EUGENE WATER & ELECTRIC BOARD
REGULAR BOARD MEETING
EWEB BOARD ROOM
MARCH 1, 2005
6:30 P.M.
Board Members present: Ron Farmer, Sandra Bishop, Mel Menegat, and John Simpson. Commissioner Patrick Lanning was excused.
Others present: Randy Berggren, Dick Varner, Debra Smith, Jim Origliosso, Roseanna McArthur, Jim Wiley, Dick Helgeson, Lance Robertson, Jean Meyers, Tom Buckhouse, Mike Logan, Joe Vaccher, and Krista Hince of the EWEB staff; Rick Lindholm, Cathy Hamilton, Lindholm Research, L.L.C.; and Ruth Atcherson, Minutes Recorder for the City of Eugene.
President Farmer convened the Regular Board Meeting of the Eugene Water & Electric Board (EWEB) at 6:49 p.m.
AGENDA CHECK
There were no changes to the agenda.
PUBLIC INPUT
There was no one present who wished to speak.
APPROVAL OF CONSENT CALENDAR
MINUTES
Commissioner Menegat pulled Item 13.
Commissioner Menegat, seconded by Commissioner Simpson, moved to approve the Consent Calendar with the exception of Item 13, a Revised L-3 Security Lighting Policy to Incorporate Outdoor Lighting Standards. The motion passed unanimously, 4:0.
ITEMS FROM BOARD MEMBERS
Vice President Bishop related that Sara Patton, of the Northwest Energy Coalition (NEC), had called her to apologize for mischaracterizing EWEB as not having spent an adequate amount of money on its Low Income Energy Assistance Program (LIEAP). Ms. Patton indicated that the numbers had not been checked for accuracy.
Assistant to the General Manager Debra Smith stated that Libby Henry, Mike Logan, and Lance Robertson had worked on correcting the misrepresentation. She explained that while the article portrayed EWEB as being the 7th from the bottom for spending on the list of utilities that had programs such as the LIEAP, it was actually on the top of the list, unless the numbers for the other utilities were inaccurate, too. She said, at minimum, the NEC would put an article of correction in its next issue.
Vice President Bishop requested from staff a verbatim of Jack Roberts and the City Councilors’ testimony from the Public Forum.
Commissioner Menegat related that he had an opportunity to appear before the Lane County Tax Equalization Association, a group comprised primarily of people in the wood products industry. He said the topics of conversation focused primarily on the potential for the location of the hospital on the EWEB site.
Commissioner Menegat noted that he and Commissioner Simpson had attended the first two days of meeting to discuss the 30 percent design on EWEB’s Master Plan.
President Farmer reported that the Chamber of Commerce Local Government Affairs Council had invited General Manager Randy Berggren, Vice President Bishop, and himself to address their forum, held every Friday morning. He said the Council had heard a presentation from McKenzie-Willamette/Triad Medical Center during their previous meeting. He related that they had accepted the invitation, but Ms. Smith would attend in place of Mr. Berggren as he was unable to attend. President Farmer noted that Ms. Smith was a member of the Council. He recommended following the same format that was being used for the public input sessions in order to avoid any mixed messages.
CORRESPONDENCE
Mr. Berggren reported the following:
Mr. Berggren asked if Commissioners wanted a Board-only dinner. The Board was amenable to the idea. Commissioner Simpson requested Mr. Berggren’s presence at the dinner.
Vice President Bishop asked what purpose the retreat was to serve. Mr. Berggren replied that it was typically the first day of strategic planning for the year and that there were still a number of outstanding governance issues to be addressed. He briefly reviewed the planned agenda.
Vice President Bishop said there were topics she would like to bring up under the heading of governance. She asked if there would be time available on the agenda for her to bring up her concerns. Mr. Berggren replied that it was the Board’s agenda and Commissioners could make changes. Vice President Bishop indicated she would bring her concerns to the retreat and then the Board could decide whether to discuss them. She also thought the frequency of retreats merited discussion.
Ms. Smith pointed out that the second half of the retreat was relatively open and, additionally, there were slots in future meetings that could be used for governance issues.
Mr. Berggren continued his report on correspondence:
Board packets include a Capitol update. Libby Henry provided a summary relevant to the Governor’s threat to sue over the biological opinion. Ms. Henry was working on that along with a number of “co-ops.”
President Farmer noted that he and Mr. Origliosso were scheduled to travel to San Francisco, California, to meet with the other two lobbying agencies on March 17 and 18, 2005.
In response to a question from President Farmer, Mr. Berggren said the fish guides could be provided the information that staff had provided the Board.
BOARD AGENDAS
Mr. Berggren provided an overview of the Eugene Water & Electric Board: Board Agenda Report; March 1, 2005. He stated that there were no outstanding backgrounders at this point in time. He pointed out that there were a number of items continuing to stack up on the list of pending items. He recommended that the Board “wade” through the list at its meeting on March 15. He highlighted the upcoming meetings.
GENERAL MANAGER’S 2004 EVALUATION
President Farmer reported that the Board met in Executive Session prior to the Regular Board Meeting and compiled the individual ratings for the General Manager, achieving consensus that the General Manager had an “exceeded expectations” rating. He said the areas that were specifically called out in which the General Manager had exhibited a strong performance were how the potential relocation of the utility was handled, the near-completion of the Walterville licensing project, the finalization and implementation of the contract with the International Brotherhood of Electrical Workers (IBEW) and the leadership he had demonstrated during the negotiation.
President Farmer reported that the Board found the following areas to need work: that the General Manager should be more assertive with the Board, that he should be more proactive in his position from a leadership perspective, and that he should be more proactive in getting messages and communications to customers. He asked for a motion relative to salary adjustment.
Commissioner Simpson moved to increase the General Manager’s salary by 4 percent, based on the “exceeded expectations” rating he received. Commissioner Menegat provided the second.
Commissioner Menegat said Mr. Berggren had done an excellent job in bringing the utility forward in all phases of its operations. He felt a 4 percent increase to be an adequate amount to be forwarded; however he wished the utility to be in a position where a more appropriate increase could be suggested and approved.
Vice President Bishop asked where the money for the increase would come from. Mr. Varner replied that it came out of the budget that had already been approved for salary increases for all staff.
Vice President Bishop called this a tough decision. She stated that there was no question that Mr. Berggren had done a great job. However, she heard from so many ratepayers who were struggling to survive that she could not, at this point in time, vote to support a raise. She said she asked the General Manager to hold the line on financial issues and because of this she could not vote to spend more money. She underscored that the reserves were still not fully funded.
President Farmer said sometimes you had to pay for leadership to get the utility from one point to another. He emphasized that the raise needed to be looked at from a historical perspective, so that one considered the raises over the last three years. When doing that, the raise amounted to less than 2.2 percent per year, less than the rate of inflation. He called for the vote.
The motion passed, 3:1; Vice President Bishop voting in opposition.
GENERAL MANAGER’S 2005 GOAL ESTABLISHMENT
President Farmer opened the floor for comments on the draft Eugene Water & Electric Board General Manager Goals dated February 25, 2005.
Commissioner Menegat stated that the document was the result of a number of discussions that had been held over a period of time and had been finalized in the draft. He felt it had moved away from the business-as-usual goals toward goals that would have a more lasting effect on the utility.
Commissioner Simpson asked if there would be a preamble to the General Manager Goals. President Farmer replied that the first goal indicated that the manager was responsible for the function of the utility and this would count for 25 percent of how his job performance was waited.
President Farmer said weighting the individual goals at 75 percent begged the question of how the weights would be distributed among those five goals.
Commissioner Simpson favored assigning them an equal weight as he did not want to take the time to place an individual percentage on each of them.
Mr. Berggren commented that none of the individual goals stood out in his view.
President Farmer recommended the Board leave the individual goals weighted at 15 percent of the total weighting process. When he looked at the measurement of success, he thought that Goal 2 (a) seemed as though it could happen without any planning on the part of the General Manager. He felt a better way to measure this would be to include that the General Manager had strategies that ensured that a contingency plan would actually be completed if necessary.
Mr. Berggren suggested that he begin planning mid-year for a poor water year. President Farmer responded that the plan he wanted to see was one that addressed a situation wherein the hydro year fell short of what was planned. He asked that verbiage be added that talked about plan completion.
Ms. Smith said she would bring the most recent version of the five-year forecast at the financial retreat scheduled for July. She suggested that staff develop and bring contingency plans dealing with most likely scenarios at that retreat
President Farmer recommended that the success of Goal 2 (d) also be measured based on the actual purchase of the site and not just the identification and approval of the purchase of the site.
Regarding Goal 2 (e), President Farmer asked that the word ‘issues’ be substituted for the word ‘events’ under (a)(1).
Commissioner Simpson requested clarification of Goal 2 (e)(c)(1). He asked if the opinion pieces provided the local newspaper would be submitted to the Board for review. Mr. Berggren affirmed that they would.
Vice President Bishop expressed discomfort with making completion of the purchase of a new site for EWEB a measurement of success. She thought the language, as it currently stood was adequate. The Board decided to leave the language of Goal 2 (d) as written.
Vice President Bishop thanked staff for their work on the document.
Commissioner Menegat, seconded by Vice President Bishop, moved adoption of the Eugene Water & Electric Board General Manager Goals 2005, with the aforementioned minor amendments. The motion passed unanimously, 4:0.
ANNUAL CUSTOMER SURVEY
External Communications Coordinator Lance Robertson reviewed results from the annual customer survey with the aid of power points. He introduced Rick Lindholm and Cathy Hamilton of Lindholm Research. He noted that Ms. Hamilton formerly served as the external communications coordinator for EWEB and now had her own marketing/public relations firm, Verb Creative, and had helped construct the survey. He underscored that the survey was intended to be a tracking tool in order to measure customer satisfaction and to identify trends. He noted that this annual survey had been conducted after two rate increases in 2004 and during the week that EWEB was in the news due to the offer from Arlie & Company.
Mr. Robertson reported an increase in the overall satisfaction of customers and that most other results were similar to previous years. He stated that the one category that continued to be of high interest to customers and in which the utility continued to lag in terms of performance was in the area of controlling costs.
Mr. Robertson cited one question that sought to find out where customers get their information about EWEB. He noted that declines were observed in the usage of almost every source of information in 2004.
Mr. Lindholm explained that the survey used a five-point scale and a four or a five was considered quite good. He noted that, in a five-point scale, people tended to score things at a four.
Mr. Lindholm affirmed, for President Farmer, that the scale given survey respondents was in whole numbers only and customers were not given the opportunity to fractionalize the scoring.
Commissioner Simpson asked if someone who would give a score of 4.9 points would then drop that to four points. Mr. Lindholm replied that a person who scored something at 4.5 points would definitely drop it to four points, but he could not be certain how a perceived score of 4.9 points would be communicated.
Ms. Hamilton reported that the survey included open-ended questions and the next question following the rating for overall satisfaction was a question asking why the rating was given. She said it was not unusual to hear people say they did not believe in giving perfect scores.
Mr. Robertson noted that the number of people who gave five-point ratings on things increased from 30 percent to 40 percent. He continued to review survey results. He underscored that the two most important categories for customers were water quality and electric reliability.
President Farmer said rate increases were in response to need. He asked if it would be possible to determine, when surveying customers, if they understood the difference between costs and rate increases. Ms. Hamilton affirmed that customers readily distinguished between electricity and EWEB’s electricity. Mr. Lindholm clarified that customers did distinguish a rate pass through and other rate actions. Ms. Hamilton added that customers continued to be specific, such as blaming California for rate woes.
In response to a question from Commissioner Simpson, Mr. Lindholm explained that 400 people were surveyed and this led to a margin of error of five percent.
Vice President Bishop was curious as to why there had been a decline in customers accessing information about EWEB. Mr. Lindholm thought that the results had returned to 2003 levels. He felt the snowstorm of 2004 had brought EWEB into the forefront because of the news articles on the restoration of electric services after the storm and this had influenced the survey results for that year.
Mr. Robertson said staff and Lindholm Research would provide a final analysis of survey results, including responses to the open-ended customers.
President Farmer observed that the primary issues were cost containment and electric reliability, but increased reliability cost more money. He asked if it would be possible to determine within the context of the survey how much reliability customers were willing to trade in return for less expense. Mr. Lindholm responded that a conjoint analysis had been conducted in 2003.
President Farmer wanted to have a Board discussion on how to reconcile and use the information and how to drive the research to help the Board better understand the results.
In response to a question from Commissioner Simpson, Mr. Lindholm responded that if one took all nine-performance variables and analyzed how they relate to the initial satisfaction question, it was clear that four of the variables were statistically significant as correlates to the satisfaction variable.
President Farmer declared that the Board should take note: EWEB was getting a strong message that cost containment was of key importance.
Vice President Bishop remarked that she would prefer to have the entire report when the analysis was complete, rather than this interim report with the scored answers followed by another report at a different meeting.
Commissioner Simpson asked how the results were used. Mr. Robertson said survey results were particularly helpful to the public affairs division as it helped determine the best media for communicating information. In particular, it was helpful to conduct some cross tabulation to determine what customers answered which question. He related that one item of information, as an example, would be where customers with a lower degree of satisfaction in the utility’s performance received their information on the utility. He said this information would be used to determine how best to disseminate information.
President Farmer commented that the question in his mind was whether to go out and try to convince the public that they should be more satisfied with the service or whether the public perception was the “reality.” He thanked Mr. Lindholm, Ms. Hamilton, and Mr. Robertson for the presentation.
ITEMS REMOVED FROM THE CONSENT CALENDAR
Commissioner Menegat apologized to Joe Vaccher, EWEB’s Energy Specialist, and Mike Logan, Senior Key Accounts Manager, for keeping them until the end of the meeting. He wished to highlight this item because it was significant and deserving of more attention than it would have received in the Consent Calendar. He called it the kind of program that EWEB was “all about.” He shared his excitement for the program and his appreciation to the staff members who did the work.
Vice President Bishop pointed out that it had not taken staff a year to compile the backgrounder, entitled Revised L-3 Security Lighting Policy to Incorporate Outdoor Lighting Standards, but it had taken the Board a year to make time for it.
Mr. Logan reported that Ms. Henry had brought to staff’s attention House Bill 2411. He said the bill had the Oregon Department of Transportation looking at lighting from a traffic standpoint and it was possible that a national lighting standard for outdoor light fixtures could be mandated. He stated that EWEB was weighing in on the issue as it did not want to be caught in a position in which the utility would have to redo the light fixtures it had just redone.
Mr. Vaccher described the lighting fixtures. He stressed that the fixtures were more efficient. They featured a flat lens and the optic went only 2 percent above 90 degrees. He explained that a 150-watt fixture produced more foot-candles than the previously used 200-watt fixtures had produced. Additionally, he said the new fixture produced fewer glares.
Mr. Logan stated that crews continued to work at a steady pace to replace the old fixtures as allowed under the Ordinance. He said the proposal was to fold this activity into the normal maintenance practices.
President Farmer asked how much it cost to change one of the fixtures. Mr. Logan replied that the fixtures cost $162 apiece, cheaper than the current 400-watt fixtures, and EWEB had spent approximately $45,000 for the crew to conduct this maintenance activity.
In response to Commissioner Simpson, Mr. Logan explained that the lights were not run through household meters and customers were charged a flat rate of $6 per month. Mr. Vaccher added that the utility required that the fixtures be hung on EWEB poles.
Commissioner Simpson asked Mr. Logan to comment on high-pressure sodium fixtures and the fixtures that the City of Springfield used. Mr. Logan said high pressure sodium fixtures were not included in the list of standards, but he felt this was a mistake because the fixtures lasted nearly twice as long as metal halide fixtures. He explained that Springfield had been using low-pressure sodium light fixtures but the use was being discontinued because the fixtures interfered with the visibility of traffic lights. Mr. Vaccher stated, in response to another question from Commissioner Simpson, that the low pressure sodium fixtures were efficient, but one usually only saw them in areas where there were observatories.
Vice President moved to approve Consent Calendar Item 13, which would incorporate into EWEB’s policies and procedures the applicable outdoor lighting standards included within Eugene City Code 9.6725 by modifying EWEB’s Customer Service Policies and Procedures pertaining to Private Property Security Lighting Service – Schedule L-3 as recommended in the attached modified version of the L-3 Schedule. The motion passed unanimously, 4:0.
President Farmer adjourned the meeting at 8:25 p.m.
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Assistant Secretary President