EUGENE WATER & ELECTRIC BOARD

SPECIAL BOARD MEETING

(WORK SESSION)

EWEB BOARD ROOM

JUNE 7, 2005

5:30 P.M.

Board Members Present: Ron Farmer, President; Sandra Bishop, Vice President; Patrick Lanning, Mel Menegat, John Simpson, Commissioners.

Others Present: Randy Berggren, Debra Smith, Dick Helgeson, Dick Varner, Jim Wiley, Tom Buckhouse, Marty Douglass, Jim Origliosso, Jean Meyers, Terry Bequette, Roseanna McArthur, Kevin Biersdorff, Ed Case, and Krista Hince of the EWEB staff; Ruth Atcherson, City of Eugene Minutes Recorder.

President Farmer convened the Work Session of the Eugene Water & Electric Board (EWEB) at 5:34 p.m.

BOARD GOVERNANCE

Assistant to the General Manager Debra Smith explained that General Manager Randy Berggren and President Farmer had gone through the open list of policies and issues. She said the highlighted items were nearly ready to discuss, most of them having been called out at the March 5, 2005, retreat. She proposed that the Board move forward with any revisions and approval of the policies before them in the attachment entitled Eugene Water & Electric Board Governance Status June 7, 2005.

President Farmer commented that, upon review, he did not consider any of the policies to be burning issues. He noted that he had not heard feedback from other Board members.

Ms. Smith suggested that GP7 Board Parliamentary Procedures be reviewed last, because it was likely to have the most discussion.

· GP10 – Public Input

President Farmer commented that, by procedure, the Board had established a time limit. He wondered if language should be included that indicated that a speaker should identify him or herself for the record.

Commissioner Lanning related that he had seen situations in which there was a clear differentiation between policy and procedure, so that he could easily understand which was which. He suggested that one way to do so would be to develop a link that would take a person from the policy to a procedure, should he or she choose.

Commissioner Simpson wondered if the procedures could be incorporated into the actual policy page, perhaps in the form of an addendum at the bottom of the page. Ms. Smith responded that in policies such as those regarding financial issues contained a lot of explanatory material that changed more quickly than the policies themselves. She thought a link could be the most effective way to give access to the procedures.

Commissioner Simpson suggested that the page note that the Board set the policies, but the procedures were working notes.

President Farmer recommended that the next to the last paragraph in the policy, which referred to the announcement the presiding officer gave in regard to the process for public input and Board response, be moved so that it preceded the sentence in the first paragraph that indicated the presiding officer would delineate the time limit.

Vice President Bishop averred that a link was not necessary because everyone knew how to give testimony. She felt the Board was adding complexity to something simple.

Commissioner Menegat did not think the policy should be made more complex. He underscored that the Board was discussing policies. He added that he did not think it would be necessary to put the procedures in the policy pages.

Commissioner Lanning thought many public speakers had addressed the Board before. He said some people had expressed that they wished they had known they could have provided their testimony in writing and that they would only have three minutes. He agreed that the Board could bog down in detail. However, he did feel that it would be appropriate to include those two points of information.

President Farmer commented that a lot of the policy was procedure. He stressed that the most important information was that the public could provide input on any subject at any meeting.

Ms. Smith said it was meant to be a board governance policy with the Board as a primary audience. She felt it was possible to make a link, but did not want to create the document for the public.

Commissioner Simpson favored the development of a guide for the public on communicating with the Board that would include testimony and all avenues of contact. He wished to emphasize that public testimony was not intended to be interactive. He commented that a better title would be “Public Input at Board Meetings.”

Vice President Bishop opined that telling people in the policy that there was a three-minute time limit would deter them from testifying. She felt it was “insulting.” She thought the time limit could be left in the policy but should not be broadcasted in procedures. Mr. Berggren asked if she meant for people to discover the time limit when they arrived to testify. Vice President Bishop responded that she did because she thought people would not show up.

President Farmer preferred communicating this ahead of time.

Commissioner Lanning pointed out that the City Council, Lane Community College, and the local School District, among others, had a three-minute time limit for public input. He thought it would be unfair to strike the language referring to the time limit from the procedures. He averred that this advance notice of the time limit enabled people to more effectively craft what they intended to say and that it would instruct them that they could submit further testimony in writing.

Ms. Smith summarized the discussion and indicated she would make the minor changes in the order and would include a three-minute time limit for public testimony. She said she would make a document link for customers to help them find the procedure.

· SD11 – General Compensation Policy

Ms. Smith explained that President Farmer had brought to the Board and staff’s attention that the policy had not been updated. She said she asked Human Resource Manager Jean Meyers to craft some alternative language.

Ms. Meyers stated that staff had been intentionally ambiguous because of vagaries in the economy but still wanted to maintain the integrity of the Board’s intent to retain a quality work force through provision of a livable wage.

President Farmer was uncertain how to determine where to establish a line in salary levels so that a slightly higher salary advancement scale was implemented for lower echelon employees. Ms. Meyers thought the line in the policy, set at $40,000, was no longer viable. She recommended working to determine the data points based on a wage that was somewhere between the poverty level and the wages for entry level positions as a critical mass and what those two data points looked like.

Fiscal Services Supervisor Dick Varner recalled that the $40,000 amount had no science behind it, but had been the suggestion of a former Commissioner.

Commissioner Lanning observed that no matter how the language came up, it would still require Board approval. He was comfortable with the policy as long as it did not contain a fixed number and the Board would set the point at which employee salary structures were adjusted to the higher or lower percentage.

Vice President Bishop said she did not “have a clue” what it meant. She wanted the policy to be less vague.

Ms. Smith suggested that staff bring the policy to the Board on an annual basis for review and potential changes.

Commissioner Lanning clarified that he intended the Board to set the point at which salaries went up or down. He averred the policy was a guiding principle.

Mr. Varner suggested that the policy be the foundation and that it make explicit that the Board would make the determination as to what the set point would be. Ms. Smith thought it could be included as part of the budgetary process. Mr. Varner felt a change in the point would only be needed every two or three years.

President Farmer questioned the need for including the language at all. In his mind it was a procedure and not a policy. He noted that the Bank of America had recently lost a $15 million lawsuit that had resulted from different pay scales. He was amenable to paying employees 60 percent of the market rate but did not want to model the pay scale of one set of employees on one percentage and another set on a lower percentage.

Ms. Meyers stated that EWEB would need to update its salary structure by August.

Mr. Varner explained that the salary discussion would not be held in tandem with the budget discussion because it did not have a direct effect on the budget. Rather, he said, it set expectations for what the pay scale would look like over the next few years.

Vice President Bishop opined that this drove the budget.

Mr. Varner stated that what the Board approved as money in the budget to give salary increases governed what could be granted to employees, but the salary ranges and what employees were paid was separate.

Commissioner Lanning thought the third paragraph was policy. He supported President Farmer’s suggestion to come back and revisit set points and resisted the idea of establishing a specific dollar amount.

Mr. Berggren suggested that the Board either remove the number or choose specificity and leave the current unscientific number in place, adding that leaving the number $40,000 in the policy presented certain challenges.

Commissioner Lanning noted that the Board would not review the salary set point until 2008, if the review were placed on a triennial basis.

Commissioner Menegat felt comfortable coming back with an escalated $40,000 figure. Ms. Meyers pointed out that the number translated in today’s figures would be approximately $49,000 in an annual salary.

President Farmer surmised that the Board indicated that it should move forward with an escalated figure based on $40,000. He disagreed on the amount, however, given that $48,000 could not be considered merely a living wage. He wanted to get away from the language that bifurcated one set of employees from another. He recommended that language specify that all EWEB employees would be paid 60 percent of the market rate. He opined that the Board was not present to conduct social engineering; it was trying to remain competitive in the employment market through its salaries and benefits.

President Lanning proposed inclusion of the following language:

“The market-based set point for salary determination shall be reviewed the year prior to the triennial review of salary levels.”

Mr. Berggren suggested planning a review for 2006. Vice President Bishop indicated a preference for scheduling it for 2007. Mr. Berggren said he would queue it up and see.

President Farmer reminded everyone that the changes were under discussion in the Work Session and would not be enacted until a vote in a Regular Session.

● SD13 – Real Property Policies

Vice President Bishop liked the policy. She felt the change to (4) Easement Acquisition was in “plain English” and was understandable.

The Board agreed to the change in language.

Ms. Smith said the discussion on GP7 – Board Parliamentary Procedures would be rescheduled for August.

TEMPORARY EMPLOYMENT AGENCIES

Ms. Meyers reviewed the information contained in a memorandum entitled Temporary Services and dated April 14, 2005. She explained that EWEB hired retirees through temporary agencies in order to avoid possible conflicts with the Public Employee Retirement System (PERS) and potentially cause a negative financial impact to the employees in question.

In response to a question from Vice President Bishop, Ms. Meyers explained that the numbers in the memorandum only reflected the temporary employees that were processed through the EWEB Human Resources department. She said managers and supervisors had the ability to hire personnel directly through temporary agencies and, because the payroll was therefore handled through the temporary agency, the Human Resources department did not track them. She stated that due to Vice President Bishop calling out the vagueness of this information, the department intended to take a look at those numbers and the procedure and would bring the issue back before the Board in August.

President Farmer asked what the guiding principle was that determined whether EWEB hired its own employees or went to a temporary employment service agency. Ms. Meyers said there was no such a principle at this point.

Vice President Bishop recognized that some of the temporary hires were a result of the large number of people who had retired. She thought there should be a Board policy that governed the use of temporary employees. She related that she had heard stories of EWEB employees hired from temporary agencies that worked for EWEB for more than a year. She suggested that one element of this policy should limit the amount of time an employee could remain classified as temporary.

President Farmer said he had no problem with using temporary employees under a well-managed program, but he was concerned that the current policies were creating an unfair advantage for PERS employees. He recognized that EWEB might not be doing this according to a legal definition but averred that in the public’s eye it could be construed this way. He asked what the overriding procedure was for such hiring.

Ms. Meyers reiterated that EWEB controlled the process when hiring temporary employees who were PERS retirees, while the administrative tasks associated with employees hired from temporary agencies were handled by the agencies.

President Farmer felt the PERS board would perceive EWEB’s hiring process as illegal. He asserted that the Human Resources department was using an outside agency to get around PERS policies.

Ms. Meyers pointed out that PERS, under its own process, allowed retirees to work in the private sector.

President Farmer maintained that EWEB was circumventing the PERS process and this created a bad public perception.

Vice President Bishop recommended that EWEB formulate a policy to govern this. She asked that it be placed in the queue as a planned agenda item. She said she had no problem with using temporary services under certain circumstances, but did not want to use them in an ongoing way. She underscored that a person who worked for EWEB in an ongoing basis should be paid as much as any other employee who was working in that capacity.

Purchasing/Risk Manager Ed Case said EWEB had three choices for hiring temporary people, as follows:

1. Instead of hiring an EWEB temporary employee from a pool they were selected for a specific task.

2. Contract with the person directly as an independent contractor; EWEB might not solicit for such a position depending upon the expertise and knowledge of EWEB practices that would be required.

3. Employees could be sent to a temporary agency that was a public entity.

Vice President Bishop alleged that contracting with a person would be illegal unless the person in question had set themselves up as independent contractors. Mr. Case replied that employees hired in this way were contractors and EWEB treated them exactly as they treated all contractors.

Ms. Meyers stated that there was a policy regarding temporary employees. She said the guideline and parameter for such employment was six months and for a limited term or limited duration employee the guideline was 12 months. She added that limited duration employees were hired with full benefits. She suggested that the area to focus on would be how such employment was tracked. She thought there was merit in developing a policy that would institute a tracking mechanism in order to account for all temporary hires in all departments.

In response to a question from Commissioner Simpson, Mr. Case said when employees were hired through such an agency, the department doing the hiring was not required to give notice to the Human Resources department, but the request came through as a contract in the Consent Calendar. Ms. Meyers added that the supervisor set such employees up for their security badges and other such details and when supervisors hired such employees it was paid from the department’s budget and not EWEB payroll.

Commissioner Lanning acknowledged that part of the reason such employees were utilized was because of the flexibility of such a labor pool. He was not comfortable with centralizing everything and losing the balance. He did not think the goal should be to provide a report to the Board. Instead, he thought the Board’s goal should be to provide services to the community.

Mr. Berggren called the hiring of temporary employees a matter of making decisions as to how best to get the work done.

President Farmer reiterated his concerns regarding PERS employees being rehired through the agencies.

In response to a question from Vice President Bishop, Mr. Berggren clarified that temporary employees were quantified as dollars in the budget and not in full time equivalent (FTE) hours.

President Farmer declared that he did not want to manage EWEB to “an FTE.”

Mr. Varner recalled that in the late 1980s when the policy governing temporary employees had been implemented, the count for EWEB employees increased from 450 to 640.

Commissioner Menegat commented that as a 1039 PERS employee he had been back to work five times. He said, for his agency, it was a “political thing” because the State would not approve additional FTEs but would approve funding for temporary workers. He said it was an advantage to the State. He opined it was an advantage for the worker, too, as it allowed greater flexibility. He did not think a worker lost anything. His concern lay in whether the Board was looking at a way to move around FTEs. He said if EWEB had the workers, it needed to have the dollars to pay them. He averred that the EWEB retired worker was the best that EWEB could bring in. He added that he was not aware of any public perception that EWEB was granting special favors to such workers.

Commissioner Simpson stated for the record that he was much more in favor of limited duration temporary employees than hiring through a temporary agency. He agreed that a temporary employee versus a permanent employee doing the same work for less money raised issues of fairness.

Vice President Bishop asked to see the policy that Ms. Meyers referred to. She also wanted to know whether all of the EWEB managers were operating within policies. She remarked that it was odd that the Board did not know how many employees worked at EWEB.

Commissioner Simpson noted that the Board members had a facts and figures booklet about EWEB that listed the number of employees. He wanted it to include temporary employees that work for EWEB full time.

Mr. Varner assured him that EWEB employees were all working for EWEB. Ms. Meyers said 15 to 20 people were currently working as temporary employees. Commissioner Simpson observed that the number was small and commented that this lessened his concern.

President Farmer adjourned the meeting at 7:25 p.m.

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Assistant Secretary President