Board Members Present: Patrick Lanning, Ron Farmer, Sandra Bishop, Dorothy Anderson, and Mel Menegat.

Others Present: Randy Berggren, Jean Meyers, Deborrah Brewer, Krista Hince of the EWEB staff, and Lynn Taylor, City of Eugene Minutes Recorder.

President Lanning called the Work Session of the Eugene Water & Electric Board (EWEB) to order at 6:00 p.m.

BOARD GOVERNANCE

General Manager Goal Setting/Performance Evaluation Process Subcommittee

General Manager Randy Berggren introduced the item. He referred Board members to a memorandum from Jean Meyers, Human Resources Manager, included in the meeting packet entitled General Manager's Performance Evaluation and Salary Setting Process. The memorandum summarized the activities and recommendations of the subcommittee charged by the Board to review the performance evaluation process and basis for future salary increases. He recalled that the Commissioners had reviewed draft 2004 goals at an earlier meeting and had agreed at that time to start thinking about their priorities for the General Manager's goals.

President Lanning, a member of the subcommittee along with Vice President Farmer, said the background memorandum prepared by Ms. Meyers captured the key points for subcommittee members. He invited comment from Vice President Farmer. Vice President Farmer said the subcommittee commenced on the process with the idea of incorporating a "pay-for-performance" approach, but decided to delay that until the end of the current contract period due to the manager's personal circumstances. In response to a question from Commissioner Anderson, Vice President Farmer said the subcommittee had discussed developing a specific measurement process that provided the Board with hard evaluative data that could be evaluated by a third-party.

President Lanning suggested the Board clarify the process and procedures, determine if the time lines were reasonable, and discuss the General Manager's salary comparison and survey. He invited questions about the materials before the Board.

Commissioner Bishop asked about the time line. Ms. Meyers recalled that the Board had initially considered a calendar year time line, inferring January of each year, but given key indicators such as the financial statement and OPM metrics were not completed until the end of February, the subcommittee had considered the first quarter as a time to evaluate the manager's performance against those indicators.

Also in response to Commissioner Bishop, Vice President Farmer said the time line mirrored the process at his place of employment and he had the opportunity to work on similar plans for other local employers in the past year, which influenced his thinking. Commissioner Bishop asked if that meant if any adjustment made was retroactive to the beginning of the calendar year. Ms. Meyers said that was not discussed.

Commissioner Bishop asked how the Board would budget for the incentives. Mr. Berggren suggested that the situation did not differ from other employees' compensation. Pay raises were projected upon data available at the time and an assumption for increases was included in the budget. He said that the projection was never precise because each employee received an individual evaluation based on performance and decisions about pay increases were made on an individual basis.

Vice President Farmer said there were different approaches to the issue of incentives. One approach was an open-ended one in which the employee benefitted from any revenues or savings he realized above a certain target; another approach was to cap the incentive and tie it to a performance matrix. He believed the latter approach was the only way to truly budget for the incentive.

President Lanning forecast that the Board needed to discuss the issue of hiring those who were here for intrinsic values or reasons.

Commissioner Menegat had no questions.

Commissioner Anderson suggested that the Board avoid the date of February 29 in the chart attached to the memorandum.

Commissioner Anderson endorsed the steps in the time line related to the collection of salary information from other jurisdictions. She suggested that the survey be done every year if it was not too difficult or staff-intensive to do so. Ms. Meyers indicated the exercise was not staff-intensive.

Commissioner Anderson indicated acceptance of the subcommittee's recommendation related to incentives.

Commissioner Anderson asked why a subcommittee, rather than the full Board, would review the updated salary information and performance matrix. Vice President Farmer said it was to save the Board's time and indicated he did not object if the full Board did the review. President Lanning agreed. Commissioner Bishop thought the existing subcommittee had set the framework for the future and it was likely the proposed subcommittee would not be needed.

Commissioner Menegat supported the concept of a subcommittee as he thought the subcommittee would be able to examine all factors and put them in perspective when they came to the Board. Vice President Farmer said that his interest in having a subcommittee was not in having it make a recommendation to the Board, but rather in having it create some context for the Board.

President Lanning concurred with the remarks of Vice President Farmer, saying he had also wished for the Board to have something before it to start the evaluation process.

Ms. Meyers recommended the Board form a subcommittee to look at the factors and ensure that at least two Board members were totally grounded in all the information before the evaluation occurred. She said it was her experience that the Board had difficulty in simultaneously processing all the information it received at the time of the General Manager's evaluation. She thought some "advance intelligence" could help the Board in its Governance capacity. The Board accepted Ms. Meyers' recommendation.

Mr. Berggren considered the time line realistic and doable.

Vice President Farmer and President Lanning agreed to continue as members of the subcommittee. President Lanning thanked Ms. Meyers for her work.

2004 Annual Calendar Discussion

Debra Smith, Telecommunication Project Manager and Mr. Berggren presented the item. Mr. Berggren emphasized the coordination that had occurred among staff members in order to create the draft agenda calendar before the Board, and said that staff had tried to be responsive to the Board's discussions regarding Governance. He commended Ms. Smith for her work in developing the calendar.

Mr. Berggren suggested that the regular business would be addressed during the first meeting of the month, and more unique or special items addressed in the second meeting of the month. He said that the calendar attempted to present an integrated view of the items that come before the Board on a sequential basis.

Ms. Smith reviewed the schedule. She noted the abbreviated budget process and recommended the Board avoid scheduling Work Session items during the Board Retreats. She anticipated that as issues arose there would be opportunities to adjust the schedule, but emphasized that for the most part, the schedule represented the items the Board had on its work plan. New things that arose were likely to extend the time for the second meeting of the month.

Mr. Berggren expressed confidence the schedule was a fairly well-tuned view of an entire year's work. Ms. Smith agreed, and said from a staff perspective it gave staff members better lead time in planning for their own work.

Commissioner Anderson commended the work done by staff but anticipated that the Board would end up having longer meetings. She believed the schedule would force the Board to be more responsible about adding additional items. She said a discussion on representation outside the city and an ombudsman needed to be scheduled soon.

Vice President Farmer also expressed appreciation for the schedule. He asked if staff had attempted to determine which items would be the subject of Work Sessions and which would be the subject of regular meetings. Mr. Berggren said that was the next step in the process. Ms. Smith said she only attempted to specify Executive Sessions. Vice President Farmer advocated for the Board to spend more time in Work Sessions than in regular sessions as he found value in the give and take of Board discussions.

Vice President Farmer suggested another logical next step was to develop a methodology for identifying priority goals for 2004 and noting where those were being addressed in the schedule. Ms. Smith indicated she would follow-up.

Mr. Berggren anticipated staff members would take the information before the Board and integrate it into their own annual calendars and begin to align the organizational support and decision-making with the Board's agendas and decision-making.

President Lanning closed the Work Session at 6:40 p.m.

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Assistant Secretary President