Prior to attending to the order of business, President Farmer administered a quiz on the financial information one needed to know when meeting with the rating agencies to Commissioners and staff. The correct answers were, as follows:

General Manager Randy Berggren explained that staff was trying to determine whether there was public support for relocation of EWEB’s operations either in tandem with the administrative arm of the utility or separately. He hoped to have survey results compiled and ready to present for the meeting scheduled for May 18, should the Board direct staff to proceed with the survey. He observed that several Commissioners already supported proceeding with a 30 percent cost estimates for both options. He projected this additional work would cost $250,000 and could take until September to complete. He asked if the Board thought this was still a good idea and whether the majority of the Board supported this. If this was so, he said the process could be streamlined and the survey could be deferred.

President Farmer ascertained from Commissioner Simpson that he would support proceeding with a 30 percent cost estimate for both options.

Public Affairs Manager Marty Douglass stated that given the fluidity of the issue if the Board chose to have the study work on both options at this point it seemed the survey would not be warranted. He explained that staff’s original intent was to bring a list of questions before the Board for input and approval at the present session. He said the general tenor of the subcommittee meeting at the previous week seemed to indicate there was not a lot of support for a survey at this time.

Mr. Douglass related that he had reviewed survey questions submitted by Rick Lindholm of Lindholm Research. He thought the questions included a lot of information that were a “snapshot in time” that might not hold true two or three months down the line. He questioned the wisdom of spending the resources it would take to go into this level of detail at present. He pointed out that the Board had yet to reach unanimous agreement on what direction to proceed in. He felt this would make it difficult to conduct a survey that would meet the needs of all of the Commissioners. He suggested the following three options:

• Proceed with the survey as developed by Mr. Lindholm with some modification and take the results as they were;
• Conduct a shorter survey that sought to get at the basics of the question, such as did the public understand the needs of EWEB and did the customers have a “leaning” as to which direction to go;
• Decide not to conduct a survey at this time and wait until the issue firmed up more.

He indicated he did not have a “hard” recommendation to make to the Board.

Mr. Douglass pointed out that EWEB had been trying to educate the community largely through the efforts of the Commissioners at neighborhood meetings. He noted President Farmer’s recent op-ed piece in The Register-Guard. 

President Farmer suggested straw polling the Board on its feelings about conducting design work and cost estimation for both options.

Commissioner Simpson said EWEB should go ahead and do the 30 percent design work for both options. He added that he was undecided at this point whether to move only the operations arm of the utility or to move both the operations and administrative arms.

Commissioner Menegat had not reached the point of making the determination on whether to move all of EWEB or the operations arm only, but he thought there would come a time at which the utility would need both of those numbers.

Vice President Bishop felt it made sense to conduct the design work for both scenarios. She averred that the utility needed all the information it could get.

President Farmer concurred. He thought the Board was equally likely to choose not to go forward at this point, as it was to choose to follow through with the sale of the EWEB property.  This, he said, did not eliminate the reasons for the move.

Commissioner Lanning agreed with Commissioner Menegat. He had not decided which direction he wished to proceed in, but he thought the survey and the design work would provide important information in order to make a decision.

Mr. Berggren extrapolated from Board input that three Board members supported proceeding with the design work and two, while not certain of what to decide, would not block proceeding with the design. President Farmer affirmed this.

Mr. Berggren asked if the cost of remaining at the current location should be included when the 30 percent design work was completed.

Commissioner Simpson indicated he was resolved to moving operations arm of the utility at the least. 

President Farmer agreed. He commented that he would not have supported the purchase of the property on Roosevelt Boulevard had he not been committed to a move.

Vice President Bishop said she wanted the information of the cost of each scenario, including the cost to stay at the current site. She wanted to know how much it would cost to replace a roof or bulldoze a building in addition to the cost of the move. She hoped the design work would be the first step taken to complete the Master Plan and discuss the planning strategy. She also wanted to know the cost of the design consultation.

President Farmer indicated that he was not as focused as Vice President Bishop on needing site studies for the present site. He reiterated that when he voted to purchase the property it was in keeping in mind that maintaining the pole yards in the downtown location was not the right long-term vision for 50 years into the future.

Commissioner Menegat stated that he was committed to the move, the Carmen-Smith facility, to creating an equity position on Carmen-Smith, and that he did not want to be committed at this point to making a move that could jeopardize some of these other potentially expensive issues. He did not want to tie up bonding capacity to make a move that might not need to be made. He wished to see numbers that would provide a basic idea on what it would take to remain at the current site.

Commissioner Lanning was amenable to this.

Commissioner Simpson said he would support exploration of what resources it would take to remain at the current site should the rest of the Board be in favor of it.

Mr. Berggren commented that it did not seem that a survey was needed at this point.

Vice President Bishop disagreed. She opined that EWEB had “suffered greatly” by not including adequate public involvement up front in this process. She felt hesitant to completely let go the idea of having a survey. She thought there was value in conducting a survey in the larger community so that the results could inform the dialogue.

Mr. Berggren believed, from what he had heard from Commissioners, that the Board was a year from taking a vote on it. He did not feel there was a value at conducting the survey at this point. Mr. Douglass agreed. He averred survey-work would be needed in advance of any major decision.

External Communications Coordinator Lance Robertson stressed that a survey sought to help EWEB Commissioners make a decision and that the utility did not want to conduct such a survey “just to find out” feelings in the interim. 

President Farmer remarked that when the subcommittee, consisting of himself and Commissioner Bishop, as well as Mr. Douglass, Mr. Robertson, Mr. Berggren, Mr. Lindholm, and Cathy Hamilton, Independent Contractor to Mr. Lindholm, had looked at the questions, he had been struck by how many questions were related specifically to the possibility of a hospital at this site. He felt the larger issues for the Board were in regard to cost and the real questions were not relevant at this point. He wanted to find out what people understood about the process. He recommended finding out the cost options first. He likened it to asking people if they want good roads and pointed out that 90 percent would say yes. But, he pointed out, if one asked the public if they wanted a tax hike to pay for the good roads, 90 percent would object to it.

Mr. Berggren said he would take this conversation to staff and initiate a plan to price out the different moving options and the option to stay. 

In response to Vice President Bishop, President Farmer stated that no action was taken at work sessions generally.

Vice President Bishop asked what would be done with the survey. Mr. Berggren responded that it should not be done at this time, according to what he had heard.

Vice President Bishop preferred to conduct a survey at this time because one had not been done yet.  She asked if there was a specific date in mind for it.  Mr. Berggren replied that there was not.

Mr. Douglass reminded the Board that Commissioners would continue to go out on the talking circuit and the information would be updated as it came in.

Commissioner Simpson stated for the record that he was in support of ultimately conducting a survey.

President Farmer reminded the Board and staff that Lindholm Research had determined that a bill stuffer was the best mode to convey information to customers. Mr. Douglass responded that it took a month to design and print a bill stuffer and another month to distribute it.

Commissioner Simpson announced that he would hang up the telephone and attend the meeting in person.

Intergovernmental Affairs Coordinator Deborrah Brewer introduced Carol Heinkel of Lane Council of Governments (LCOG) and EWEB Water Resource & System Planner Brad Taylor. She underscored that water was going to become the big issue in this planning scenario.

Ms. Heinkel said the project was beginning a major public outreach, the theme of which was Design Your Future. She explained that the Region 2050 consortium was formed in 1999 with the intent to develop a sustainable regional growth management strategy. She noted that Region 2050 operated with a consensus process. She stated that the population of the Southern Willamette Valley was slated to increase by 160,000 people by the year 2050. She provided a brief power point presentation on the project.

In response to a question from Vice President Bishop, Ms. Heinkel affirmed that all of the members of the Regional Policy Advisory Board (RPAB) had a vote, with the exception of the Lane Transit District (LTD) and Eric Henderson, the representative from the Governor’s office. She said the group met seven times per year.

Vice President Bishop asked if there were other non-voting members. Ms. Heinkel responded that there was a Regional Technical Advisory Team made up of people who primarily worked in the public works field for all of the involved municipalities. She said they met monthly and provided technical guidance. She underscored that the Region 2050 project had strong support for the planning process from all levels of government, including EWEB.

Commissioner Simpson arrived at 6:50 p.m.

Vice President Bishop asked how the planning process related to the Metro Plan. Ms. Heinkel anticipated that planning strategies would be incorporated into the plan by individual governments.

President Farmer asked what would happen if, upon completion of the planning process, the Town of Veneta decided to opt out. Ms. Heinkel replied that all of the jurisdictions had participated for five years. She stressed that the process was not designed to force a jurisdiction to do something it did not want to do. 

President Farmer remarked that it had appeared to him that anyone could opt out at any time.  Ms. Heinkel pointed out that the State had indicated that it would only approve certain permits if a jurisdiction joined the regional growth design process and there were some federal funding mechanisms that were contingent on participation in the process as well. She said it was easier to obtain consensus on the larger issues in the growth plan. 

President Farmer commented that livability was easy to say but difficult to define. He felt the growth planning was a bigger challenge than it appeared to be on the surface.

Ms. Heinkel stated that there was a real value in having a policy advisory board because all of the jurisdictions were represented. She pointed out that the Mayor of Lowell represented rural interests to a certain degree and had been very instrumental in keeping everyone “on their toes” about that perspective. She said it had been valuable in helping the jurisdictions attain consensus. She felt this planning process was an opportunity and provided a forward view in the potential projects that would arise from the process. She noted that several cities had realized through this process that they did not have enough water to serve projected growth.

Continuing, Ms. Heinkel stated that services were evaluated against the three growth scenarios. She said the electric facilities were well positioned to provide for growth in areas. She noted that each utility had a plan for growth management and were prepared for the slow load-growth that would occur over time.

Vice President Bishop asked if this assumed that all power came from the grid. Ms. Heinkel affirmed that no distributed generation had been taken into consideration.

President Farmer pointed out that electric facilities were available at a cost and, in terms of economic development; one could not assume growth would occur in an area merely because electricity was available.

Mr. Taylor outlined EWEB’s capacity to meet future demand projections with the aid of slides.  He reiterated that EWEB had two certificated surface water rights on the McKenzie River that equaled 76 million gallons per day (MGD) and had one permit, which had an application, submitted for an extension that was 118 MGD. Of the latter, EWEB had only used three MGD. He said EWEB also had a pre-1909 water claim on the Willamette River at the headquarters site of approximately 20 MGD. He added that EWEB had not used this claim since 1927. He reminded the Board that EWEB was also pursuing as part of source diversification and for emergency reliability a groundwater permit for 12 MGD. He stated that this item would likely be before the Board again soon.

Mr. Taylor said development of future demand projections was part of the 2004 Master Plan and was presented to the Board in a 20-year context. He stated that those numbers were consistent with those that LCOG had arrived at. He indicated that future demand projections were critical to the one permit extension as the Department of Water Resources (DWR) required that EWEB document demand projections and their consistency with the types of lands and the uses for those lands that EWEB would serve. He explained that the DWR would not accept a mere claim of need. He said Region 2050 provided land use planning out to 2070. He noted that, in addition to permit extensions, EWEB would be required to submit a water conservation and management plan.

In response to a question from President Farmer, Mr. Taylor explained that to serve the population of the year 2000 EWEB used between 65 and 70 MGD. He indicated with a graph the growth projections of Region 2050 and EWEB’s service area. He extrapolated from this that EWEB would need a permit extension to the year 2125, 50 years past the point at which EWEB could document the land use component justifying the need.

Mr. Taylor delineated with a graph that at 2070 EWEB could lose up to 50 MGD of existing permit capacity on the McKenzie River. He stated that EWEB had been a water utility for over 90 years and the point at which it had crossed the 50 MGD line was in the late 1970s and early 1980s. He underscored the importance of holding on to as much water as possible for the community.

In response to a question from President Farmer, Mr. Taylor clarified that the McKenzie River water supply to EWEB was the existing permitted capacity that could be compromised and the Willamette River water claim was not in question at this point. He said from the standpoint of straight demand EWEB had no justification for the Willamette River water but from the perspectives of source diversification and emergency back up supplies it benefited EWEB to keep the claim in the mix. He explained that the McKenzie River right could not be considered as source diversification or a back up supply.

Commissioner Simpson asked Mr. Taylor to explain the difference between the certificated rights and the total of water rights on the McKenzie River. Mr. Taylor responded that EWEB had three rights on the McKenzie River, of which two were certificated and provided the 76 MGD number. He said the difference between the two certificated rights and the line on the graph that was around 200 MGD was the permit that was on extension. He said the permit had already been on extension since the 1960s, but the utility had only used a very small percentage of it. He reiterated that this made it susceptible through the permit process.

At Mr. Berggren’s request, Mr. Taylor clarified that certificated meant that the utility had demonstrated that the utility had put the water to beneficial use. He stated that municipalities could not be required to forfeit certificated water rights.

Commissioner Simpson asked what the maximum for MGD currently was from the McKenzie River. Mr. Taylor replied that EWEB was limited to 75 MGD. He added that EWEB had the ability to work into the water that was on permit extension, called “green light water.” He reiterated that the largest issues facing the utility were where the endpoint would be set at and what quantity it could hold on to and for how long.

Mr. Taylor highlighted a lawsuit against Coos Bay/North Bend Water Board that had challenged the validity of municipal water rights through permit extensions and the point of development of that permit. He said the lawsuit had called to light a requirement to develop such a permit within five years and pointed out that EWEB’s permit extension had been made in the 1960s. He saw this as a real issue that had raised a red flag for many municipalities. He said the intent of House Bill (HB) 3038 was to validate existing permits on extension past the five year window provided the municipality substantiated its need for the water. It also required new water rights be conditioned so that development of the water right would be required within 20 years, but this would not apply to existing permits such as the one that EWEB held.

Continuing, Mr. Taylor reported that a panel of experts had been assembled to evaluate the preliminary draft assessment of the analysis of the water supply and facilities in relation to projected growth, with members representing government agencies, utilities, and other local water providers participating. He related that the assessment goal was to develop a regional strategy to facilitate the efficient provision of infrastructure and community service in the Southern Willamette Valley in conformance with the desires of each utility and district. He underscored that this was a Region 2050 goal. The assumptions the draft assessment were based on were:

• State requirements for surface and groundwater rights would remain the same;
• Existing technology and legal requirements would remain the same through the planning period;
• Current levels of consumption would remain the same, though most likely conservation efforts would foster a downward trend;
• Cost included in the evaluation was in 2004 dollars.

Mr. Taylor predicted that health standards would become more stringent for smaller communities. He highlighted the transmission difficulties some communities presented by virtue of geographic location.

Regarding the growth scenarios, Mr. Taylor stated that the compact and satellite scenarios for growth were about equal as far as meeting the criteria lay out by the expert panel. However, he said the big issue was water availability and the satellite scenario was not rated as high because it was uncertain how outlying communities such as Creswell, Veneta, and Coburg would attain water rights to meet their projected populations. He related that the rural scenario had a lower rating for meeting the criteria overall, costs were more difficult to predict, and there were greater uncertainties related to public health and reliability of facilities.

In summary, Mr. Taylor stated that land use planning using the Region 2050 planning process justified EWEB’s water need to 2070 and determined the quantity of water that could be extended for the given available lands. He predicted EWEB could do this in a way that would allow it some flexibility. He said regional cooperation among local water providers may be needed to provide adequate and cost-effective supplies to meet the population growth and to allow EWEB to hold onto its water rights. He underscored that the key factor in determining the viability of the growth scenarios was water availability.

In response to a question from Vice President Bishop, Mr. Taylor stated that the water suppliers that were involved in the regional water planning were those in the immediate area, such as Creswell, Veneta, Coburg, and the Springfield Utility Board (SUB) most of whom utilized groundwater for their supplies. He predicted that most of them would be pursuing further water rights.

President Farmer asked what kind of a shortfall was projected to occur outside of the urban growth boundary (UGB). Mr. Taylor said he would need to review the numbers in order to provide the best estimate and he would provide his response via email.

In response to another question from President Farmer, Mr. Taylor affirmed that water rights were sellable. He added that it was simpler to sell water than it was to sell water rights.

Mr. Berggren noted his recent meeting with the City Manager of the Town of Creswell regarding the town’s potential interest in the Willamette Water Company and what the potential costs of transmission could be. He said six miles of pipe was estimated to cost $3.5 to $4 million and the price of the water company was $1 million, but construction of a new water treatment facility and accoutrements would cost the town over $10 million. He indicated he would meet with the Creswell City Manager again. He thought EWEB might have an interest in looking seriously at the concept of regional supply, given the somewhat precarious nature of water rights.

President Farmer adjourned the meeting at 7:37 p.m.