Pre-Meeting Q & A from the Board - July 10, 2018

The following questions have been posed by Commissioners prior to the scheduled Board Meeting on July 10, 2018.  Staff responses are included below, and are sorted by Agenda topic.

Residential Pricing Tiers (LAWSON)

There is justifiable rationale for eliminating tiered energy charges in our electric rate design. Doesn't this logic apply equally, if not more so, to our situation with the Water Utility? And if so, why are we not considering eliminating the tiered water rate design as well?  Collapsing the tiers for water consumption is worth further consideration, and we've asked Finance to do some further analysis similar to the impact studies on Electric customers. There are some parallels between water and electric rates, including a combination of fixed and variable charges. The characteristics driving water prices vary from electric in a few distinct ways. First, while EWEB has a surplus of electricity searching for consumption, water only produces at levels needed for consumption. We do have extra water capacity, but much of the volumetric costs are associated with only the production needed. The near-term marginal cost is small. The water utility covers a higher percentage of fixed costs through fixed charges. Additionally, EWEB's Water Management and Conservation Plan, as required by our water permit according to OAR Chapter 690, Division 86, includes tiered rates in our water rate design elements. We will need to have our amended plan approved and assess potential impacts if pricing approaches for water consumption are changed. There can be some operational advantages to aligning the approaches.

Correspondence

Records Storage Analysis / In-House Feasibility (FAHEY)

It is indicated "staff has reduced annual budget requirements for records storage by $20,000". In the original Consent item it was $150,000 for 5 years or $30,000 per year. Is this statement indicating costs were reduced from $30,000 per year to $10,000 per year?  Yes, staff has revised cost projections to be $10,000 annually. The original cost projections included an assumption that the consolidation efforts would increase the demand for off-site storage. Records owners though have increasingly converted records to digital format rather than send off site. Additionally, DocuTRACK is located very near to the ROC and transportation costs have been minimal compared to the previous Portland-based vendor.

Since we have to store documents up to 100 years, I can't believe that renting is more cost effective than building a structure and storing. Why didn't we use a longer projection as we have zero control over the costs of renting and if we spend the money now to build a plain building with a heat pump we have frozen the cost with only operating costs escalating, not dissimilar to what the rental market will experience and pass on to us, so isn't that a wash?  You are correct that a building would last more than 10 years. Beyond the 10 year window, off-site costs are difficult to project, partly because new technologies will likely reduce storage demand even further than we've already experienced. Other long-term considerations include repair and replacement of climate control systems, recordkeeping software, and the equipment to safely move boxes in storage.

When considering storage spaces, in addition to being in a fire-resistant, temperature controlled structure, public records laws require additional protections from such things as humidity, mold, and insects. Approximately 300 boxes per year are moved into or out of storage. Staff estimates that having the records in a self-managed, off-site location would cost an additional $4500 in staff time annually, when compared to present practices.

The contract with DocuTRAK provides the ability to terminate for any reason throughout the life of the contract. Staff will continue to evaluate the efficiency and cost-effectiveness of alternative storage options as we consolidate operations.