EWEB Board of Commissioners — May 5, 2020

0:01 well welcome everybody happy Cinco de Mayo and welcome to the May 2020 web board meeting we're doing it virtually this year if there any members out there in a lot of live audience thanks for playing along and we hope to provide a meeting that is as useful and productive as it would be if it were a lot of session down at a web headquarters well I will jump right into item number one and it is the agenda check can I just confirm that all five commissioners and our general manager Frank have a copy of the agenda in front of them and digitally or otherwise if anybody has any changes to the agenda please let me know now by raising your hand appears that there are no changes to the agenda

0:46 will move into item number two and that's items from board members and the general manager we will start with in the order in which I suppose we normally do and Mindy Schlossberg sits furthest down to the oh gosh I guess the furthest away from the river I will go from the furthest away the river right down to the bank so Mindy you're up first thank you um I don't really have anything this month other than to think that you have staff for helping out members of our community who really are in need right now and making funds available for them to help keep their lights on and their water running that's it for me great

1:32 Commissioner Carlson I believe you're next I attended a virtual meeting for two virtual meetings for Elkanah this last month primarily grappling with similar things of how do we address the Kovach crisis and it looks like just for a quick update on the census that Lane County was at a sixty percent return rate which is great it was above the it was above the average for the state and for what we're seeing across the country it surprises me because people have a lot of time at home and with computers and it should be a very easy process so if there are things you do to help encourage people to continue to fill out that census it's very important for the region that's a lot thanks Thank You

2:20 Alison well I don't have anything really to report either we've all been sort of combined two quarters and I just want to express appreciation to a ye web staff and also to the community as a whole for the work that we're all doing to keep our community safe at this time and I'm looking forward to the update on the agenda as to how that's all going in terms of you absorb for customers well I'm Thank You commissioner next I'll just echo really Dick's comments and those with Commissioner slash verbs as well for any members of the e web staff that are listening in and just wanted to express my appreciation that's one of five board members I know it's been probably extra hard and extra weird

3:05 in lots of ways for our staff water and power are absolutely essential and therefore so is your work and for those of you who are having to do it under challenging circumstances it's very much appreciated Commissioner Brown um I echo the sentiments that regroup and said and for the record I just like to state that Frank and I have been meeting with leadership of sub regarding some real estate matters in Glenwood and we continue to make progress on that so that's all I have thank you Frank if you'd like to weigh in you have the opportunity to as well president Mattel commissioners staff members public good evening I have just a few things I wanted to to note this

3:51 evening first of all appreciation for staff not only for the response to the köppen pandemic and all the the interesting challenges that come with that but also the past that this past weekend we had a windstorm blow through and about 700 customers ended up losing power temporarily designers support staff crew members all pitched in to keep the lights on in that case and so appreciate the fact that the lights stayed on the water keeps flowing as part of our response I would also like to note some things are continuing even though we're in a different work environment the

4:38 resource adequacy work is continuing this is a round northwest regional adequacy for for electricity the Columbia River system operation and the environmental impact statement that work continues with Bonneville and so that type of work in our electrification study which we're planning on some initial results in August that is continuing and so while we're working under a different environment a lot of the work is continuing just in a different form in a different way and I wanted to commend staff for continuing to do that especially RIS staff for facilitating over 300 people to telework which is really sets us up well for the

5:26 future as well so security staff there's just there's a lot of people that are doing what we do and you'll learn more about that a little bit later but wanted to send out my appreciation to to staff and to leadership for what they've done and to the board for your support as well Thank You president Mattel does this mean that in addition to putting HQ up for sale we can put the rock up for sale as well Frank well I'm I'm actually hoping we don't do that maybe maybe a part of the rock but everybody's chance is working from home just fine what do we need rock for I'm just kidding of course everybody all right we will move on to our next item which is public input and if you're there maybe you could let me know if

6:11 there are if there's anything to be read into if anybody submitted comments that need to be read at this point a president might tell no we received no public comment for this evening and I believe we had previously advertised that there would be no opportunity for live comments so having received no comments in advance and no opportunity for a lot of comment I believe I do not even need to open up a public testimony session is that correct um I believe so there wouldn't be a way for folks to respond if they did wish to speak all right well I am therefore neither opening or closing the public input session and we will move into the

6:57 next section of our agenda which is the board action items the first item is the approval of the consent calendar normally I would just ask for a motion but I'll just quickly but since circumstances are a little bit different folks might not have all this information in front of them I'll just remind everybody that there are the minutes there are six contracts and governmental agreement and two resolutions on our consent calendar do I hear any requests to pull any of those items Commissioner Hamas's president Matala I'd like to pull for a quick comment item number eight the

7:43 intergovernmental agreement with Energy Northwest well I was gonna pull that one but you beat me to it does anything else like to Sonia would you like to pull something thank you along that same vein number five just so you can talk about the whole Stone Creek project as one all right anybody else like to pull anything you're pretty dressed to approve the balance of the consent calendar - - items number five and eight do we have a second so that is from Commissioner Brown all those in favor please actually

8:28 do raise your hand so I can see and say I on the count of three one two three was unanimous a set of eyes to pass the balance of the consent calendar will take we will discuss them in the order in which they're pulled so why don't we pull number eight Commissioner Howe this in the floor is yours okay thank you well I'm probably one of the few people in the virtual room that remembers when this project was initiated and how we came about our relationship with PGE and I know that there were some questions that came up prior to the meeting for commissioners around kind of where we're at with this project generally so it looks like we'll have an

9:13 opportunity here to get more information for your benefit I just want to say that in my experience this has been one of the better small hydro projects that we've invested in over the years it was actually a project that PGG itself wanted to develop back in the day and was a pretty attractive for them because it's it's strategically within their transmission circuits and I'm surprised to have lived long enough to see us come to a point where the contract for the current operation is coming out but it looked to me based on the staff response to our questions that that that despite the fact that we're not proposing to

10:00 contract with Energy Northwest for the operation that that that will still be a positive condition2 contribution margin over the next while and so I just wanted to acknowledge the relationship with PGE that we've had all these years and to the extent there's an opportunity for staff to convey our appreciation notwithstanding the fact that we're moving away from that relationship to PGE I think that would be something that would be appropriate well I'll jump in the go ahead Frank I yes commissioner help us and I think just a couple of background pieces of

10:46 information would be helpful regarding stone Creek there are two contracts because there are two different pieces of infrastructure that need support the energy Northwest is specific to the generation site itself energy Northwest also provides onm service to some other local hydro facilities in the Portland area that therefore it's probably more economical for them to do it than for us to travel the entire distance where we're contracting with PGE has to do with the transmission service they made the choice not to continue to do OEM at cost for the actual generation

11:32 site so it might have been a little bit confusing there's actually two components the generation site itself and then the transmission that's why there's two contracts and I would echo that that of Commissioner helgesson which this has been a very highly performing plant for us it continues to be that even under an increase in the O&M costs the license last through twenty thirty eight it is also one of the few resources that we can use for what would be called a new large single load if there was load that happened to come to Eugene we could use that as a new large single load provider so it's very flexible it continues to provide

12:18 positive margins for us even though those margins probably aren't as favorable as when they were with PG&E who basically was also servicing their their own facilities in the area so that's just a little bit of background I know that with two contracts replacing one that sometimes it gets a little confusing I appreciate the opportunity to clarify it just just one quick comment in addition to that and that's the it's my recollection that one of the reasons PGE offered us kind of a sweet deal on the 1m from the get-go with some reasonable sort of escalation in it was because they were hoping that at some point we would sell the project to them as I said they had originally wanted to develop themselves and it's ideally positioned

13:03 within their generation mix and area and so I think that given that we we've not proposed at any point to offer the the plant for them and because it continues to be a positive revenue producing asset for us that's not likely that that might be a contributing factor why they're no longer interested in maintaining and operating the facility for us that's correct commissioner I'm gonna jump in the queue sorry Sonia I didn't see your hand so just now I'll get you in just a moment my questions have largely been answered just based on the comments provided by Frank but so it sounds like the NPV is still positive and that we are not

13:49 interested in selling it right now the question I suppose it's remaining is should we become interested in selling that sometime before either of those two contracts is set to expire is there anything in those contracts that would make that more difficult to do so president Patel no there are not those are like a lot of our contracts those are one-year Interpol contracts and so we we could end those for that reason or if we weren't we're not happy with the performance of those contracts okay thank you and just so you know the other commissioners some of you you're very very small on my screen if you have your hands just up only a tiny bit it's actually hard to see if you put them up a little higher I'll notice them that much easier commissioner cross and go

14:34 ahead okay great I just wanted to say that my answers are the questions that I haven't learned largely been answered as well given the background and concern about kind of when this project can do I'm glad to hear that we have a number of years past the end of this contract that it's still operating and it's operating the positive so I'm I'm good to move forward and I'm good on number five as well so I don't I don't need further discussion on number five hold it so thank you I'm happy to if unless others have other conversation I'm more than happy to move that we approve both numbers five and eight seconded all right well we have a

15:22 motion I believe discussions complete we have a motion to approve numbers five and eight on the consent calendar can I have a I'm all those in favor please raise your hand and say aye aye I don't really know does anybody we'll find out in a moment does anybody have to say name all right I'm going to assume therefore that that was a unanimous vote in support of those two contracts hold on just a moment and we'll move into the next item as soon as I can remind myself what it is all right number six is the general managers annual performance evaluation and merit discussion for the 2019 calendar year I will initiate the discussion and offer

16:08 each of the commissioners to make any statements if they so choose and give Frank an opportunity to weigh in as well so just very briefly I'll say that we updated our evaluation process slightly this past year and I want to thank Lena for her support of that we in the last six weeks or so each of us has completed a performance evaluation HR consolidated those we each had the opportunity to review each other's comments and ratings in full and therefore and then also had an opportunity to to make changes to our own in light of what we our fellow commissioners had to say and the things that they may have noticed and perhaps we have missed that process wrapped up a

16:54 week ago or so Frank had an opportunity then to see the the final performance evaluation and we also as a group of the five of us plus Frank had an opportunity to to review that in executive session just now so I'll just say provide a few additional comments and then open it up for commissioners I want to say that the performance evals the 2019 calendar year there were four categories similar to that the performance evals made PT staff at a Webb Frank ranked exceptionally high and high in all of those categories and in most of them most commissioners in every case voted

17:41 him exceptionally high this puts him in the top nine percent of all a web ma PT staff as nine percent received the exceptional ranking and another 26% got the highly ranking so that just gives everybody a sense of where Frank fits in we see him as a very valuable general manager and that was largely expressed his salary he had a merit increase that was automatic at the beginning of the year just like of the rest of the MA PT that was a 2.4 percent increase in so his salary went from roughly three hundred and eleven thousand dollars to three hundred and nineteen thousand dollars at the beginning of the calendar year as part of the contract that's written so the document that we made

18:27 available or that we made or built vailable to Frank I believe is being submitted into the public record Frank I just want to say on my own behalf and I'll open it up to the other commissioners in just a moment that we're very thankful for your leadership I feel that he Webb is moving in a really strong direction the some of the things that you in particular have added that to the role of general manager is provided strategic leadership and very and in and written in clearly in the form of a strategic plan and clearly written goals for the year and for the five-year period ahead of us and you also do an evaluation every year and let us know exactly how we are tracking relative to those goals and have invited us to rate you according to the goals of

19:13 the institution and that's something I am deep full deeply thankful for as I think it's an important element of leadership to take that level of responsibility we will address the question of merit and just um and and potential increase in just a moment but I want to open it up to the other commissioners to weigh in and provide any feedback that they would like to once again we could go in order from farthest away from the river to closest so Commissioner schlossberg that brings you up next thank you I just want to echo your comments president mattel thank you Frank for your leadership and I guess I just want to add that I really appreciate your aspiration leadership

20:00 how you're not just satisfied with chugging along and keeping things as they are but you really have a vision for the agency and I appreciate how thoughtful you are in being forward-thinking one other thing I'd like to add it's um in this process I just want to thank you and the executive team for being available to our fielding our questions and our feedback about your performance that was invaluable and I know that we all really appreciate their input as well and that is it mr. cross them

20:48 no I thought dick was next yeah frame thank you so much for everything that you've done and you know I mention it before but I'll mention it again the the team that you've built and you know it being a leader is not just about you know being your best all it's about how you organize people and the people you bring to the table and how you motivate them and I think that you know you have a very open door policy I think you've positively changed the e Webb culture I think that you've created with a lot of support from your team a really funky functioning group and it just it shows in every aspect of how the organization is evolved over the last number of years

21:33 and I really am thankful that I get to be a small part of it and I thank you for your leadership and helping make that all happen and I'm really appreciative to the team that supports you to help you shine too so thank you for all that great work and looking forward to tackling some really big challenges ahead don't boast over Frank sure he'll listen okay thank you I too am pleased with the direction and the results organizationally and in Frank's leadership over the past year leadership is critical in any organization and it's it's a challenging thing and it also requires support from

22:20 other capable leaders such as those that are part of the management team here at U web and so I want to express my appreciation to Frank and to the rest of you for another good year and progress on our goals and strategic objectives I also because Frank is always pointing out to us that that his performance is really just a reflection of the performance of the organization as a whole I want to point out that even though leadership is necessary and critical to an that it's not necessarily sufficient to provide excellent performance and that credit goes once again to the whole organization and I just want to extend

23:06 my appreciation for the things that were reflected in Frank's report on status of the organization that we had the opportunity to review as part of this process so thank you Frank and and thanks to the rest of you for the work that you're doing Commissioner Brown thank you for brevity I won't repeat what's already been said I agree with everything but I think that Frank you know exemplary is the word I use quite a bit but you've done a great job in the past and I'm so grateful that we have you and everybody that you have going into the future because it's totally uncharted and I think of anybody I'd want at the helm of this organization

23:51 it's you and your your executive team and and all the people that work at you web because we've got some challenges we're facing and I don't think we could face him with a with a better group I'm we're gonna be challenged but I think we're up to the challenge so thank you for everything you've done and everything you're going to do Frank if you'd like to make any comments and now would be your chance and then we'll get to a brief marriage discussion so president metallic commissioners first of all thank you for for a couple of things one is we all recognize especially as leaders that going through an evaluation is an important process and and thank you for the detail that you provided doing an evaluation is is

24:37 one of the most important things that we do as leaders evaluating both ourselves the organization those who report to us our peers it's it's an important feedback process and I appreciate the time and effort that you went through as well as Lena went through to facilitate it and also for your leadership and guidance along the way I think it's important that you function very well as a team which you do and you're respectful of each other and provide guidance to to me in the organization I think also that it is important to recognize that that I am a reflection of the organization and how we perform

25:23 matters it matters to our customer owners it matters to the community it matters to each other and we set and are setting expectations that we want to live up to sometimes that means that you don't meet a goal you have to adjust you have to realize it you have to change your approach going forward you have to admit it you have to understand it both results and methods matter in the long term and so I think it's an opportunity to continue to get better I'm excited about where we've come but I'm actually more excited about where we're going I know that it sounds a little bit termal to us where we're going but I think

26:09 there's opportunity in it and we're gonna have to work very closely together the board leadership staff to create something that the community is ultimately very proud of that's that's the objective we it's their money we work for the community you represent the community and that's that's really important to all of us so thanks for the direct feedback I will note that when it comes to to compensation as an organization we look at three components one is how competitive is the particular position I think that's that's been addressed in my case we try to make sure we're competitive with all positions we also look at performance results do

26:54 count and then we look at a third component which is our ability to reward our ability to pay and and that's something that we know that there's there's struggles in the community we want to make sure we're doing it in the context of our budget and our financial constraints and so those are the three things we look at within the organization and I would expect the board to look at those same things but yes thank you for the feedback I appreciated it I learned from it and I definitely appreciate the team that I have and the staff that we have they are they make me proud every day and so with that I'll just turn it back to you president Patel thank you all right well

27:39 thank you we're almost done normally this would be the opportunity in the moment for somebody one of the five commissioners to make a motion if he or she so chose to and seek support from the other commissioners for some kind of a merit increase to reflect the excellent performance evaluation that we just gave you and so that's where we would be right now I have my own feeling is that despite that under normal circumstances without the COBIT issue that were now facing we one of us are and I believe supported by all of us would make exactly a recommendation just like that for some kind of a merit increase to reflect the excellent performance that you did in the fact

28:25 that you had last year and the value you brought to the institution but we are facing extremely unusual times there is a lot of sacrifice at a web and elsewhere in the community we're seeing other leaders not just of utilities but all kinds of public and private agencies willingly taking a pay cut we are not asking for or recommending a pay cut at the top or anywhere with any web at this point in time but I do feel like it's not the appropriate moment to to provide American crease largely owned essentially entirely because of the signals it might send to those in our own institution and more broadly across the region so there's no motion that I am making but I want it to be clear that

29:11 there was a reason why I'll open it up to other commissioners if anybody would like to say anything Commissioner Brown I concur I think Frank is deserving of it but I think given the exact reason that you stated it so well that it's not a good time it's the optics and and we have to lead by example and this is the first example hopefully we don't have to go further but I think we to give a merit increase at this time would not be appropriate anybody thinks differently now would be your opportunity to voice that there's no motion on the table but if anybody would like to put one on the table and now's your chance

29:59 all right any concluding comments from anybody before we move into our next agenda item looks like we have something from dick helgesson and then Franco give you the final word okay thank you well I just without further comment say I concur with what was said just earlier in terms of not taking action on merit at this point I would like to ask though that we stay clear and I think we made good progress last year when we made amendments to the contract with our general manager that eliminated a considerable amount of previous ambiguity about how our compensation process was to work and so I think we have a much clearer set of parameters in the contract now that we're all vetted and approved in public session back in December I believe I would just ask that

30:46 with some help from our HR manager that we make sure that we're all clear about what those mechanics are in terms of base pay adjustment in the beginning of the year merit consideration even though we're foregoing it this year and also kind of how that fits into the concepts of potentially one-time bonuses or other consideration so that as we go forward and as we revisit this process next year that we are all clear and stay clear about how those mechanics are supposed to work the other thing that I would ask is for some clarity as to whether or not we're going to continue to maintain a market reference and a set of comparators that we would occasionally review just to make sure that as those

31:33 mechanics work through in in future timeframes that we always have an external reference to consider and I know that while we're not replicating that this year at this time that it's important to have that as an element for reference in the future and I also know that there was some change in the availability of survey data and the number of comparators that we had so if with some help from Lena we could both clarify and make sure we're all on the same page in our understanding of how the Macan are to work even though we're not exercising the merit component this year and also leaving the conversation with some renewed clarity about whether or not and how we're to go about

32:19 maintaining that external reference in the future I would appreciate that and I think it would serve us well to make sure that we don't leave the conversation this year without making sure that we have enough information in the record about those components that that we have some to refer back to next year thank you so dick I believe that was a request that needs to be supported by other commissioners for some kind of a background or type document produced by Lena is that addressing those handful of points that you just made well I guess I will make that request that would be one way to respond to the interest that I've just expressed and if

33:04 in the process of figuring out how best to do that you could be in consultation with with Lena to kind of represent what we're looking for there I would appreciate that and that's all subject to there being at least two others on the board who would support me in this request well we'll take that we have support for you know a background or document to help us get back on up to speed about our external reference points for Frank's salary and other and some of the other considerations to make sure that we're staying where we want to be relative to our Peters across the region so I'll certainly support that Frank I'll get you a question just a

33:49 moment it looks like we have support Lena I hope you were taking notes because I think that assignment is going to land on your desk dick asked me to represent that but I'm gonna put it back on him nobody knows what he wants better than him dick would you mind being our representative with Lena to get clear on what questions we want to be answered in that document sure I'm happy to do that and I won't stray from the things that have been discussed here I trust you won't dick I don't have any doubt about that for a moment Lena I don't think we need to address this issue just now but I guess dick will be giving you a call a next date or two to flesh that out okay RQ yep thank you Frank we got a little astray there with us some detail but nonetheless you got a

34:34 great performance evaluation and I think we should end on that high note and give you the last word Thank You president metallian commissioners I I would Commissioner hell Pistons questions aside I I would note that at the beginning of every year part of the standard process that Lena goes through is to provide the board in January with an update relative to any changes in compensation for not just myself but for the organization and where that would fit me in the competitive range so I actually believe that's already covered and then it's updated automatically annually I would still you know

35:19 Commissioner helgesson can still reach out to Lena Katsopolis if if he has further questions but I think that's in many ways already covered what the board just mentioned relative to a compensation award is is consistent with the way we we view the organization that's always been important to me that that I am treated the same way that we treat the entire organization relative to how we look at compensation how we're competitive and how we reward people and so I certainly appreciate and understand the board's position I do have a competitive compensation package relative to to my peers and so I absolutely agree with it and understand

36:06 it so thank you mostly for the for the evaluation itself and thanks to leadership and staff for their support and for their pursuit of our goals in service of the community thank you very much I appreciate it all right well thank you glad to do it we will move on to our next agenda item which is actually scheduled a break there's no cheesecake to run off and get unless you have some in your own coverage I don't let me just pull the board real quick and find out whether we want to indeed take that break we're about 35 minutes ahead of schedule right now if anybody needs a break we will gladly take it folks want to trudge on through we can do that as well those in

36:52 favor of taking a break raise your hand seeing none we will just continue on through our next item is number 8 that's the Koba 19 customer assistance update and I believe it's being sorry led by Julie and Renae and Anna do you want to tell me when you can see all of us are ready and Anna up you are all visible at least to me but only one person at a time in our on the screen is the way it's working ok perfect I'll get started good evening commissioners Julie McGehee chief customer officer tonight we have

37:38 Rene Gonzalez customer solutions manager and Anna Wade business line manager talking to us about a web's efforts around kovat 19 customer assistance and Renee I will pass it over to you Thank You Julie Travis can we move with next slide please thank you so much so good evening president metal commissioners and manager lawson as you most likely now you have developed and implemented a variety of relief efforts for customers early into crisis and to ensure customers wouldn't go without critical services we suspended shut offs and late fees to residential and commercial customers we also increased funding to

38:24 increase the number of ECC recipients and we expanded qualifying criteria to include a job loss for those customers who have lost their jobs we've also expanded residential payment plans and empowered staff to allocate crisis funding on a case-by-case basis and we simplified processes by expanding proof of eligibility options and implemented a mailing process for senior and disabled customers for whom impersonal or online application micro significant challenges currently we're working on potential solutions for general service better known as commercial customers and and I will provide more information on that and details and continued funding allocation so that's the - Jana thanks

39:11 Renee and Thank You Julie good evening commissioners good to see familiar faces from the Wade bunker Travis can I get the next slide please thank you so Evo customer care truly exists in a state of continuous improvement every single month this year we have found ways to improve our process efficiency a program accessibility or customer experience we've been able to make decisions on the fly and pivot in real time which would not have been possible had we not brought the program in-house at the start of the year so very grateful for that decision especially in Covidien times so let's jump into some numbers and see where we're at I know commissioners I apologize that

39:57 you can't see these slides very well hopefully you were able to preview the the memo it also included that data the ECC took the 20 20 sec table literally highlights decisions made in mid-march to respond to the emerging covin 19 crisis with the abrupt announcement of shut shut downs we knew that the community would absolutely need our support in April we had originally planned for $90,000 in ECC funds when we raise the bar to 260 so we can award benefits to a thousand customers just so that you know q2 and q3 are typically troughs in bill assistance spending obviously not the case this year so in April we awarded nearly as much as was planned for the entire quarter but even with such a huge

40:44 increase ECC was closed after the first hour involve April and May so absolutely the demand is outstripping supply I want to draw your attention to the totals at the right of the table as you as you can see at the end of the prior line we already had forecasted spending of just over 1.4 million which is more than 270,000 above our working budget of 1.2 currently with our updated numbers the plan overspend is now over half a million we will rely on customer donations to account for the Delta between that working budget number and the total spend at year-end the the great news is that we started with a surplus as you probably recall we were

41:30 able to fund increase customer credits last year through administrative savings so we did not draw from donations to augment ECC as we have done regularly in the past important to note however the current allocation schedule that you have before you will take that funding source down to a minimal balance the second table you can see in 2019 you have provided over a million dollars in bill assistance to almost form a 300 customers my heap awarded an additional 1.1 million to around 3,400 a web customers so it goes without saying that both sources of support are crucial to our community so I want to talk a little bit more about LIHEAP for those that

42:15 aren't as familiar with this program LIHEAP is not a a web rate payer funded program um has contracts with the county and with the state of Oregon to apply credits to customer accounts for which the utility is is later reimbursed my heat funding is uncertain it's literally an act of Congress every year to determine that amount and the federal requirements for income verification are burdensome for our community partners like Lane County as well as Campbell Senior Center and and Catholic Community Services unlike ECC at 260 bucks the LIHEAP amount varies from customer to customer the on the slide you can see the the

43:00 2019 average was around 400 bucks but looking at the data I saw credits as high as 1200 and as low as 65 bucks so huge standard deviation their LIHEAP operates on a fiscal calendar which begins on October 1st the application opens on the first business day of each month however LIHEAP is not available year-round they typically stop taking applications in December or early January depending on if they get additional funding I don't want to drill into this point a little bit because it's not evidence it's not evident in the data and also I think Commissioner Schlossberg had some some questions about this so if you look at 2019 assistance for LIHEAP let's start with

43:45 October a lot going on there less than $4,000 in that first month that they start taking applications and then there's a big bump up in November with large assistance numbers caring through q1 and as you can see lightning begins to taper in q2 and is virtually non-existent in q3 so they stopped taking out the patient's really January and then they devote q1 and q2 to income verification and awarding the actual funds much of this process is attributable to the rigorous intake requirements mandated by the FET mandated by the Fed scuse me I don't want to be clear it's not the local agencies are doing a bad job in fact they're they're working their tails off it's just that they have an

44:30 impossible job to do if the goal is to get money to those who need it immediately and efficiently so in this way I would suggest ECC really helps to balance the flow of LIHEAP dollars and vice versa so I think that covers our status update for residential assistance programs Travis can I get the next slide please thank you as you probably know general service customers do not qualify for ECC while all customer rates fund our assistance programs there is not a general service equivalent given our current crisis we are working to expand our portfolio of programs small business

45:15 means a whole lot to our community I probably don't need to go into it don't need to go into this but I will just a little bit they provide jobs and yes they generate revenues for the utility but I think it's a lot more than that small businesses to find the character and the livability of Eugene whether it's a restaurants or a yoga studio or your favorite brochure these are the places that you take out-of-town company to with a sense of local pride and our local entrepreneurs are resourceful they're trying really hard during this period I've read that Marley's monsters is stepping up to mass produce reusable masks thinking tree distillery pivoted and is now making hand sanitizer for the

46:00 state of Oregon and restaurants are completely changing their business model to do takeout as they're trying really really hard but many small businesses are getting absolutely hammered by the shutdown and once once that's over what's the shutdown has been lifted many are going to face higher costs as they re inventory as they account for social distancing within their establishments and as they bring back a labor force they will likely do so with tepid demand as we all kind of get comfortable coming back into the public sphere so I will get back to this light here we go within the small business recovery program we're looking at two different options so the first four customers that have accrued a balance we aim to offer a

46:46 deferred payment plan the existing balance may be deferred for a period of time say up to six months with a payback schedule of 12 to 24 so long of course as the customer continues to make full payment on the current charges this will allow these customers to get back up and running without the weight of higher utility cost during this period the section the second option for customers that have managed to maintain a current account balance but face similar restart obstacles we aim to offer a reduced payment plan using our budget billing module so for example we may offer a fixed monthly payment of 85 to 90% of their 12-month average these accounts would then you know go through that

47:31 first year at the reduced amount and then true up through their second year in either case application approvals will be based on observable creditworthiness and it is our goal to allow customers specific terms within established limits so that we have flexibility and we meet them where they're at as individuals to reiterate this is not a grant but rather a structured approach to helping gs customers pay back what they owe in a time frame that increases their ability to thrive and create and contribute to the community in years to come so that's like 10,000 feet in looking at our current general service efforts the last thing I do want to touch on is payment plans so this is a must-do

48:16 effort as our our balances have been growing we have a horizontal team including is finance and customer solutions working together to leverage existing CIS modules to create greater flexibility so some of the priorities for this group first and foremost we need to allow longer payback periods we think we've pretty sure that's going to be essential to we want to to the extent possible address bill presentment so that it's clear to customers each month what they owe versus the the component of their bill that covers that back pay and then lastly of course we need to accommodate prudent financial monitoring on the balances and ensure existing reports will need to take into account

49:03 accurate inclusion of these new programs so that's about it nothing I've touched on today is tactically or financially simple to the utility it is complicated but a lot of the things that we're working on are and yet everything that we do for our customers our customers needs to be easy for them to understand and apply for so customer experience will continue to be our goal with that what we were open to questions stooop observations etc thank you all right I'll open up a queue in just a moment just a reminder I forgot to say at the beginning we have 30 minutes for this agenda item and I set my trusty pocket watch here so there are about 18

49:48 minutes remaining for Q and a I'll just uh frame it up a little bit by saying that I think one of the big questions potentially out there for the commissioners to wrestle with is is is it an is it enough I wasn't here in 2008 but I know a little bit about the history and at that point in time commissioners decided to dramatically increase the budget for for our customer care like programs so I'm guessing that that's large that's on them on all of our minds and the potentially an option for us to exercise we do have that discretion if majority of us choose to exercise it so that might not be the only question but I'm sure it's potentially one of them out there I'll open up a queue if anybody wants to jump in it it

50:33 looks like you all hold your hands up I see John Brown but that's alright now alright John Brown go ahead thank you for the great presentation I'll just let you know that you just just came over the internet had a good article in the river reflections about a web's Assistance Program just came out I just saw it a few minutes ago that said number one the Assistance Program that bill deferment for commercial customers are you going to do an outreach to I mean I have an interest in a property management company and we manage many many retail office industrial people and especially the retail are getting hit hard so we can convey this information to them about their ability to the deferred payments and things such as that

51:18 what your just the presentation just gave us Anna yeah absolutely so one of the things that have been critical through this time is that is the work done by our communication staff so the article you just you just mentioned Jim Connors has been one of our point people so we've gotten the message out there and it's helped us on a lot of different fronts with regard to our general service offerings yes we want to get information out as soon as possible we're trying to get enough of the nuts and bolts together that we don't issue a decree without some sense of here's generally what we're trying to offer but yes as soon as that we do Jen will be again be my partner in developing a fraud customer communication plan

52:04 letting them know generally who will qualify and what we'll need from them okay and my second question is on the the q1 strategic operational report on we talked about we have some statistics on the ECC program and I see we budgeted 1.1 million but we're projected for 1.7 on the math didn't work because there at least I don't know how this works because year-to-date is seven hundred twelve thousand for four months and so if I extrapolate that out to an annual base or is it going what the 1.7 million referred to because obviously we we've projected 90,000 in April we allocated 260 I'm

52:51 just wondering how the 712 for for the first four months equates to 1.7 million on an annual basis sure hey Travis you want to kick back to the previous light so thank you um alright let's take a look so the the 1.7 is basically okay what did we award in January February March so as you look across there those are the actual amounts that were awarded in each of those months from there it's really just a forecast so the reason that that that number can move around there's a couple different reasons so one we actually have quite a few outstanding

53:37 applications that have been received year-to-date and referred out to the agencies so we believe that those funds will be awarded but I'm talking I think it's two or three two hundred applications that are sitting and waiting and that was before we opened last Friday for me so there can be a difference between okay we opened up two we opened up April to a thousand applications or the equivalent of 260 that number may be less than that if we have customers that fail to meet appointments or come in so the 1.7 is the math of year to date actuals plus a forward forecast okay because I'm the chart I have as

54:23 April at 260 March 1 47 160 I can't read the chart up there so yeah the same numbers so now I'm just wondering if because I know where we're going to go with this or at least I can sense it about maybe increasing it because if it runs out in an hour that tells you something very quickly so thank you let's Frank or Renee Frank your choice one of the two of you jump in and add any detail that you'd like yeah I'll jump in first and then Rene can supplement Commissioner Brown I I think relative to your question as well as as commissioner or president Mattel's observation around funding levels we need to make that kind

55:10 of decision in the context of our forward financial forecast of which we would like to bring to the board more detail in June the at this point we we do think there's an opportunity to help both residential and general service commercial customers this is where the plan is heading but we really want to bring something back in June that's fully baked so that the board can also understand our go forward forecasts it would be a shame to put such financial strain on the organization because we increase funding only to have to turn around and raise rates in the fall and so if that's the choice we want to do it

55:56 fully transparently enix and expose what we think where we're going to be going through I'll talk a little bit more about what those parameters look like in the next presentation this is where our thinking is at the moment we staffs done a really good job of putting the pieces together but we want to make sure that the board and and all of us are making these financial choices with all eyes open relative to what our future financial picture might look like Renee did you want to anything yeah I think you you said it already Frank just want to add real quick that in regards to the allocation amounts the 1.1 million

56:41 budgeted versus the 1.7 million actual that Delta is being funded from customer donations fund so just not way yeah thank you Frank thank you for that reminder all right Sonja I think you had your hand up I can't remember any more is that correct yeah once you go next and then Commissioner helgesson after him after you so I just wanted to confirm I think when we hit the 1000 mark of applications then we don't take more than that so we don't have a sense of how many more than that we how much more demand past that thousand is out there is that correct that's correct and one of the things that I was alluding to early on in the

57:28 presentation is that you know having this program in-house I can actually see the demand I can actually see what the phone load is I can see how many applications are coming in per minute and I can see that pace grow and then you know slow down as we start going down the program so we don't have perfect data around what happens as soon as or how many people are knocking on the door afterwards but we are getting a much better sense of pacing and what that immediate demand is because we can see it now that's great thank you so much I mean I know that this is it's such a difficult time another issue was raised and potentially increasing the

58:14 fund I'm certainly willing to look at it I know we have some reserves that have been higher I also know that we're you know depending on how long we think this all will last I don't know how long those reserves get us there but it would certainly be helpful for me to see what you know some some kind of quick modeling I guess to see what kind of the worst-case scenario and what's the upside maybe best-case scenario we have another wave and you have to close again and then worst case scenario we're in it for the next two years or maybe even longer but that's kind of what the what the gamut seems to be and I would certainly

58:59 I think that the governor made a plan and was talking about that it's extended at least through July 6 which means I think everybody is going to continue to be in a lockdown mode at least until there and maybe past then granted right now we usually have lower load because we're not heating it's at least a little bit easier to deal with there but anyway I would certainly just wanted to put out that you know I might have some potential support there if we have a prudent way to do that just because of how much need there is out in the community thank you thank you hi I just

59:46 want to appreciate Frank's comments I would like to be responsive to the need I think that's a bit of a balancing act in terms of kind of protecting the financial health of the utility particularly coming on the heels of the number of years where we've cut costs and built reserves and I would want to make a decision as Frank has suggested in the context of an understanding of the big picture and that's not standing the fact that I'd like to be as responsive as we can reasonably be and find that appropriate trade-off place I think you know one one reality is that with the level of at least hopefully

1:00:32 short-term unemployment that we're likely to be seeing here that there's there's probably no way we're going to meet the need so you know it's more than just putting more money in the budget it's also a matter of figuring out okay so so we double the budget now we can take a 2,000 request but then you know there's a long line out the door after that so you know how do we kind of address the situation holistically with whatever resources we can bring to bear and I also would point out as part of that big picture that there may be some actions taken by Congress that further supplement the LIHEAP budget which we want to take into consideration as well

1:01:17 but I would like to discuss that further in the context of a kind of a bigger picture understanding if that's something that can be done as early as June then I'd be comfortable with with with that timing well I'll jump in the queue myself and just follow on the comments made already so I you know will withhold the urge to you know take some action this evening so and largely because of things that Frank said and echoed by others I guess I would like to see if there's support around the virtual table by my other commissioners for a set of options you know kind of a you know to give us a sense of what things look like I do

1:02:02 nothing into do no more option all the way up to a pretty aggressive and painful one and something in between or maybe even two in between so that not only do we have a sense of what we can do we have a sense of you know what too far looks like as well so that'd be my request to help us queue up this decision next month like what our reserves look like as Sonia said what are what the you know outlook looks like forward and and then a set of options for us to consider so that's my request to see if there's any support for that from the other board members to ask staff to prepare something like that for June meeting I see Sonia's hand up and I think I saw John Brown's I see Mindy's as well it

1:02:48 looks like there's unanimous support for a minimum of three options as sort of a low medium high but if a staff decide to increase that to four or five I don't think we would complain Steve I just want to say I support the request for options I think it's probably part of what we need to consider in the context of that big picture Frank was talking about I just don't want to consider this one thing in isolation I want to know what the trade-offs are in terms of levels of reserves needs for other things because we're going to be short on revenue if you looked at the revenue projections and our experience so far in this circumstance so I certainly support options and this is something I'd want to consider but I want to I want to take

1:03:33 that as kind of a trade-off decision against all the other needs that face the community and the utility yeah absolutely I assume those options will come complete with that kind of analysis you know this is what it would cost us and now and potentially in the future and this is where the money would have to come from in actions we might have to take if we were to move forward with any one of those options so I assume it would be a fairly complete analysis for us to review and respond to Sonya I see your hand up but before we come to you I want to give Mindy an opportunity to weigh in if she chooses she hasn't had a chance to say anything this first round um I don't have any additional questions but I appreciate you answering my

1:04:20 question my previous questions about LIHEAP and the reduced ECC funding in the latter half of the year so thank you for that okay well we'll open up I'm gonna just check the time remaining in this section we have just a little over three minutes if we need to extend it I suppose we can check in on that so we'll open up a second round if anybody has any follow-up questions Commissioner Carlson I think you may have had one just two quick comments on the options that are being brought back one we might want to look at you know a timing of release so we have you know a portion of the funding that you fill back in for the winter months when that I mean we don't know what the winners going to look like that could be a it could be a very drastic winter and we might haven't

1:05:06 even higher need at that point you know so definitely whenever you bring you know when when the options are available we should definitely look at the timing of how those come in and then the second piece was they don't want to forget about the business aspect too if there's anything else that we can do to enhance those I mean just as Anna brought up earlier I mean the businesses make our community they support jobs and is there gonna be really struggling to get by especially the longer this drags on so there's you know other things that we can do I know we were looking primarily at the ECC program for maybe increasing funding maybe there's other things that we can do to help support businesses too I don't know but I just wanted to make

1:05:52 sure that was lost thanks good dick go ahead just a quick comment on the small business component I'm glad we're looking at that I like the conceptual approach there are a couple of things that concern me that notwithstanding what one is that I think we need to clearly define whose small business is because there may be some business in the community they're large enough and have the capabilities to ride this out without needing our support it's less of a consideration if it isn't a grant but I am aware of some small Midland businesses in the community who actually have been doing reasonably well under the circumstances construction firms that have Public

1:06:37 Works contracts that continue enforce and I noted that under the congress's relief package that even those small businesses that aren't experiencing a particular financial hardship that everybody understands and appreciate the contribution that they make to the local economy and to who we are but I'm aware some who applied for and qualified for loans when they haven't had to lay anybody off and they're working full tilt on their construction projects but yet qualifying for federal assistance that just goes straight to their bottom line which kind of surprised me and I know we wouldn't do something like that but I would just hope that in keeping it simple that

1:07:23 there's some some consideration given to what small business is and how that's defined and also you know that it's in fact a business you know like I'm not sure Albertsons necessarily needs bill assistance as a large you know corporation that operates some through this crisis and I'm sure that those are all things that are being considered so thanks for the opportunity to comment but sorry I see a show of hands to see how many people feel like they have something they need to say looks like John Brown Renee Frank I was gonna give you the last word to help us tidy up is that what anybody else all right well

1:08:10 the the 30 minutes has elapsed but I'll just take the opportunity to extend it a couple of minutes to get these last few comments in and then again Frank you'll have to find a word or tidy up make sure that you were all clear with what the expectations are going forward so John Brown why don't you go ahead and then Renee you'll have a chance and so will Frank I just appreciate everything that's been said I just would give staff just a reminder that if they're talking about timing and funding and impacts in middle of November property taxes become due and they are much greater expense than utilities and they'll take priority to a lot of people because unpaid taxes accrue interest in 16 percent and so if you're talking about timing in the winter whether it's residential or commercial it doesn't matter everybody has to pay them and they're not going to

1:08:56 reflect this decline in the in the economy because it goes back to January 1st of 2020 so it's gonna be a huge in my opinion it's going to be a pretty significant impact and I think you need to keep that in mind in the timing of the funding so thank you there are two things I didn't know Rene go ahead I think you president metal just acknowledging Commissioner Harrison's comments and informing the board that just about everything Commissioner augustson expressed are things that we are currently looking at we didn't provide a lot of joint process behind-the-scenes information just we really just wanted to know if we're headed in the right direction regarding general services customers so the definition of what a small business

1:09:42 customer is and the other concerns expressed by Commissioner analogous and we're looking into and also there's important component regarding nonprofits right we haven't touched on those they play a specific role in the community and that's also something that we're working on so more to come on those you know two or three things that's it thank you all right Frank why don't you have the last word Thank You president Mattel commissioners we appreciate your comments they're very insightful and they they tie in quite well with the next presentation around COBIT recovery and the providing the overall context for which we're going to look at these

1:10:27 issues there are a number of scenarios that we're looking at and and as far as timing I I don't believe that this is a a one and done type of decision I believe that as our community recovers as the challenges either extend or they don't we are going to be able to work with you as as the board to make adjustments within our capabilities to help the community and also within the right context I'll provide this like I said this I think we have a very clear view of what you're asking for it aligns with our thinking already and we'll get into a little bit more of what that looks like in the next presentation

1:11:15 all right well with that we'll close out that item and move into item number nine actually before we do so just a quick check we have according to the clock about oh I'm gonna guess forty minutes of material yet to cover does any if if anybody wants a break probably now is the time to do it otherwise we'll just run to the finish line where anybody raise your hand if anybody wants to take a break otherwise we have 40 minutes give or take to go Frankie do you want to break yeah maybe maybe two minutes well I wonder what you need to do all right well then it looks like we're taking a couple of minutes break according to my calendar at 7:12 we will be back here at we'll do five minutes at 7:17 Thank You president Mattel sure

1:12:02 thing you

1:13:08 you

1:15:36 all right we'll get started as soon as I see all five commissioners at right now missin if you're if you're back but you're if you don't mind yeah exactly thank you putting your screen on well I don't know about the rest if so I'll call the session back into order I don't know about the rest of you but I was thinking about a scene from the Naked Gun well we have on break I'll leave it at that somebody knows what I'm referring to uh hold on a second I'm needing to pull up my count my copy of the agenda all right we are in item number nine the co good 19 pandemic proposed recovery and I think that's with Frank and I'm gonna put 20 minutes on the clock president Mattel commissioners thank you

1:16:23 been actually looking forward to this presentation for for some time we do get asked quite often how we are responding to kovat and and what we're planning around relative to the future if our producer could load the presentation and I will go ahead and get started great thanks next slide please so from a high level we've looked at our response in from what we were referred to as the four R's initially was all about response we were governed and guided by our various health authorities

1:17:08 state government CDC etc I won't talk a lot about response tonight the next phases that were we're working on the state calls it reopening we are really looking at a reintegration part of that is because we've continued to supply essential services along the way and really didn't have a closing per se other than the lobby and what we're doing there is we're trying to be consistent with the state guidelines or what's now really become more of the the western state alliance around situational planning that is most an internal reintegration of staff and other things we'll talk the most tonight

1:17:53 about recovery which is mostly around the economic and community recovery what we're referring to as the lifelines that we'd like to provide customers you've heard about some of those already and then what that looks like and then also a replenishment strategy to make sure that we are continuing to be resilient in the long term including financially resilient next slide please so the the reintegration like I mentioned we're looking at several guiding criteria this would mean this looks at a few things one is the feedback loop around symptoms cases this

1:18:41 would be what commissioner carlson referred to is you know what if there's another outbreak what if there's an outbreak within a web staff we would be monitoring that pretty closely as well as our preparedness we have two versions of PPE they're listed that's actually one of them you're very familiar with personal protective equipment the other one is public protective equipment and so we don't so for example a cloth mask is more around protecting the public from you rather than you from the public so we're looking at that in both senses of PPE from our workforce perspective can we maintain working spaces correctly what kind of screening and policies and

1:19:26 procedures do we want to have in order to bring a majority of our staff back into the workplace and then in some cases which staff do not come back into the workplace because of increased capability around telework or telecommuting and then the last three items areas we're looking at this similar to the state where we have various phases there's a purpose and a goal for each of those phases and the gating criteria will then determine how we integrate and how fast we progress through that again most of this relative to internal operations next slide please from annex perspective we we are working under the

1:20:13 assumption that we were we are facing a period of time where economic recovery is going to be challenging for our community to get really to be the very specific we're gonna model three different levels of impact to our financial system one would and most of that is on the revenue side the revenue both from a reduced consumption perspective as well as a payment perspective relative to customers ability to pay in our modeling we're going to model a status quo we're gonna model a 5% reduction and we're gonna model a 15% reduction relative to revenue that's retail revenue specifically for comparison in 2008 we

1:21:02 experienced a 6.5 percent revenue reduction and so we're looking at all Alsace takes on both sides of that some more significant than others and we're gonna model our financial opportunities and challenges within those parameters we're also gonna look at this from a multi-year perspective anywhere from a remainder of 2020 all the way through 2022 so we're gonna model this that could be a six month issue or it could be a two and a half year issue these are the parameters around what we're gonna look at and what we're going to model relative to both how wide and how deep this economic challenge might be next

1:21:47 slide oh by the way that picture that's if you go back that picture is a food line in Texas just just so you know not that we have food lines like that here and it's not that flat here but that's that's just one example of how it's impacting people go ahead and next slide please I don't expect you to actually be able to read this this is a daily chart of load one thing the red arrow there shows when the the states shelter-in-place order was issued we we tracked this relative to the the need for heating this time of year and so the number of

1:22:35 heating degree days or how much heat we need to supply our customers probably drives load more than anything else but you can see over the last several weeks that yellow shaded area we have seen a general trend toward reduced consumption and this is retail consumption at this point and I just wanted to point out that there it looks like there is some decrease in load already given probably closing of commercial sites with some increase in residential sites next slide please on the other end of the spectrum the yellow shaded area that is our 30-day aging number and so we some of the

1:23:24 programs the response that Rene mentioned earlier it does have an impact it has a direct impact and you can see that that really since mid-march that 30-day aging number has roughly doubled and so as well as the yellow line there which is our 60-day aging that's accounts receivable and so while we think it's going to be very important to supply customers lifelines we also recognize that there is an ability and and a requirement to pay we want to facilitate that but we also recognize that there's there's risk and in fact long-term risk around moratoriums on disconnects for example and shutoff

1:24:11 switch is something that we really believe is necessary as a backstop and this this is just this is very recent data and so you can see that there is definitely a train since we changed our policy toward letting accounts age and as much as anybody we want to keep customers customers and we want to facilitate their ability to pay next slide please I'm sorry Frankie you just pick up can you just go back to that slide and just quickly explain what give us little more detail about 30 of the aging number what it means that that sure yeah yeah absolutely the the yellow shaded line there is basically bills people OS that are more than 30 days old okay and so

1:24:57 and the yellow line would be more than 60 days old okay those probably the two most important lines there got it great next slide please so some of the things that we're looking at for recovery we think there's actually a two-step process one as a community owned utility we would really like to work with the board and our community around facilitating the economic recovery of the community we also need to and this was part of our last conversation we need to do that within the financial capabilities that we have and so whether this is six months or whether it's two and a half years what we're looking at is

1:25:43 prioritizing the impacts on the community during that initial period obviously within the constraints that we have a the long term sustainability of the organization we at the end of that would like to at some point within that period return to the pre-pandemic consumption aging and exposure and delinquency numbers that we saw before the pandemic occurred but in this period of time we want to work with the board on what capabilities and what things that the board might be willing to sacrifice or take some risk on relative to reserve accounts for example even

1:26:29 though financial metrics are very specific and we're fortunate that we're entering this period of time financially strong we don't want to take risk that would jeopardize our future but we also know that we're if anybody in a good position to be able to to help where we can following that period we would look as a I call it a replenishment period this is where we once again rebuild or replenish the financial resiliency that we enjoy today so the little bit of a two-step process here that we are proposing and would like to work with the board on next slide please

1:27:16 so the recovery period one of the things that there's there's different roles and things that would happen in this we we do see that there's probably multiple lifelines some of those were described earlier this is this is not necessarily a get-out-of-jail-free card we do think that there's there's opportunities to to spread cost or facilitate repayment our ultimate goal is to keep customers healthy and help where we can I think Anna and and the team Renee and Julie did a good job of presenting this as a way of not putting ourselves at undue risk especially for customers with what was already a bad credit situation but helping where we

1:28:01 could trying to prioritize the impacts especially on rates you know one of the things that can happen is that we already do a certain amount of socializing of our cost and so when one customer cannot pay or goes delinquent on an account in essence what happens is their neighbors pay that for them and at some point as a board and as an organization we've agreed that we want to help certain people we will finance that but that if it spirals too far can push rates to the point where further burden on those who are maybe on the edge before also takes place so we really want to watch these dials pretty carefully and then within this recovery

1:28:48 period also we're we're there's there's going to be a focus on our spending both from an expense perspective as well as a capital perspective there might be some acceleration to certain strategic projects that would also have operational and expense benefits one example might be a MI and then we would continue to throttle capital we probably push a little bit on the risk-based category where it doesn't matter if we do something this year or two years or three years from now those are things that we would would monitor the trade-off between o and M expense Capital next slide please in the replenishment period that's really post

1:29:35 helping the community as much as we possibly can afford to without risking our future we would want to be able to we've always felt like being resilient has three components it has an infrastructure component a financial component and a workforce component we think those all need to be important part of our values and how we operate going forward and so depending on how wide and how deep the economic impact post Cova de T times I think is what Anna described it as depending on how wide and how deep we will look to adjust

1:30:22 those dials to make sure we're we're balancing this helping of the community with not putting ourselves into position that is vulnerable and so we we still have obligations we have compliance obligations obligations to serve keep the lights on the water flowing the data flowing and in some ways the the money flowing those are all important to sustaining our operation for the betterment of the community going forward and so we're looking at the four R's which is you know response reintegration recovery and replenishment on next slide please and so we do think

1:31:09 this is going to be pretty severe we're planning around it as well as other things you know with it it's not just about a 5% or 15% will play pay pretty close attention to impacts on secondary markets for example where supply and demand might be impacted we'll look at certain key customers anybody in our top ten we're going to want to play pay particularly close attention to relative to their financial health that could be another issue that we would have to respond to and we're gonna prioritize our recovery to help the community and also then make sure that we replenish any resiliency sacrifices that we make and we're going to need to work very closely with you

1:31:55 all on the board around managing our strategic risk our financial policies and if there are areas that we're willing to relax for a certain period of time paying close attention to all these dials that's a pretty high overview of our approach there's a lot of details that that leadership and management staff are filling in some of those you talked about already but with that I'd be happy to answer any sort of I guess get guidance and comments so that next month when we bring back more details around some of this and our financial planning we can make sure we get all of your your questions and and guidance addressed so I appreciate that thank you very much president matau I'll turn it

1:32:41 back to you all right well thank you we've got just a little over three minutes remaining on the on the clock we could add some I suppose if we need to are there any comments or observations questions for Frank I'll open up a queue Tech Commissioner Brown would like to jump in hey Frank good presentation thank you I'll just be brief I assume that you're keeping the city apprised because with these revenue projections that's going to be a pretty big hit for them on silk and I know that they have always thought in the past that we were always raised rates but we haven't done it for so many years and now if the rates you know if the revenue goes down as much as we make project it that's going to be a financial hit for them as well so I hope we're keeping them

1:33:26 apprised at this for their budgeting yeah I'm Commissioner Brown I've I had some generic discussions with the city manager around how we're doing some of the modeling I haven't I don't believe given her specific numbers yet I think after five years of no raising rates maybe they're kind of used to it but the difference between a plan and in actuals we did have a conversation earlier today around comparing notes on how we're responding and and I do plan to provide more specifics especially after next month when we get guidance from the board as to what potential

1:34:11 directions we might take I will note too that the cares Act and I don't remember which version version 2 or version 2.5 or 3.5 did add 900 million dollars to LIHEAP not like heap directly but using the LIHEAP mechanism and that is something that may be part of future federal action and so I just mentioned that because of the context that we just went through relative to a webs customer care program and how things might fit in with each other those are things that were we're monitoring pretty closely but Thank You Commissioner Brown I'll make sure that we're communicating with the city other questions comments observations Commissioner sauce Brenda

1:34:58 thanks I just have one quick question that you don't have to answer now Frank but maybe to address in future meetings and it's just about the impact on regional adequacy planning I know that you've been really involved with that and that there's been a lot of talk about what's going to happen when the coal plants go offline and the need for increased power sources and I'm just wondering regionally how everybody's thinking about it now with potentially not needing as much power or having decreased decreased need that's it it's a good observation commissioner I I think there's a couple of things that will probably be be noteworthy we're not

1:35:44 hearing significant load reductions yet from our balancing authority which is Bonneville they've they've said there's slight reductions I think maybe even more important too that there's kind of two issues one is resource adequacy tends to look just beyond this two-year window so most of our concern has been in the two to five year window which still could be part of recovery the other one is actually the shifting of timing of load and we've we've seen that on the electric side of the utility a shift from a peak in the middle of the day which would be more aligned with commercial activity to more of a leveling including in the evening because people now are staying at home

1:36:30 so we've seen some profiles that look a little bit different than we have in the past would in fact the model that we've used does a lot like spring break from a load shape perspective so it's it's the timing of it I think it's a good observation it's the level of it and then it's the when during when is actually that energy consumed so it's a great observation and I think people in those conversations around resource adequacy are starting to to see what that impact might look like our time for this item has elapsed but if there are other folks who have yet to had a chance to weigh in and would like to I think we can extend a moment or two

1:37:16 all right well seeing none I think we'll close that out for now and move on to our last two items sorry I gotta pull up my Advent all right well thank you Frank we will move excuse me I almost skipped something entirely it looks like our next item is a quarterly strategic an operational report for 2020 so Frank you have another 20 minutes well I'm not gonna take 20 minutes Thank You president Mattel I'm going to actually ask Rob price to join in on this as well I have basically if you could pull up the slide deck our producer could pull up the slide deck I'd appreciate it

1:38:08 next slide please so before I turn it over to rod I just wanted to make a couple of observations about the first quarter rods going to talk a lot more about some of the capital projects that are that are taking place first thing important to recognize it's the first quarter of the year for us it's usually a pretty strong quarter from the electric utility perspective about thirty percent of our gross margin comes from the first quarter and it was a bit sluggish most of that because of a conservative consumption due to warmer than unusual weather water utility was strong financially but the flipside is that the water utilities first quarter is usually very a very light part of the year so we have to take both of those financial pictures in context we did see

1:38:54 solid reliability numbers in the first quarter both water and electric some of that lack of storms for example and a knock on wood because the wind just blew through here a minute ago and we just had some over the weekend but pretty good numbers on the reliability side one of the success stories over the last year and it was actually proven again was we're doing a bio filtration pretreatment process at hayden bridge we did a successful test this winter and what we were specifically testing for was to see if that pre filtration would work when we backwash with cold water and you get cold water in the winter and

1:39:39 we didn't know how the bio agents would react to that and they did very very well and it was a successful test and the result of that test is low byproducts that when you get chlorine reacting to organic substances that can create disinfectant byproducts that go through your system and so that was a very successful test it aligns with the previous tests that we've done under warmer weather and so that is proving to be a very good process for our water treatment process near the end of the quarter we got in what we've been talking about mostly so far this meeting and that's our pandemic response again thanking staff for their

1:40:24 foresight their leadership and their response to that flexibility it's been a difficult environment to understand and and respond to think thanks to them and in all of this our goals are we're still progressing on our goals six or eight are on schedule the sub collaboration is a little bit behind schedule as well as a mi meters are the meter portion of a mi is a little bit behind schedule but most of the rest are on schedule and that's thanks to staff continuing to to work and pursue to those so with that it's kind of a high level I'm going to turn it over to rod price who's going to talk

1:41:09 a lot more around capital and capital planning and capital status so rod take it away next slide please Thank You commissioners I just wanted to take a real quick moment and say thanks for the kind words for staff in the context of Frank's review I I know I appreciate those words and there's a lot of people on the phone that I know appreciate it as well so anyway again to acknowledge the the appreciation from you folks but I just take a few minutes to pass on some information about questions that you may or may not be having about the capital work and what's going on in the context of our are sort of slowdown that we're doing and talk a

1:41:55 little bit about you know what what some next steps might be you'll hear more about strategy and that kind of thing so go ahead and move to the next slide please so first thing I want to talk about because I've heard some questions around this is you know are we supplied do we have enough supplies and it is a concern of ours for sure and so we have some monthly monitoring going on for our key supplies shout out to Sarah Gore singers who's doing that what we're finding though is that most manufacturers of course are affected by Cola but they're adjusting to to maintain output because of the essentialness supplies that they give us so I think the biggest impact

1:42:42 has been shipping which can meet longer lead times but right now our warehouse is fully stocked with most of the stuff we need for our projects in emergency situations including pandemic response responsible supplies the PPE and the PPE as Frank calls it next slide please its water weak by the way so I'm gonna have some you have water because my throat's sticky okay so despite our our shelter in place and crew reductions that kind of thing we still are getting a lot of work done and I sprinkled colors throughout the

1:43:27 slides because in the past we've been talking about capital in different categories and so we I wanted to continue to sort of illustrate that no one sector of capital is getting impacted perhaps any more than the other we're still doing a lot of work in a lot of different areas so an electric in particular we're focusing on compulsory kind of work and type one work will continuous plan for the year there's a picture of the downtown Network to the right they're putting in some switches to help flexibility switching around we've talked a lot to you about the FEMA projects I think we're 13 out of 15 done or something like that I should look that up but we're getting pretty close

1:44:12 to finishing those up we're doing 11 million dollars worth of work but Carmen in the type 3 in water we continue our very important reservoir work in bridge lab though it's the picture of the ground breaking on the first slide you saw we continue our ami work emergency water sights is another high goal another thing that we're working on that we'll probably talk and be more about coming up is our our water resilient spine and so there's a transmission line being built to help be an alternate path and there was a consent item about that this evening so next slide please

1:45:01 in the other divisions we continue to focus on customer capital work what we've noticed is our electric work has been more or less on pace and waters been down a bit or the projections I guess just as importantly though I wanted to make sure that you understood we continue work on compliance we have dam safety if you've got Newark projects we have sports protection all these kind of things are still continuing in our work process and on track is they've just plunked right ahead CEI projects hopefully Julie gets a chance to talk about that upcoming board meetings but that project is moving along fine and Gani saw other consent item this evening about that our ami upgrades in the is department are moving

1:45:47 along tremendous amount of work from home support as Frank mentioned earlier support services we are knock on wood hopefully weeks away from finishing my remodel work in the rock so we can start moving people back over there sometime as we unwind from our shelter in place and then fleet updates as well as you saw another consent item tonight on that so next slide please so the question is well so what's not getting done at least for now we did reduce our field work quite a bit and so I'm going to talk more about ami in another slide but we

1:46:33 have paused am i in deployment of meters in March in April we expect to start and deploying meters again in June there is some type one-time work that's not getting done in water service work and service requests are down they're expecting a 20 to 30 percent drop in that by the end of the year but we'll see well hum that's all remains up in the air a little bit of course but Frank mentioned the risk projects like water main replacements and improvements those are not currently being done because folks are sheltering in place next slide please and what's not being done this year the big one for us an electric is the Carmen

1:47:19 unit to run a replacement hand generator rewind there's a couple reasons that's not getting done some of the materials were the runner I believe was stuck and maybe still stuck I don't know in China due to the Cova chipping there was also some problems with the some of the materials for the rewind and then also of course the contractor has been sheltered in place also we took a look at all those kind of factors and the decision was made to push that project and eight million dollars into 2021 I mentioned the meter deployment has slowed down one of the things we had had done also is budgeted some money to repair Leaburg canal as you remember the

1:48:05 FERC has asked us to do not operate the canal until some it's repaired we did budget two million dollars this year to work on that just in case we had a plan at this point we're converting some of that to study and again I think you'll we're gonna come to the board and talk about that maybe next next board meeting and then similar to water there's some risk based work that's we're gonna push off a little bit next slide please so I wanted to talk a little bit about ami we had at the very beginning of the year we had adjusted the deployment rate

1:48:50 a little bit and there was a number of reasons for that one of the things we did is we took a look at what happened the previous year and you know what are the things we can improve on one of the things we decided that could use some help was we needed some more leadership and some more bodies to to manage projects and keep things rolling so we we set up a project team or a program team and we split into four main projects so while deployment is down is projects are full steam ahead right now we're putting up we put up the first radio tower that's a picture from yesterday or Monday of another radio tower going in at Spring Creek radio towers by the way our key to getting

1:49:36 more meters in the field because we need more radio towers to get more throughput and in the opt-out scenarios so we did put a pause on the meter deployment for for March and April hope to re-establish some deployment in June especially as we get this tower up and running we have another tower scheduled for Delta so that should open up some some paths for us so the other one that's kind of interesting in this one is the meter to cache we one of the things we've talked about is our processes and the number of things going on with c.i and how we can merge up some of our process work with

1:50:21 that project as well as the the actual installation of meters and how we read meters and how we turn those into Billings so so we've created a separate project out of that and that's just beginning I think this month so I'm sorry the previous month so it's no under its way so next slide please so what does that all mean right now we're projecting about a 80% spend of our capital budget at the end of the year this means about 3.6 million and the water utility understand and about 11 in electric I think the numbers could vary a little bit just due to customer work we'll see at least in water but in

1:51:09 the electric we have the the major portion of it is that 8 million dollars that goes to the runner so that numbers a little more solid next slide please so finally I just wanted to touch on you know the next steps we long-term Frank's talked a lot about the you know the recovery period and the the reintegration periods and all these kinda things there's none of things we're looking at in our capital plan and we're looking at some options about how to change some spending and how that affects the long term financial plan those discussions are coming up in June and July is you know the usual budget cycle one of the

1:51:56 things that we will continue doing there's things like Carmen in our reservoir projects in the water working on our resilience Pines in both water and electric and continuing ami so there's some projects that will we're going to keep and we're gonna keep moving on the question is and this becomes more of that strategic discussion as we bring in impacts of the kovat response for instance and you folks talked about reserves and allocating money for four different things and all of that comes into play I think in our future capital discussions and so the McKinsey the the Lee Burke now impact triple bottom line for instance there's a lot of money wrapped

1:52:41 up in some of those decisions so I think we'll be bringing some of these conversations in front of you there's a lot of fun interesting work ahead I think we have as Frank puts that we've got some opportunities in front of us to set to make some improvements and do some better but I think for the next 18 month or so we're gonna be a little slower in the capital world and with that I would just open it up to questions you can move the slide traps thanks Frank and we have just about five minutes any questions or comments on brown and then

1:53:30 dick house well I keep always going first thank you rather great presentation just on the reserve funds I noticed that between working catch and designated funds were almost 50 million above target on pages 8 and 10 of the background information and just working cash alone is almost 17 million is that can you give me a brief synopsis of why we're so far above target I can do that a little bit Commissioner Brown some of this will come up as we give a preview of the long-term financial health plan next month some of it relates to planned spending at Carmen for example so that we can offset borrowing most of that was

1:54:17 was allocated other than sort of rate stabilization funding and things like that I think that the the cash position is going to be an important part of the discussion with the board it's not just about reserves but it's about the flow of cash I know historically you're aware that debt service coverage has been the challenge on the electric side at least during your tenure but we also think that we may be in a position where we have to watch our cash flow just to give you an example the 15 percent scenario that we're looking at just for this year would take a 9 to 13 million dollar draw from our reserves and so those are

1:55:02 things that we want to have a real transparent discussion with you all it looks a little bit inflated but some of that is pre-planned offset of borrowing well Kate that because I noticed that like our rate stabilization fund was designed to put away 21 million 21 1/2 million to reduce borrowing but we're sitting at 24 million I mean just things such as that where we have you know that's quite a bit of money above even even what our target was yeah I think this will be an important part of what we talk about next month when we look at the different scenarios and if there are drawers on reserve reserves that the board does those with a really good forward-looking view of what that money

1:55:48 was was planned for and then what was maybe just held in reserve for just those kinds of things which is our you know it's okay and I think what to spend you know used one-time reserves for one-time expenses but we also have replenishment policies that we'll need to work with the board on so not all that's capital certainly but I think it's part of a broader discussion okay thank you Jake you still have a question go ahead I just want to look forward to the discussion in June and and and further on down the road I think unfortunately you know whether it's in the process of

1:56:33 waiting for this to resolve on the public health front or unwinding the impacts as we've discussed even briefly tonight this is going to go on for a while and our response you know rather be nimble at the same time we're going to be mindful of the fact that the implications of this will string out over a period of time I would just hate to see I'm not sure that I should read the realm of things into Rods presentation which was a good one and thank you for that but I would hate to see us I would like us to pursue a path that allows us to resume and keep faith with

1:57:18 our strategic plan and our need for continuing infrastructure investments and I'd hate to see us well I understand perfectly a slowdown over the next period of time in our capital work I'd hate to see us sacrifice the level of our reinvestment in the system over time simply to deal with with near-term operating costs and I appreciate that you know that that discussion is part of what we'll get to beginning next month I'm done I'm Commissioner held this and I would echo your your sentiments there

1:58:05 I do think that in many ways we manage assets for a community on a long-term basis and that requires continued investment it requires prudent investment I don't think that what we will bring to the board is a any kind of strategic sacrifice relative to the things that we think are going to be important we do know that that there's a certain artistic nature to some of the spending that takes place and we want to make sure we're transparent with that but I think most if not all of the leadership with within the utility and I think the

1:58:50 board believes this that we are an ongoing asset to the community and we need to be really cognizant about keeping our organization financially healthy continue to invest in those things that provide delivery of our products and services and I think we we definitely feel like you feel but also want to make sure we balance that with with being sensitive to an economic recovery that might be pretty wide and pretty deep and when to be able to adjust to that but thank you for that comment we appreciate it crossing I think you had a question go ahead just three things one I really

1:59:39 appreciate the information on the supply chain and I keep poking on that it's a lot of what I do constantly so it's always at the top of my mind I know that personally I mean we're seeing some costs of raw materials skyrocket through the roof I mean three four five times what they normally are because the demand is very huge and or maybe the demand has stayed off but the supply has decreased because the production plants are not in and well it's it's wonderful that our supplies are currently stocked I do think that when you're doing your modeling for those that we think may be constrained and may still have the same levels of demand we may need to build in

2:00:25 higher costs to provide that for some time now if and I'm sure your supply folks are very well connected but it's just something that again if this continues on and there isn't a reason for the demand to go down for things that support water and electric and so forth that it's something we should consider and not modeling I sent an email about co2 I don't know if that's a piece of water water production in our particular facility but I've seen that that's also something that they're thinking is going to be in shorter supply and curious on that one it's the making replied back at some point it doesn't need to be on this meeting necessarily and then I wanted to get an

2:01:11 update on the debt refinancing so what know where we're at Thanks yeah president mentality you mind if I respond go ahead no I think I think relative to your second question we do not use co2 in our treatment process and so I thought we had responded to you on that but unless we're going to convert to seltzer water we we do not use co2 in our process at this point as far as our bond refinancing we took a little bit of a pause we're starting to crank that back up again as liquidity comes back into the bond market there for a month or two it was yeah it was a

2:01:58 very difficult market - it was as a higher risk than we would normally want to take relative to those specific bond offerings we do have a number of months that we can do that but it looks like it's going to be more in the in the next month or so as opposed to you know four or five months out but we we did hold off a little bit just because of the lack of liquidity in the bond markets but it will probably become and continue to be attractive as recovery occurs and as people shift money from from other sources of investments one if I may just one last comment yep we are over time so let's wrap up please I am curious if there are some projects that we you know

2:02:45 strategically hold on as well because we think that you know the construction groups they may not see as much as time wears on for this and we may be able to get some of those projects and lower costs in the future if you can get supplies okay thanks very comment before we move on to our next item all right well all right well then thank you we have just two items remaining it's correspondence and board agendas and then the board wrap-up my back's killing me these three hour meeting sitting up here in my bedroom all by myself is a bit much and I missed the neighborhood

2:03:31 house I hope you all have neighborhood house in your neck of the woods we have one in ours it's really fun eight o'clock all right Frank take us home president ow commissioners thank you there were there were four informational items under correspondence any of those you feel free to reply with with comments that one was an update on our risk assessment associated with the America water infrastructure act that was kind of a high level assessment that we did with final action plans due this fall and so they'll they'll be more as we go through the capital process and updating updating you on that some brief kind of initial

2:04:16 reserve transfers that that obviously becomes part of a larger conversation that was just an initial recommendation relative to properly funding some of the retirement the retirement previous retirement plans the there was a proposed change of the consent item process and we could actually try this out next month this was there there seems to be kind of two categories of consent items some of those are very much dictated by statute and board policy where we might get multiple proposals multiple bidders and we go through a an award process those are pretty standard and then there might be

2:05:01 another one where we would want to focus more attention which would be kind of the exceptions to the rules or particular agreements it's our way of maybe trying to segment those out so that you can kind of know what's what's filling a standard versus what may be a little bit more abnormal then if you'd like we could just try it next month and see how it works see if it's of benefit and then the final one was a report out on our flow regime this year at Walter ville being based on the snowpack and our projection that we will have a slightly reduced flow into the project to keep more than 10% of the flow in the

2:05:46 river and so that's the process we go through every year and we did the assessment and that was based on snowpack projections and so if you have any questions on those I could either answer Minh answer those or call and staff as needed or we can just take feedback between now and and next meeting if you'd like well I'll just take a quick poll in response to your question on consent calendar French proposing to give the new approach a try I'm game personally looking for at least a couple other hands to see if there's willingness to support that and I got one from Sonia and Commissioner looks like we're in more or less - dick but that's just how it goes all right Frank you get your wish if anybody else has any comment

2:06:34 about the about those four items now is your chance otherwise we'll go into board wrap up and be done president Mattel I add one more thing and that's the future agendas the you know one of the things that I'll just give you a little bit of heads up on and and this will be for me to work with you president Mattel and vice presidential osburgh on the the June agenda looks like it's going to be a pretty packed agenda because we're going to add some conversation around the financial planning and how we approach for example our customer care levels and things like that so just as a heads up that that

2:07:20 either might be a very normal abnormally long meeting with a lot of great content or Commissioner Mattel and slots Berg we may have to work to see if there's some things that could be either informational or pushed off a month but just just as a heads up that that is going to actually be more packed than it already appears just and and so will will talk about that I am expecting at this point that we will have our June meeting in person based on projections it's if we do that we will we will have certain likely distancing PPE potentially and I'll say a hygienist or

2:08:07 someone capable of making sure that we're living up to the safety policies and health policies but I'm I am planning at this point on having that meeting in person but you know that's subject to some of those criteria that we talked about earlier I'm hoping it to be in person all right well thank you our final agenda item is just board wrap-up we'll go down the aisle in the same order in which we've taken everything else so I'm into you know first I'm just really quick I want to thank the IT help for this to make this meeting possible so thank you to Travis and Ann and Holly and whoever helped us

2:08:52 set it up I wasn't familiar with teams and it's worked really well Thank you Thank You commissioners crossing yeah I echo that this went much more smoothly than the last meeting it was great to actually be able to see everybody I would personally be very surprised if we were back in June but I would love to see it Frank that's all I've got things did go ahead good meeting the technology worked well I appreciate the help with that you know I know I'm probably gonna get somebody's gonna push the injector ejector button on me here but I you know I think there's enough in this conversation

2:09:38 about what if scenarios around kind of covered recovery and our financial situation that that's almost something that particularly if we got a heavy meeting in June might deserve its own meeting I guess I just throw that out there for the officers consideration with the recognition that it's probably pretty unlikely but I would be willing as one board member anyway if necessary to devote an entire work session to that conversation and again it's the one that follows up on Frank's indications of how we might be looking to talk about a path forward and kind of that financial balance that will ultimately need to

2:10:23 strike but otherwise good meeting I appreciate seeing everybody yeah likewise and you know at least it's on my mind that if we end up in a video situation again next month we'll just see how that goes I know at least my experiences time sitting in it for three hours is harder than sitting a significantly harder release for me than sitting in the normal commissioners seats you know in full view of everybody so if we get stuck in this situation once again and we have a particularly heavy load I might also look to you all for your willingness to split it out into two meetings spread across the month of June but we'll cross that bridge not for a few more weeks Commissioner Brown yeah that'd go a

2:11:09 little of cinemates I'd just a reminder that when we I started on this board we always had two meetings a month and it's not something that's not atypical and I'm more than willing to do it because I think we've got a situation coming up that is unprecedented and if we need another meeting so be it that's why we're here is to get the job done so I'm off what I not that I want another meeting you know me and meetings in time but I certainly would not say no I support it wholeheartedly because I think we have a lot of a lot of heavy lifting coming up all righty any other final items before we close this out

2:11:56 all right then I am going to adjourn this meeting thanks everybody see you soon Travis can I hit the eject button you certainly may sir Thank You commissioners