it was not a dependable service platform because of the issue of physical access and because telephone technicians disconnected lines serving meters because they did not understand their purpose.

Mr. Logan showed the Board a wireless device to read meters developed by EWEB staff employing cellular technology. He said that it was appropriate for the time being, but not for the long-term.

Mr. Logan showed the Board an example of a radio frequency (RF) meter that could be installed in hard-to-reach locations and the information accessed by radio. He indicated that 700 meters would eventually be installed, starting with bad dog locations. Commissioner Smith asked if the customer would have to pay the cost. Mr. Logan said no.

Jim Origliosso, Treasurer, discussed the development of the business plan, emphasizing the private-partner element of the plan.

Responding to a question from Commissioner Bartel, Mr. Origliosso said that there were requirements that the investors would place on EWEB in the form of reserve funds, for example. A private placement generally had negotiated requirements on a case-by-case basis, such as credit support, equity, or a source of revenue that, if not guaranteed, was sufficiently reliable to reassure investors.

Commissioner Bartel asked if the backbone system could be used to support the bonds. Mr. Origliosso said that he believed it could be security for repayment of the bond. Commission Bartel asked how that would affect the cost of money for EWEB. Mr. Origliosso responded that there were several gradations, as well as a tax-exempt market, which generally had lower interest rates. Commissioner Smith asked why so many telecom bonds were in default. Mr. Origliosso responded that projections of financial performance were not satisfied. At one time such bonds were quite a popular investment. Most of the defaults had been private, not public, systems. He was not aware of any municipal system that had defaulted on a telecom bond.

President Bishop asked if there were any other municipalities that had issued taxable bonds. Mr. Origliosso responded that most public systems that had done telecom were smaller systems. The larger systems paid for the system using cash, and did not issue bonds for the purpose. There was little history of a utility EWEB's size taking such an approach.

Commissioner Bartel said that he was attempting to determine whether risk would be to the investor or utility. Mr. Origliosso said the risk would be born by the investor. However, EWEB's credit could be affected, even its electric and water credit. Commissioner Bartel asked if staff had an assessment of the risk. Mr. Origliosso said that the risk was similar to that of the co-generation bonds, which were issued by a third party and secured by credit. The bonds were nonrecourse bonds issued to EWEB. If there were a default, EWEB would not be responsible for the repayment of the bonds. It was difficult to predict the impact on EWEB's credit. The utility had assumed the same type of risk before at roughly the same magnitude.

Commissioner Bartel asked questions clarifying the bond terms and interest rates.

Mr. Origliosso shared data regarding the value of and annual debt service for public/private ownership taxable bonds. He shared data regarding the value of and annual debt service for public ownership tax exempt bonds.

Responding to a question from President Bishop, Mr.Origliosso confirmed that the tax-free bonds were about two-thirds the cost of private/public ownership taxable bonds.

Responding to a question from Commissioner Bartel, Mr. Origliosso responded that EWEB's capital costs were projected to be considerably lower than those paid by AT&T, which also had the expense of bringing the cable systems it purchased up to date.

Mr. Beeson reminded the Board that he had shared information at the last meeting about third-party service providers, and reiterated there did not appear to be a great deal of interest at this point. EWEB continued to reach out to those providers to determine their interest. EWEB staff believed there was community interest in the utility providing some of those services. He said that staff desired to see an open platform that could accommodate multiple-service providers, and wanted to see it populated with some services that provided enough support to construct and support the system.

Mr. Beeson solicited comments from the Board.

Commissioner Smith said it seemed wrong to go into the cable business as a means to an end. She said that the Board did not offer the option to the citizens, or she would feel differently. Given what the Board told the community to date, she was concerned about pursuing that approach. She said that going into the cable business was a huge question that had to be evaluated on its merits. Commissioner Smith said that if the Board went through that evaluative exercise independently and had community support, she would feel differently.

Vice President Anderson said she recognized the goal of universal access but was not adverse to discussion of provision of other services if she had more information.

President Bishop said she was not surprised that the Board was discussing providing services. She was convinced that telecommunications would not work unless EWEB went into the business directly. She was not sure of her position because there were too many questions about the business plan. She had heard from the community that residents wanted universal access. President Bishop said that residents indicated to her that they wanted EWEB to maintain ownership, which supported the staff option for maintaining the system in public ownership. Given that the technology involved was constantly changing, President Bishop asked if EWEB was prepared to address the constant change that came with such a service. She wondered if it was a financially responsible approach for EWEB to take. She thought that the staff approach represented a careful examination of the issues involved.

President Bishop recommended that staff continue to update the City Council, and to do so on a monthly basis. Staff should also let the counicil know that provision of services was being discussed.

Mr. Beeson indicated that the updates were being published on EWEB's Web site.

Commissioner Bartel suggested that staff develop an interested parties list for mailing of updates.

Commissioner Bartel said he did not support simply establishing a platform without any "value added" services. He thought it was a valid approach for the 21^st century. He said that the development of the infrastructure was the thrust of where the country wanted to go as national policy.

Commissioner Bartel thought the request of other Commissioners for more information was reasonable. He believed the Board could make a decision about whether to go into the cable business at the appropriate point in time, and it had not reached that point. He was enthusiastic about the possibilities, but wanted to be fiscally responsible.

Commissioner Smith asked Commissioner Bartel his vision of the scope and breadth of "value added" services. Commissioner Bartel said he had no serious vision because he lacked information.

Mr. Berggren suggested the issue of how "value added" services played out in Eugene was the challenge of the Board.

Commissioner Bartel said that the vision to him was EWEB's obligation to long-term asset management. He said that EWEB was not like a private company and did not have an obligation to stockholders to maintain a cost per share.

Commissioner Lanning indicated that he continued to have many questions about the issue.

President Bishop clarified that the Board had yet not made a decision about whether it would undertake the provision of "value-added" services. She believed such a decision would be made in the not-too-distant future.

President Bishop asked about the Telecommunications Group and citizen involvement group. She confirmed that the staff group was meeting the following day, and the citizen involvement group would meet on December 2. Nancy Nathanson of the Eugene City Council would serve on the group with a staff backup when she could not attend meetings. She said that everyone who had expressed interest had been invited to participate; there were approximately 15 people on the group.

Commissioner Bartel commended the composition of the group.

President Bishop said she wanted to know what other public utilities were doing in the area of telecommunications.

Items Removed from the Consent Calendar

There were no items removed from the Consent Calendar.

The meeting adjourned at 8:50 p.m.

_____________ ______________________________________

Assistant Secretary President