AGENDA

EUGENE WATER & ELECTRIC BOARD
SPECIAL BOARD MEETING
(EXECUTIVE SESSION)
EWEB BOARD MEETING
DECEMBER 16, 2003
5:30- 6:00 P.M.

WORK SESSION
6:00-7:30 P.M.

1. Board Governance - Randy Berggren and Debra Smith, Telecommunications Project Manager (Presentation - 30 min./Discussion - 60 min./Information)
   •Board Subcommittee - GM Goal Setting/Performance Evaluation Process
   •2004 Annual calendar Discussion

SPECIAL BOARD MEETING
7:30 - 8:30 P.M.

Consent Calendar
December 16, 2003

1. Executive Session minutes of October 8, October 21, November 3, November 18, and December 2, 2003; the Minutes of the October 21, 2003 Special Board Meeting, the November 3, 2003 Work Session and the November 3, 2003 Regular Board Meeting
   
   BUDGET AMENDMENT
   
   
2. Budget Amendment No. 19 - Substation Additions (14009), Residential Additions (14510), Commercial Additions (14511), and Distribution Transformer Replacements (17050) Amendment for: Electric Capital Projects. In accordance with Board policy, staff is reporting 2003 budget variances for Electric Division capital projects with annual budgets greater than $200,000 that are expected to exceed budget by either 20% or $100,000, and is requesting Board approval of an amendment to the 2003 capital budget. This amendment is necessary due to overruns in four electric Projects (Substation Additions, Residential Additions, Commercial Additions, and Distribution Transformer Replacement) driven by variations in forecasted versus actual customer work, new development, facility renewals and replacements, and variations in budgetary project scopes and estimates. (Overall, the electric capital budget is approximately $2.1 million under budget, with bond-funded projects $2.7 million under budget and rate-funded projects $0.6 million over budget; however, the bond funds need to be reserved for 2004 work.) Please refer to the background memo in Board packet for detailed information. The overrun of $1,238,868 will be offset by application of $632,000 from favorable variances in other Electric, Facilities Services and Corporate Services capital Projects and $605,000 from Finance Division Project #14343 - Debt Management Electric. Contact person is Dean Ahlsten, 484-2411, ext. 321.
   
   BUSINESS SERVICE AGREEMENTS
   
   
3. Bank of America - Commercial Banking Services - Finance Division. In 1997, Commercial Banking Services were advertised and proposals were received from qualified financial institutions in compliance with State of Oregon public contracting laws and EWEB Board adopted rules. As a result of that solicitation, the Board approved a contract with Bank of America for the commercial banking services for EWEB. The contract terms allow the continuation of these services for up to five consecutive years. This contract will expire December 31, 2003 and can no longer be renewed.
   
   EWEB advertised and solicited bids on July 22, 2003 in compliance with State of Oregon Public Contracting laws and EWEB Board adopted rules to establish a new contract for Commercial Banking Services. Proposals were received from US Bank, Umpqua Bank, Wells Fargo, Key Bank and Bank of America. Proposals were evaluated and Bank of America was deemed the highest-ranked proposer as a result of the evaluation.
   
   Staff is requesting Board approval for the award of an initial three-year contract (2004 through 2006) with the option to renew for two additional years. Cost of commercial banking services for Electric and Water Utilities are expected to be $57,300 per year, or $286,500 over the potential five-year total contract term. Fees are included in the budget for the appropriate periods. Contact person is Cathy Bloom, Assistant Treasurer, 484-2411, ext. 3277.
   
   
4. PricewaterhouseCoopers - Electric & Water Utility and Trojan Project annual Audits - Finance Division. In 2000, Auditing Services were advertised and proposals were received from qualified accounting firms in compliance with State of Oregon Public Contracting Laws and EWEB Board adopted rules. As a result of that solicitation, the Board approved a contract with PricewaterhouseCoopers LLP for the auditing of EWEB and Trojan. The contract terms allow the continuation of these services for up to five consecutive years. The contract is currently in its third year. Staff is requesting Board approval for the renewal of the last two years of the contract (2003 & 2004 annual audits). Cost of auditing services for Electric and Water Utilities and Trojan Project are expected to be $195,000 and $14,500 respectively. Fees are included in the budget for the appropriate periods. Contact Cathy Bloom, 484-2411 ext. 3277.
   
   
5. AON Consulting - Conpensation and Benefits Administration - Human Resources - Corporate Services. For additional work beyond our standard contracted amount due to changes in the Regence Lane County physicians panel (HMO) that resulted in major changes in our medical contracting language in addition to additional time spent on the Retiree implementation issues. Money that had been budgeted for others jobs will be used and has been budgeted for in the 2003 budget. Amount is $15,000. Contact person is Laurie Muggy, 484-2411, ext. 3013.
   
   
6. Harrang Long Gary Rudnick P.C. - Legal Services - Human Resources - Corporate Services. Harrang Long will provide legal services to EWEB for all employment and personnel related matters. Under this agreement, legal services include general advisement and representation in matters involving employment litigation if necessary. Services of up to $150,000 will be provided on an "as needed" basis as requested by EWEB thorough the Executive Management or Human Resources Manager. Contact person is Jean Meyers, 484-2411, ext. 3015.
   
   
7. Second Growth - Leaburg Power Canal Revegetation - Environmental Services - Corporate Services. Second Growth is under contract to reseed and revegetate areas impacted by 2002/03 construction activities at Leaburg/Walterville hydroelectric projects. This amendment is for Second Growth to replant 1) areas disturbed by recent stump removal along the Leaburg Power Canal and 2) areas disturbed by construction of the Leaburg tailrace barrier. The replanting along the Power Canal consists of native grass seed, wildflowers and blue wild iris and daffodils (near the entrance to Leaburg community and across from Greenwood drive - two areas highly visible from Highway 126), and native shrubs and trees along the toe of the canal at specific locations. Earlier this fall, Second Growth completed hydroseeding with a sterile wheat to stabilize the bank and prevent erosion during the rainy season. The replanting plan for the Canal was developed with a group of local Leaburg citizens throughout last spring and summer and presented to Randy Berggren in August. The replanting of the Leaburg tailrace barrier consists of native shrubs, trees and shrubs to restore areas disturbed by 2003 construction activities and is required as a condition of environmental permits. Replanting of both areas will commence in December. Funds to replant the Leaburg Power Canal are from deferred maintenance of generation facilities. Funds to replant the Leaburg tailrace are from relicensing. Contract amount is $112,654. Contact person is Laurie Power, 341-8525.
   
   INTERGOVERNMENTAL AGREEMENT
   
   
8. Department of Environmental Quality (DEQ) - Manufactured Gas Plant Site Investigation - Environmental Management - Corporate Services Division. This request is to add and additional $12,000 to cover Department of Environmental Quality oversight fees pursuant to the November 25, 1998 Intergovernmental Agreement (IGA) between EWEB and DEQ for the investigation and cleanup of the former Eugene Manufactured Gas Plant Site. The funding sources are the 2003 and 2004 budgets. EWEB's obligations under the IGA are anticipated to be completed in early 2004 upon DEQ approval of the Focused Feasibility Study (FFS) for the site. The FFS develops and evaluates alternatives for remediation of contamination at the MGP site. EWEB is currently addressing DEQ comments on the draft FFS and anticipates submitting the final FFS by March 2004. Upon DEQ approval of the final FFS, the existing IGA will terminate and EWEB and DEQ will need to negotiate a new agreement to address site remedial activities.
   
   DEQ cost recovery fees from 1995 through September 2003 total $38,491. EWEB as the property owner, is responsible for paying the DEQ. However, pursuant to cost sharing agreements with two of the parties who are responsible for the MGP site contamination, EWEB gets reimbursed for approximately 83% of the DEQ costs. Through September 2003, EWEB has received $31,700 in reimbursements, resulting in a net cost to EWEB of $6,801. EWEB's anticipated share of remaining DEQ costs under the current IGA will be approximately $2,000. Contact person is Debbie Spresser, 484-2411, ext. 3319.
   
   SYSTEMS DEVELOPMENT CHARGE GRANT PROPOSAL
   
   
9. Water System Development Charge Grant Request - Santa Clara Plaza Project (SVDP) - Interagency Housing Policy Board - Water Division. In accordance with established procedures, the Lane County Interagency Housing Policy Board has requested a $48,853 grant to offset Water System Development Charges for a 62-unit multi-family dwelling complex to be located on a three-acre parcel on Santa Clara Avenue. Prior Board resolution and interagency agreements provide for annual consideration by EWEB of up to $100,000 in SDC grants for qualifying low income housing projects, subject to availability of funds and Board approval. This project is being built by St. Vincent dePaul (SVDP), a local nonprofit agency, and meets the Board's established eligibility criteria. Two other such requests totaling $31,620 have been approved thus far in 2003, leaving ample room for Board consideration of this latest request. Staff recommends approval of this grant request with funding from available surplus water operating reserves. Contact person is Dick Helgeson, Water & Steam Division Director, E-Mail Dick Helgeson or 484-2411, ext. 3960.