Board Members Present: Patrick Lanning, Ron Farmer, Sandra Bishop, Dorothy Anderson, and Henry Masterson

Others present: Randy Berggren, Jim Wiley, Roseanna MacArthur, Debra Smith, Tom Buckhouse, Dick Helgeson, Win Calkins, Jim Origliosso, Brenda Sirois, Krista Hince, and John O'Connor as facilitator.

INTRODUCTION

General Manager Randy Berggren provided the preamble to the discussion, noting that the present meeting represented a long awaited opportunity to begin work on Board Governance. He stressed that he did not think it extremely important to choose a particular model or embrace a particular perspective to guide the work of the Board, but rather, that the Board collectively agree upon the development of a foundation for Board Governance for the Eugene Water & Electric Board (EWEB).

Mr. Berggren said that, when the Board had revised the charter in 1990, the Board had delegated much of the authority to the General Manager. He added that this held him, as the only employee of the Board, responsible for the performance of staff and of the utility. He felt that this had led to confusion on the roles that he and the Board should assume at times.

In closing, Mr. Berggren opined that every Board meeting held was a Governance session.

GROUND RULES AND EXPECTATIONS

Mr. O' Connor affirmed that the most basic expectation of the rules was that the Bylaws were in effect. He explained that his role was as a gatekeeper, to assure that all members had an opportunity to provide input. He stressed the importance of good listening skills. He stated that he would, at points in the conversation, paraphrase what was being said in order to provide further clarity.

DISCUSSION #1

EWEB's General Council Win Calkins provided a brief history of EWEB for the benefit of the newest Board member, Henry Masterson. He noted that a typhoid epidemic in 1906 that had been attributed to a private water company and had instigated the formation of the Eugene Water Board. He referenced the constitutional provision, Article 11, section (2), which formed the Home Rule Charter. He related that the home rule language in the revised charter of 1976 was still in use in the present, and that sections 44 and 45 pertained to EWEB. He said that the utility took the view that certain powers and authorities were given to the City Council in the charter and certain powers and authorities were given to the utility in the charter. He noted that, because of the home rule charter, the utility was not under the regulatory authority of the Public Utility Commission (PUC), though EWEB was under the purview of the PUC regarding public safety and some boundary issues.

Vice President Farmer asked what the governing principle that defined the jurisdictional power of the PUC was. Mr. Calkins replied that the concept of home rule was that a municipality ought to be able to reasonably do as it saw fit within its own community, according to ORS 757. He noted that the utility was subject to public contracting laws and public meeting laws.

Mr. Berggren circulated a graph entitled Governing EWEB: Roles and Responsibilities. He explained the different levels of functionality, which included the Strategic Planning and Management, the Operational Planning and Management, and the Daily Work and Management as it was split by the Board, executive managers, middle managers, and employees. He discussed the history of his employment by public utilities. He commented that every Board brought different and unique contributions to a utility. He highlighted the additional stresses that deregulation had caused to the industry. He affirmed that more clarity was needed in the role of the Board.

Mr. O' Connor began a list of issues to be discussed:

• Board members consider and determine the definition of its role in relation to the utility.
• How to keep Board members from directing staff.

Commissioner Anderson commented that it was difficult to resolve how to act as a Board so that all Board members would feel they had a stake in the action. She felt that there was a certain level of uncertainty as to how the Board was to function. She questioned how it could accomplish efficiently what was needed to be accomplished with the limited time that the Board has available and without individual Board members giving direction to staff.

Vice President Farmer stated, regarding committees, that due to the size of the Board, it was difficult to create a committee that had more than two members and that a committee of two was "not much of a committee." He suggested that the Board consider bringing in outside people to serve on committees in order to increase the input in the process.

Commissioner Bishop considered the most important role of the Board to be that of a conduit to the community. She felt that the Board represented the customer.

Commissioner Masterson felt that there should be a clear delineation between the staff and the Board. He stressed that the staffing and assignments should fall under the auspices of the General Manager. He suggested that the Board refer to the Bylaws for the definition of the relationship between Board and staff.

• There should be clear delineation between the responsibilities and activities of staff and Board.

Vice President Farmer felt that there was not much difference between a private utility and a public utility, as the private utility was responsible to the stockholders and the public utility was responsible to the customers. He said that the Board represented the values of the stakeholders. He stated that the responsibility of the Board was to determine what those values were and then to work on a strategic direction to achieve or maintain the values. He asserted that the plans to implement those values should come from management and that it was up to the Board to decide whether those actions allow those values to be achieved.

• The Board should represent the values of the customers, acting as a conduit with the community.
• Determining values of the institution and determining whether the values are being implemented are two key aspects of the Board's role.

Commissioner Masterson asked for clarification as to what was meant by values in this instance. Vice President Farmer responded that it was up to the Board to determine what EWEB should accomplish in this situation and what purpose was sought to be achieved. He added that he did not think that it was the Board's role to determine what the strategy was, but rather to review strategy provided by management and to provide guidance, input, and approval.

Commissioner Masterson stated that one value was the delivery of the highest levels of service to the utility customer. Vice President Farmer added that other values could include keeping energy costs down, maintaining safe delivery of service, and maintaining reliability.

Commissioner Bishop asserted that the Board should "risk and exhibit vision." She commented that she did not feel that the Board should be a watch dog, but rather should take a more advocating role.

Mr. O' Connor asked if the mission statement was Board driven or staff driven. Debra Smith, Telecommunications Manager, read the mission statement, as follows:

To be an outstanding provider of energy and water products that meets customer needs and benefits the citizens of Eugene.

Commissioner Anderson commented that she was unsure that the Board should be leading in a strategic discussion with management. Vice President Farmer responded that he did not think it was the job of the Board to determine how something should be done, but rather that management would propose a strategic path and that the Board would provide assistance and agree on it.

Commissioner Bishop opined that the public held the Board accountable for the actions of the utility, and because of this Board members did become involved with some of the daily interface of the utility's actions with the public. She felt that this forced Board members to be more educated about the daily function of the utility. Vice President Farmer likened the role of the Commissioners to that of a City Councilor, as a City Councilor was as likely to get called about a pothole in the street as the Commissioners were to be called about something relating to the utility.

Commissioner Masterson and President Lanning both commented that, when receiving phone calls from customers, they listen and then referred the call to management.

Commissioner Bishop disagreed and asserted that it was a misuse of the General Manager's time to have to address the smaller concerns. She felt that it made sense that the Commissioners were called as they were serving as the representatives of the public. She related that, when taking a call, she attempted to determine what staff person could address the concerns of the individual calling and referred the person to that staff person.

Continuing, Commissioner Bishop felt that Commissioners were receiving more calls and that this should be looked into and that it would be good to provide Commissioners with some guidance as to how to handle calls.

Mr. Berggren said that he could, with reasonable surety, assert that in 98 percent of the cases of a Board member referring a customer to staff, he was made aware of it. He assured Board members that, in the case of any call referred by a Board member, he was engaged in the resulting action. He opined that something was being lost in the way that it was currently working. He noted that staff was working very hard under extreme conditions and, yet, there was an impression in the mind of the public that staff was not providing good service.

Commissioner Masterson reiterated that it was not his job to assign a staff person to address a constituent's call, that it fell strictly under the auspices of the office of General Manager.

Commissioner Anderson related that customer service was sometimes referring calls to the Board members. She said that, in her experience, she could gain information from staff and then call the customer back and that this provided some resolution for them.

Commissioner Bishop opined that it was the Board's role to continually monitor policy and take responsibility for it.

Mr. O' Connor rephrased what had been said about the Board role using customer service as an example, as follows:

• There was a strategy about customer service, a plan to improve customer service, and that it was the Board's role to measure the improvement.

The Board broke for ten minutes at 7:15 p.m.

DISCUSSION #2

Mr. O' Connor and Ms. Smith had compiled bulleted points of discussion during the break, as follows:

• Within the context of the charter and the statutory mandates, the board would act as a conduit with the community

• Defines distinction between staff and board role
• Clarify board versus individual decision
• Board role to measure and deliver accountability.

2) Determining the purpose, vision, mission, policy, goals of EWEB.

Mr. Berggren said that he interpreted the Board role as one of representing the community and receiving feedback from the community.

• Establishing clarity around Board decisions.
• Delegating to the general manager.

Mr. Calkins noted that delegation could be the basis for a legal analysis as there was a whole body of law that addressed it. He related that, where delegating a broad responsibility, generally the requirements of legal parameters on delegation was that there needed to be reasonable guidelines or policies under the delegation for it to be legally valid. He stated that this allowed accountability to the legal authority, i.e. the Board.

• Assuring accountability and measures of success.

Vice President Farmer recommended adding the word ongoing before accountability and that these measures should be measured in a regular way. Ms. Smith suggested that the Board could map, over time, what time line there would be for assessing measures of success.

Mr. O' Connor asked the Board members to consider what sorts of outcomes they would seek to achieve, given the definition of role that they had just discussed. The Commissioners spent five minutes writing outcomes down.

Vice President Farmer suggested, as a point of procedure, that they should be testing agendas bi-weekly to see if they fit the role that the Board should be playing. He felt some agenda items were a briefing of management activities and requests for the Board to provide a "de facto buy in" on their decisions.

Commissioner Masterson felt that the Board needed a mechanism to determine its purpose and its vision and that these needed to be clearly established.

Commissioner Anderson noted that the Board had in its Bylaws that the Board would review the Bylaws and principles every time a new Board member came on. She felt that it would be important to establish a regular schedule for their review.

Commissioner Bishop asserted that the Board should participate more in the setting of the meeting agendas, as had been a past practice.

Commissioner Bishop opined that it would be valuable to have an agreement on Board protocol, such as communications. She felt that the Board had been under pressure and had been dealing with volatile and urgent issues and that, at times, it had seemed that the level of respect and professionalism had been somewhat lacking.

Commissioner Anderson suggested getting more into the Board-staff relationship in order to gain a better understanding of it. She thought that different Board members had different ideas of what that relationship was.

President Lanning added that the Board should have clarity around its direction of staff as a Board, rather than an individual.

Commissioner Anderson advocated for "getting more deeply" into how the Board was intending to monitor accountability.

Vice President Farmer felt that an effort needed to be made to promote financial growth. He suggested that financial accountability be tied to strategy and to tie accountability to financial compensation at the General Manager's level. He stressed that the utility had a responsibility to look at best practices within the industry.

Commissioner Bishop reiterated that one outcome that should be promoted was customer satisfaction. She added that another outcome she would promote was a "fitness assessment" which would include an interaction between the financial goals of the organization and sustainability of it.

Commissioner Bishop suggested that determining a communications standard and policy, and clarifying the EWEB utility customer information privacy policy, would be an important outcome.

Vice President Farmer commented that time could be managed better. He said that staff provided "great back grounders" and then would, at meetings, read to the Board. He felt that it was up to Board members to read the back grounders and understand the meat of a meeting.

President Lanning recommended that staff determine a "boundary" on how much time staff could spend on information requests from individual Board members.

Commissioner Bishop advocated for Board members to learn more about the function of the utility by touring the facilities.

Commissioner Anderson supported assessing how time was managed at Board meetings.

Vice President Farmer opined that there should be a "cultural shift" to change to a mode of empowering staff and management to act independently of the Board on some things and to make stronger recommendations.

DISCUSSION #3

Mr. O' Connor grouped all the issues and outcomes the Board had discussed by category, as follows:

(1) Agendas
• Do agenda items fit the Board's role?
• Can items be briefed?
• Who should set the agenda?
• Time management: no repeat on staff backgrounders.
• Keeping time at Board meetings.

(2) Establish and Review Mission, Purpose, and By-laws
• What is the mechanism by which to determine this?
• How often should these be reviewed?

(3) Agreement on Board Protocol - Code of Conduct
• Determine a defined communication standard.

(4) Board Versus Individual Relationship with Staff
• Clarity of Board's direction to staff versus individual Board members.
• Communicate understanding of Board/staff relationship.
• Establishment of clear ground rules around Board interaction with staff.
• Individual information requests - Board members use of staff time.
• Should Board empower staff to make recommendations and decisions.

(5) Accountability
• How should it be monitored?
• Financial accountability related to strategy.
• Tying General Manager's compensation to accountability.
• Looking at best practices in the industry.
• Fitness assessment, including financial sustainability and accountability.

6) Customer Satisfaction
• Board Understanding of Operations

Mr. O' Connor provided Board members with three votes and the instructions to apply one vote for each of the top three concerns that the Board member wanted to address. Ms. Smith added that anything receiving few votes or not receiving any votes would be held for future consideration. Mr. O' Connor stressed that the exercise before the Board was to prioritize what items would be acted upon first.

The Commissioners cast their votes. Mr. O' Connor and Ms. Smith tallied the votes.

Mr. O' Connor listed the prioritization, as voted upon:

• Agendas
• Board Versus Individual Relationship With Staff
• [Three items tied] Establish and Review Mission, Purpose, and By-laws and Agreement on Board Protocol - Code of Conduct and Accountability

Mr. Berggren commented that the first item was an item to have the most immediate opportunity to create an effect. He felt, though, that a discussion on Board protocol might be a precursor to altering the agenda process.

Commissioner Anderson said that she was anxious to conduct the review of the Bylaws. Ms. Smith noted that the Bylaws were scheduled to be reviewed by June.

Mr. Berggren reiterated his concern, stating that without ground rules any item could suffer from failure to communicate adequately. President Lanning and Commissioner Masterson concurred.

Commissioner Masterson added that if the Board could not interact with one another, there would be no forward movement.

After some discussion, Commissioners chose to engage the issue of Board protocol. President Lanning noted that it had been placed on the agenda for the present meeting.

DISCUSSION #4

Commissioner Bishop noted that in the State Legislature there was a prohibition against derogatory personal remarks.

Mr. O' Connor suggested that there be a positive statement, such as saying that, in the conduct of Board meetings, Board members would demonstrate personal respect even though there may be differing opinions.

Vice President Farmer commented that it would not be possible to legislate morality.

Commissioner Masterson remarked that all of the Board members were adults and should know how to behave as such.

Mr. O' Connor summarized Board protocol, as follows:

• Prohibition of derogatory comments.
• Treatment of others with respect.
• Decorum is maintained.
• Issues between individuals get resolved outside of meetings.
• Staff is treated with respect.

President Lanning suggested, in response to concerns raised by Mr. Berggren, that should a staff person be demeaned, the General Manager should bring it up to the Board.

Mr. Berggren commented that, historically, there had been a role for the General Manager as a facilitator when disagreements arose.

In discussing communications, Commissioner Bishop asked what the parameters were for the Board's communications with the public. Mr. Berggren suggested that there be more clarity on what communications external to the organization needed signatures from the Board versus what communications should be signed by staff. He noted that, at times, editorials written by individual Board members had caused contention between Board members and staff.

In response to a question from Commissioner Masterson, Mr. Berggren explained that the utility had staff members who were charged with maintaining public relations.

President Lanning opined that the responsibility for communications from the utility was in the realm of the staff.

Vice President Farmer felt that more clarity on such a policy would be beneficial. He noted that Lance Robertson, EWEB's External Communications Coordinator had called him and requested that he take on some speaking engagements.

Mr. O' Connor suggested that staff could provide a draft policy on this to the Board prior to the next meeting.

Ms. Smith said that a time would soon be set for the review of the Bylaws and that the Board would also be examining its mission, purpose, and the Board operating principles on May 9 and 10.

President Lanning suggested that the Governance work be incorporated into Work sessions. He felt that if the staff could lessen the time spent on reading material previously submitted to the Board, more of the Governance work could occur at such sessions. Vice President Lanning interjected that some of the Governance work was best conducted in a round table sort of session and that a Work Session was not always conducive to that.

Mr. Berggren requested that Board members step back and consider whether this sort of discussion was meeting some of the Board's needs. Vice President Farmer suggested that Mr. Berggren do the same, taking into consideration the historical perspective.

Commissioner Bishop felt that the session had been helpful. She thanked the staff for their hard work and dedication. She noted that having an outside facilitator had been beneficial to the process.

Vice President Farmer opined that the "hard work" was in the discussions to come on the establishment of mission and principles. He likened the development of accountability and methods of measurement on progress to the place "where the rubber meets the road."

Mr. Berggren said that all of the information extrapolated at the meeting would be provided in memorandum form to the Board members.

The meeting adjourned at 9:30 p.m.

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Assistant Secretary President