3/2/2005

Board Members present: Ron Farmer, Sandra Bishop, Mel Menegat, and John Simpson.

Others present: Randy Berggren, Marty Douglas, Dick Helgeson, Mark Oberle, Debra Smith, Jim Wylie, and Krista Hince of the EWEB staff; and various members of the public.

PUBLIC HEARING ON POSSIBLE SALE OF LANDS

Commissioner Farmer convened the meeting at 7 p.m. He noted that there were forms for written testimony for those who did not wish to testify.

Commissioner Farmer said EWEB might not have communicated as well as it should regarding the possible move to a new location. He stressed that the Commissioners were present to listen to the community and outlined the options being considered by the utility.

Commissioner Farmer said EWEB had begun searching for property that could be used for a new base of operations. He said the site search had begun well before the current offers from Triad and Arlie & Company and before most of the Board members had been elected.

Commissioner Farmer noted that the buildings on the current site required repairs totaling more than $10 million. He added that there were substantial difficulties in operating a truck and pole yard in a downtown area. He said the Roosevelt property would alleviate those difficulties if the utility desired to move. He stressed that no decision or contract to move had yet been made but acknowledged that the current property was for sale. He stressed that the sale price would need to be sufficient to construct a new location and address its logistical issues with no increase in rates.

Commissioner Farmer said EWEB did not have to move but noted that if there were no move, then EWEB would have to get its facility repair costs from rates. Commissioner Farmer said the Commissioners had hired WGBS to provide a 30 percent design process that would show building outlines on the new property and provide basic information needed for establishing moving costs. He said September 2005 was the target for completion of that work.

General Manager Randy Berggren outlined the options for possible sale and how
they would be funded.

• Move the entire utility to a new location

Mr. Berggren said this would involve a funding strategy that required a sale of the existing site in addition to some refinancing of existing debt. He said rates would not be affected by a move in that context.

• Move only field operations

Mr. Berggren said the proceeds from a partial sale and refinancing of existing debt would fund a move for field operations only.

• Not move at all

Mr. Berggren said this decision would require the investment of $10 million plus to pay for needed repairs to the buildings on the site. He said this would come from rates as well as refinancing of existing debt.

Mel Damewood, Master Plan Project Manager, provided a presentation on the 30 percent conceptual design process. He showed a aerial view of the proposed new location. He said the site was approximately 46 acres and was zoned I-3 Industrial. He said due diligence had been very thorough on the site. He said the question of split versus combined would be revisited during the 30 percent design process. He said the City had granted permission to develop wetlands on the property. He noted that EWEB would have to pay $50,000 for every acre of disturbed wetlands on the property to the wetlands mitigation bank or redevelop in-kind wetlands on the site. He noted that the cost did not include the cost of building intersections and lighting on Roosevelt Boulevard.

Mr. Damewood stressed that the purchase of the property did not necessitate a move. He said it would provide EWEB with a viable option for moving its headquarters. He said the Roosevelt site was the preferred property over all of the other options that had been explored.

Explaining the 30 percent conceptual design, Mr. Damewood said that was the process for allowing EWEB to see how the property would be developed, gross square footage requirements, basic placement of buildings, locations of various departments, and sustainability requirements.

Moving on to Key desired outcomes of the process, Mr. Damewood said it would enable EWEB to look forward to its future. He reiterated that split versus combined operations would be reviewed during the process. He said each department would participate in a detailed programming phase that would outline how departments interacted with each other and existing/future needs so relative costs of both options could be thoroughly explored.

Regarding public involvement, Mr. Damewood said EWEB staff would be attending neighborhood organization meetings to provide updates. He said there would also be progress updates during scheduled board meetings. He added that there would be project meetings with two Board members attending. He said there would also be a public information session at the end of the design process to give the public an overview of what had been decided.

Commissioner Farmer called for public testimony.

Pauline Hudson commented that the current site appeared to be in good repair. She raised concern that the new site was inconvenient to customers and suggested having drop boxes distributed around town for customers to make payments.

Ms. Hudson also raised concern over traffic problems that would occur if a hospital were located on the site. She raised concern that emergency vehicles would not be able to arrive in a timely manner if a stalled vehicle or an accident blocked the Ferry Street Bridge.

Lane County Commissioner Peter Sorenson said his constituents were also EWEB ratepayers as well as citizens who used a hospital scheduled to move out of the community. He thanked the Commissioners for offering the chance for public input. He said if a move were required then taking advantage of Triad’s offer should be kept in mind since a hospital needed to be located in the City of Eugene. He said the community needed a hospital south of the Willamette River; south of the river that was not affected by bridge access.

Commissioner Sorenson urged the Commissioners to make the sale happen as long as it was in line with the Board’s primary responsibilities.

Warren Logan, Mount Tom Drive, Coburg, thanked the Commissioners for providing an opportunity for the community to speak. He stressed that customers were the Board’s highest concern.

Mr. Logan said one hospital could no longer serve the communities of Eugene and Springfield. He said people living in Eugene deserved direct access to hospital services west and south of the river.

Fred Reem, Woodridge Drive, spoke as a concerned rate payer. He said EWEB rates had increased over 50 percent in the previous four years. He questioned whether the claim that the move would not affect rates was the truth. He commented that Triad’s offer for the land would not pay the costs EWEB had shown for moving and questioned where the difference would come from. He stressed the importance of decisions that were based on the best interests of ratepayers.

Don Klingensmith said the ultimate decision for what was done with the property rested with the City Council but opined that the Eugene City Council was out of control. He said he did not believe that ratepayers would be unaffected by the costs of the move.

Charles Biggs, 540 Antelope Way, raised concern that a hospital on the site would interfere with the Willamette Greenway. He said the purpose of the greenway was enhancement of the riparian environment and surmised that a hospital did not fall under that characterization. He added that the public’s right of first purchase should be maintained so that if Triad eventually sold the property it would revert to public lands.

Mr. Biggs said EWEB should hold its current site until the market price and redevelopment cost came in line with one another. He also questioned how much acreage would be lost from the property if the City acquired 150 from the river for parks space.

Ruth Freeman said she had seen McKenzie Willamette grow for 33 years and was currently managing the short stay unit. She said the core values of McKenzie Willamette were partnerships, quality, integrity, respect and compassion. She said the hospital would need to move if it were to continue to serve the community in the way it had grown used to. She said Eugene needed a hospital and EWEB had the means to facilitate that move.

Roy Orr, 2345 Parkview Drive, spoke as the Chief Executive Officer of McKenzie Willamette Medical Center. He said he was aware of the importance of the decision that the EWEB Board had to make but said it would be irresponsible to not carefully consider the offer made by McKenzie Willamette. He said Eugene’s City Council and Planning Commission approved of attracting a hospital to its core area. He said EWEB’s current property was one of the very few sites meeting that criterion. He raised concern that Eugene was on the verge of becoming the only city of its size in the country without a full service hospital and emergency room.

Brenda Yoder, 706 C Street, Springfield, said she worked as a chaplain for McKenzie Willamette. She said the setting of the current EWEB property would work well for the community. She said a McKenzie Willamette located on the EWEB property would be a wonderful central setting for people to attend support groups and seminars on health. She said McKenzie Willamette was responsive to the interests and needs of the community and would work to solve any problems raised in locating on the EWEB property. She said a hospital at the current EWEB location would benefit the community more than condominiums or shops.

Maureen Weathers spoke as the Chair of the McKenzie Willamette Triad joint venture. She thanked the Commissioners for its consideration of the proposal offered by the venture for the EWEB property. She stressed that the challenge for EWEB was how to meet the needs of its constituents in the best way. She expressed a hope that the site would be sold to McKenzie Willamette since that would benefit both EWEB and McKenzie Willamette. She stressed that Eugene needed a hospital and the community wanted a hospital to remain in the core area of downtown. She urged the Commissioners to continue due diligence without delay and to get on with gaining a better understanding of the collective options available.

Brad Thompson said Peace Health would soon be building a large hospital in Springfield. He said it was a very long ambulance ride from his home in South Eugene to north Springfield and noted that there were thousands of people in south Eugene who would have to consider the length of a trip to get to that hospital.

Mr. Thompson commented that the current EWEB property was full of unused vacant lots and remarked that EWEB had not been a good steward of its property over the years.

Rick Barnham, 1310 East 20th Avenue, spoke as the Associate Administrator at McKenzie Willamette Hospital. He urged the Commissioners to continue the due diligence process. He stressed that access to quality medical care was critical to the community. He said there was a need for a hospital in the population center of Eugene so people would not have to travel so far to the Peace Health facility. He urged the Commissioners to attend the planned public sessions sponsored by McKenzie Willamette.

David Rodriguez, questioned the wisdom of having two hospitals along two rivers. He raised concern over possible flooding. He said that the EWEB site was located in the 500 year flood plain and noted that part of EWEB’s facilities had been flooded in 1964. He added that railroad tracks and the Ferry Street Bridge were both in close proximity and raised concern that a hospital on the EWEB property would be boxed in. He reiterated the danger of flooding to any facilities located along the river.

Mark Herring spoke as a physician living in Eugene that did not work for McKenzie Willamette. He said he supported a community hospital in Eugene at the EWEB site. He said there was no question that it was in the best interest in the community. He stressed the difference that a few minutes could make in treating a stroke or a heart attack and reiterated that a hospital in Eugene’s core would mean critical minutes to patients who needed to be treated. He said EWEB had an opportunity to be an enormously positive asset to the community by selling to McKenzie Willamette.

Rosie Prior, 2671 East Wilshire Drive, spoke as an employee of McKenzie Willamette and an EWEB ratepayer. She said she applauded that the EWEB Board was thinking outside of the box in considering a sale of its property to McKenzie Willamette.

David Hinkley, 1350 Lawrence, said the matter at hand was not a hospital but what was best for EWEB and its ratepayers. He said he was not against a hospital locating on EWEB’s property as long as they paid the right price. He suggested retaining the current administration building and selling off the rest of the property in lots since that would bring a better price. He said moving costs were the minimum price and not what the market would dictate.

Zach Vishenoff, Patterson Street, Eugene, submitted written material into the record. He commented that the Eugene City Council had not learned from its experience with Peace Health. He said the Board should listen to the public and do nothing until an independent review board was formed to examine riverfront access issues. He surmised that the University of Oregon was pushing the Eugene Planning Commission behind the scenes so that cars could be brought closer to the river.

Doug Newton, Cross Place, Eugene, said it was unfortunate that the Board was caught in the middle of a hospital-swapping debacle. He stressed that city council mission statements and goals did not supercede EWEB’s obligation to be responsible stewards of public assets. He said EWEB’s property was not the only option for a hospital looking to locate in Eugene. He remarked that other sites would require a hospital to pay for profit property taxes while locating on public land would put money directly into the City’s urban renewal fund.

Mr. Newton said there had been a dramatic escalation of real estate values and questioned the amount of the McKenzie Willamette offer for the property. He said Triad could not afford to pay an honest price for the property and were resorting to manipulating desperate politicians to help acquire the property.

MaryAnne Holser asked for caution and consideration on all the deals being proposed for EWEB property. She said Triad’s initial offer left EWEB $15 million short on its relocation costs and opined that the ratepayers would be asked to make up the difference.

Ms. Holser raised concern that construction of a hospital on the site would damage the riverfront and questioned whether the property would be accessible enough to meet the needs of a hospital. She submitted written material into the record.

Otto Petitia, 1820 Kona Street, said there was no question that McKenzie Willamette should locate west and south of the river but stressed that this was not EWEB’s problem. He said the current site should be re-appraised as a mixed use zone rather than a public lands zone. He said this would significantly increase the value of the assessment. He said the property should be rezoned and remarked that selling the land in mixed use lots would bring in a much higher price.

Karen Francis, 2380 Lake View Drive, spoke as an employee of both McKenzie Willamette and Peace Health. She stressed that Eugene did need a hospital near its core area. She said McKenzie Willamette was a strong community partner and looked for community input in any project it participated in. She said the appraisals of the EWEB property had been done by independent appraisers and remarked that the offer made by McKenzie Willamette for the property was very fair. She reiterated that a hospital was needed for all the citizens living west and south of the Willamette River.

Jim Bishop, 2464 Portland Street, spoke as the vice president for Business Development for McKenzie Willamette Hospital. He said he supported the development of a hospital on the EWEB property. He said the physician’s community also supported the idea. He said McKenzie Willamette would continue to be a community hospital that matched its services to the needs of its patrons.

Ruth Daimler said the community enjoyed the administration building and was an important part of the community and would hate to see it leave. She said she supported a hospital in Eugene but also raised concern over possible rising of rates if a move were to take place. She questioned how EWEB’s steam customers would be served if the utility moved its location. She reiterated her concern over additional increases in utility rates and stressed that this should be the primary concern of the Commissioners.

Carlos Ferrera reiterated previous testimony regarding a desire to locate a hospital on the EWEB site. He noted that the Board members of the Friendly Area Neighborhood Association were unanimously opposed to a hospital on the EWEB site. He noted that there were other choices south of the river and noted that the site at 13th Avenue and Willamette Street was an attractive option. He urged the employees of McKenzie Willamette present in the audience that evening to give that site serious consideration. He also urged the EWEB Commissioners to resist the forces being used to encourage it to sell the current property.

Dan Herbert said the Commissioners needed to consider more than immediate bottom line costs for a move. Specifically, consider whether the new location would result in more efficient operations. He urged a longer term and broader view to free the river front property for a new hospital, which would have a greater value for the whole community.

Scott Bartlett said he was as conflicted as the Commissioners on the issue of the sale of the property. He said he could envision a beautiful hospital or a fabulous mixed use development. He said it was a good idea to have a hospital in the core area of the community. He remarked that the value of the property would go up after the new federal courthouse was completed. He stressed the importance of negotiating in good faith

John Silvermoon noted that when ODOT was widening the Ferry Street Bridge, remains were found that were significant archeological resources. He said the National Register had determined that the Millrace Archeological District did have eligibility for the National Register of Historic Places. He stressed that a good portion of the EWEB property was in this area. He said EWEB, under Goal Five and Federal Law, had an obligation to consider that fact in its decision to develop the land or sell it to another developer. He suggested that whomever purchased the property should be aware of the historic significance of the area.

Joanne Johnson spoke as an employee of McKenzie Willamette. She said Fall Creek Dam had been constructed since 1964 when a part of the EWEB land had been flooded. She said EWEB should move all of its facilities and McKenzie Willamette purchase and locate on the site. She stressed that change happened even in Eugene.

Kathy Madison, 1604 Ardendale, raised concern that two public forums were not enough to really allow the public to provide its input. She urged the Commissioners to allow the community enough time to discuss the implications of a possible move. She urged the Commissioner not to turn a blind eye to the consequences of its decision.

Nick Urhausen, 2858 Warren Street, said the administrative headquarters building should remain on the site while operations could move to the new location. He said it had been strange for him to see city councilors advocating for a for profit business at the previous public forum.

Andy Lewis said he strongly opposed the hospital at the EWEB site. He said he had not planned to speak at the hearing but Commissioner Farmer’s comments relating to the Board’s responsibility had made him want to speak that evening. He expressed his confidence that the Commissioners would act in the interest of the rate payers but disagreed with the idea that making a business decision protected the Board from a greater responsibility to the public good. He said that meant that reflecting on making a decision on the future use of the property and whether it was to the public interest to locate a hospital on the EWEB property.

Eric Gross thanked the Board for holding a public forum. He urged the Commissioners not to develop wetlands on its new property. He urged the Board to make the most fiscally responsible option when selling its property. He raised concern that selling for less than its moving costs would result in higher rates for EWEB customers. He said it made perfect sense for McKenzie Willamette to locate at 13th Avenue and Willamette since the EWEB site was boxed by a bridge, river, and railroad tracks. He opined that the Board’s thinking had been clouded by big money interfering with public interest.

Kevin Matthews, Friends of Eugene, PO Box 1588, Eugene, raised concern that McKenzie Willamette employees were speaking under the pretext of public comment. He noted that the local paper had reported that the testimony had been in favor of McKenzie Willamette locating on the EWEB property. He said the testimony had actually been split and of the portion in favor of the relocation more than half had been McKenzie Willamette staff. He said the media had given a false impression of previous testimony. He noted that the numbers for the evening were 16 people against locating the hospital on the EWEB property and 14 people in favor. He noted that of the 14 in favor, nine had self-identified as McKenzie Willamette staff. He said this resulted in a three to one ratio for opposition. He said the public had not yet had a chance to absorb the new facts coming out of the Peace Health settlement that required them to get rid of their 13th Avenue and Willamette Street property. He reiterated that a future hospital was not the issue before the Board.

Dr. Denise Wa spoke as a doctor at McKenzie Willamette Hospital and said she felt strongly that a second hospital was needed in the area to give people choice. She said McKenzie Willamette would build a useful and environmentally sound facility that would provide a true healing environment.

Dick Abraham spoke as an emergency room physician in the community. He said he worked at, but was not employed by, McKenzie Willamette. He said he shared concern about possible increases in rates but stressed that Eugene needed a hospital in its downtown area. He said not having emergency care in the core of Eugene would cost lives. He said the sooner the Board made a decision to sell the better for the community. Commissioner Farmer called for comments from the Commissioners.

Commissioner Farmer said EWEB was a separate independent body from the City and would make the final decision about a land sale. He added that the operation of the steam plant could be taken over by the University of Oregon who also operated a steam plant.

Commissioner Menegat thanked those who had attended the forum. He stressed that he wanted to see the data generated by the 30 percent design process.

Commissioner Simpson thanked those who had testified. He said he appreciated the public’s knowledge of the issue before the Board but said the Board had not made up its mind to sell to a particular party. He said there was still a lot of fact finding to be completed.

Commissioner Bishop thanked those who had testified. She reiterated Commissioner Farmer’s comments that the Board would make a final decision on a land sale.

Commissioner Bishop said she hoped that the completion of the due diligence process would help to clear up gaps in the EWEB Master Plan

Commissioner Bishop said she was struggling with the issue of public good versus making an economic decision. She noted that, in Europe, there were covenants that reverted land back to the public after a pre-agreed upon span of time. She added that the Board was doing its best not to have rate increases. She noted that if EWEB elected to stay on the current site then it would need to pay for needed repairs to its facilities.

Commissioner Farmer thanked those who had attended. He said he still needed more information before giving an opinion on a possible move but noted that he did not view the current administration building as a local icon. He said concrete and bike paths went right to the water’s edge and the building itself was constructed in the greenway.

The meeting adjourned at 10 p.m.

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Assistant Secretary President